CROs competing for big-name deals may face a more crowded market now that on-the-ropes diagnostics companies are getting into the clinical research game, something LabCorp ($LH) demonstrated this week as it inked a preferred-provider contract with Bristol-Myers Squibb ($BMY).
|LabCorp CMO Mark Brecher|
Under the 5-year deal, LabCorp's clinical trials business will conduct full-service global central laboratory services and biomarker testing for BMS' early and late-stage programs, stemming from previous partnerships between the companies.
"We are excited to expand our relationship with Bristol-Myers Squibb to provide a more flexible and integrated approach to laboratory testing services in support of their innovative clinical development pipeline," LabCorp CMO Mark Brecher.
The math is fairly simple: Markets for diagnostic tests are weathering declining demand and daunting cuts to Medicare reimbursement, whereas the CRO business has long been on the rise, giving the likes of LabCorp plenty incentive to seek out contract research deals to pad their revenues.
Quest Diagnostics ($DGX), the industry's other heavyweight, is working the same angle, last month licensing PrimeraDx's assay-development platform to use in its clinical trial business, ideally recruiting biotechs for research and then leveraging those relationships to market companion diagnostics once drugs are approved.
The trend could spell trouble for BMS' other contract providers, Outsourcing-Pharma notes, including Icon ($ICLR).
- read the announcement
- here's FierceMedicalDevices' take
- check out Outsourcing-Pharma's story