Quest Diagnostics Launches New BRCA 1/2 Test

Andrew D. Smith
Published: Monday, Dec 02, 2013
Quest DiagnosticsQuest Diagnostics, a business founded 46 years ago in a medical resident’s two-room apartment, has parlayed the exponential subsequent growth in medical testing into an operation worth $8.5 billion.

The company, which is based in Madison, New Jersey, now employs 41,000 people to provide 3000 different tests at 2100 patient service centers across the United States and around the world. Quest regularly serves about half the nation’s doctors and hospitals, performing at least one test on about 30% of the American population each year. It expects to earn at least $583 million this year.

Quest’s tests range from basic diagnostics—total cholesterol, Pap testing, white blood cell count—to more complex examinations. For example, in October, Quest announced the availability of BRCAvantage, a cutting-edge test that identifies mutations in BRCA1 and BRCA2 genes that are associated with increased risk of inherited breast and ovarian cancers. The test is cheaper than the Myriad Genetics version, and Quest hopes to challenge Myriad for market share.

BRCAvantage comprises four individual tests that are administered on the basis of a patient’s risk level. The test screens for known harmful BRCA 1/2 mutations using nextgeneration sequencing and multiplex ligation dependent probe amplification (MLPA). Identified gene variants are crossreferenced with mutational databases for clinical analysis. To facilitate the implementation of BRCAvantage, Quest announced that it will offer clinicians and patients access to third-party genetic counselors.

A number of the tests that Quest offers were developed, at least in part, inside company labs. Quest sells its many tests under a variety of banners that reflect acquisitions over the years and the creation of specialized subsidiaries: Quest Diagnostics Nichols Institute, AmeriPath, Athena Diagnostics, Berkeley HeartLab, Dermpath Diagnostics, and Focus Diagnostics.

Among the many niche-testing markets served by Quest, the largest may be the market for analysis on blood and other samples collected as part of clinical research projects. Another major testing niche is employee screening. Quest and its ExamOne subsidiary offer not only a comprehensive slate of drug tests but also a wide line of products designed to catch heart problems and diabetes early.

For customers who prefer to do their own testing, Quest sells a wide variety of kits and equipment—under its own name and the Celera, Focus Diagnostics, and InSure brands—designed to detect everything from HIV to warning signs that a patient will reject a transplant organ.

Finally, alone among all the testing businesses, there is Care360, a medical IT company that helps about 200,000 American doctors analyze, share, and store electronic medical records.

All told, these business lines generate more than $7 billion in annual revenue, with net margins of around 20%.

Analysts’ reviews of the company are uneven. Skeptics note that the economic downturn has reduced what people will pay for medical tests and that deficit-fighting efforts may lead the government to cut reimbursements. Bullish analysts note that the Affordable Care Act is expected to add 30 million Americans to the ranks of those with medical insurance and that the number of things we know how to test for keeps increasing rapidly.

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