), a prominent player in the field of diagnostic testing, has
expanded its portfolio with a new laboratory assay, named TERC test
to help physicians recognize molecular changes to cervical cells
that increase the probability of cervical cancer in women.
As cervical cancer fails to produce symptoms in the initial
stages, this test is expected to play a vital role in the detection
of pre-cervical cellular abnormalities among thousands of women
with the risk of malignancy each year.
According to Quest Diagnostics, when standard screening tests
like Papanicolaou (Pap) and human papillomavirus (HPV) fail to
provide clear results about the cervical cancer risk, its TERC test
will enable physicians to detect women who display characteristics
of a cancerous state, unless treated.
The test will examine the abnormalities of telomerase RNA
component (TERC) gene based on advanced scientific knowledge on
molecular changes that turn cervical dysplasia into malignancy. The
company believes that this test, which is designed as an addition
to Pap and HPV tests, will act as a second opinion for doctors to
confirm malignancy in the initial stage.
To develop the TERC test for cervical cancer, Quest Diagnostics
earlier acquired a nonexclusive patent license for human TERC gene
marker from the National Institutes of Health (NIH). TERC result
will help in classifying risks in abnormal Pap tests prior to
Women with high risk results may benefit from additional
cervical biopsies at colposcopy and more aggressive observation and
treatment, while women with low-risk results may undergo lesser
With cervical cancer being the major cause of death in women in
the U.S., we expect this TERC test to mark a definite improvement
over traditional methods, leading to better treatment from faster
detection. Therefore this test should strengthen Quest Diagnostics
portfolio of molecular testing.
Quest Diagnostics has been working continuously on expanding its
portfolio. In early 2012, the company started offering testing
services to identify E6/E7 messenger RNA to help detect women
infected with HPV who may have a significantly increased risk of
Other significant tests that were launched over the recent past
include a thyroid test to help physicians determine whether a
thyroid gland is cancerous and requires surgical removal. Also, the
test and an advanced renal transplant monitoring test to detect
rejection in kidney-transplant patients.
This test enables physicians to adjust therapy based on an
individual's genetic makeup. All these tests not only improve
patient care but also reduce the high costs associated with
Quest Diagnostics is currently focusing on latent areas such as
drugs-of-abuse testing, gene-based, esoteric testing for cancer,
cardiovascular disease, infectious disease and neurological
disorders. The company has been witnessing stronger demand for
these tests than routine tests.
In order to bolster this specialized niche, Quest Diagnostics
has engaged in accretive acquisitions such as Athena and Celera.
This apart, we are encouraged by Quest's efforts to improve its
sales effectiveness and strengthen its relationship with health
plans and payors.
However, the company continues to witness challenges with
respect to physician office visits, which remains soft. Moreover,
the competitive landscape is tough with the presence of
Laboratory Corporation of America Holdings
). LabCorp is also targeting the esoteric testing space and has
acquired Genzyme Genetics to meet its objective.
We currently have a Neutral recommendation on Quest Diagnostics
over the long term. The stock retains a short-term Zacks #3 Rank
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