SECAUCUS, N.J. - Quest Diagnostics (NYSE:DGX), a provider of diagnostic information services, has announced the acquisition of select assets from PathAI Diagnostics, a business unit of PathAI known for its AI and digital pathology services.
The transaction, set to close in the second quarter of 2024, includes PathAI Diagnostics' digitized laboratory in Memphis, Tennessee, which will become Quest's hub for AI and digital R&D, enhancing its AmeriPath and Dermpath Diagnostics services.
In addition to the acquisition, Quest will license PathAI's AISight digital pathology image management system for use in its labs across the United States. The collaboration also opens the door for Quest to support PathAI's algorithm product development and become a preferred provider for PathAI's biopharmaceutical clinical laboratory services.
Kristie Dolan, Senior Vice President of Oncology at Quest Diagnostics, emphasized the importance of AI and digital technologies in improving cancer care, noting Quest's ability to scale and deliver these innovations.
The partnership is expected to enhance Quest's pathology offerings, contributing to the entire oncology care continuum, according to Mark Gardner, Senior Vice President of Molecular Genomics and Oncology at Quest.
Andy Beck, MD PhD, co-Founder and CEO of PathAI, highlighted the strategic relationship as a significant milestone for the anatomic pathology industry, indicating a major turning point for digital pathology adoption in the U.S.
Digital pathology allows for the electronic sharing of digital images of tissue biopsies, which can expedite testing and results reporting, and is particularly beneficial for areas with a shortage of pathologists. AI further complements digital pathology by aiding pathologists in identifying disease patterns for potentially more accurate diagnoses.
The adoption of digital and AI pathology aligns with Quest's history of strategic AI and automation deployment across various laboratory and business functions. The transaction is expected to enable Quest to offer digital slide preparation and diagnostic services more flexibly, as well as extend its anatomic pathology services into more profitable areas such as dermatopathology.
This collaboration is based on a press release statement and reflects the ongoing efforts to enhance pathology services with AI and digital technologies. Quest Diagnostics and PathAI aim to leverage their respective expertise to improve the quality and efficiency of disease diagnosis, particularly in oncology.
InvestingPro Insights
Quest Diagnostics (NYSE:DGX) has recently made a strategic move to acquire assets from PathAI Diagnostics, positioning itself as a leader in AI and digital pathology. This decision is supported by a series of financial and operational strengths that InvestingPro data highlights.
InvestingPro Data shows a robust Market Cap of $15.35 billion, indicating the company's significant presence in the diagnostics industry. The P/E Ratio stands at 18.44, reflecting investor confidence in Quest's earnings potential. The company has demonstrated a Gross Profit Margin of 33.08% over the last twelve months as of Q1 2024, underlining its ability to maintain profitability in its operations.
InvestingPro Tips reveal that management's confidence in Quest's future is underscored by aggressive share buybacks. Moreover, Quest has shown a strong commitment to shareholder returns, having raised its dividend for 12 consecutive years and maintained dividend payments for 21 consecutive years. These actions suggest a stable financial footing and a shareholder-friendly approach, which may be attractive to long-term investors.
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