An Orange County acquisition is among the recent deals boosting the outlook on North Carolina-based Laboratory Corporation of America Holdings.
LabCorp bought Santa Ana-based Westcliff Medical Laboratories last year.
This year the company has “done a little bit better” than New Jersey-based rival Quest Diagnostics Inc., according to Thomas Gallucci, a managing director and senior analyst with New York’s Lazard Capital Markets LLC.
One of the reasons: LabCorp has been “more consistent on the acquisition front, which can be beneficial both from a top-line and bottom-line perspective,” Gallucci said in a discussion with industry newsletter Wall Street Transcript.
LabCorp administers medical tests and processes samples. It spent $57.5 million last year to buy Westcliff, which filed for bankruptcy in 2010.
Before the Westcliff deal closed, LabCorp had to fight off a challenge from the Federal Trade Commission, which contended that it would harm medical laboratory competition.
Regulators argued that the buy would leave Quest—owner of Quest Diagnostics Nichols Institute in San Juan Capistrano—as the only other large laboratory serving Southern California.
District Judge Andrew Guilford of Santa Ana denied the FTC’s challenge earlier this year.
That cleared the way for what analyst Galluci called a “tuck-in” deal that should bring $90 million to $100 million of revenue to LabCorp without a lot of incremental costs.
“You just fold it into your own infrastructure,” he said.
LabCorp has annual revenue of $5 billion and a recent market value of $9.5 billion.
The company is planning to make deep cuts in its local operations.
LabCorp said in a state filing earlier this year that it would move or cut more than 300 jobs at its laboratory and office in Santa Ana in the next few months.
Speculation on industry message boards suggested that LabCorp was planning to move most of the testing accounts it inherited in the Westcliff buy to San Diego.
LabCorp’s been part of the medical laboratory market here for some years. It bought U.S. Labs Inc., an Irvine cancer testing provider, for $155 million in 2005.
Digital Marketing
Executives from several local medical device makers, both large and small, recently talked about their digital marketing at a University of California, Irvine University Club forum.
Trade group Southern California Biomedical Council, or SoCalBio, hosted the event. SoCalBio has an Irvine office.
Panelists included Brad Reece, head of digital strategy for Irvine heart valve maker Edwards Lifesciences Corp.; Giulia Newton, director of worldwide marketing for Abbott Medical Optics, a Santa Ana unit of Chicago’s Abbott Laboratories; and Brian Driscoll, vice president of marketing for Aliso Viejo device maker Cianna Medical Inc.
Driscoll discussed Savi Sisters, a website that Cianna created to assist doctors and treatment facilities in providing education and support for patients. The website takes its name from the company’s Savi device for treating breast cancer.
Reece talked about Edwards Connect, an internal social network to help workers do their jobs.
Newton showcased an integrated, multi-channel digital advertising campaign for Abbott Medical’s Tecnis multifocal intraocular lens, which is used in cataract surgeries.
Abbott Medical created and distributed custom content and electronic newsletters to qualified consumers. It also conducted a banner ad campaign that linked consumers to a website providing information about cataracts.
Doctor Salary Survey
Primary-care and specialty doctors in the western United States, including California and OC, are on the lower side of the compensation equation, a new study shows.
Median compensation for primary care doctors in the West was $200,457, while specialists’ median income came in at $360,603, the Englewood, Colo.-based Medical Group Management Association reported.
The association’s Physician Compensation and Production Survey shows the lowest median compensation for primary and specialty doctors was in the Eastern U.S., at $194,409 and $305,575, respectively.
Doctors in the South received the highest median compensation at $216,170 for primary care doctors and $404,000 for specialists. Managed healthcare is less prevalent in the South compared to other regions.
When it comes to the types of specialty doctors and pay, orthopedic surgeons nationally had the highest median compensation in 2010 at $514,659, up 3.7% from 2009. The largest overall hike came for neurologists.
The association said that several factors affected regional differences, such as whether a certain area had a high level of competition between medical groups or specific specialties.
Bits and Pieces
Shares of Radient Pharmaceuticals Corp., a Tustin drug maker, now is trading on the OTCQX exchange. The company previously traded on the New York Stock Exchange’s AMEX index, but had received notice that it wasn’t in compliance with certain criteria for continued listing … The Service Employees International Union-United Healthcare Workers West said that more than 300 employees of Garden Grove Hospital recently voted to stick with it instead of joining the National Union of Healthcare Workers, which was established by former SEIU officials … AltaMed Health Services Corp., a Los Angeles health clinic operator, remodeled its Huntington Beach medical and dental clinic on Newman Avenue. The remodel added eight new examination rooms and a procedure room, and allowed AltaMed to move its dental clinic operation into the building.
