BURLINGTON, N.C. - Labcorp (NYSE: LH), a prominent provider of laboratory services, announced today the acquisition of select assets from Invitae (OTC:NVTAQ), a medical genetics company. This strategic move aims to bolster Labcorp's capabilities in genetic testing for oncology and certain rare diseases, enhancing its continuum of care from patient diagnosis to personalized treatment.
Mark Schroeder, Executive Vice President and President of Diagnostics Laboratories at Labcorp, stated, "By adding Invitae's cutting-edge science and industry-leading experience, we will extend our leadership in genetic testing solutions with the most comprehensive offerings in areas such as oncology and select rare diseases." He emphasized the shared mission of both companies to leverage genetic insights for better health outcomes and personalized medicine.
The acquisition is expected to expand Labcorp's specialty testing services, allowing for improved integration of genetic data in clinical trials and treatment plans. The deal will reportedly enhance the company's ability to provide a more complete set of insights for each patient's journey, from testing through to treatment.
Labcorp's footprint in the healthcare industry is significant, with over 67,000 employees and operations in approximately 100 countries. In 2023, the company supported 84% of the new drugs and therapeutic products approved by the FDA and conducted more than 600 million tests for patients worldwide.
The financial terms of the acquisition were not disclosed. However, Invitae was advised by Kirkland & Ellis LLP, Moelis (NYSE:MC) & Company LLC, and FTI Consulting (NYSE:FCN), Inc., while Citi served as Labcorp's financial advisor, with Hogan Lovells and Kilpatrick Townsend providing legal counsel.
This announcement contains forward-looking statements, which are subject to change and involve certain risks and uncertainties. Labcorp cautions readers not to place undue reliance on these statements, which are qualified by a cautionary note regarding the potential factors that could affect the company's ability to implement its business strategy and achieve the anticipated benefits of the acquisition.
The information provided is based on a press release statement and should be considered in the context of Labcorp's regulatory filings and risk factors outlined in its most recent Annual Report on Form 10-K and subsequent Forms 10-Q.
In other recent news, Laboratory Corporation of America (NYSE:LH), known as Labcorp, has reported impressive growth in its second quarter of 2024, with revenues reaching $3.2 billion and adjusted earnings per share (EPS) of $3.94. The company's free cash flow from continuing operations hit $433 million. A notable development during this quarter was Labcorp's acquisition of select assets from Invitae, a leading medical genetics company, which is expected to enhance Labcorp's growth in 2025.
BofA Securities has updated its outlook on Labcorp, raising the price target to $260 from the previous $240, while maintaining a Buy rating on the stock. This update follows discussions of margin dynamics within the company, particularly in light of the upcoming Invitae acquisition. Despite an anticipated margin decrease in the 2024 fiscal year due to the Invitae deal, the firm's outlook remains positive, expecting the assets to become net accretive to EPS in 2025.
Labcorp's diagnostics revenue grew by 8%, and biopharma laboratory services saw a 1% increase. The company also announced plans to refinance $2 billion of debt maturing over the next 12 months. Additionally, Labcorp's Board of Directors approved a $1 billion increase in its share repurchase authorization. These are among the recent developments for Labcorp.
InvestingPro Insights
In light of Labcorp's (NYSE: LH) recent strategic acquisition of assets from Invitae, investors are keen to understand the potential impact on the company's financial health and market position. Labcorp has demonstrated a commitment to expanding its genetic testing capabilities, which is reflected in the company's aggressive share buyback strategy, an InvestingPro Tip that highlights management's confidence in the company's value. Furthermore, the company is trading near its 52-week high, indicating a strong market sentiment.
From a financial perspective, Labcorp boasts a robust market capitalization of $19.82 billion, underlining its significant presence in the healthcare industry. The company's P/E ratio stands at 44.79, with an adjusted P/E ratio over the last twelve months as of Q2 2024 at 24.76, suggesting a potentially more appealing valuation for investors considering long-term growth prospects. Moreover, Labcorp has experienced a 5.22% revenue growth over the last twelve months as of Q2 2024, which may be further catalyzed by the latest acquisition.
Investors interested in further insights should note that there are additional InvestingPro Tips available on Labcorp, which can be accessed at https://www.investing.com/pro/LH. These tips provide a deeper dive into the company's performance and future outlook, equipping investors with valuable information to make informed decisions.
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