DGX Stock Up on New Blood Test Development Deal With MD Anderson

Quest Diagnostics Inc. DGX recently announced a collaboration with The University of Texas MD Anderson Cancer Center (MD Anderson). The partnership will focus on improving the assessment of elevated risk of cancer in individuals who would benefit from medically appropriate cancer screenings.

Under the terms of the agreement, Quest Diagnostics will develop and validate a laboratory-developed blood test based on circulating protein biomarkers associated with high risk for one or more cancers, including colorectal, lung, breast, pancreatic, ovarian, liver, prostate, esophageal and stomach.

DGX Stock’s Likely Trend Following the News

Since the June 10 announcement, DGX shares have risen 2.6%, closing yesterday’s session at $182.07. The development comes at a time when patients are skipping preventive screenings in cancer care due to the procedures being invasive, inconvenient or unaffordable. Another major hurdle is the lack of tests for infrequent but often deadly cancers, like pancreatic cancer. Accordingly, we expect the market sentiment on DGX stock to remain positive surrounding this news.

Quest Diagnostics has a market capitalization of $20.12 billion at present. Going by the Zacks Consensus Estimate, the company’s 2025 earnings are expected to grow 8.6% over 2024. It delivered an earnings beat of 2%, on average, in the trailing four quarters.

More on Quest Diagnostics’ Latest Collaboration

Quest Diagnostics will base the test on a developmental license to technology and intellectual property associated with the Multi-Cancer Stratification Test (MCaST), a cohesive risk model developed by the laboratory experts at MD Anderson. The team has identified a set of biomarkers that inform the model through extensive clinical research conducted on screening study cohorts involving tens of thousands of individuals. DGX plans to refine, and further develop and validate the MCaST technology for its lab-developed test.

Assuming the successful validation of the test, the parties may agree for Quest Diagnostics to exercise rights to commercialize the test, aiming to make it available for providers in North America in 2026. 

Only 51% of U.S. adults say they have had a routine medical appointment or routine cancer screening in the last year. Quest Diagnostics expects the future test will supplement and not replace conventional screening methods by providing insights to help providers identify patients who would benefit from medically appropriate screening or other forms of evaluation.

Industry Prospects Favoring DGX

Per a Research report, the global cancer diagnostics market was valued at $109.6 billion in 2024 and is expected to grow at a compound annual rate of 6.1% through 2030. Some of the key factors driving the market’s growth are the rising prevalence of cancer, technological advancements in diagnostics procedures and rising initiatives undertaken by private and public organizations.

More Developments at DGX

In April, Quest Diagnostics introduced AD-Detect Abeta 42/40 and p-tau217 Evaluation, a new laboratory blood test designed to help physicians confirm amyloid brain pathology due to Alzheimer's disease in patients with mild cognitive impairment or dementia. The test combines results of blood levels of amyloid beta (AB) 42/40 determined by the company's proprietary tandem mass spectrometry techniques with blood levels of p-tau217 determined by an in vitro immunoassay test.

DGX Stock Price Performance

In the past year, shares of DGX have rallied 31.3% compared with the industry’s growth of 3.6%.

DGX’s Zacks Rank and Key Picks

Quest Diagnostics currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Hims & Hers Health HIMS and Cencora COR. While Phibro Animal Health sports a Zacks Rank #1 (Strong Buy) at present, Hims & Hers Health and Cencora each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Estimates for Phibro Animal Health’s fiscal 2025 earnings per share have jumped 5.2% to $2.04 in the past 30 days. Shares of the company have rallied 36.9% in the past year compared with the industry’s 9.6% growth. Its earnings yield of 8.5% compares comfortably with the industry’s 0.5% yield. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 30.6%.

Hims & Hers Health shares have surged 123.8% in the past year. Estimates for the company’s 2025 earnings per share have jumped 2.8% to 73 cents in the past 30 days. HIMS’ earnings beat estimates twice in the trailing four quarters, matched in one and missed on another occasion, the average surprise being 19.6%. In the last reported quarter, it posted an earnings surprise of 66.7%.

Estimates for Cencora’sfiscal 2025 earnings per share have increased 0.4% to $15.75 in the past 30 days. Shares of the company have jumped 24.6% in the past year against the industry’s 16.2% fall. COR’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6%. In the last reported quarter, it delivered an earnings surprise of 8.3%.

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

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