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| Quintiles CEO Tom Pike |
Months after LabCorp acquired its rival Covance, Quintiles ($Q) has signed a sweeping agreement with lab testing giant Quest Diagnostics ($DGX) to launch a joint venture focused on clinical trials.
The new business, 60% owned by Quintiles, will specialize in offering lab tests for companies developing new drugs, marrying the CRO's expertise in running clinical trials with Quest's global network of testing sites. The joint venture would have banked about $575 million in revenue last year, according to Quintiles, and the company believes joining forces in trial testing will help it grow into some white space in the market.
The new entity will draw on each company's expertise in biostatistics, including Quest's more than 20 billion processed tests and Quintiles' health information culled from more than 60 million patients. The idea is to apply that sprawling data set to the world of lab testing, turning to Quintiles' Rolodex of the world's biggest drugmakers to create a one-of-a-kind offering.
"It will join together the scale, expertise and end-to-end capabilities of the broader Quintiles and Quest Diagnostics organizations with a laser-like focus on providing world-class laboratory services that will help improve customers' probability of success," Quintiles CEO Tom Pike said in a statement. "Quintiles and Quest Diagnostics are already industry leaders with complementary offerings, capabilities and visions to improve patient outcomes and human health."
The pairing comes about a month after LabCorp ($LH), Quest's chief competitor, closed a roughly $6 billion acquisition of Covance, one of the world's largest CROs. The thinking behind that deal was much like that of the Quintiles-Quest JV: Through decades of running clinical trials and diagnostic tests, LabCorp and Covance have amassed longitudinal data on millions of patients, and their merger will help clients of all stripes make more informed decisions and pave the way for more cost-effective healthcare, the companies said.
Along those same lines, Quest and Quintiles expect their partnership to spark some further collaborations beyond lab tests, hoping to innovate in patient recruitment, companion diagnostic development and the implementation of data analytics.
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