Labcorp (LH) Gains From New Collaborations Amid FX Issues

Core Insights - Labcorp is experiencing growth driven by strategic investments in high-growth areas, particularly in oncology, women's health, autoimmune diseases, and neurology [1][2] - The company is expanding its capabilities in specialty testing and biopharma, with a focus on cell and gene therapy, and has launched new services to support global clinical trials [3][4] Business Development - Labcorp's acquisition of Invitae assets highlights its strong business development pipeline and commitment to specialty testing in oncology and rare diseases [2] - The Biopharma Laboratory Services segment is benefiting from collaborations with pharmaceutical companies, with a 9% revenue growth in central laboratories during Q2 2024 [4] Financial Performance - The company faces challenges from macroeconomic uncertainties, including inflation and geopolitical tensions, which could impact demand for diagnostic testing and drug development services [5][6] - In Q2 2024, Labcorp's cost of revenues increased by 4.7% year-over-year, while SG&A expenses rose by 10.3% due to higher personnel costs [6] International Exposure - Labcorp's significant international presence, with 58% of BLS revenues derived from overseas, makes it susceptible to currency fluctuations, particularly with 13.7% of revenues in non-U.S. dollar currencies [7] - The recent strengthening of the U.S. dollar has negatively impacted revenue growth, with a 0.1% offset in BLS and Dx revenue growth due to unfavorable foreign currency translation [7]