Quest Diagnostics (DGX 2.64%) runs medical tests on one in three American adults each year, and there are treasure chests full of medical insights buried in the mountains of genetic data some of those tests generate. To help analyze and interpret all the sequenced genetic data that piles up, Quest recently acquired a privately held company called Blueprint Genetics for an undisclosed sum.
All roads lead to Helsinki
Quest Diagnostics is best known for processing the most commonly performed laboratory tests, but it has lots of capable competition in that niche, a condition that can quickly squeeze profit margins. So it's rapidly building a slate of next-generation DNA sequencing services to add to its menu of advanced diagnostic services; Blueprint will give it a greater capacity to interpret the results.
In the seven years since its founding, Blueprint Genetics has grown into a global leader in the genetic diagnostics business, with customers in more than 70 countries. It has a North American base of operations in Seattle, but Quest plans to allow it to continue operating independently from its headquarters in Helsinki, Finland.
New revenue streams
Thousands of diseases caused by genetic mutations affect an estimated 30 million Americans, and developing the first FDA-approved tests for one after another is a great way to stay a step ahead of the competition.
The diagnostics business is extremely competitive, and depending too heavily on any single revenue stream isn't healthy. Quest Diagnostics is eager to build out its gene-based service offerings, and Blueprint's ability to interpret the data generated by genetic testing on a mass scale could expand its new owner's menu by leaps and bounds.