- LabCorp announced Tuesday its total second-quarter revenue fell 4% to $2.8 billion. Although the company's diagnostics revenue declined 3.9% compared to last year, the company said in June its organic daily volumes were up about 6%, as a 17% decline in the base business was more than offset by significant demand for molecular coronavirus tests.
- More specifically, a 35.3% decline in organic test volume in its base business was partially offset by a 14.6% rise in demand for COVID-19 testing. However, the lab giant said it saw "stunning" recovery in its base business, including diagnostics and drug development, "as people are starting to return to their doctors for testing and clinical trials activity is resuming," according to CEO Adam Schechter.
- LabCorp's current COVID-19 testing capacity is about 180,000 tests per day and the company is delivering results on average in two to three days with faster results for hospitalized patients. By comparison, rival Quest Diagnostics late Monday reported it is able to perform 135,000 molecular diagnostic tests a day and that non-priority patients face average wait times for their test results of seven or more days, while "priority 1" patients are now having to wait an average of more than two days.
As the country's two largest commercial lab networks, LabCorp and Quest have been working for months to ramp up COVID-19 testing capacity to meet rapidly rising demand for molecular diagnostic tests, particularly from hotspots areas of the U.S. This high demand has strained their respective resource and resulted in delays in providing test results.
Schechter said the company is building testing capacity as fast as it can with average wait times for results of two to three days from specimen pickup, down from the average of three to five days reported last week.
Schechter told investors on Tuesday's earnings call that LabCorp is currently processing those test results in 16 labs with COVID-19 capacity of about 180,000 tests per day. However, he noted that "in recent weeks, the rapid acceleration in sample volumes had outpaced our capacity and increased time to deliver results to just over four days on average." Now, Schechter says the company is "back" to a two- to three-day turnaround time despite continuing testing supply and equipment constraints.
LabCorp's improving average turnaround time for reporting molecular diagnostic test results stands in contrast to Quest, which for most of July has reported average result wait times for non-priority patients of a week or more.
While a statement from Quest on Monday noted that its testing capacity "slightly" exceeded demand for the first time since early June, the company warned that persistent high demand continues to create strain and delays for test results remain.
"The most significant hurdle we face now is limits to complex testing platforms and chemical reagents required to perform testing," Quest said in a statement, which also said that while "it will take time" to add capacity, the company expects to return to average turnaround times in the range of one day for priority patients and three days for non-priority patients.
Both Quest and LabCorp are looking to maximize molecular diagnostic testing capacity with sample pooling, a method meant to screen more people using fewer testing resources. Quest on July 18 announced its PCR test, which first got emergency use authorization by FDA in March, was granted an agency EUA for sample pooling. LabCorp announced Saturday that it also received an EUA from FDA authorizing diagnostic testing of groups of individuals for active COVID-19 infections using pooled testing.
Quest's molecular test allows specimens collected from four people to be tested in a pool or "batch" using one test, while LabCorp's pooled testing method involves testing up to five samples at once.
"Though we cannot fully predict the future, we have confidence in our base business and in our ability to continue to aggressively scale COVID-19 testing," Schechter said. Nonetheless, given the unpredictability of the coronavirus pandemic, LabCorp said it continues to not provide 2020 guidance.