Leveraging its takeover of Covance, Laboratory Corporation of America Holdings LH recently entered into a strategic partnership with Japan-based Sysmex Corporation – a leading clinical laboratory services provider.
Under the terms of the collaboration, Sysmex Inostics – a subsidiary of Sysmex Corporation – will offer reagents and associate services that will enable Covance’s central labs to perform molecular genetic analyses to facilitate clinical trials in oncology.
The collaboration reflects LabCorp’s efforts to bolster its footprint further in the global billion-dollar oncology market.
We note that the Sysmex OncoBEAM and Plasma Sequencing testing services, offered by Sysmex Inostics, are capable of performing blood-based diagnostic DNA tests to determine the mutational status of a patient’s tumor, even in the absence of tumor tissues. This non-invasive, highly sensitive technology facilitates potential selection of appropriate medical solutions and, in some cases, may eliminate the need for further surgeries or biopsies.
The partnership combines Sysmex Inostics' strength in diagnostic testing with LabCorp's solid global network of central laboratory locations. This is aimed at enhancing the overall scope of precision medicine in oncology, in line with LabCorp’s core mission of improving health care for cancer patients.
The number of cancer patients worldwide is increasing at an alarming rate. Naturally, the focus of biopharmaceutical and molecular diagnostic companies now lies on oncology testing, treatment and services.
LabCorp, through its specialty testing laboratories business, Integrated Oncology and Dianon Pathology, provides premier services in cancer diagnostics, including cancer screening, prognosis, therapy selection and disease monitoring. The company is also consistently involved in developing and testing new oncology assays in clinical trials.
With the global oncology market slated to grow at a substantial CAGR of 7% to $109 billion by 2020 (as per Ace Business & Market Research Group), this strategic deal should help LabCorp capture a larger share in this space, going forward.
Currently, LabCorp carries a Zacks Rank #3 (Hold). Some better-ranked med-dental/supply stocks are AmerisourceBergen Corporation ABC, Luxottica Group SpA LUX and Merit Medical Systems, Inc. MMSI. All the three stocks hold a Zacks Rank #2 (Buy).
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