Laboratory Corporation of America Holdings LH, popularly known as LabCorp, recently announced that its Covance Drug Development arm launched a laboratory solution within its functional service provider (FSPx) portfolio. This new laboratory data management FSPx will cater to the pharmaceutical and biotechnology customers.
LabCorp, one of the major players in the global healthcare contract research organization (CRO) business, has been offering FSP services through Covance to its customers for more than 30 years now. The acquisition of Chiltern in 2017 provided it a major boost, which significantly enhanced the company’s FSP offerings. The new service was renamed as FSPx, which included clinical analytics service and clinical operations capabilities.
Significance of the Launch
With the latest launch, clinical analytics now includes Laboratory FSPx, which delivers customized global data solutions that enable clients to better manage laboratory data acquisition and site interactions. Clinical operations include clinical research associates and related functions.
The company believes that Laboratory FSPx will help customers improve data readiness by assimilating FSPx and central laboratory data teams from study setup to completion. It will also enable faster study start-up by implementing standards, shorter processes and combined roles.
Why is Laboratory Data Management Service Better?
Currently, various pharmaceutical and biotech companies are increasingly using the LabCorp’s FSPx model, with the target of cost reduction, reconciliation and streamlining of operations. This is made possible by integrating a specialized group of highly experienced professionals, who will help clinical teams interface with central, local and specialty labs- including biomarker and pharmacokinetics labs.
Laboratory FSPx’s capabilities at Covance aim to provide end-to-end solutions to assist clients in managing laboratory operations.
The company believes that the FSPx portfolio will strengthen its foothold in the CRO business as it is expected to meet growing demands of the industry for flexible and best-in-class solutions for clinical research.
Per Grand View Research, the global healthcare CRO market’s size is expected to reach $54.7 billion by 2025, at a CAGR of 6.6% between 2014 and 2025. The major factor driving this industry is the increasing cost of drug development.
With such a positive outlook for the market, this launch has come at just the right time.
Some Recent Developments
Among a series of new developments, in July, LabCorp announced that it made an important expansion to its Pixel by LabCorp platform, which will allow consumers to purchase testing online, visit a convenient LabCorp patient service center (PSC) for specimen collection by a LabCorp phlebotomist and receive confidential results through a secure online portal.
In June, the company announced taking another step toward its goal of improving laboratory services and patient care by partnering with the Mount Sinai Health System, an integrated healthcare delivery system based in New York City. The companies will work to establish Mount Sinai Digital and AI-enabled Pathology Center of Excellence.
Another milestone of the company in June was incorporating a new companion diagnostic test, therascreen PIK3CA PCR mutation analysis. It is now available through LabCorp and its Integrated Oncology specialty laboratory. Also, the company announced the completion of the acquisition deal with Envigo to strengthen and enhance the way their respective businesses support research in the biopharmaceutical and life sciences industries.
Share Price Performance
Shares of the company have gained 32.8% in a year compared with the industry’s growth of 10.5% and the S&P 500 index’s rally of 13.5%.
Zacks Rank & Stocks to Consider
Currently, LabCorp carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the broader medical space are GW Pharmaceuticals PLC GWPH, EssilorLuxottica SA ESLOY and Haemonetics Corporation HAE.
GW Pharmaceuticals estimates third-quarter earnings growth rate to be 72.8%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EssilorLuxottica’s long-term earnings growth rate is projected at 8.7%. It currently carries a Zacks Rank #2 (Buy).
Haemonetics, with a Zacks Rank #2, has a projected long-term earnings growth rate of 13.5%.
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