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LabCorp (LH) Partners HealthVerity to Grow in Drug Development

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Laboratory Corporation of America Holdings or LabCorp (LH - Free Report) continues to remain in the headlines with major back-to-back developments within the company’s business. Following last week’s announcement of the company getting FDA’s EUA for its VirSeq SARS-CoV-2 NGS (next-generation sequencing) test, this time the company announced a new partnership with HealthVerity to broaden its clinical trial and drug development capabilities.

The financial terms of the deal were kept under wraps.

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HealthVerity is a renowned name in Identity, Privacy, Governance, and Exchange (IPGE) for real-world data (RWD) and will expand Labcorp’s comprehensive, end-to-end drug development and clinical trial program. Pharmaceutical manufacturers, payers, and government organizations collaborate with HealthVerity, seeking solutions for their most complicated use cases through transformative technologies and the RWD infrastructure.

According to LabCorp, this partnership is expected to broaden its comprehensive, end-to-end drug development and clinical trial programs. More specifically, with this, LabCorp will expand its existing end-to-end solutions for drug and diagnostics development, commercialization and clinical trial efforts to include large-scale access to RWD for research applications.

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LabCorp noted that these days, study sponsors are more dutifully checking the potential of RWD to yield longitudinal patient insights before, during and after trials. Under such circumstances, using the HealthVerity IPGE platform with more predictive analytics and artificial intelligence applications for fully interoperable RWD, Labcorp claims to align de-identified patient data with ten times greater accuracy than industry alternatives.

In addition, access to HealthVerity’s RWD with on-demand de-identification and data linkage capabilities strengthens Labcorp’s ability to be a reliable source of information for its clients.

Recent Notable Developments

As noted earlier, in June, LabCorp gained FDA’s emergence use authorization (EUA) for its VirSeq SARS-CoV-2 NGS (next-generation sequencing) Test on the PacBio Sequel II sequencing system. The latest regulatory authorization demonstrates LabCorp’s ability to respond promptly during the pandemic while highlighting the strength of its scientists, the value of its technology and its continued focus on innovation. The FDA EUA for the SARS-CoV-2 NGS Test will likely fortify LabCorp’s COVID-19 testing (consisting of COVID-19 PCR and antibody testing) business.

The same month, LabCorp introduced a testing program, sponsored by Eli Lilly and Company (LLY - Free Report) , to help advanced non-small cell lung cancer (NSCLC) patients and their physicians make detailed treatment and care management decisions based on comprehensive genomic insights. The program will leverage LabCorp’s OmniSeq INSIGHT test to offer comprehensive genomic and immune profiling for cases that match the eligibility criteria.

Eli Lilly and Company management believes that the latest agreement to bring OmniSeq INSIGHT tests to more patients will demonstrate the importance of precision medicine.

In May 2022, the company announced the launch of a test that assesses Lymphocyte-activation gene 3 (LAG-3) expression levels by immunohistochemistry in tumor tissue, thereby expanding treatment options for skin cancer. The test is available for use in both clinical trials and the care and treatment of patients. It was developed by LabCorp Drug Development for a clinical trial that is studying dual checkpoint inhibitors, including LAG-3 immunotherapy.

The company also announced the launch of an at-home collection kit for diabetes screening, which measures hemoglobin A1c (HbA1c) from a small blood sample. With the introduction of the kit, consumers can access the diabetes risk test kit and other health and wellness tests through “Labcorp OnDemand.” The Labcorp OnDemand Diabetes Risk test utilizes a dried blood technology to provide a snapshot of the body’s average blood sugar levels over time.

Share Price Performance

The stock has underperformed its industry in the past year. It has declined 26.9% compared with the industry’s 19.3% fall.

Zacks Rank and Key Picks

LabCorp currently carries a Zacks Rank #3 (Hold).

Two better-ranked stocks in the broader medical space are Alkermes plc (ALKS - Free Report) and Medpace Holdings, Inc. (MEDP - Free Report) .

Alkermes has an estimated long-term growth rate of 25.1%. Alkermes’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkermes has outperformed the industry in the past year. ALKS has gained 15.2% against the industry’s 44.2% decline in the said period.

Medpace has a historical growth rate of 27.3%. Medpace’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.1%. It currently has a Zacks Rank #2 (Buy).

Medpace has outperformed its industry in the past year. MEDP has declined 25.3% compared with the industry’s 54.7% fall.