) subsidiary, has entered into an agreement with
Eli Lilly and Co.
) for developing companion diagnostic tests that could help
detect people more susceptible to cancer. Eli Lilly is developing
a medicine for these prospects.
Agilent had acquired the Danish cancer diagnostics company,
Dako, for $2.2 billion (on a debt-free basis) last year. Dako
provides antibodies, scientific instruments and software mainly
to cancer-related diagnostic labs and collaborates with drug
companies for the development of methods to identify patients
likely to benefit from certain therapies.
Currently, the healthcare sector is witnessing a revolution
and companion diagnostic or personalized medicine is taking the
center stage in diagnostics. It has been found that not all
treatments are same for cancer patients or any other patients, as
some require tests that are more specialized.
Dako's expertise in the development of methods to identify
patients likely to benefit from certain therapies will help Eli
Lilly to select patients that may benefit from its ongoing
investigational oncology medicine; thus enhancing the diagnostic
The whole process may revolutionize the healthcare system, as
personalized medicine may become helpful in improving patient
care and reducing medical bills. If the companion diagnostic
tests really kick off, it would be a positive for the testing
companies, with a corresponding positive impact on revenues.
According to Global Industry Analysts, companion diagnostics
market may reach $280.2 million by 2017 worldwide. The growth is
driven by the enhancement of the drug's clinical usage, thus
reducing the overall cost and risk involved in drug
The success of the collaboration may help Agilent to build a
position for itself in personalized medical care, a segment that
is seeing good growth.
Agilent's revenue in the third quarter was flat sequentially
and up 1.9% year over year, short of management's expectations of
a 2-3% sequential increase ($1.77 billion to $1.79 billion). The
newly added Diagnostics and Genomics segment accounted for 9.0%
of revenue in the last quarter, up 47.2% sequentially.
Currently, Agilent Technologies has a Zacks Rank #5 (Strong
Sell), and Eli Lilly carries a Zacks Rank #2 (Buy) rating.
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