LabCorp Partners With Medable to Expand Technology Ecosystem

Laboratory Corporation of America Holdings LH or LabCorp recently announced a tie-up with Medable to expand its technology ecosystem. The expansion, undertaken by LabCorp’s drug development business Covance, is aimed at accelerating the adoption of decentralized clinical trials, which are often referred to as hybrid and virtual clinical trials.

Per LabCorp’s management, the alliance will enable it to fully utilize its capacities of LabCorp Diagnostics business, Covance as well as its technology ecosystem to improve patient access and experience. This, in turn, will enable the acceleration of timelines for clinical development along with increasing participation in trials.

With the recent alliance, LabCorp aims to strengthen its Covance Drug Development (“CDD”) business globally.

More on LabCorp’s Clinical Trials

Covance had introduced its latest solution to help transform the conduct of decentralized clinical trials in late 2019. Further, patient-centric ecosystem of conveniently located resources (like LabCorp’s U.S.-based Patient Service Centers and LabCorp at Walgreens locations) are provided by LabCorp’s decentralized clinical trials which are connected by a technology platform.

Rationale Behind the Alliance

Medable’s modular software platform will enable Covance to run its patient and site interface, thus providing immediate access to applications that will allow patients to participate in decentralized clinical trials. Further, the platform will enable data and system interoperability, facilitate remote data collection and engagement between patients, sites, and clinical investigators.

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, at 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 increasing importance of accessible and convenient clinical trials for patients, the collaboration is well-timed.

Recent Developments in CDD

Of late, LabCorp’s CDD segment has been making few developments.

In March, LabCorp announced that it will manage a virtual clinical trial for Adaptive Biotechnologies. The enrolment to generate immune response data was to be opened by Adaptive in April to collect de-identified blood samples, using a LabCorp-enabled mobile phlebotomy service, from individuals diagnosed with or recovered from COVID-19.

Further, in March, LabCorp announced the availability of LabCorp 2019 Novel Coronavirus (COVID-19), NAA test, which effectively detects the presence of the underlying virus causing COVID-19. Notably, the test is to be used for patients that meet the current evaluation guidance of coronavirus infection.

Price Performance

Shares of the company have gained 7.5% in the past year against the industry’s 8.1% fall and the S&P 500’s 8.4% rise.

Zacks Rank & Stocks to Consider

Currently, LabCorp carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Aphria Inc. APHA, Surmodics, Inc. SRDX and Owens Minor, Inc. OMI.

Aphria’s long-term earnings growth rate is projected at 24.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Surmodics’ long-term earnings growth rate is estimated at 10%. The company presently sports a Zacks Rank #1.

Owens Minor’s long-term earnings growth rate is estimated at 8.3%. It currently carries a Zacks Rank #2.

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