Agilent (A) Announces Expanded Use of Diagnostic Assay (revised)

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Agilent TechnologiesA recently announced the expanded use of its diagnostic assay, Dako PD-L1 IHC 22C3 pharmDx. This marks the company's efforts to expand in the growing companion diagnostics market.

This assay will help in assessing the PD-L1 expression status for both untreated and previously treated metastatic non-small cell lung cancer (NSCLC) patients and thereby offer the first-line treatment using KEYTRUDA. In fact, this product is used only as a companion diagnostic with KEYTRUDA.

KEYTRUDA is an anti-PD-1 therapy manufactured by Merck & Co. MRK .

PD-L1 IHC 22C3 pharmDx has been known for identifying PD-L1 expression levels on the surface of NSCLC tumor cells and offer treatment with KEYTRUDA. Now, physicians can also determine PD-L1 expression for previously untreated patients with metastatic NSCL and offer treatment with KEYTRUDA. Prior to this, chemotherapy was the standard first-line treatment for most NSCLC patients.

Coming to the price performance, over the past one year, shares of Agilent have underperformed the Zacks categorized Electronic Test Equipment industry. The stock has returned 32.88% compared with the industry's gain of 42.66%.

Healthcare Sector

Currently, the healthcare sector is witnessing a revolution. Companion diagnostics or personalized medicine is taking the center stage as it could provide improved patient care and better manage costs by administering the most appropriate treatment to individuals. It has been found that not all treatments are suitable for patients suffering from a specific disease as some require more specialized tests.

The advancements in companion diagnostics could have far-reaching effects on the entire healthcare system as personalized medicines considerably improve patient care while reducing medical bills.

Agilent has signed several collaborative agreements with pharma and biotech companies including Pfizer PFE , AstraZeneca AZN , Bristol-MyersSquibb, Merck & Co., Amgen and Eli Lilly on companion diagnostics for the treatment of cancer and other diseases.

Bottom Line

Agilent is an original equipment manufacturer (OEM) of a broad-based portfolio of test and measurement products serving multiple end markets. We remain positive on Agilent's broad-based portfolio and increased focus on segments with higher growth potential. Further, the company continues to introduce high-margin products.

According to Global Industry Analysts, the worldwide companion diagnostics market may reach $280.2 million by 2017, driven by the enhancement in a drug's clinical usage. This would reduce the overall cost and risk involved in drug development and commercialization.

We believe these new tests will help the company to cash in on the fast-growing healthcare companion diagnostics segment.

Agilent Technologies, Inc. Price and Consensus

Agilent Technologies, Inc. Price and Consensus | Agilent Technologies, Inc. Quote

Currently, Agilent Technologies has a Zacks Rank #4 (Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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(Note: we have revised this article to correct an error. The original version, published February 2, 2017, should no longer be relied upon.)

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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 Nasdaq, Inc.

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

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