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LabCorp (LH) Names Two Leaders for Major Business Wings

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Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp has come out with a major management reshuffle. This follows the company’s June announcement about the quitting of its current chairman, president and CEO David P. King. As planned, King has to step down on Oct 31 and the following day, Adam H. Schechter will succeed him as the president and CEO of LabCorp.

The latest declaration highlights two new leadership roles for the company’s business segments, namely LabCorp Diagnostics and Covance Drug Development.  Effective Nov 1, 2019, the Covance unit’s existing CEO John Ratliff will take the reins as the CEO of LabCorp Diagnostics. While Dr. Paul Kirchgraber, the reigning senior vice president and head of Covance’s clinical trial testing solutions, will fill Ratliff’s shoes as the CEO of Covance.

LabCorp is highly optimistic about this recent top-brass reshuffle as according to the company, John Ratliff, who has already demonstrated his transformational leadership capability in the Covance business, is also intensely involved with the LabCorp Diagnostics business over the past three years. He joined LabCorp as the CEO of Covance in October 2016.

Meanwhile, Kirchgraber efficiently runs one of Covance’s most successful divisions — clinical trial testing solutions. This business unit includes the very prosperous central laboratories, bioanalytical laboratories, and chemistry manufacturing as well as serves clinical trials in more than 100 countries.

Management believes that under Schechter’s tenure with Kirchgraber and Ratliff’s support, LabCorp is well-poised to grow and flourish in the years ahead.

LabCorp’s Progress With Growth Strategy

In this regard, we note that as part of its three key strategic plans, LabCorp is working hard on innovations with academic institutions in order to capture the growing lab testing market with its advanced assays and tools.

In Diagnostics, the company successfully continues to provide the foundation for new collaborations with health systems, large physician groups and managed care partners.

LabCorp has also created avenues of growth opportunities in women's health, medical drug monitoring, genetics and oncology testing as well as in tough collaborations with Walgreens and 23andMe. Also, its partnerships with UnitedHealthcare and Aetna have helped LabCorp become a contracted laboratory provider for all major national plans.

Within Covance Drug Development, the company’s ongoing strategic investments in precision medicine, therapeutic expertise, FSP solutions and biologic drug development capabilities steadily increase its win rate with existing partners and new customers. The acquisition of Chiltern is significantly strengthening LabCorp’s strategic position in clinical development and accelerating revenue plus profit growth within Covance. This apart, the company’s recent strategic technology contract with QIAGEN is expected to garner a positive outcome down the line.

Challenging Market Competition

LabCorp currently faces a close contest from its major rival Quest Diagnostics (DGX - Free Report) besides other commercial laboratories and hospitals. A significant player in the clinical diagnostic testing market is Bio-Rad Laboratories (BIO - Free Report) . Within the CRO (Contract Research Organisation) space, Charles River Laboratories International, Inc. (CRL - Free Report) is a prominent name.

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