LabCorp Reports New Use Of Agilent's Cancer Diagnostic Test

Laboratory Corporation of America Holdings (NYSE:LH) or LabCorp recently announced that Agilent’s Dako pathology division’s development — the PD-L1 IHC 28-8 pharmDx assay — is now available in the United States for new expanded use. Per LabCorp, this test has got the U.S. approval to be used as a complementary diagnostic with Bristol-Myers Squibb Company’s (NYSE:BMY) OPDIVO (nivolumab) for two new indications — metastatic urothelial carcinoma or bladder cancer and squamous cell carcinoma of the head and neck — respectively.

It is encouraging to note that tests of the clinical studies that supported approval of the new indications for the assay were performed at the company’s Center for Molecular Biology and Pathology laboratory. Per LabCorp, OPDIVO is already approved for the two aforementioned indications without use of the test. However, the PD-L1 IHC 28-8 pharmDx test provides vital information about those patients, who are most likely to respond positively to OPDIVO.

Earlier, the PD-L1 IHC 28-8 pharmDx assay was approved for use as a complementary diagnostic with OPDIVO to treat certain patients with non-squamous non-small cell lung cancer (NSCLC) and melanoma. At that time too, LabCorp’s central clinical trials laboratory was the only provider of testing to support the clinical trial for the 2015 approval of the non-squamous NSCLC treatment indication. Per the company, this successfully demonstrates how the combined capabilities of LabCorp’s clinical laboratory infrastructure and Covance’s central clinical trials laboratory are paving new ways for clinical trials.

LabCorp’s consistent efforts to expand in the growing field of complementary and companion diagnostics is gradually fetching unmatched results. Notably, the company has adopted this strategy to work closely with health systems that have expressed interest in becoming preferred partners in LabCorp and Covance’s clinical trials. In this regard, the company has signed agreements with several major health systems recently.

Earlier this year, the company entered into an agreement with Thermo Fisher Scientific (NYSE:TMO) to join its NGS Companion Diagnostics Center of Excellence program. It has also inked an exclusive deal to distribute OmniSeq’s immune profile and tumor profiling tests. Within Diagnostics, LabCorp has made a strong progress with consumer and patient-facing initiatives. The company’s LabCorp-Walgreens collaboration is off to a terrific start with respect to patient volumes, Net Promoter Scores and patient feedback riding on years’ experience at these sites.

Within drug development business, the company is focused on driving future profitable growth through expanded solutions and enhanced operational capabilities. The acquisition of Chiltern closed on Sep 1, is significantly strengthening LabCorp’s strategic position in clinical development as well as accelerating revenue and profit growth within Covance.

LabCorp was trading above the broader industry over the last six months. The stock has gained 8.1% compared with the industry’s 4.7% gain.

Zacks Rank & Key Picks

LabCorp carries a Zacks Rank #3 (Hold). Two better-ranked medical stocks are PetMed Express, Inc. (NASDAQ:PETS) and Align Technology, Inc. (NASDAQ:ALGN) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed has a long-term expected earnings growth rate of 10%. The stock has soared roughly 77.9% over a year.

Align Technology has a long-term expected earnings growth rate of 28.9%. The stock has skyrocketed 156.3% in a year’s time.

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