Quest Diagnostics (DGX) has received emergency use authorization (EUA) from the U.S. Food and Drug Administration (FDA) to use specimen pooling with its molecular diagnostic test for COVID-19.
Quest is the first lab provider to receive FDA authorization for the technique for COVID-19 testing in the United States.
In pooling, specimens must still be collected into individual vials, but then are combined into small batches or pools by the laboratory. A negative result for a batch means that all patients in that pool are considered negative. If a positive result occurs for the batch, each specimen is retested individually.
According to Quest, the technique is an efficient way to evaluate patients in regions or populations with low rates of disease. Pooling is used routinely in blood banking to screen donated blood for a variety of viruses, among other applications.
With the new pooling EUA, the Quest Diagnostics SARS-CoV-2 RNA test may be used with pooled upper respiratory specimens (nasopharyngeal, mid-turbinate, anterior nares or oropharyngeal swabs).
In clinical data presented by Quest to the FDA, none of 3,091 total specimens from a population with a prevalence rate of 1-10 percent, if pooled, would have been incorrectly determined to be negative (95%CI 0.0-0.1%), the company said.
Quest now plans to deploy the technique at its laboratories in Chantilly, VA and Marlborough, Mass., by the end of next week with additional laboratories to follow.
“As COVID-19 continues to spread around the country, access to timely, quality laboratory testing is critical to patients and an effective public health response,” said Steve Rusckowski, CEO of Quest Diagnostics. “Pooled specimen testing is a proven technique that will help us to optimize testing capacity at this critical time for our country.”
On July 13, Quest stated that soaring demand for COVID-19 molecular diagnostics is slowing turnaround times to report results.
“We now have capacity to perform up to 125,000 molecular diagnostic tests a day, roughly double our capacity 8 weeks ago. By the end of July, we expect to have the capacity to perform 150,000 molecular diagnostic tests a day” the company said.
“Despite that dramatic increase, demand for testing is increasing even faster. As a result, our average turnaround time for reporting test results is slightly more than 1 day for our priority 1 patients. However, our average turnaround time for all other populations is 7 or more days” Quest added.
Shares in DGX are up 17% year-to-date, and analysts have a cautiously optimistic Moderate Buy consensus on the stock. However the average analyst price target of $125 is flat with the current share price.
“While enthusiasm for DGX has clearly been building around the ramping utilization of COVID testing as well as a recovery of core volumes, we continue to favor LabCorp (LH), where we note its core clinical lab business will also benefit from the aforementioned drivers, while its diversification strategy and LT CRO growth drivers remain underappreciated” commented Credit Suisse analyst Erin Wright on July 14.
She has a hold rating on the stock, but boosted her price target from $126 to $128 (2% upside potential) after Quest positively pre-announced second quarter earning results. (See DGX stock analysis on TipRanks)
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