LabCorp, ORIG3N Collaborate for Special Stem Cell Storage - Analyst Blog
Laboratory Corporation of America Holdings LH recently signed a strategic agreement with biotechnology company – ORIG3N, Inc. The deal reflects LabCorp’s effort to elevate its position in the global billion-dollar genetic testing market.
Boston-based ORIG3N is a leading provider of induced pluripotent stem cell (iPSC) repository, called LifeCapsule.
Per the collaboration, LabCorp will allow ORIG3N’s LifeCapsule to be stored at its biorepository facilities. The partnership will also allow LabCorp to perform genetic analysis on the stored stem cells of ORIG3N’s LifeCapsule at its storage facilities.
Stem cells can potentially develop into different cell types within the body during the various stages of early life and growth. iPSCs are adult cells that are genetically reprogrammed to an embryonic stem cell-like state and can be individualized to every other cell type of the human body. iPSCs facilitate more accurate drug development and disease modeling.
Through this strategic deal, LabCorp will gain access to a large, genetically diverse population of iPSCs. This should help revolutionize the treatments of a variety of gene-based diseases.
As a leading healthcare diagnostic company in the U.S., LabCorp offers one of the most comprehensive genetic test menus in the industry with approximately 140 genetic counselors and 6 medical geneticists working with the company’s physician clients in optimizing patient outcomes.
At present, genetic testing represents the most rapidly expanding segment of the global molecular diagnostics market. As per an industry analysis done last year, the global genetic testing market is expected to reach approximately $60 billion by 2020. Given these developments, we believe LabCorp is well-positioned to capture a significant share of this multi-billion dollar market, over the long run.
Moreover, this partnership also is in line with one of the elements of LabCorp’s five-pillar strategy, that is, to deploy capital in investments that will enhance its business and return capital to shareholders. Notably, since 2009, LabCorp has invested approximately $7.9 billion in strategic business deals that has helped strengthen its geographic presence and expanded its specialty testing operations. We believe this recent deal with ORIG3N is no exception to this practice.
Currently, LabCorp carries a Zacks Rank #3 (Hold). Some better-ranked med-dental/supply stocks are AmerisourceBergen Corporation ABC, Luxottica Group SpA LUX and Merit Medical Systems, Inc. MMSI. All the stocks hold a Zacks Rank #2 (Buy).
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