Dec 2, 2009 | Laboratory News, Laboratory Pathology
Consolidation continues in the lab testing sector that serves physicians’ offices
Last week it was disclosed that the health system which owns Centrex Clinical Laboratories, Inc. is selling its laboratory testing business to Laboratory Corporation of America (NYSE: LH ). Faxton-St. Luke’s Healthcare stated that it expected the transaction would be finalized by the end of the year.
Several times in recent years, Faxton-St. Luke’s Healthcare shopped Centrex Clinical Labs to interested buyers. For that reason, news of the sale to LabCorp did not surprise informed observers.
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Oct 23, 2009 | Laboratory Management and Operations, Laboratory News
Management Tool Contributes to More Collected Revenue, Higher Sales Prices
Revenue Cycle Management (RCM) is hitting the radar screen at the nation’s best-managed clinical laboratories. That’s because shrinking reimbursement makes it imperative for clinical labs and pathology groups to collect every dollar legally due for the lab testing services they provide. RCM is a proven management tool for reducing unpaid claims and unlocking more productivity in the coding/billing/collections process.
“Revenue Cycle Management for laboratories encompasses all the administrative and management functions that contribute to the capture, and collection of revenue associated with lab testing services,” observed Lale White, CEO of Xifin, Inc. of San Diego, California. White has been an acknowledged national expert in laboratory coding, billing, and collections for more than two decades.
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Jun 23, 2009 | Laboratory Management and Operations, Laboratory Pathology
Acquisition adds more companion diagnostics to LabCorp’s molecular test menu
Here’s another validation of the prediction that companion diagnostics will be a cornerstone of personalized medicine. Laboratory Corporation of America Holdings (NYSE: LH) of Burlington, North Carolina, said Tuesday (June 23) it would acquire Monogram Biosciences, Inc. (NASDAQ: MGRM) of South San Francisco, California. In an all cash deal totaling $106.7 million, LabCorp will pay $4.55 per share.
“Monogram Biosciences, Inc., has an excellent clinical reputation, a market leading infectious disease test, a market leading companion diagnostic, an exciting technology platform for oncology, and offers LabCorp a substantial growth opportunity,” said David P. King, LabCorp’s Chairman and Chief Executive Officer.
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Oct 31, 2008 | Compliance, Legal, and Malpractice
Facing pressure by the Food and Drug Administration over its OvaSure test for ovarian cancer, Laboratory Corporation of America announced last Friday in a Securities and Exchange Commission filing that it had stopped sales of the test. The dispute between the FDA and the nation’s second largest laboratory company will be closely watched for insights into how the FDA regulates “home brew” assays.
In the October 20, 2008 issue of The Dark Report, an intelligence briefing provides an assessment on the issues of concern to the FDA about the OvaSure test for detection of ovarian cancer. It was these concerns which led the federal agency to send an initial letter and then a warning letter to LabCorp in recent months.
The current troubles swirling around the OvaSure assay represent two unfolding trends in laboratory medicine-and healthcare in general. One is the trend for new healthcare technology to have a demonstrated clinical benefit, along with a reasonable cost to achieve the improvement in clinical outcomes. Two is the repeated statements by the FDA that it sees the need for tighter oversight of diagnostic assays which incorporate molecular technologies.
The first trend came into play shortly after LabCorp, last June, began selling the OvaSure test as one method to detect cervical cancer. A number of physicians quickly criticized this decision. They argued that data from the clinical trials used to evaluate the OvaSure technology was not comprehensive enough to appropriately support how LabCorp recommended that physicians use the OvaSure test to detect cervical cancer. It didn’t take long before certain women’s health advocates also chimed in with criticism of LabCorp’s marketing of the OvaSure test. These criticisms were similarly rooted in a belief that the data from the clinical studies did not fully support the marketing claims for the test.
As to the second trend, the FDA seems to have noticed these public criticisms. It sent a letter to LabCorp late in the summer describing its concerns. Apparently, the FDA was not satisfied by whatever response was provided by LabCorp, because the agency then sent a warning letter to LabCorp earlier this month. In this correspondence, the FDA again questioned the adequacy of the clinical data used to support the manner in how the OvaSure test is marketed. The federal agency also, in its letters, noted that LabCorp was purchasing components of the test from Yale University and was thus not compliant with aspects of the home brew requirements.
