FDA Clears Quest Diagnostic's First HSV-1, 2 Detection Test - Analyst Blog

Shares of leading diagnostics information company Quest Diagnostics Inc. DGX rose 4.45% to close at $57.99 yesterday. This was since the company announced the U.S. Food and Drug Administration (FDA) 510(k) clearance and receipt of CLIA (Clinical Laboratory Improvement Amendments) moderate complexity categorization for its Focus Diagnostics business' new Simplexa HSV 1 & 2 Direct molecular test on the 3M Integrated Cycler.

This Simplexa test, the first molecular test to be approved by the FDA that enables qualitative detection and differentiation of herpes simplex virus 1 (HSV-1) and herpes simplex virus 2 (HSV-2) in cerebrospinal fluid (CSF) in patients suffering from central nervous system CNS infection, including encephalitis. This CE marked test delivered 100% and 98% sensitivity in clinical studies for detection of HSV-1 and HSV-2, respectively.

Encephalitis is an inflammation of the brain often caused by the herpes simplex or other viruses. The availability of this Simplexa HSV 1 & 2 will enable the healthcare providers to take more informed therapeutic decisions in a timely manner for patients suffering from encephalitis. We remain confident about the efficacy of this test and expect the recent FDA approval to seamlessly strengthen the company's foothold in the U.S. companion diagnostic market.

Quest Diagnostics generated revenue of $7.1 billion in FY13. The company renders services through its other businesses like AmeriPath, Dermpath Diagnostics, Focus Diagnostics and Athena Diagnostics.  Focus Diagnostics manufactures Simplexa HSV 1 & 2 Direct, which has been launched commercially in the U.S.  Focus Diagnostics is set to become the first company to deliver diagnostic resolution for the emerging infectious diseases. Its major achievements include assays for West Nile Virus, SARS and Influenza A H1N1.

Currently, Quest Diagnostics has a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader healthcare industry are Chemed Corp. CHE, China Cord Blood Corporation CO and PharMerica Corporation PMC.  Chemed Corp. sports a Zacks Rank #1 (Strong Buy) while China Cord Blood Corporation and PharMerica Corporation carry a  Zacks Rank #2 (Buy).