Quintiles and Quest Diagnostics said today they will combine their clinical trials laboratory operations into a joint venture that will be the world’s second-largest central lab services company.
The value of the deal was not disclosed, though the companies did say their lab operations would have generated about $575 million in revenues last year.
Quintiles, the world’s largest provider of biopharmaceutical development and commercial outsourcing services, will own 60% of the new joint venture. Quest Diagnostics, the world's leading provider of diagnostic information services, will own the remaining 40%.
The as-yet-unnamed joint venture’s competitors are headed by leading lab services provider Laboratory Corporation of America® Holdings (LabCorp)—which recently expanded by acquiring Covance for $6.2 billion, in a deal completed last month.
Quintiles and Quest Diagnostics said their joint venture will be better able to serve customers by combining their scientific, medical, and data expertise—including their combined workforce of approximately 3,500 M.D.s, Ph.D.s, and biostatisticians—as well as the companies’ capabilities in genomics and precision medicine.
Those capabilities, the companies said, includes advanced testing and services designed to enable companion diagnostic development with regulatory, reimbursement and commercial strategies—all to assist biopharma customers with their precision medicine efforts.
The joint venture will bring under one umbrella Quintiles’ Infosario® technology platform and Quest Diagnostics’ data analytics capabilities. Quest Diagnostics draws from 20 billion test results, and maintains a supply chain serving 250,000 healthcare providers—about half the nation’s physicians and hospitals—through 2,200 service centers and 3,000 couriers. Quintiles’ assets include electronic health records representing more than 60 million patient lives and a network of 250,000 clinical investigators.
Quintiles and Quest Diagnostics also said they see opportunities for collaborations in other areas. These include enhancing patient recruiting and retention for clinical trials; speeding the validation, development, and commercialization of companion diagnostics; enhancing support of real-world late phase studies; and developing new population-health analytics and tools.
“This joint venture builds upon the best of Quintiles’ and Quest Diagnostics’ strengths, creating top-quality services for customers,” Quintiles CEO Tom Pike said in a statement.
Added Quest Diagnostics CEO Steve Rusckowski: “The joint venture model will enable us to generate growth and value from our clinical trials assets while simultaneously strengthening our focus on our core diagnostic information services business.”
Quintiles is headquartered in Durham, NC, and Quest Diagnostics in Madison, NJ. It has not been decided where the joint venture will be based, Phil Bridges, Quintiles senior director of corporate communications told WRAL TechWire, adding: “We expect to be able to provide this information around the time of the transaction close.” He added that decisions have also yet to be made on what facilities will be retained, and whether any job cuts will occur as a result.
The deal is anticipated to close in the third quarter of 2015, subject to standard and customary closing conditions.
Quest Diagnostics finished last year with $592 million in net income on $7.4 billion in revenues from continuing operations, compared with $356.5 million in net income on about $5.5 billion in revenues for Quintiles.