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Quest Diagnostics (DGX) Inks New Deal With Ultima Genomics
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Quest Diagnostics (DGX - Free Report) recently announced a collaboration with Ultima Genomics, the developer of the revolutionary new ultra-high throughput sequencing architecture. Through the collaboration, the companies aim to improve patient access, affordability and outcomes by expanding the use of highly accurate, cost-efficient and high-volume whole genome sequencing in fast-growth areas, such as solid-tumor minimal residual disease (MRD) testing.
The latest development will significantly fortify Quest Diagnostics’ Molecular Genomics and Oncology business.
A Backdrop of the News
Despite technological improvements, the costs of sequencing have remained mostly high throughout the last decade. As a result, whole genome sequencing is typically used for rare diseases and some oncology testing, but its applications for large populations are less available. In response to this challenge, Ultima recently unveiled its platform technology, a new sequencing architecture that supports sequencing an entire genome for $100.
Image Source: Zacks Investment Research
The revolutionary new sequencing architecture scales far beyond conventional technologies, driving down the costs of sequencing to help overcome the tradeoffs that scientists and clinicians are forced to make between the breadth, depth and frequency with which they use genomic information. In addition, it is unique for its high sensitivity for detecting rare cancer-related gene variants, particularly changes in DNA base pairs called single nucleotide variants (SNVs).
The company also previewed its first commercial system to use this new architecture, the UG 100 System, featuring innovations such as an open wafer to replace a traditional flow cell, built-in technology to enable highly accurate SNV detection and machine learning to drive continuous improvement in sequencing data quality. All these offer unique benefits for many high-volume applications.
News in Detail
Quest Diagnostics will deploy the Ultima technology for the possible development of lab-developed tests involving its Haystack solid-tumor MRD technology for future clinical and biopharmaceutical MRD applications. This will supplement its current whole exome sequencing approach, as well as for certain future whole genome testing applications, such as rare disease detection in pediatric patients.
In addition, the collaboration will leverage DGX’s expertise and scale in oncology, genomics and pathology and national scale in tumor biopsy and blood specimen collection. By radically driving sequencing costs down, Ultima has changed the economics of genomics so that other costs in the testing value chain become critically important. DGX’s capabilities in solid tumor and blood testing can further drive down the costs while increasing access, allowing more people to benefit from the clinically rich insights of whole genome sequencing.
Industry Prospects
According to Quest Diagnostics’ provided estimates, approximately 1,958,310 new cancer cases and 609,820 cancer deaths are projected to occur in the United States in 2023. Most cancers are due to solid tumors, such as colorectal, breast, skin and lung cancer. While treatment typically combines surgical tumor removal and adjuvant chemo- or immune therapy, tiny cancer molecules can persist, triggering cancer recurrence.
Other Notable Developments
In November 2023, DGX announced a multi-pronged partnership with the precision immunology company, Scipher Medicine, to expand patient access to diagnostic services advancing precision medicine for rheumatoid arthritis (RA). Through the collaboration, the company will provide advanced RNA extraction and next-generation sequencing services for Scipher's PrismRA test, which analyzes RA patients' molecular profiles to identify those unlikely to respond to TNF inhibitors.
Price Performance
In the past six months, shares of DGX have decreased 3.3% against the industry’s rise of 2.3%.
Zacks Rank and Key Picks
Quest Diagnostics currently carries a Zacks Rank #3 (Hold).
Haemonetics stock has decreased 3.2% in the past year. Earnings estimates for Haemonetics have remained constant at $3.89 in 2024 and at $4.15 in 2025 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for DaVita’s 2023 earnings per share have remained constant at $8.07 in the past 30 days. Shares of the company have increased 38.0% in the past year compared with the industry’s rise of 9%.
DVA’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.6%. In the last reported quarter, it delivered an average earnings surprise of 48.4%.
Estimates for HealthEquity’s 2023 earnings per share have increased from $2.03 to $2.15 in the past 30 days. Shares of the company have increased 20.9% in the past year against the industry’s 8.2% fall.
HQY’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 16.5%. In the last reported quarter, it delivered an average earnings surprise of 22.5%.
