A Temporary Blip or A Long-Term Slowdown for Lab Giants?

Quest and Laboratory Corp. of America, two Wall Street favorites for several years, seem to be bumping up against a wall when it comes to growth. Their growth is heavily dependent on acquisitions--but there aren't many big labs left to buy. Lab Corp.'s just announced offer for Dianon not withstanding. Quest's bid to buy California-based Unilab, is under FTC scrutiny--although Wall Street is betting the deal will fly. Lab Corp. faces intense regional competition, which it claims it is addressing. Still, the bigger these companies get, the tougher it is to maintain growth.

Quest Diagnostics Inc. and Laboratory Corp. of America , the nation's two largest commercial laboratories, and Wall Street favorites for the past three years, both appear to have bumped up against a wall in terms of growth. Their stocks are down—33% in Quest's case, more in LCA's—a situation partly reflecting the bear market, but also industry-specific events. As bellwether stocks for the industry, analysts wonder whether the setbacks are temporary quarterly declines or long-term signals that the laboratory industry's robust growth is slowing. The answer will depend on a number of factors: notably, the availability of consolidation opportunities, reimbursement, and physician demand for new kinds of tests, genomic and otherwise.

The setbacks are all the more noteworthy in light of the stocks' heretofore extraordinary rise. Only six years ago, LCA...

Read the full article – start your free trial today!

Join thousands of industry professionals who rely on In Vivo for daily insights

  • Start your 7-day free trial
  • Explore trusted news, analysis, and insights
  • Access comprehensive global coverage
  • Enjoy instant access – no credit card required

More from Business Strategy

When VC Steps Back: Finding Alternative Biotech Funding

 
• By 

The biotech funding landscape is undergoing a fundamental shift. With traditional VC becoming increasingly cautious and selective, industry executives are exploring new avenues for capital. Conversely, this evolution may ultimately benefit the sector's long-term sustainability.

Podcast: “They Are Able To Keep Their Body”: Medipost On Its Stem Cell Therapy Vision

 

In Vivo spoke with Edward Ahn, CEO of Medipost, a Korean company that has developed stem cell therapies from cord blood, on how they are working across regulatory markets to provide a novel treatment for degenerative diseases.

Can Italy Shake Off Its Reputation And Become A Premier Hub For Biotech?

 
• By 

Leading industry experts have spoken to In Vivo about how investment, a change in mindset and a fresh approach to policy may allow Italy to kick-start its biotech ecosystem.

Rising Leaders 2025: Abbas Kazimi’s Vision For Nimbus Therapeutics

 
• By 

Rising Leader Abbas Kazimi's leadership at Nimbus Therapeutics combines immigrant resilience, patient-first partnerships, contrarian strategic bets and a deeply personal mission driving breakthrough drug discovery innovation.

More from In Vivo

Rising leaders 2025: Aneesh Karatt-Vellatt On Maxion Therapeutics’ Antibody Revolution

 
• By 

Aneesh Karatt-Vellatt is leading the charge to redefine how ion channels and G protein-coupled receptors (GPCRs) are targeted with antibody therapies, one of the most notoriously challenging classes of drug targets.

Podcast: Scancell’s Cancer Vaccine Progress With NHS Partnership

 
• By 

In the latest podcast interview, Phil L'Huillier, CEO of Scancell, discussed the company's work in cancer vaccine development, and its selection as the first British biotech to be a part of the NHS Cancer Vaccine Launch Pad.

Geopolitical Volatility Not Dimming A Healthy Mid-Term Outlook For Life Sciences Deals

 
• By 

New report by global law firm Taylor Wessing and Bayes Business School forecasts a steadily increasing volume of major life sciences M&A in the coming five years, but highlights concerns over cybersecurity and unrealistic valuations. Taylor Wessing partner Andrew Edge spoke to In Vivo.