By its actions, LabCorp has obviously decided that the best response to the FDA’s stop letter is to cease sale of the OvaSure test. This story has several chapters yet to come, depending on whether LabCorp wants to pursue its case with vigor and whether the FDA takes additional steps to rein in other home brew assays that many laboratories currently offer in today’s clinical marketplace.
For medical laboratories, there are two useful lessons to draw from the flow of events to date. First, a new laboratory test coming to market will have a much easier time gaining acceptance by physicians and payers if that test has strong clinical data to support its clinical efficacy, as well as its cost effectiveness.
Second, the FDA has once again served notice that it is concerned about home brew assays. This is not auspicious for the nation’s molecular testing laboratories, since any additional regulations will make it tougher for these laboratories to offer “home brew” assays to clinicians. It would also make it tougher for labs to gain additional knowledge about how home brew assays perform in clinical use.
Related Information:
Jul 28, 2008 | Laboratory Management and Operations, Laboratory Pathology, Management & Operations
Although officials at Stanford Hospitals & Clinics decline to publicly discuss the pending sale of its laboratory outreach business, Laboratory Corporation of America (NYSE:LH), during a conference call with analysts executives last week, confirmed that the sale is imminent.
“I can tell you that we signed a definitive agreement with Stanford in July to acquire their outreach business and we expect that to close on August 1st,” stated LabCorp President and CEO David King, in response to questions from analysts during the phone call which took place on July 24.
Last Friday, in response to press inquiries, a Stanford Hospital spokesman denied claims by union officials that as many as 350 laboratory employees would lose their job as a result of the sale. He stated that only 200 employees had received lay-off notices earlier this spring and that “to date, over half have been hired or offered positions by the purchaser, and we expect that number to grow.”
Even as the LabCorp acquisition of the Stanford Hospital laboratory outreach business moves to a conclusion, there has been no official word on the other major laboratory business known to negotiating a sale. It is believed that Carilion Clinic has narrowed the list of buyers down to just one: LabCorp. Carilion officials had placed their laboratory business up for sale last winter. (See Dark Daily, April 15, 2008.)
Several other laboratory acquisitions are unfolding. One deal just announced is the sale of UroPath, Inc. of Arlington, Texas, to HealthTronics, Inc. , of Austin, Texas. This transaction price is $7.5 million and involves the anatomic pathology condominium laboratory business developed by UroPath. Another laboratory sale is the purchase of Parkway Clinical Laboratories, Inc. of Bensalem, Pennsylvania, by Rosetta Genomics Ltd. (Nasdaq: ROSG) of Jersey City, New Jersey. Purchase Price is $2.9 million.
Laboratory owners, shareholders, and pathologists with partnerships in pathology group practices who are interested in the laboratory merger & acquisition market will have the opportunity to get up-to-the minute intelligence on these and other laboratory acquisitions. On Wednesday July 30, Dark Daily and The Dark Report will host “Lab and Pathology Mergers & Acquisitions: Essentials that All Lab Owners and Buyers Should Know.” It will be conducted at 1 p.m EDT/12 p.m. CDT/11 a.m. MDT/10 a.m. PDT. Click here to register and get additional information.
Speaking on the audio conference are:
1) Doug Brown, Managing Director of Wachovia Securities, who will provide a concise overview of the factors supporting higher valuations for laboratory assets, along with a discussion of recent noteworthy lab acquisitions, and,
2) Attorney Anthony Konkoly, Esquire, and Member of McDonald Hopkins, based in Cleveland, Ohio. Konkoly will provide useful information about the mistakes lab sellers often make, and how to fix those issues before offering the laboratory for sale. He will also provide laboratory owners with some proven recommendations on how to minimize tax consequences from the sale and maximize the net proceeds from the sale for the lab’s owners.
In closing, the upcoming audio conference will include ample question and answer time for participants, to allow lab owners and sellers personal access to the perspectives and expertise of these two veteran lab industry deal-makers.
THE DARK REPORT AUDIO CONFERENCE DETAILS
DATE: Wednesday, July 30, 2008
TIME: 1 p.m. EDT; 12 p.m. CDT; 11 a.m. MDT; 10 a.m. PDT
PLACE: Your telephone or speakerphone
COST: $245 per dial-in site (unlimited attendance per site)
TO REGISTER: Go Here http://www.darkreport.com/Audio/7.30.08/Laboratory-Pathology-Mergers-Acquisitions-Sell-and-Buy.htm or call 1-800-560-6363 toll-free