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Quest Diagnostics (DGX) Inks New Deal With Ultima Genomics
Quest Diagnostics (DGX - Free Report) recently announced a collaboration with Ultima Genomics, the developer of the revolutionary new ultra-high throughput sequencing architecture. Through the collaboration, the companies aim to improve patient access, affordability and outcomes by expanding the use of highly accurate, cost-efficient and high-volume whole genome sequencing in fast-growth areas, such as solid-tumor minimal residual disease (MRD) testing.
The latest development will significantly fortify Quest Diagnostics’ Molecular Genomics and Oncology business.
A Backdrop of the News
Despite technological improvements, the costs of sequencing have remained mostly high throughout the last decade. As a result, whole genome sequencing is typically used for rare diseases and some oncology testing, but its applications for large populations are less available. In response to this challenge, Ultima recently unveiled its platform technology, a new sequencing architecture that supports sequencing an entire genome for $100.
Image Source: Zacks Investment Research
The revolutionary new sequencing architecture scales far beyond conventional technologies, driving down the costs of sequencing to help overcome the tradeoffs that scientists and clinicians are forced to make between the breadth, depth and frequency with which they use genomic information. In addition, it is unique for its high sensitivity for detecting rare cancer-related gene variants, particularly changes in DNA base pairs called single nucleotide variants (SNVs).
The company also previewed its first commercial system to use this new architecture, the UG 100 System, featuring innovations such as an open wafer to replace a traditional flow cell, built-in technology to enable highly accurate SNV detection and machine learning to drive continuous improvement in sequencing data quality. All these offer unique benefits for many high-volume applications.
News in Detail
Quest Diagnostics will deploy the Ultima technology for the possible development of lab-developed tests involving its Haystack solid-tumor MRD technology for future clinical and biopharmaceutical MRD applications. This will supplement its current whole exome sequencing approach, as well as for certain future whole genome testing applications, such as rare disease detection in pediatric patients.
In addition, the collaboration will leverage DGX’s expertise and scale in oncology, genomics and pathology and national scale in tumor biopsy and blood specimen collection. By radically driving sequencing costs down, Ultima has changed the economics of genomics so that other costs in the testing value chain become critically important. DGX’s capabilities in solid tumor and blood testing can further drive down the costs while increasing access, allowing more people to benefit from the clinically rich insights of whole genome sequencing.
Industry Prospects
According to Quest Diagnostics’ provided estimates, approximately 1,958,310 new cancer cases and 609,820 cancer deaths are projected to occur in the United States in 2023. Most cancers are due to solid tumors, such as colorectal, breast, skin and lung cancer. While treatment typically combines surgical tumor removal and adjuvant chemo- or immune therapy, tiny cancer molecules can persist, triggering cancer recurrence.
Other Notable Developments
In November 2023, DGX announced a multi-pronged partnership with the precision immunology company, Scipher Medicine, to expand patient access to diagnostic services advancing precision medicine for rheumatoid arthritis (RA). Through the collaboration, the company will provide advanced RNA extraction and next-generation sequencing services for Scipher's PrismRA test, which analyzes RA patients' molecular profiles to identify those unlikely to respond to TNF inhibitors.
Price Performance
In the past six months, shares of DGX have decreased 3.3% against the industry’s rise of 2.3%.
Zacks Rank and Key Picks
Quest Diagnostics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Haemonetics (HAE - Free Report) , DaVita (DVA - Free Report) and HealthEquity (HQY - Free Report) . Haemonetics and HealthEquity each presently carry a Zacks Rank #2 (Buy), and DaVita sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics stock has decreased 3.2% in the past year. Earnings estimates for Haemonetics have remained constant at $3.89 in 2024 and at $4.15 in 2025 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for DaVita’s 2023 earnings per share have remained constant at $8.07 in the past 30 days. Shares of the company have increased 38.0% in the past year compared with the industry’s rise of 9%.
DVA’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.6%. In the last reported quarter, it delivered an average earnings surprise of 48.4%.
Estimates for HealthEquity’s 2023 earnings per share have increased from $2.03 to $2.15 in the past 30 days. Shares of the company have increased 20.9% in the past year against the industry’s 8.2% fall.
HQY’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 16.5%. In the last reported quarter, it delivered an average earnings surprise of 22.5%.