Laboratory Corporation of America Holdings or LabCorp (LH - Free Report) recently entered into a master service agreement with Sample to Insight solutions provider, QIAGEN Inc. (QGEN - Free Report) , in the field of companion diagnostics.
Per this deal, LabCorp will participate in the QIAGEN’s Day-One Lab Readiness program under which, the former will provide physicians and patients with faster access to Qiagen’s companion diagnostic products post the regulatory approval of the tests and associated drugs. These drugs are genomically targeted, which gradually became important therapies for a growing variety of cancers.
Is the Contract Strategic Fit?
Per the FDA’s modernized regulatory approach, QIAGEN’s Day-One Lab Readiness program enables molecular diagnostic labs like LabCorp to begin implementing the activities necessary to prepare for the commercial launch of new drugs and IVD tests once the FDA approval is obtained.
Assays for multiple indications including the novel companion diagnostics across a range of cancers ranging from lung, breast, colorectal, bladder to eventually the pan-tumor disease areas are currently in LabCorp’s Day-One Lab Readiness pipeline.
According to news, this tie-up will help a broad base of patients as LabCorp’s skill in the commercial use of companion diagnostics will offer them a better access to advanced tools for precision medicine.
In recent times, the biomarkers and advanced technologies are getting increasingly used to in vitro diagnostics (IVD), which in turn, makes the companion diagnostic testing complex. Under such circumstances, both companies are extremely hopeful about this alliance as LabCorp’s extensive experience in these areas is a strong complement to QIAGEN’s personalized health collaborations with the pharmaceutical giants.
The global in vitro diagnostics (IVD) market is booming with prospects now. According to Grand View Research, the market is expected to reach $98.99 billion by 2025. It is anticipated to see a CAGR of 6.6% over the next five years.
Per the geriatric population report, growth is one of the major drivers. Further, the rising prevalence cardiovascular disorders, cancer, diabetes and other chronic diseases along with surging demand for onsite diagnostics are expected to boost the in vitro diagnostics (IVD) market in the upcoming period.
Taking this into consideration, we expect LabCorp’s recent deal for expanding in this field to be perfectly strategic and well timed.
Share Price Performance
In the past three months, shares of LabCorp have outperformed its industry. The stock has rallied 23.4% as compared with the industry’s 15% rise.
Zacks Ranks and Key Picks
Both LabCorp and QIAGEN currently carry a Zacks Rank of #3 (Hold). Two better-ranked stocks in the broader medical space are Stryker Corporation (SYK - Free Report) and Amedisys, Inc (AMED - Free Report) , each stock currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Stryker’s long-term earnings growth rate is projected at 10%
Amedisys’s long-term earnings growth rate is predicted at 19.7%.
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