Labcorp To Spin Off Its Clinical Trial Business, Posts Mixed Q2 Earnings

Laboratory Corp of America Holdings LH plans to spin off its unit focused on the clinical development business. Wall Street Journal was the first to report the news.
The clinical drug trial business operates as a Contract Research Organization, providing Phase I-IV clinical trial management, market access, and technology solutions to pharmaceutical and biotechnology organizations.
According to WSJ, the move will create a new stand-alone company in the fast-growing contract-research sector.
Labcorp plans to retain the parts of the drug-development business that focus on early-stage development and central laboratory work, given that they require similar resources to its diagnostics operation, WSJ reported.
The spun-off business delivered total revenue of $3.0 billion in the 12 months ending June. It grew 8% on a CAGR basis from Q2 2019 to Q2 2022.
The Clinical Development business is expected to deliver high-single-digit revenue growth in the future.
Labcorp is targeting completion of the planned spin-off in 2H of 2023.
The company reported Q2 sales of $3.70 billion, missing the consensus of $3.75 billion, down 3.7% Y/Y due to lower COVID-19 PCR and antibody testing.
Q2 adjusted EPS reached $4.96 versus $6.13 last year, beating the consensus of $4.70.
Guidance: Labcorp expects FY22 EPS of $19.00 - $21.25, compared to the prior guidance of $18.25 - $21.00 and the consensus of $19.70.
Price Action: LH shares are up 0.61% at $251.00 during the premarket session on the last check Thursday.

Market News and Data brought to you by Benzinga APIs

Comments

Earnings Calendar

Never Miss Important Catalysts

Popular Channels

Tools & Features

Partners & Contributors

About Benzinga