A new coalition has been formed between leading diagnostic
) and Natera, a genetic testing company with proprietary
bioinformatics-based technology ("NATUS"), which offers a
complete high-throughput testing for reproductive indications
from minute quantities of DNA. As per the newly formed
relationship, Natera will get distribution help from Quest
Diagnostics, which will offer physicians access to Natera's
latest non-invasive prenatal test Panorama. The terms of the deal
were not disclosed.
This test uses cell-free fetal DNA in circulating maternal
blood to screen for chromosomal abnormalities associated
with genetic disorders like trisomy 21 (Down syndrome), trisomy
18 (Edwards syndrome), trisomy 13 (Patau syndrome) and monosomy X
(Turner syndrome). Panorama can be used at a very early stage of
Quest Diagnostics, which is currently striving to expand in
women's health, plans to forward specimens for testing to
Natera's CLIA-certified laboratory in Calif. This prenatal test,
Panorama, will be available to the clients of Quest Diagnostics
in certain regions in Mar and countrywide in Apr 2013.
As per a recent opinion made by the American Congress of
Obstetricians and Gynecologists (ACOG), cell-free fetal DNA
testing can be used as a primary screening test for women with an
increased risk of aneuploidy. It can also act as a follow-up test
for women with a positive first-trimester or second-trimester
screening test result.
We believe that Quest Diagnostics' focus on women's health is
necessary as its peers like
) plans to acquire Verinata Health, Inc., a privately-held
company dedicated to non-invasive tests for the early
identification of fetal chromosomal abnormalities. The
acquisition was announced a month before. Further, the company's
arch rival -
Laboratory Corp. of America Holdings
) made an alliance with non-invasive prenatal genetic test
company, Ariosa Diagnostics, last year.
Currently, we remain concerned about Quest Diagnostics as it
is continuously witnessing 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. Although we hold a favorable view regarding the company's
massive organizational restructuring strategy announced in Oct
2012 to increase operational efficiency and restore growth,
near-term visibility is discouraging. Moreover, concerns linger
regarding the reimbursement cut, which has been in effect from
Jan 1, 2013.
The stock currently carries a Zacks Rank #5 (Strong Sell).
Another medical device stock,
Medical Action Industries Inc.
), carries a Zacks Rank #1 (Strong Buy) and appears
QUEST DIAGNOSTC (DGX): Free Stock Analysis
ILLUMINA INC (ILMN): Free Stock Analysis
LABORATORY CP (LH): Free Stock Analysis
MEDICAL ACTION (MDCI): Free Stock Analysis
To read this article on Zacks.com click here.