LabCorp (LH) to Expand Clinical Trails Access With New Pact
Laboratory Corporation of America Holding or LabCorp LH entered into a strategic collaboration with Hawthorne Effect to accelerate decentralized clinical trial capabilities for pharma, biotech and medical device sponsors. Through this collaboration, sponsors seek to increase patient diversity and inclusion, reduce site burden and accelerate enrollment and clinical study timelines.
The recent move will fortify LabCorp’s Clinical Laboratory services business.
More on Collaboration
By working together, LabCorp and Hawthorne Effect hope to enhance decentralized clinical trials by merging existing services and developing fresh, unique service offers. Hawthorne Effect's extensive digital platform increases diverse patient participation, improves the quality, completeness and timeliness of trial data and shortens trial timelines. It also makes it possible to conduct complex study visits and clinical data collection in the patient's home or community with ease.
Strategic Implications
With this partnership, LabCorp intends to leverage its extensive global laboratory network and logistics expertise and Hawthorne Effect's digital platform to enhance its decentralized clinical trial capabilities, broaden the accessibility and diversity of clinical trials and provide more value to patients, their doctors and sponsors.
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The combined experience of LabCorp and Hawthorne Effect will enable clinical trials to run more efficiently, with better patient access and higher levels of compliance, resulting in shorter timelines for clients. This collaboration reflects both company’s shared commitment to improving global health.
Industry Prospects
Per a report by Grand View Research, the global clinical laboratory service market size was estimated at $217.53 billion in 2022 and is expected to witness a CAGR of 3.2% by 2030. Factors such as the increasing burden of chronic diseases and the growing demand for early diagnostic tests are driving the market.
Other Notable Partnerships
In November 2023, LabCorp completed a comprehensive laboratory relationship with Legacy Health. Under the terms of the agreement, LabCorp will acquire the select assets of its outreach laboratory business in the Northwest United States, including laboratory facilities and equipment. The collaboration allows LabCorp to bring its leading diagnostics capabilities to patients across Legacy's service area.
Earlier in May 2023, LabCorp finalized its strategic relationships with Jefferson Health — one of the largest health systems serving the Greater Philadelphia area in Southern New Jersey and with Providence, Oregon to acquire its outreach laboratory business. The company is also seeking regional laboratory acquisitions across geographies to broaden access to diagnostics and expand capabilities.
Price Performance
In the past year, LH’s shares have increased 5.4% compared with the industry’s rise of 12.4%.
Zacks Rank and Key Picks
LabCorp currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Haemonetics HAE, DaVita DVA and HealthEquity HQY. Haemonetics and HealthEquity each carry a Zacks Rank #2 (Buy), while DaVita sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics’ earnings estimates have remained constant at $3.89 in 2023 and at $4.15 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for DaVita’s 2023 earnings per share have remained constant at $8.07 in the past 30 days.
DVA’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.6%. In the last reported quarter, it delivered an average earnings surprise of 48.4%.
Estimates for HealthEquity’s 2023 earnings per share have increased from $2.03 to $2.15 in the past 30 days.
HQY’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 16.5%. In the last reported quarter, it delivered an average earnings surprise of 22.5%.
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