LabCorp Launches New Division to Focus On NGS Testing

LabCorp, the nation’s second-largest laboratory, has announced a plan to enlarge its focus on the well-paying realm of molecular diagnostics. The company has launched a division called Enlighten Health Genomics that will capitalize on next-generation sequencing technology. “Enlighten Health Genomics is an important part of LabCorp’s strategy to capitalize on our unique assets, create new sources of revenue from our core capabilities and meaningfully differentiate us from competitors,” Dave King, LabCorp’s chief executive officer, said in a statement. “The launch of this business is another tangible step in the development of Enlighten Health, our initiative to create innovative tools and capabilities to enhance patient care.” No details were released about Enlighten Health’s management, but it will have a scientific advisory board, chaired by Duke University genetics professor David Goldstein. “We believe that patients with serious genetic conditions require a thorough interpretation of their genome. Our goal is to offer innovative and affordable diagnostic solutions to broad patient populations, making genomics a routine part of clinical decisions,” Goldstein said in a statement. An enhanced focus on molecular diagnostics makes business sense. Although coverage for many tests has been held up by a regulatory thicket on the Medicare side, many tests command prices of hundreds or thousands of dollars apiece, meaning that large chunks of revenue can be generated without dependence on a heavy volume. Meanwhile, LabCorp, like its counterpart Quest Diagnostics, has been struggling with flat revenue. In 2013, its revenue, $5.8 billion, was less than 2 percent higher than it had been in 2012 and essentially unchanged from 2011. “LabCorp has historically been increasing its footprint in molecular testing and genomic analysis through both internally expanding their menu and acquisitions, and clearly sees this as an important market for product expansion,” said Lâle White, chief executive officer of XIFIN, a San Diego-based firm that focuses on laboratory reimbursement issues. “Genomic analysis is essential to the test menu of any comprehensive lab, not just to preserve market share and grow revenue, but because it is the fastest-growing segment of lab services and represents the future of diagnostics, personalized medicine, disease management, and population health management.” White added that labs are also pressured to turn to esoteric assays “since there is a continual compression of reimbursement for older assays that are performed with greater automation and thus commoditized. As the result of the rapid advancements in technology, molecular and genetic testing are simply beginning to outpace the commoditization of . . . basic chemistry testing.” In addition to the Enlighten Health division, LabCorp also said that it would introduce a whole-genome sequencing service called ExomeReveal later this year. It would focus on “genome-wide interpretation for children with serious childhood genetic diseases as well as additional diagnostic information for patients of any age,” the company said in a press release. But that was pretty much the limit of what LabCorp was willing to say. The Burlington, N.C.-based lab has a reputation for being exceedingly tight-lipped, particularly for a publicly traded company of its size, and it did not deviate from that path in this matter. Its mandated regulatory filing with the Securities and Exchange Commission regarding Enlighten Health did not include anything beyond the spare press release it had issued. Company spokesperson Stephen Anderson said any queries would have to be cleared by LabCorp’s legal department. However, the company did not respond by time of publication to both e-mail and telephonic requests for comment. Takeaway: In a bid to grow revenues, LabCorp has launched a new division that will focus on the lucrative niche of molecular health and next-generation sequencing.