LabCorp Aims To Prioritize Inpatient Coronavirus Testing

Laboratory Corporation of America Holdings (NYSE:LH) , or LabCorp, announced plans to explore all possible options to prioritize coronavirus testing for the hospital inpatient population. Notably, such a population includes patients, who are currently being treated for suspected coronavirus infection.

Currently, the company is on track to finalize options throughout the week and will subsequently work with hospitals for the implementation of the same.

With the recent strides, LabCorp aims to strengthen its LabCorp Diagnostics (LCD) segment globally.

Significance of the Announcement

Per the company, it has been continuing to add testing capacity per the guidelines of the Centers for Disease Control and Prevention (“CDC”) and other health authorities to meet the growing demands. LabCorp is also on track to advise healthcare providers to follow the guidance to prioritize testing for patients, who are currently hospitalized and undergoing treatments for suspected coronavirus infection.

Notably, the company is planning to provide technical support to hospitals that it serves to perform on-site serological and molecular tests for coronavirus, including Cepheid’s recently announced Xpert Xpress SARS-CoV-2 molecular test, once available.

LabCorp is continuously coordinating with manufacturers that are developing additional test options. The company will also continue to work closely with healthcare providers to teach them how to use the tests once those become available.

Industry Prospects

Per a report by MarketsAndMarkets, the global in-vitro diagnostics market will grow from $87.93 billion in 2018 to $68.12 billion by 2023, witnessing a CAGR of 5.2% during the period. Factors like the growing incidences of chronic and infectious diseases, increasing adoption of fully automated instruments, automation in laboratories, and increasing adoption of point-of-care testing are likely to drive the market.

The global outbreak of coronavirus is expected to extend the scope of the market in the months to come.

Recent Developments in LCD Segment

Of late, the LCD segment has been making a lot of efforts to contain the coronavirus outbreak.

In March, the company announced that it reached the capability of performing more than 20,000 coronavirus tests per day, representing a significant increase in its capacity since the release. It is now performing tests in three of its largest labs in the country.

Apart from making efforts to contain the pandemic, LabCorp is serving the vulnerable patients, who do not have the coronavirus. In March, it announced that it is dedicating the first hour of service each day at its nearly 2,000 patient service centers across the United States for the non-coronavirus testing needs of other patients. The company intends to make it easier for patients, who are at higher risk and need critical lab testing services.

Price Performance

Shares of the company have moved down 26.8% in the past year compared with the industry’s 31.8% decline.

Zacks Rank & Key Picks

Currently, LabCorp carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are ResMed Inc. (NYSE:RMD) , Medtronic plc (NYSE:MDT) and Hill-Rom Holdings, Inc. (NYSE:HRC) .

ResMed has a projected long-term earnings growth rate of 14.4%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Medtronic’s long-term earnings growth rate is estimated at 7.1%. The company presently has a Zacks Rank #2.

Hill-Rom’s long-term earnings growth rate is estimated at 11.1%. It currently carries a Zacks Rank #2.

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