Leading diagnostic player Laboratory Corporation of America Holdings (LH) has expanded its HCV testing portfolio with the launch of a nucleic acid sequencing assay, developed by Monogram Biosciences. The test reports NS3 and NS4A mutations and NS3 associated resistance to the recently approved HCV protease inhibitors. Identification of mutations will be of great help to doctors in deciding a patient’s treatment.
As per estimates, approximately 3.2 million people in the US and up to 170 million globally are infected with HCV. Since 2002, the standard of care for HCV infection in the US has been treatment with pegylated α-interferon and ribavirin.
Recently, in May 2011, the US Food and Drug Administration (FDA) approved two direct-acting antiviral (DAA) agents – boceprevir (Victrelis) by Merck (MRK) and telaprevir (Incivek) by Vertex Pharmaceuticals (VRTX).
Both the agents are used in combination with pegylated α-interferon and ribavirin for the treatment of HCV genotype 1 infection. During clinical trials, it has been observed that HCV variants containing mutations led to reduced susceptibility to boceprevir and telaprevir.
Consequently, patients experienced sub-optimal treatment responses. The recently launched assay detects mutations in NS3 and NS4A and specifically identifies those associated with boceprevir and telaprevir resistance.
LabCorp is aiming at increasing its revenues from esoteric testing in the next few years. To achieve this target, the company has made some acquisitions, the most significant being Monogram Bioscience (August 2009) and Genzyme Genetics (December 2010). These acquisitions should help strengthen the company’s esoteric testing capabilities and its personalized medicine strategy.
During the first quarter, 40% of revenues came from genomic, esoteric and anatomic pathology categories. Banking on the acquisition of Genzyme Genetics, LabCorp expects to record about 45% of its revenues from these businesses in the next 3-5 years. During the last reported quarter, esoteric volume increased 10% over the prior year.
We are currently Neutral on LabCorp, which also corresponds to a Zacks #3 Rank (Hold) in the short term.
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