March 31, 2015
By Alex Keown, BioSpace.com Breaking News Staff
RESEARCH TRIANGLE PARK, N.C. –Quintiles Transnational Holdings Inc., a contract research company, and Quest Diagnostics Incorporated , a medical test maker, will combine forces to form the world’s second-largest global clinical trials laboratory services business, the companies announced this morning.
The companies will combine clinical trials laboratory operations in an effort to “succeed in the increasingly complex biopharmaceutical industry,” the companies said in a joint press release. The companies said customers will benefit from a business model that is “singularly focused on delivering top-quality laboratory services informed by deep medical and clinical knowledge.”
The venture will enable end-to-end companion diagnostic development with regulatory, reimbursement and commercial strategies, to help biopharmaceutical customers’ precision medicine efforts. The joint work will be assisted due to Quest Diagnostics’ elaborate supply chain that serves approximately half of the physicians and hospitals in the U.S. and includes 2,200 service centers, 3,000 couriers and connectivity solutions used by 250,000 healthcare providers.
Market reaction to the news of the joint venture has been blasé this morning, with Quintiles, Inc. having no change since its Monday closing at $68 per share. Quest (DGX) on the other hand, is slightly down at $77.49 per share.
Durham, N.C.–based Quintiles, which helps develop and commercialize many pharmaceuticals, will own 60 percent of the joint venture, with Madison, N.J.–based Quest owning the rest, the companies said on Tuesday. Financial terms of the deal were not revealed, however the companies speculated joint venture last year would have generated approximately $575 million in revenues. The joint venture will be led by a management team appointed from both Quintiles, which posted earnings of $4.2 billion in 2014, and Quest Diagnostics. The deal is expected to be finalized by the end of the third quarter of 2015, the companies said.
The new entity also will leverage a number of additional resources from the broader Quintiles and Quest Diagnostics organizations. Quest Diagnostics draws from 20 billion test results, and Quintiles’ assets include electronic health records representing more than 60 million patient lives and a network of 250,000 clinical investigators.
Tom Pike, chief executive officer of Quintiles, said the venture will merge 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.”
In addition to laboratory support for clinical trials, the companies expect other benefits from the joint operation, including new ways to enhance patient recruiting and retention for clinical trials; speed the validation, development and commercialization of companion diagnostics; enhance support of real-world late phase studies; and develop new population-health analytics and tools.
Earlier this month Quintiles forged a partnership with startup Tute Genomics, a partner of Google Inc., for access to its database of 8.5 billion annotations of genetic variants.
