With demand for COVID-19 tests rapidly drying up, testmakers like Quest Diagnostics are scrambling to find deeper waters that’ll keep them from running aground.
Quest, for one, is banking on its core testing business to stay afloat. That base business includes diagnostic services catering to healthcare and insurance providers, as well as a consumer-initiated testing program that allows individuals to order lab tests themselves.
In the first quarter of this year, Quest reported a year-over-year revenue increase of more than 6% for its base business, clocking in at just over $2 billion. Its overall revenues for the three-month period fell 4%, however, thanks to a massive 27.6% drop in COVID testing sales, which fell below $600 million—backing up the company’s shift in focus back to its less COVID-centric core business.
“COVID-19 volumes remained strong early in the quarter and decreased in February and March, in line with the market,” outgoing CEO Steve Rusckowski said in a statement. “We continue to make investments to further accelerate growth in the base business, while our efforts to improve productivity are helping us to offset inflationary pressures.”
Indeed, despite the setback caused by dwindling coronavirus testing, Quest expressed its confidence in its other services by upping the low ends of its full-year forecasts. It’s now expecting to see its base business bring in at least $8.35 billion for the year, up from $8.3 billion—a year-over-year increase of just over 4%, rather than 3.5%. That would help bring total annual revenues to at least $9.2 billion, instead of the previously estimated $9 billion minimum, which would mark a decrease of 14.7% rather than nearly 17%.
Alongside that decision to double down on the testing services at its core, Quest appointed a flurry of new leaders. In addition to promoting a trio of company alums into senior vice president roles for its regional operations, clinical solutions and diagnostic services, the company tapped Mark Delaney—most recently a sales and marketing VP at Hillrom and, after its acquisition at the end of last year, a VP and general manager at Baxter—to serve as its new chief commercial officer.
Quest also created an entirely new role: general manager of consumer-initiated testing, which comes with VP status at the company. That title will go to Richard Adams, who previously held leadership roles in e-commerce and digital consumer experience at JCPenney and jewelry company Pandora.
Adams will oversee QuestDirect, the direct-to-consumer testing business that Quest launched in 2018. Since then, the service has swelled to offer more than 50 tests for COVID, sexually transmitted infections, allergies, cholesterol, vitamin deficiencies, cancer screening and more, all of which can be ordered by individuals directly to their homes.
Quest’s renewed focus on the service mirrors competitor Labcorp’s own post-COVID shift to consumer-centric testing. Earlier this year, it launched Labcorp OnDemand, where users can choose from several dozen diagnostics that can either be shipped to their doorstep or ordered to a nearby patient service center, if certain types of samples are required.