Labcorp Acquires 15% Stake in SYNLAB for €140 Million to Expand European Diagnostic Footprint

Recently, U.S. integrated laboratory testing giant LabCorp acquired a 15% stake in European diagnostics and testing company SYNLAB for €140 million (approximately RMB 1.35 billion).

LabCorp, founded in 1971, is one of the largest independent clinical laboratories (ICLs) in the United States. Its core businesses comprise two main segments: diagnostic services and biopharmaceutical laboratory services. The biopharmaceutical laboratory services segment is dedicated to providing comprehensive laboratory support, from non-clinical to clinical stages, for new drug development. In 2023, LabCorp supported 84% of the new drugs and therapeutic products approved by the U.S. FDA and performed over 600 million tests for patients worldwide.

SYNLAB, founded in 1998, is a leading European chain of laboratories. It has established approximately 300 branches in 35 countries worldwide. Its main business includes human and veterinary pharmaceuticals, as well as environment-related testing. The total number of test items exceeds 5,000, with an average annual diagnostic testing volume of over 400 million tests.

Acquisition is the primary avenue for LabCorp’s expansion. According to incomplete statistics, since 2000, LabCorp has acquired more than 20 companies across various sectors, rapidly growing into a leading global laboratory services provider. This acquisition will help LabCorp further expand its diagnostics and testing markets in Europe and globally, while also providing SYNLAB with financial support and market opportunities.

On August 1, LabCorp announced its financial results for the second quarter of 2024. During the reporting period, revenue reached $3.22 billion, representing a 6.2% increase from $3.03 billion in the same period last year.

Based on LabCorp’s recent activities, we can identify three primary reasons for its steady revenue growth:

First, maintain significant investments in the four high-growth sectors of oncology, autoimmune diseases, neurology, and women's health.

In 2021, LabCorp identified the aforementioned areas as its “Four High-Growth Sectors” and prioritized them for future development. In 2024, LabCorp’s frequent investment activities further demonstrated its determination and confidence in this strategy.

For example, in early 2024, LabCorp announced the acquisition of select assets from medical genetics giant Invitae for $239 million, aiming to leverage its genetic capabilities to develop new therapies for oncology and rare diseases and provide personalized medicine. Additionally, LabCorp expanded its collaboration with Ultima Genomics to explore new clinical applications of whole-genome sequencing (WGS) using Ultima’s UG 100 sequencing solution and ppmSeq technology.

Labcorp is highly confident in the women’s health sector. On March 28, Labcorp acquired the clinical diagnostics, reproductive, and women’s health testing businesses of BioReference Health, one of the largest clinical laboratory and medical diagnostic service companies in the United States, for $237.5 million (approximately RMB 1.714 billion). According to BioReference Health’s performance data, this segment generates annual sales of approximately $100 million.

Public records indicate that LabCorp has been prioritizing investments in the women’s health sector since 2016. That year, LabCorp acquired Sequenom for $370 million, expanding its footprint in non-invasive prenatal testing (NIPT), women’s health, and reproductive diagnostics. In 2023, it further acquired the digital women’s health platform Ovia Health, continuing to broaden its women’s health product portfolio.

In recent years, the women’s health sector has seen a robust rise. According to data from Acumen Research & Consulting, the global market size for women’s health reached $25.3 billion in 2021 and is projected to expand to $97.3 billion by 2030, with a compound annual growth rate (CAGR) exceeding 16% during this period. LabCorp’s continued strategic investments in women’s health will lay a solid foundation for its future leadership position in this market.

Second, by expanding laboratory facilities and testing protocols, establishing new partnerships with healthcare systems, and leveraging the latest scientific and technological advancements, we will continue to drive the company’s long-term value growth.

On one hand, LabCorp has expanded and built new laboratories in eight countries worldwide, operating more than 20 non-clinical R&D laboratories to enhance its global service capabilities and scientific research strength. Since entering the Chinese market in 1998, LabCorp has established early-stage R&D laboratories, central laboratories, and bioanalytical laboratories in Shanghai, and founded a pharmaceutical R&D innovation base in Suzhou.

On the other hand, LabCorp is also actively building strategic partnerships to expand its network in the laboratory testing sector. In January, it announced a strategic partnership with Hawthorne aimed at providing new services to support Decentralized Clinical Trials (DCTs), thereby improving patient experience and enhancing trial accessibility and efficiency. Starting in the third quarter of 2024, LabCorp established a comprehensive strategic partnership with Naples Comprehensive Healthcare (NCH) to manage the daily operations of NCH’s inpatient laboratories and serve as the primary laboratory within the NCH network.

Third, introduce innovative digital and data solutions to enhance customer stickiness.

First, LabCorp received FDA approval for two of its products this year. One is PCGx elio plasma focus Dx, which has been approved by the FDA for pan-solid tumor liquid biopsy. This targeted blood test analyzes 33 cancer-related genes and originates from Personal Genome Diagnostics, which LabCorp acquired for $450 million in 2022. The other is a companion diagnostic (CDx) that received FDA approval as a Humanitarian Use Device (HUD) to determine patient eligibility for Pfizer’s recently FDA-approved gene therapy for hemophilia B, BEQVEZ.

