Covance ($CVD) posted a roughly 2% increase in sales last quarter, weeks before merging with LabCorp ($LH) in a $6 billion deal that management says will help the CRO accelerate its growth.
The company's revenue came in at $634.4 million on the quarter, beating the prior year's $623.1 million. Covance's early development segment grew 1.4% to $231.4 million, while its late-stage business grew 2.1% to $403 million. On the year, the CRO banked $2.5 billion in sales, a nearly 5% rise over 2013.
The fourth-quarter results will likely be Covance's last as an independent entity, the company said, as management expects the LabCorp deal to close shortly after a stockholder meeting scheduled for Feb. 15. After that, Covance will become a subsidiary of the testing giant, with CEO Joe Herring staying on board to lead.
Covance is already getting "significant positive client feedback regarding our planned merger with LabCorp," Herring said in a statement. "For example, in a notable January clinical trial win, a key driver in the client's decision was the potential data synergies with LabCorp, which are expected to accelerate clinical trial patient recruitment."
LabCorp's vision is that by marrying expansive capabilities in diagnostics with Covance's share of the drug development market, it will create an industry-leading entity that can support a candidate therapy from its preclinical inception to well past its market debut. Through decades of running safety and efficacy trials and diagnostic tests, the two companies have amassed longitudinal data on millions of patients, and the pair says its merger will help clients of all stripes make more informed decisions and pave the way for more cost-effective healthcare.
At least one investor has taken serious issue with the buyout, however, filing suit last year and claiming that chief broker Goldman Sachs had a conflict of interest in advising Covance through the process.
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