FLICKR, SOLCOOKIEThe diagnostic company LabCorp is entering the clinical trial business with the purchase of Covance, a contract research organization (CRO) based in Princeton, New Jersey, for $6 billion dollars. The Wall Street Journal, citing executives at the firms, reported that “the deal allows LabCorp to diversify its customer base away from insurers and to squeeze more revenue from the extensive patient data it has accumulated.”
“We have an enormous database of patients, which includes their demographic information, their diagnosis information,” the WSJ reported LabCorp Chairman and Chief Executive Officer David King having said in a conference call. “It gives us a tremendous tool to recruit and enroll clinical trials more quickly.” The company insisted that it would be legal to use the database in this way.
A Reuters news report stated that reimbursements for diagnostic services have been cut and orders have slowed. “For LabCorp, the last few years have been challenging with regards to volume and price perspective,” Evercore ISI analyst Michael Cherny told Reuters. “And so to diversify away to a more pharma-related customer base will help mitigate some of those risks in the long term.”
LabCorp’s stock ...
