Quest Diagnostics' (DGX) New Pact to Advance Cancer Screening
Quest Diagnostics Incorporated DGX entered into a strategic collaboration with Universal DX (UDX) aimed to advance colorectal cancer screening in the United States, for which over 110 million people may be eligible.
In the United States, colorectal cancer is the third most commonly diagnosed cancer and the third highest cause of cancer death in men and women. According to the American Cancer Society, 153,020 people will be diagnosed with colorectal cancer in the United States in 2023, with 52,550 dying from the disease.
The latest move will expand Quest Diagnostics’ portfolio of cancer services, fortifying the Diagnostic Solutions business.
More on Collaboration
Under the terms of the commercial agreement, Quest Diagnostics intends to perform and offer clinical laboratory services to providers and patients in the United States based on UDX's Signal-C, an advanced colorectal cancer screening blood test, assuming premarket approval in the United States.
To gather clinical evidence for the test, UDX will enroll patients in a 15,000-patient study, including over 100 investigator sites, to support a submission to the FDA for premarket approval. Once the FDA approves the test, Quest will have exclusive rights to provide clinical laboratory services in the United States.
Additionally, UDX declared the first close of its nearly $70 million series B financing round from investors, which included Quest Diagnostics.
Strategic Implications
The partnership intends to bring together Quest's national scale and experience in the United States, along with UDX's cutting-edge liquid biopsy screening technology. This includes nearly 2,100 patient service centers for blood draws, extensive connectivity between health plans and electronic health records and more.
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With its national reach and superior oncology knowledge, Quest Diagnostics is well-positioned to use UDX Signal-C technology and make it widely available across the United States. This partnership will increase the likelihood that Americans will eventually have an easy, reliable and accessible way to check for colorectal cancer.
Industry Prospects
Per a report by Fortune Business Insights, the global colorectal cancer screening market size is projected to reach from $17.05 billion in 2023 to $23.03 billion by 2030, witnessing a CAGR of 4.4%. The major factors for growth of the colorectal cancer screening market include the advent of efficacious genetic tests, an increase in the prevalence of colorectal cancer and increasing cancer prevention initiatives.
Recent Developments
In July 2023, Quest Diagnostics launched a novel prostate cancer biomarker test through its subspecialty pathology business unit, AmeriPath. The laboratory test is developed in collaboration with Envision Sciences — an Australia-based clinical diagnostics company with a focus on oncology diagnostics and prognostics in tissue and blood.
In June 2023, Quest Diagnostics acquired Haystack Oncology. The acquisition is intended to improve patient outcomes through early, accurate detection of residual or recurring cancer. Based on circulating tumor DNA (ctDNA), Haystack Oncology created a highly sensitive minimal-residual disease (“MRD”) testing tool to help with the early detection of residual or reoccurring cancer and to guide treatment choices better. Quest Diagnostics will use this MRD technology to create new blood-based clinical lab services for solid tumor cancers that will be made available starting in 2024.
Price Performance
In the past year, DGX shares have declined 9.5% against the industry’s rise of 3.7%.
Zacks Rank and Key Picks
Quest Diagnostics carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Haemonetics HAE, Insulet PODD and DexCom DXCM. While Haemonetics and DexCom each carry a Zacks Rank #2 (Buy), Insulet presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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