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Labcorp is a global leader in laboratory services, operating through two main segments: Diagnostics Laboratories (Dx) and Biopharma Laboratory Services (BLS) . The company provides a wide range of laboratory testing services, including routine and specialty/esoteric testing, and is heavily involved in the development of new drugs, having worked on 90% of the new drugs approved by the FDA in 2023 . Labcorp's strategic focus includes expanding its specialty testing capabilities in areas such as oncology, women's health, autoimmunology, and neurology .
- Diagnostics Laboratories (Dx) - Offers routine and specialty/esoteric testing services, with nearly all revenues generated in the U.S. This segment is a major contributor to the company's revenue .
- Biopharma Laboratory Services (BLS) - Focuses on early development research laboratories and central laboratory services, with revenues nearly evenly split between the U.S. and other countries .
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Given the substantial growth of Labcorp OnDemand but its current immaterial impact on revenue, when do you anticipate this platform reaching a scale significant enough to break out its financials, and what are the main obstacles to achieving that critical mass?
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With Walgreens planning to close numerous stores and considering you have about 400 patient service centers within their locations, how do you intend to mitigate the potential impact on patient access and volumes, and what strategies are in place to ensure continuity of services in affected areas?
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The acquisition of Invitae has resulted in a margin decline this quarter, with expectations of slight earnings accretion only in 2025; can you elaborate on the integration challenges you're facing and how confident are you in achieving the projected top-line growth and margin improvement?
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You've mentioned ongoing strain in the employer testing-related business with no significant positive outlook for 2025; what strategic actions are you taking to address this underperforming segment, and is divestiture being considered to improve overall business performance?
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Despite underlying improvements, adjusted operating margins in the Diagnostics segment were negatively impacted by Invitae, weather, and calendar days; how sustainable are your margin improvement initiatives, and what measures are you implementing to mitigate such external factors affecting your profitability?
Recent developments and announcements about LH.
Corporate Leadership
CFO Change
Labcorp's CFO, Glenn Eisenberg, has announced his plans to retire. Julia Wang will take over as the new CFO starting December 2, 2024. Eisenberg will remain with the company as a Special Advisor to the CEO until April 2025 to ensure a smooth transition .
Leadership Change
Glenn Eisenberg is leaving his role as Chief Financial Officer (CFO) at Labcorp. He is retiring and will step down on December 2, 2024. He will remain as a Special Advisor to the CEO until April 2025 to ensure a smooth transition and assist with strategic initiatives .
Julia Wang will step up as the new CFO starting December 2, 2024. She brings extensive experience from her previous roles at BeiGene, Alexion Pharmaceuticals, Quest Diagnostics, Johnson & Johnson, and PepsiCo .
Board Change
Julia Wang has been appointed as the new Chief Financial Officer of Labcorp, effective December 2, 2024. She will replace Glenn Eisenberg, who will retire on April 30, 2025 .
Financial Actions
New Share Buyback Program
Laboratory Corporation of America Holdings has announced a new buyback program involving the issuance of $2,000,000,000 in debt securities. This includes $650,000,000 of 4.350% Senior Notes due 2030, $500,000,000 of 4.550% Senior Notes due 2032, and $850,000,000 of 4.800% Senior Notes due 2034. The interest on these notes is payable semi-annually on April 1 and October 1, starting from April 1, 2025. The company has the option to redeem these notes before their respective Par Call Dates at a price equal to the greater of 100% of the principal amount or a make-whole premium, plus accrued interest .