Sep 15, 2010 | Laboratory News, Laboratory Pathology
Price of 2.5 times revenue makes this a high price for a clinical laboratory
Monday, Laboratory Corporation of America (NYSE: LH) agreed to purchase Genzyme Genetics Corp’s. (NASDAQ: GENZ) fetal genetics and oncology testing division for $925 million in cash. Genzyme has shopped its neo-natal genetic testing business since last year.
LabCorp is paying a purchase price that is 2.5 times Genzyme’s $371 million in annual revenue. This is one of the highest prices paid for a clinical pathology laboratory company since Quest Diagnostics Incorporated (NYSE: DGX), paid about 2.5 times revenue for Ameripath, Inc. in March 2007. In that transaction, Quest Diagnostics paid about $2 billion for Ameripath, which had annual revenues approaching $800 million at the time of sale.
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Apr 7, 2009 | Laboratory News, Laboratory Pathology
Here in Chicago at the huge HIMSS meeting, people are paying attention to lab testing
Dateline: Chicago, IL-Most physicians, nurses, and other healthcare workers are quite familiar with the “Five Rights of Medication.” If one innovative healthcare company is successful, soon all these folks will be equally familiar with the newly-articulated “Five Rights of Laboratory Testing,” which emphasizes that every patient is entitled to receive the proper benefits from laboratory testing.
Sunquest Information Systems, Inc has launched a campaign to promote the Five Rights of Laboratory Testing. The goal is to increase awareness among all healthcare workers of the need to exercise vigilance when ordering laboratory tests and using laboratory test data in patient care decisions.
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Mar 27, 2009 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology
Allegations of false claims implicate discounted client billing practices
It’s the first major whistleblower lawsuit in the laboratory industry in recent years. On March 20, California State Attorney General Edmund G. Brown Jr. announced that his state had joined a qui tam lawsuit that alleges a number of laboratories have filed false claims on a “massive” scale, thus defrauding the California Medi-Cal program of “hundreds of millions of dollars.”
The unusual twist in this whistleblower lawsuit is that it was originally filed by the owner of a California-based laboratory. In 2005, Chris Reidel, owner and CEO of Hunter Laboratories, in Campbell, California, initiated the legal action, alleging what AG Brown characterized as “massive Medi-Cal fraud and kickbacks. Medi-Cal is the state’s Medicaid health program for the poor.
The original lawsuit filed by Reidel seeks to recover at least $100 million. However, one of his attorneys, Joe Cotchett, of the San Francisco-based law firm of Cotchett, Pitre & McCarthy, believes the state’s actual losses could be more than $1 billion. The lawsuit is pending in San Mateo Superior Court and was filed under seal in 2005.
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Mar 26, 2009 | Digital Pathology, Laboratory News, Laboratory Pathology
Digital Pathology Imaging: Coming Soon to a Pathology Group near You!
Will pathologists soon say “sayonara” to glass slides? Plenty of smart money already bets the answer to that question is “yes”! Every pathologist in the United States and abroad should be watching developments in whole slide imaging and digital pathology systems. That’s because digital pathology imaging is a trend with momentum-and it also has the potential to be disruptive, although probably not in the short term.
One powerful sign that digital imaging in pathology is ready to go mainstream is the take-up of digital imaging solutions and digital pathology systems by leading pathology laboratories in the United States and developed countries across the globe. These are academic and tertiary center pathology labs, along with major private pathology companies. As the pathology profession’s first-movers and early adopters, it is these laboratories which set the pace for the entire profession. Their acceptance and growing use of digital imaging and digital pathology systems can be taken as evidence that the current generation of imaging and informatics technologies perform adequately.
However, there is another powerful force propelling digital imaging forward in anatomic pathology. It is the emergence of molecular assays which incorporate digital images and use either computer-aided diagnosis (CAD) or pattern recognition software to help the pathologist make a precise diagnosis. By design, these molecular tests require the pathologist to work from a digital image of the specimen. At The Dark Report‘s second annual Molecular Summit on the Integration of In Vivo and In Vitro Diagnostics, conducted last February in Philadelphia, examples of these types of emerging assays were abundant. (more…)
Dec 18, 2006 | Laboratory News, Laboratory Pathology
Few people were prepared for Friday’s announcement that Sonic Healthcare, Limited of Sidney Australia will acquire American Esoteric Laboratories, Inc. (AEL) of Nashville, Tennessee.
However, Sonic’s purchase of AEL provides several useful insights about the competitive laboratory marketplace and will be the lead story in The Dark Report which is at the printer today. Sonic will pay approximately $180 million cash to acquire American Esoteric Laboratories. Subject to regulatory approvals, seller and buyer are working to close the deal in early January.
More details about this acquisition are in our full intelligence briefing in The Dark Report. For owners of independent laboratories, there is good news. Sonic is paying a fairly strong multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization). On one hand, this shows the demand for good laboratory business, since there were other buyers who looked at purchasing American Esoteric Laboratories and Sonics offer would reflect that demand. On the other hand, it shows that Sonic Healthcare is willing to pay a strong price for laboratory business operations it considers a solid platform for ongoing growth.
When completed, this acquisition will mean that Sonic Healthcare’s business divisions in the United States are providing laboratory testing services to clients in 14 states. Since it first entered the U.S. lab testing market with its acquisition of Clinical Pathology Laboratories (CPL) in late 2005, Sonic Healthcare has taken careful steps to expand its presence in regional markets throughout the United States. By acquiring AEL, Sonic gains a significant presence in Memphis, Tennessee, through AEL’s Memphis Pathology Laboratories (MPL).
Finally, The Dark Report knows that Sonic Healthcare is having discussions with other independent laboratory companies. Our prediction is that Sonic Healthcare will acquire several significant laboratory operations during 2007. For reasons explained in detail in our Dark Report intelligence briefing, some laboratory owners consider Sonic Healthcare to be a more attractive acquirer than the two blood brothers. Thus, it is likely that Sonic�s next few laboratory acquisitions will involve a least one of the nation’s most prominent, independent regional laboratory companies.
Should you have comments or insights on this acquisition, please contact Robert at rmichel@darkdaily.com.
PS: Cognescenti Health Institute, a division of Sonic Healthcare, disclosed that Philip Chen, M.D., Ph.D., founder of Cognescenti and Vice President and Chief Medical Informatics Officer for Clinical Pathology Laboratories. Inc., on the Board of Directors for the Central Florida Regional Health Information Organization Details of this strategic informatics initiative are in the December 18, 2006 issue of The Dark Report.
