LabCorp (LH) Launches Test To Detect Presence Of Coronavirus

Laboratory Corporation of America Holdings (NYSE:LH) , or LabCorp announced the availability of LabCorp 2019 Novel Coronavirus (COVID-19), NAA test, effective Mar 5. The test effectively detects the presence of the underlying virus causing the COVID-19 and is to be used for patients that meet the current evaluation guidance of infection with the same.

However, the test can only be ordered by physicians and other authorized healthcare providers anywhere in the United States.

Apart from the test for COVID-19, the company is also eligible to perform the Centers for Disease Control and Prevention (“CDC”) 2019-nCoV Real-Time RT-PCR Diagnostic Panel, if needed, to meet higher testing demand. Although the CDC test has not been approved by the FDA yet, LabCorp has been authorized under an Emergency Use Authorization (EUA) for use by authorized laboratories.

With the recent test launch, the company aims to strengthen its Covance Drug Development (CDD) business globally.

A Peek Into the Tests

The internally developed LabCorp 2019 Novel Coronavirus (COVID-19), NAA test has been made available under the guidance issued by the FDA and has been validated for use with respiratory samples. The test is a qualitative evaluation, using the PCR technology. Notably, LabCorp is one of the key contributors to the commercialization of the technology.

However, the FDA’s independent review of the validation is pending. LabCorp is also pursuing an EUA for the NAA test.

The CDC test is for the presumptive detection of 2019-nCoV RNA in upper and lower respiratory specimens, and other authorized specimens collected from individuals, meeting the CDC criteria for the COVID-19 testing.

Significance of the NAA Test Launch

Per the company, the availability of a high-quality, reliable and scalable laboratory test is crucial, given the current scenario, where COVID-19 continues to spread in the United States. It is of utmost importance to efficiently identify infected people and provide appropriate care to better manage the use of healthcare resources, thus helping contain the spread of the virus.

Apart from the LabCorp 2019 Novel Coronavirus (COVID-19), NAA test, the company has been authorized to carry out the CDC test only for the detection of nucleic acid from 2019-nCoV and not for any other viruses or pathogens. The NAA test is only authorized for the duration of the declaration that conditions exist justifying the authorization of emergency use of in vitro diagnostic tests for detection and/or diagnosis of 2019-nCoV.

Industry Prospects

LabCorp has two reporting segments, including CDD, which is a global contract research organization (CRO) and a comprehensive drug development service provider.

Per a report by Grand View Research, the global healthcare CRO market was valued at $37.1 billion in 2019 and is expected to reach $62.1 billion by 2027, witnessing a CAGR of 6.6%. Factors like rising investments in R&D programs, preference for outsourcing activities due to time and cost constraints, and patent expiration in the healthcare sector are expected to drive the market.

Given the market potential and the rising incidences of COVID-19, the launch of the test has been timed well.

Comparison With Peers

Currently, various companies are working toward the containment of the COVID-19 virus, and are launching and shipping test kits to various parts of the world.

QIAGEN N.V. (NYSE:QGEN) announced the shipping of its latest QIAstat-Dx Respiratory Panel 2019-nCoV test kit to four hospitals in China for evaluation purposes in February.

Quest Diagnostics (NYSE:DGX) announced on Mar 5 that it will launch a COVID-19 test service. It also stated that it will be in the position to receive specimens for testing and begin to provide testing from Mar 9.

Moderna, Inc. (NASDAQ:MRNA) , in February, announced the release of the first batch of mRNA-1273 for human use, which is its vaccine against the novel coronavirus.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Quest Diagnostics Incorporated (DGX): Free Stock Analysis Report

Moderna, Inc. (MRNA): Free Stock Analysis Report

QIAGEN N.V. (QGEN): Free Stock Analysis Report

Laboratory Corporation of America Holdings (LH): Free Stock Analysis Report

Original post

Zacks Investment Research