Though demand for COVID-19 testing this year has receded faster than many diagnostics companies expected, the quick return of patients to the clinic for routine care—such as screenings for heart disease or cancer—may be picking up the slack.
Quest Diagnostics reported “faster than expected recovery” in its base businesses during the second quarter, the lab testing giant’s CEO, Steve Rusckowski, said Thursday.
The company posted $2.55 billion in net revenues, an increase of 39.5% over the same three months in 2020, when the first wave of the coronavirus pandemic began in earnest in the U.S. and prompted patients to defer trips to the clinic unless absolutely necessary.
But by then, the first authorized diagnostic tests for COVID-19 were coming to the fore, with Quest and its competitor Labcorp launching testing initiatives in pharmacies and online by late April 2020, before expanding their screening programs nationwide later that May.
For Quest, the tempestuous second quarter of 2020 resulted in only a 6.4% revenue drop compared with the year before, amounting to about $1.83 billion as base testing volumes shifted over to coronavirus screenings.
Now, with both segments on more solid footing, the company is seeing stronger overall growth, posting a 44.4% increase for the first six months of this year for $5.27 billion.
“This was the first quarter since 2019 that organic base testing revenues grew in the quarter, driven by contributions from new hospital lab management contracts as well as people returning to the healthcare system,” Rusckowski said in a statement.
“We are well-positioned to continue our momentum and support the return to healthcare in the coming months, which is reflected in the outlook we have provided for the remainder of 2021," he added.
The company said it expects its base businesses to fully recover before the end of the year, and it's forecasting between $9.54 billion and $9.79 billion in revenues—slightly above the $9.44 billion Quest brought in for 2020, which in and of itself was a dramatic 22.1% leap over 2019’s $7.72 billion haul.
At an investor day earlier this year, Rusckowski said Quest is processing about 1.8 million tests per day, and COVID-19 diagnostics will be a permanent part of the company’s menu. This includes antibody blood tests for gauging immune responses as more people aim to return to daily life.
Meanwhile, Quest is aiming to work more closely with health plans to capture a larger share of in-network diagnostic tests or become the sole preferred provider. It’s also working to provide direct-to-consumer testing through digital platforms, including through collaborations with telehealth providers like 98point6.