Labcorp says clinical trials spin off Fortrea will focus on agility, innovation and “delivering life-changing solutions faster.”
The firm shared details of the Fortrea plan this week just ahead of its end of year call, which is scheduled for February 16.
According to Labcorp, Fortrea will have a staff of 19,000 and will provide Phase I through IV clinical trial management and commercialization solutions.
The new CRO will be led by ex-Quintiles chief Thomas Pike who joined Labcorp as president and chief executive officer of its Drug Development Clinical Development business unit on January 9.
Labcorp also confirmed it will spin out Fortea to shareholders through a transaction intended to be tax free for US federal income tax purposes.
The separation is due to be completed in Mid-2023.
After the move, Labcorp will retain its central labs and early development research businesses.
In a press statement, Labcorp chief marketing officer Amy Summy predicted “the debut of the Fortrea brand is a defining moment in our journey to create a transformative force in clinical drug and device development.”
She added that the Fortrea name “represents innovation and agility—improving the trial process and delivering life-changing solutions faster.”
Spin off
Labcorp announced it would separate off its clinical trial business last summer.
On a call at the time, CEO Adam Schechter said “spinning off the clinical development business will benefit customers and shareholders by creating two standalone businesses that are poised to accelerate growth and focus resources on distinct strategic priorities, customer needs and value creation.”
Clinical trials have always been the smaller part of Labcorp’s business. Over the four quarters ending June 30, 2022, the clinical trials unit brought in revenue of $3 billion.
In contrast, lab services, central lab and early development research lab businesses delivered total revenue of $12.7 billion, or $10.5 billion excluding COVID-19 Testing revenues, over the same period.
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