Quest Diagnostics Develops CAH Tests - Analyst Blog

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Quest Diagnostics ( DGX ) recently announced that it has expanded its endocrine diagnostics portfolio with the recent introduction of four new tests panels for congenital adrenal hyperplasia (CAH), an endocrine disorder mostly found in newborns, children and women. Quest Diagnostics claims that the new CAH panels of tests, based on advanced analytical-test method, will increase patient care by fast detection and treatment of CAH in comparison with traditional tests. The new panels of tests have been developed by Nichols Institute, Quest Diagnostics' advanced research, development and testing center.

CAH is a hereditary disorder that secretes excessive quantity of androgens (a family of male hormones including testosterone) in newborns and children of both genders leading to development of male features in the body. The appropriate and timely diagnosis of CAH is of utmost importance as this disorder can be fatal for newborns if not treated properly. Currently, CAH screening of newborns is extensively done in the US.

The entire set of offerings consists of a panel for newborn screening for CAH. In this panel, CAH tests use the highly sensitive and specific liquid-chromatography tandem mass spectrometry (LC/MS/MS) measurement technique to analyze all the 13 steroids linked with CAH. Moreover, this test can be performed on a sample volume of 0.1 milliliter, suitable for newborn heel-prick sample collection. On the other hand, the conventional clinical CAH test requires bigger sample volume and is based on immunoassays, less trustworthy than LC/MS/MS while measuring certain steroid levels in children and women.

Apart from the above panel of tests, Quest diagnostics also introduced three other CAH panels by LC/MS/MS, all developed by Nichols Institute. These are targeted towards newborns with acute stress conditions (who can be misdiagnosed for CAH), adults and children suffering from the most common form of CAH. The fourth one is meant to differentiate non-classic CAH from polycystic ovary syndrome (PCOS).

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 is also focusing on women's health. It has launched SureSwab for gynecological infections and also Spinal Muscular Atrophy testing, which has been witnessing significant acceptance. Quest Diagnostics is witnessing higher demand for these tests compared to routine tests.

In order to bolster this specialized side of business, Quest has been pursuing 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 testing volume. Moreover, the competitive landscape is tough with the presence of Laboratory Corporation of America Holdings ( LH ). LabCorp is also targeting the esoteric testing space and has acquired Genzyme Genetics to meet its objective. Quest Diagnostics currently retains a short-term Zacks #3 Rank (Hold). We currently have a Neutral recommendation on Quest and Lab Corp over the long term.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CAH , DGX , LH

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