Laboratory Corporation of America Holdings
), a leading player in the U.S. diagnostic market, recently
introduced GeneSeq, the company's next generation sequencing
assay for genetic causes of familial cardiac disease.
According to the company, GeneSeq Cardio will help recognize
patients with pathogenic mutations in genes, who need regular
cardiac screening, lifestyle changes or clinical intervention to
prevent the progress of cardiac disease and secondary
complications. Identification of these individuals may help
prevent myocardial infarction, stroke, and sudden cardiac death.
Given that familial cardiac diseases are associated with 80% of
sudden cardiac death cases in young patients, LabCorp remains
hopeful about the prospect of this next generation test.
Despite the near-term challenges from reimbursement issues,
LabCorp is working on portfolio expansion to drive top line. The
company is focusing more on the high-margin esoteric testing
business. The company recorded approximately 40% of total
revenues during the last reported quarter from the genomic,
esoteric and anatomic pathology categories, which is expected to
go up to 45% over the next 3−5 years. The esoteric volume during
the fourth quarter increased 3.5% on the back of decent growth in
specialized endocrinology and coagulation businesses, and
cardiovascular and chronic kidney disease programs.
In an attempt to diversify its portfolio in this line, earlier
in 2012, LabCorp tied up with Ariosa Diagnostics to offer the
latter's Harmony prenatal test, a non-invasive test for detection
of common fetal trisomies, utilizing cell-free DNA (cfDNA) in
maternal blood. The company is also working to expand its
portfolio of molecular diagnostics testing. Moreover, the company
introduced several new tests and collaborated with major
companies and academic institutions to develop advanced
Further, the company is excelling in the field of chromosomal
microarray analysis. In addition to its pediatric, prenatal and
conception test offerings, the company is also working with
oncology applications.Given the continuous focus on portfolio
expansion, we are confident about LabCorp garnering higher
revenues from specialized testing, going forward. The stock
arries a Zacks Rank #3 (Hold).
However, other stocks in the medical device sector, carrying a
Zacks Rank #1(Strong Buy), like
Medical Action Industries Inc.
Given Imaging Ltd.
) appear impressive.
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