DGX Stock Gains Following the Launch of New AD-Detect Blood Test

Quest Diagnostics DGX recently launched its new laboratory blood test, AD-Detect Abeta, which combines 42/40 and p-tau217 Evaluation. It is designed to help physicians confirm amyloid brain pathology due to Alzheimer's disease (AD) in patients with mild cognitive impairment or dementia.

The latest launch expands the company’s AD-Detect suite of advanced diagnostics.

DGX Stock’s Likely Trend Following the News

After the announcement, DGX’s shares edged 2.7% to close the session at $164.04 on Wednesday. 

On a promising note, Quest Diagnostics’ AD-Detect suite of advanced diagnostics has grown to include a range of validated blood-based biomarkers, giving providers options for personalized testing for patients. 

Further, the company plans to expand the portfolio with new biomarkers to help providers better assess Alzheimer's and other forms of dementia. We expect the market sentiment toward DGX stock to remain positive surrounding the latest launch of new test panels for AD. 

Quest Diagnostics has a market capitalization of $18.21 billion at present. Going by the Zacks Consensus Estimate, the company’s 2025 earnings are expected to grow 8.5% on a 9.1% improvement in revenues. 

About DGX’s New AD-Detect Blood Test

The AD-Detect Abeta combines results of blood levels of amyloid beta (AB) 42/40 with blood levels of p-tau217. The test results are then used to produce the AD-Detect Likelihood Score, a composite interpretation created through a proprietary algorithm validated utilizing a well-characterized cohort from the Florida Alzheimer's Disease Research Center. 

Significance of DGX’s New AD-Detect Blood Test

In AD, a protein called amyloid forms plaques in the brain, triggering changes in another protein, tau, and causing it to twist into tangles. These plaques and tangles disrupt brain cell function while also causing abnormal levels of both proteins to circulate in the bloodstream. While amyloid PET imaging and cerebral spinal fluid testing are established methods for aiding the diagnosis of AD, they are significantly more expensive, invasive and specialist-dependent than blood-based tests.

At the American Academy of Neurology's annual meeting, Quest Diagnostics' researchers presented favorable data demonstrating that the new blood test assesses AD pathology with greater than 90% sensitivity and accuracy due to the addition of ApoE, a genetic risk marker. 

The blood test fulfills acceptable performance criteria set forth by the CEOi. It gives providers greater confidence in moving patients (with a high likelihood score for AD) on the path to treatment. It could also potentially prevent the use of PET and lumbar puncture in patients whose blood values strongly indicate that they do not have AD.

Industry Prospects Favor DGX

Per Centres for Disease Control and Prevent, nearly 7 million people in the United States have Alzheimer's, and the number is projected to reach 14 million by 2060. Approximately 12-18% of adults over the age of 60 are living with mild cognitive impairment, a potential sign of AD, according to a report by Alzheimer's Association. 

Per a report by Quest Diagnostics, 77% of physicians are of the view that new therapies will transform Alzheimer's into a chronic, manageable disease, and 94% believe that blood tests would be more cost-effective for the healthcare system compared to more invasive methods of detection. 

Another Development by DGX

Last month, Quest Diagnostics collaborated with Google Cloud, owned by the parent holding company, Alphabet. As part of the collaboration, the company will use Google Cloud's data analytics and generative AI (gen AI) technologies to connect employees and customers with enterprise-wide knowledge and automate complex tasks through intelligent, customizable agents.

DGX Stock Price Performance

In the past year, shares of DGX have gained 27.4% compared with the industry’s growth of 5.3%.

DGX’s Zacks Rank and Key Picks

Quest Diagnostics currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space are Masimo MASI, Boston Scientific BSX and Cardinal Health CAH. At present, Masimo sports a Zacks Rank #1 (Strong Buy), whereas Boston Scientific and Cardinal Health carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo’s shares have rallied 18.6% in the past year. Estimates for MASI’s 2024 earnings per share (EPS) have increased 1.2% to $4.10 in the past 30 days. MASI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 17.1%. 

Estimates for Boston Scientific’s 2025 EPS have jumped 2.9% to $2.85 in the past 30 days. Shares of the company have surged 49.5% in the past year compared with the industry’s growth of 10.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.25%. 

Estimates for Cardinal Health’s fiscal 2025 EPS have increased 1.5% to $7.94 in the past 30 days. Shares of the company have jumped 23.9% in the past year against the industry’s 2.4% decline. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%. 

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This article originally published on Zacks Investment Research (zacks.com).

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