Leading diagnostic testing player
) did not miss World Kidney Day. The company came up to support
the updated guideline of the National Kidney Foundation Kidney
Disease Outcomes Quality Initiative ("KDOQI") Chronic Kidney
With roughly 26 million Americans currently suffering from
CKD, we expect this initiative from Quest Diagnostics to be a
strategic fit and improve the company's specialized testing
Chronic Kidney Disease is a state of gradual loss of kidney
function. Recently, CKD has become more prevalent in young
adults due to the increasing problem of obesity, which leads to
diabetes and hypertension (high blood pressure).
According to Quest Diagnostics, awareness among patients about
CKD is vital because early detection is essential before the
kidneys stops working. This way, with the help of proper
detection through laboratory tests, one can avoid the extreme
aftermaths like dialysis or kidney transplant.
The updated guideline by National Kidney Foundation broadened
the CKD classification system with the inclusion of albuminuria,
protein in the urine, and glomerular filtration rate ("GFR")
stage. According to Quest Diagnostics, these modifications will
be helpful in detecting a patient's condition.
Despite the current challenging environment, we appreciate
Quest Diagnostics' commitment toward improving the specialized
testing business.Quest Diagnostics has been focusing on areas
with high potential such as gene-based esoteric testing for
cancer, cardiovascular disease, infectious disease and
The company has experienced increasing demand for gene-based
and esoteric tests compared with routine tests on the back of
increased esoteric mix contributed by Athena and Celera.
As a part of this strategy, Quest Diagnostics recently shed
its OralDNA Labs salivary-diagnostics business and HemoCue
diagnostic products business. This would enable the company to
refocus its attention on its core diagnostic information
services. In the recent past, Quest developed a number of
gene-based and esoteric tests.
We also believe that the acquisition of UMass Medical Lab is
in sync with its goal to create a planned 'lab of the future,'
which will help it increase long-term growth opportunities in the
rapidly growing esoteric markets. We assume all these endeavors
could very well turn around the company's fortunes going
However, Quest Diagnostics continues to witness challenges
with testing volume. Concerns also remain about a conservative
2013 revenue outlook, indicating that the industry trend will not
improve in the near future. Moreover, reimbursement pressure from
government and other payers continue. Concerns linger regarding
the reimbursement cut effective from Jan 1, 2013.
The stock currently carries a Zacks Rank #3 (Hold). However,
other medical device stocks worth a look are
Medical Action Industries Inc
). All these stocks carry a Zacks Rank #1 (Strong Buy).
CYTOKINETCS INC (CYTK): Free Stock Analysis
QUEST DIAGNOSTC (DGX): Free Stock Analysis
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MEDICAL ACTION (MDCI): Free Stock Analysis
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