Nearly six years after launching a joint venture with IQVIA’s contract research progenitor, Quintiles, Quest Diagnostics is handing over the remainder of its minority share in return for $760 million in cash.
The two companies formed Q2 Solutions in 2015 to provide global biopharma companies with the lab tests needed to run clinical trials and get their therapies approved—and to help compete with LabCorp, which had acquired Covance for its own drug development arm.
Described as the second-largest central laboratory services company in the world, Q2 Solutions operates labs in the U.S., U.K., Singapore, India, Japan and China, with diagnostics giant Quest previously owning 40% of the enterprise. Now, IQVIA gets it all.
Instead, Quest aims to refocus on its diagnostic testing efforts, currently in high demand thanks to the COVID-19 pandemic, as well as its own M&A strategy. However, over the course of a multiyear agreement, Quest will stay connected as the preferred lab provider for Q2 Solutions’ clients.
“We are proud of our contributions to the growth of Q2 Solutions and are confident that IQVIA has the strategic vision and agility to lead Q2 Solutions on the next phase of its journey as a global leader in central lab services,” Quest’s chairman, president and CEO, Steve Rusckowski, said in a release.
Over the course of 2020, Quest’s revenues jumped to $9.44 billion, up 22% compared with the year before.
“Declines in our base business recovered rapidly throughout the summer and fall; however the recovery stalled at the end of November and into December due to the surge in COVID-19 infections across the country,” Rusckowski said in announcing the results. “Continued high demand for COVID-19 testing drove our performance through the second half of the year.”
North Carolina-based Q2 Solutions, meanwhile, previously partnered with the Coalition for Epidemic Preparedness Innovations, known as CEPI, to help standardize the evaluation of multiple potential vaccines for COVID-19 alongside several other international labs and providers.