Next is the continuous launch of innovative products and testing services. In oncology, LabCorp introduced new strategic services within its precision oncology portfolio to reinforce its position as the preferred single partner for biopharmaceutical companies; in women’s health, it launched a first-trimester preeclampsia screening test to assess the risk of developing preeclampsia before 34 weeks of gestation, applicable to all pregnant women; additionally, LabCorp OnDemand has added multiple new testing services, including standard drug testing, comprehensive drug testing, comprehensive testosterone testing, HIV testing, and comprehensive heart health testing.

In addition to clinical testing, LabCorp also possesses strong capabilities in the field of drug development, having become one of the global leaders in drug development services through the acquisition of Covance. However, since spinning off Covance into the independent publicly listed company Fortrea in 2022, LabCorp has remained focused on its core areas, including diagnostics, central laboratory services, and early-stage research laboratory services.

According to the China Health and Health Statistical Yearbook, the revenue of domestic medical and health institutions in 2019 reached RMB 4.64 trillion, with clinical laboratory testing revenue accounting for approximately 10% of the total (a market size of about RMB 464 billion). Independent Clinical Laboratories (ICLs) accounted for approximately 8% of the testing market (a market size of about RMB 37 billion), indicating substantial room for growth.

From a policy perspective, with the advancement of a series of policies such as centralized procurement, reform of medical insurance payment methods, and tiered diagnosis and treatment, third-party testing institutions may occupy a more important position in the industry due to their large-scale and specialized services.

An analysis of the latest financial reports from three leading independent clinical laboratory (ICL) companies—KingMed Diagnostics, Dian Diagnostics, and Adicon—reveals thatIndustry participants are actively exploring innovative applications of AI and digitalization in the field of medical diagnostics to improve testing efficiency and accuracy.

Taking the large language models that are currently drawing significant industry attention as an example, leading independent clinical laboratory (ICL) enterprises such as KingMed Diagnostics and Dian Diagnostics are also actively deploying large language models to promote the intelligentization and precision of healthcare services.

In August, KingMed Diagnostics released the industry’s first large language model for medical laboratory services, the “Yujian Yiyuan Large Model,” to facilitate comprehensive intelligent transformation across all scenarios of medical testing. This initiative aims to streamline pre-test inquiries, enable intelligent production during testing, and provide precise post-test interpretation, thereby reducing physicians’ workload and optimizing patients’ healthcare experience. Leveraging this large model, KingMed Diagnostics also launched “Xiao Yu Yi,” an AI agent designed for end-to-end medical laboratory scenarios. It offers functionalities such as intelligent test recommendation, automated laboratory testing, smart report interpretation, and assistance in disease diagnosis and treatment, thus supporting clinical and laboratory physicians in their decision-making processes.

In September, Dian Diagnostics released the “Dian Medical Laboratory Large Model,” co-developed with Huawei Cloud. Leveraging this model, medical test reports that previously required 24 hours to generate can now be produced within 3–4 hours. Furthermore, the model enables in-depth extraction of value from medical data, providing precise and personalized support for clinical disease diagnosis and assisting physicians in making more accurate diagnostic and treatment decisions.

Since launching its comprehensive digital transformation in 2023, Adicon has been continuously deepening this initiative, strategically focusing on AI-assisted diagnosis and image interpretation, digital platform development and intelligent upgrades, technological innovation and R&D investment, as well as cost reduction, efficiency improvement, and cost control.

Examining the testing businesses of these three companies, as global and Chinese population aging accelerates, the demand for medical services among the elderly has significantly increased, particularly for tests targeting complex diseases and rare disorders, driving rapid growth in specialized testing services.

KingMed Diagnostics’ annual report shows that in the first half of 2024, the proportion of revenue from its high-end technology platform businesses reached 54%, a year-on-year increase of 1.02 percentage points; the share of revenue from tertiary hospitals reached 45.75%, a year-on-year increase of 5.81 percentage points. Driven by innovative products, multiple specialized testing business lines achieved substantial growth. For instance, in the first half of 2024, revenue from the company’s infectious disease tNGS series grew by 125%, revenue from the multi-pathogen nucleic acid combination test for respiratory diseases grew by 182%, revenue from the Solid Tumor Huimin 3000 series grew by 274%, and revenue from single-gene carrier screening grew by 234%.

In its 2024 interim report, Dian Diagnostics also highlighted its specialized testing business, “focusing on the high-quality development needs of provincial and ministerial-level hospitals, prefecture-level general hospitals, and tertiary specialized hospitals.” During the reporting period, the proportion of revenue from tertiary hospitals, which primarily handle complex and rare diseases, increased to 41%. Among this, the revenue from specialized testing services reached RMB 961 million, accounting for 40.69% of the total diagnostic service revenue.

Adicon’s testing portfolio includes over 2,300 specialized tests. In the first half of 2024, its specialized testing business also saw rapid growth, with a year-on-year increase of more than 30%. Among these, revenue from infectious disease testing rose by 38% year on year, while oncology testing achieved an even higher year-on-year growth rate of 57%. Since 2020, Adicon has maintained a robust growth trajectory in its specialized testing business, with a compound annual growth rate (CAGR) of 38.6% from the first half of 2020 to the first half of 2024.

When combined with the robust performance of KingMed Diagnostics’ focused specialty testing business and Meikang Bio’s specialty testing segment, it becomes evident that specialty testing will emerge as a key development direction for the ICL industry.