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DGX' New Genetic Test for Opioid Cure

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Recently, Quest Diagnostics (DGX) introduced its latest lab-developed genetic test for the delivery of personalized opioid pain-relieving treatment. Quest Diagnostics developed this test using Transgenomic, Inc.’s (TBIO) gene variant through a non-exclusive licensing agreement with the latter. However, additional terms of the deal were not disclosed.

With the rollout of this test, Quest will become the first clinical lab with assays for variants in all cytochrome P450 (CYP450) genes that influence the CYP450 enzyme system. We also note that opioids include oxycodone and methadone, and are very effective pain-alleviating medications. The metabolism of opioids and other medications are affected by the CYP450 enzyme system.

According to Quest Diagnostics, this genetic testing will prove effective in predicting the rate of opioid drug metabolism. It will also help the physicians to decide on adjustment of dosages or usage of other therapies, reducing the likelihood of drug toxicity, drug interactions, and other adverse outcomes.

With over 100 million Americans in the U.S. suffering from chronic pain, opioids are the most prescribed medication at present. Thus the company remains extremely optimistic about the adoptability and market capture potential of this new genetic test.

Currently, 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.

However, the overall soft industry trends leading to low volume growth were dampeners for the company. In addition, lower healthcare utilization and reimbursement cut acted as other major headwinds.

Quest Diagnostics currently carries a Zacks Rank #3 (Hold). Other medical devices companies that are expected to outperform in the near term are Affymetrix Inc. (AFFX) and Alere Inc. (ALR). All three stocks carry a Zacks Rank #1 (Strong Buy).

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