Leading diagnostic player, Quest Diagnostics (DGX) has received CE Mark approval for Simplexa Cytomegalovirus (CMV) molecular test kit that will run on the 3M Integrated Cycler. The test has been developed by Quest’s Focus Diagnostics business. This test will enable detection of CMV, a potentially fatal virus infection in patients with compromised immunity or those undergoing organ transplantation.
Focus Diagnostics now has a wide portfolio of molecular transplant-testing menus for Europe. In early 2011, Simplexa EBV and Simplexa BK quantitative assays were granted CE-IVD status. The company also offers molecular primer pairs for the development of laboratory tests, including JC virus, Varicella-Zoster Virus (VZV), adenovirus and human herpesvirus-6 (HHV-6).
The latest approval is second in a row for the Simplexa portfolio within a month. Earlier this month, Quest received CE Mark approval for the Simplexa Flu A/B & RSV Direct test. Using a proprietary technique, this test can eliminate nucleic-acid sample extraction, a process that is time-consuming.
Quest Diagnostics is focusing on areas of high potential such as gene-based, esoteric testing for cancer, cardiovascular disease, infectious disease and neurological disorders. The company is seeing increasing demand for gene-based and esoteric tests compared to routine tests per se.
To hone this specialized side of business, Quest has been targeting suitable acquisitions. The acquisitions of Athena and Celera are expected to strengthen the company’s foothold in gene-based and esoteric testing. Quest is also witnessing strong growth in the expanding market for pain management.
Quest recorded revenues of $1.9 billion for the most recent quarter, up 2.2% year over year. The acquisitions of Athena Diagnostics and Celera Corporation contributed 3% to revenue growth. Clinical testing revenues inched up 1% during the quarter with clinical testing volume (measured by the number of requisitions) declining 1.2%. Revenue per requisition, however, increased 2.1%. While the improvement in pricing is encouraging, the drop in volume however came as a disappointment.
Quest’s primary competitor, Laboratory Corporation of America Holdings (LH) is also targeting the esoteric testing space and acquired Genzyme Genetics to meet its objective. During the last reported quarter, LabCorp’s testing volume and revenue per requisition increased 2.1% and 7.8%, respectively. Genzyme Genetics accounted for approximately 0.9% of the company’s volume growth and 6% of the growth in revenue per requisition.
We are currently Neutral on Quest Diagnostics, in line with its peer, LabCorp.
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