DGX to Launch Dementia Test Panel

Zacks

Quest Diagnostics (DGX), the largest providers of commercial laboratory services in North America, recently announced its plan to introduce a panel of tests at the American Academy of Neurology meeting for the diagnosis of suspected dementia.

According to Quest Diagnostics, this dementia test panel is the first in the industry that combines a number of guideline-recommended tests for identifying secondary, treatable causes of dementia as a single blood test.

Dementia is growing at an alarming rate among the aging population and suspected dementia is currently a medical challenge causing cognitive impairment. The company, as a result, is very optimistic about the prospects of its dementia test panel in this field of development.

The test panel, according to the company, provides a standard laboratory evaluation to rule out confounders of memory or reversible causes of memory loss. Test results are expected to help exclude co-morbidities and reveal potential risk factors, and identify the primary cause of dementia.

Amid the current market environment, which remained challenging for Quest Diagnostics in the form of commercial pricing pressures, testing volume and Medicare cuts, the company is coming up with several new tests that focus on high growth areas. Quest Diagnostics has been focusing on areas with high potential such as gene-based esoteric testing for cancer, cardiovascular disease, infectious disease and neurological disorders.

The company has experienced increasing demand for gene-based and esoteric tests compared to routine tests on the back of increased esoteric mix contributed by Athena and Celera. We are encouraged by Quest’s strong portfolio of tests, many of which are finding greater acceptance with time.

Despite the current challenging environment, we appreciate Quest’s commitment toward improving the specialized testing business and balancing capital deployment philosophy. Apart from this, the company is looking to improve its sales effectiveness and strengthen its relationship with health plans and other payors.

In addition, the company is adopting several strategies such as suitable acquisitions, increased sales force and geographic expansion to drive its top line.

However, the competitive landscape remains tough with the presence of Laboratory Corporation of America Holdings (LH). Concerns also remain about a conservative 2013 revenue outlook, indicating that the industry trend will not improve in the near future.

The stock currently carries a Zacks Rank #3 (Hold). However, other medical device stocks worth a look are Given Imaging (GIVN) and Cytokinetics Incorporated (CYTK), which carry a Zacks Rank #1 (Strong Buy).

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Read the Full Research Report on LH

Read the Full Research Report on GIVN

Read the Full Research Report on CYTK

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