About Laboratory Corporation of America Holdings
This company pricks and prods for profit. Laboratory Corporation of America (LabCorp) is a top provider of clinical laboratory services, performing blood and other tests on more than 500,000 specimens daily for some 220,000 clients including managed care organizations, contract research organizations (CROs), hospitals, doctors, government agencies, drug companies, independent clinical labs, food and nutritional companies, and employers. Services range from routine urinalyses, HIV tests, and Pap smears to specialty testing for diagnostic genetics, disease monitoring, forensics, identity, clinical drug trials, and allergies. Through
LabCorp operates through two primary segments: LabCorp Diagnostics (LCD) and Covance Drug Development (CCD).
The LCD segment, which accounts for some 70% of LabCorp's annual revenues, offers more than 4,800 different tests. Many of the tests it performs each year are routine tests (including blood chemistry analyses, blood cell counts, and HIV tests) and nutritional chemistry and safety tests. It also offers specialty testing services for women's health, allergies, infectious disease, oncology, pain management, and other areas. LCD's genomic and esoteric testing operations include subsidiaries
CDD (30% of revenue) provides early drug development, associated laboratory testing, efficacy studies, and clinical trial services to biopharmaceutical clients.
Most of LabCorp's operations are conducted through its extensive network of facilities throughout the US (which accounts for more than 80% of total revenue). The company also has joint ventures in Canada, where it provides diagnostic testing services in several provinces, and it has established presences in China, Japan, Singapore, the United Arab Emirates, and the UK.
CDD operates a network of laboratories in the US, Switzerland, Belgium, Singapore, and China. Covance has pre-clinical laboratories in Wisconsin, Virginia, Michigan, and Indiana. It also operates labs in the UK (3), Germany, China, and Singapore.
Altogether, LabCorp operates in approximately 60 countries.
Sales and Marketing
LabCorp uses a direct sales force to promote its products and services to customers including doctors, hospitals, clinical labs, drugmakers, managed care companies, and government agencies. As payments from managed care entities (HMOs and PPOs) make up a significant part of LabCorp's net patient revenue, gaining and maintaining contracts with these clients is a main thrust of the company's strategy. For instance, LabCorp has a multi-year contract with
LabCorp's LCD segment receives about 15% of its net revenue from
All of LabCorp's efforts towards expanding its offerings and geographic presence have helped keep the company's finances healthy for several consecutive years, with its revenue growing each year since 2008. In 2016 the group reported an 11% increase in sales to some $9.6 billion. Both the LCD and CDD segments saw growth that year: LCD rose 6% due to organic volume growth and CDD rose 23% thanks to the addition of revenues from the recently acquired Covance.
After years of falling, net income rose 68% to $732.1 million in 2016. A decline in restructuring and other special charges, as well as a relatively low increase in selling, general, and administrative expenses helped boost the company's bottom line.
With the higher net income, cash flow from operations increased 20% to $1.2 billion that year.
Over the past seven years, LabCorp has invested some $6.3 billion in strategic acquisitions. The company is focused on expanding its advanced testing capabilities, especially in the areas of genetic and cancer testing. One particular area of interest for the company's product development efforts is the field of personalized medicine. It has introduced a number of "companion" diagnostic tests that determine whether a patient will react well or poorly to certain drugs. LabCorp is developing such tests internally, as well as through partnerships with life science entities such as
LabCorp strives to capitalize on its nationwide presence to strengthen managed care partnerships. In addition, LabCorp looks to keep its physician customers happy with education tools and integrated information management systems, including eLabCorp, a web-based tool that allows doctors to access testing services online, and its electronic health record (EHR) solution.
The company is also expanding consumer-focused tools, such as its LabCorp Beacon patient portal. In 2017 it partnered with Walgreens to develop and operate patient service centers within Walgreens stores. These centers will offer lab testing to provide patients with a broader range of health care services.
Meanwhile, LabCorp's specialty subsidiaries, such as kidney stone analysis firm Litholink, work to control costs for payers by focusing on providing patient-specific tools to manage chronic conditions.
Mergers and Acquisitions
In 2015 LabCorp bought New Jersey-based
In 2016 LabCorp acquired
In mid-2017 the company bought UK-based CRO Chiltern International for $1.2 billion. With that deal, it expanded its oncology operations as well as growing its international business.
The following year, LabCorp acquired scientific process services firm Sciformix for an undisclosed amount. Sciformix became part of Covance, strengthening that unit's pharmacovigilance capabilities. The newly acquired firm's operations are primarily located in Asia.
358 S MAIN ST
Burlington, NC 27215-5837
Phone: 1 (336) 229-1127
Employer Type: Publicly Owned
Stock Symbol: LH
Stock Exchange: , NYSE
SVP and CIO: Lance V. Berberian
EVP, CFO and Treasurer: Glenn A. Eisenberg
Chairman, President and CEO: David P. King
Employees (This Location): 2,000
Employees (All Locations): 61,000
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