LabCorp says COVID, trials, and diagnostics revenues key last year
COVID-19 testing, clinical trials, and diagnostics were key growth drivers in 2021 according to LabCorp, which predicted that the trend will continue in guidance issued this week.
Total revenue for the quarter was $4.1 billion, down from $4.5 billion in the equivalent period last year. LabCorp said the decline was driven by a decrease – 15.3% – in COVID-19 PCR and antibody testing and divestitures.
For the full year revenue was $16.1 billion, up from $14 billion. LabCorp attribute the gains to growth of its core business, which included an 8.2% increase in drug development service revenue to $5.84 billion and an 8.8% hike to $10.363 billion in revenue from its diagnostics unit.
CEO Adam Schechter acknowledged the key role LabCorp’s drug development unit – which includes its clinical trial services business – played in the year during a call with analysts.
“Drug development ended the year with a solid trailing 12-month net book-to-bill of 1.25 and a strong backlog of $15 billion, representing a $579 million increase in the third quarter. Also decentralized clinical trial awards were up 62% over the prior year.”
Cancer trials
And LabCorp’s clinical trials business is set for continued growth in 2022 according to Schechter, who cited the firms recently established oncology business unit and enterprise oncology offering as examples.
“In oncology, we made significant strides in fortifying our position as a leader by expanding diagnostic offerings and clinical trial opportunities.”
He also said the acquisition of Personal Genome Diagnostics (PGDx) – plans for which were announced in December – as an opportunity for growth.
“The company has a strong portfolio of innovative liquid biopsy and tissue-based products which complement our existing capabilities. Through PGDx' kitted solutions, we can provide oncologists access to tumor profiling at the hospitals where the patients are treated or centralized to one of our laboratories.”
Patient access
Schechter also predicted LabCorp’s agreement with Ascension – which saw it buy assets of the latter’s outreach labs for $400m and take over management of hospital labs in 10 US states - would further expand the firm’s clinical trial business.
He said “It expands our clinical services in several states across the country, and it builds on our strong track record of building similar relationships.
“The deal with Ascension also underscores our ability to help health systems manage industrywide shifts. As part of the collaboration, we will explore clinical trial and oncology opportunities that enhance patient access.”
Decentralized trials
LabCorp also expects decentralized trials to be a growth driver in 2022. Schechter told analysts the firms’ investments in GlobalCare and SnapIOT had positioned the firm to cater for growing demand for site-free studies.
“A lot of the growth is coming from the later stage clinical trial business. We see great opportunities there.
He added, “We've invested in there with things like GlobalCare as well as SnapIOT to give us good capabilities in terms of decentralized clinical trials which are becoming more and more important.”
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