Summary
- Over 700,000 COVID-19 tests are being performed daily across the US.
- OPKO Health's wholly owned subsidiary, BioReference Labs is the nation's third-largest diagnostics laboratory.
- Fastest test result turnaround in the industry has landed the company impressive state, local, and sports contracts.
Back in 2015, OPKO Health (OPK) acquired medical diagnostic testing company BioReference Laboratories (BRL) in a $1.5 billion all-share offer.
While seen by some at the time as non-synergistic, it is this deal that will propel OPK's share price higher in the short to medium term due to our current black swan pandemic event.
BioReference is the third-largest diagnostic testing company in the US and earns over 80% of OPKO's revenues. Since COVID-19 hit the country, BRL has been expanding its sample collection locations and expanding its lab capacity to process those samples.
COVID-19 Testing
In late February, Jon Cohen M.D., the executive chairman of BioReference (previously Chief Medical Officer at Quest Diagnostics and senior policy advisor to former NY Gov. David Paterson), saw that COVID-19 was going to be a nationwide crisis. As reported by The Atlantic:
The public-private partnership can work. In New York, the company BioReference Laboratories made the decision to bring up all available COVID-19 test assays, regardless of manufacturer, in the last week of February. “It was pretty clear at that time that the chance of this breaking open was pretty much certain,” Jon Cohen, the executive chairman of BioReference, told us. “It was just a matter of when and how big it was gonna be.” The company brought online five different platforms for testing, including Roche’s.
BioReference, having chosen to be testing platform-agnostic, has been the key to having the quickest test result turnaround in the industry.
The company has and uses kits from Copan, Roche, BD, Puritan, and Thermofisher but it is likely that BRL has found other dedicated sources as those traditional suppliers are overwhelmed and unable to keep up with demand.
In addition, they are developing their own kits which are awaiting regulatory approval.
(Source: Company website and 360DX.com)
In a recent Bloomberg article, New York state officials have stated that the public should avoid using both LabCorp (LH) and Quest (DGX) due to the large backlog and long wait for results.
New Yorkers thinking of getting a coronavirus test should check that their sample will be processed by a local lab, instead of companies like Laboratory Corp. of America Holdings and Quest Diagnostics Inc., state officials said, as a national testing logjam leads to extended waits for results.
Each major testing company has partnered with a nationwide pharmacy to provide on-site COVID-19 testing. LabCorp with CVS (CVS), Quest with Walgreens (WBA), and BioReference with Rite Aid (RAD). The testing turnaround time for each company is as shown:
