Zacks Investment Research | Mar 20, 2018 10:40PM ET
Laboratory Corporation of America Holdings or LabCorp (NYSE:LH) has recently entered into a national agreement with Interpace Diagnostics Group, Inc. (NASDAQ:IDXG) in the field of cytopathology. On one hand, this win-win alliance will expand Interpace’s nationwide network of cytology providers, supporting its Thyroid molecular business unit. While on the other, it will be helpful in strengthening LabCorp’s core specialty diagnostics arm.
Notably, this is not the first time that LabCorp has partnered with Interpace. In fact, this latest agreement builds upon the original deal inked in 2016. The earlier contract enabled electronic ordering and result reporting via LabCorp for the Interpace’s proprietary ThyGenX and ThyraMIR tests. The reports provided more specific diagnostic information about the presence of thyroid cancer in patients, whose initial biopsy fails to indicate if a thyroid nodule is malignant or benign.
Under the new agreement, Dianon Pathology — a member of the LabCorp Specialty Testing Group — will perform the thyroid biopsy analysis. If the result is indeterminate, then Interpace will perform the molecular tests. This apart, doctors can order an automatic reflex to Interpace’s tests from Dianon in the event of an indefinite biopsy assessment. In either case, Dianon will automatically refer those samples to Interpace to perform the company’s proprietary assays, ThyGenX and ThyraMIR.
It is important to note that LabCorp works hard on new innovations with academic institutions as part of its three key strategic plans to capture the growing lab testing market through advanced assays and tools.
In Diagnostics, the company successfully continues to provide foundation for new collaborations with health systems, large physician groups and managed care partners. It constantly increases its scale and competency levels in clinical laboratory medicine by resorting to acquisitions ranging from routine capabilities to highly esoteric testing.
Among the company’s other recent tie-ups, worth mentioning are its two major health systems partnerships namely Mount Sinai Health System and PAML, a Pacific Northwest-based market-leading reference and outreach laboratory.
Per LabCorp, these anchor health systems will gradually become research hubs, improving access to trials as well as Covance's site activation and investigator and patient recruitment capabilities.
LabCorp has also created ample growth opportunities for women's health with medical drug monitoring, genetics and oncology testing as well as effected critical collaborations such as Walgreens and 23andMe. Also, its partnerships with Mount Sinai and PAML's former owners, Providence and Catholic Health, continue to expand.
Additionally, LabCorp expects the above three transactions to benefit from full-year ownership and growth to generate approximately $500 million in incremental profitable revenues for 2018.
Share Price Performance
Over the past three months, shares of LabCorp have outperformed its Zacks Investment Research
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