SECAUCUS, N.J. and BOSTON – Quest Diagnostics (NYSE: NYSE:DGX), a provider of diagnostic information services, has finalized the acquisition of PathAI Diagnostics' laboratory assets from PathAI, with the objective of enhancing the use of artificial intelligence (AI) and digital pathology in disease diagnosis, including cancer.
PathAI will continue to operate independently, focusing on the development of AI and digital pathology technologies for use in the biopharmaceutical industry and pathology labs. The acquisition is part of PathAI's strategy to expand its AI capabilities and software algorithm portfolio.
The PathAI Diagnostics facility in Memphis, now rebranded as AmeriPath, will serve as Quest's national hub for AI and digital research and development (R&D), supporting its specialty pathology businesses. PathAI will retain a separate research lab at the same Memphis location to serve its biopharmaceutical clients.
Quest and PathAI have also entered into separate agreements to further promote the use of AI and digital pathology. Quest will implement PathAI's AISight™ digital pathology image management system in its pathology labs across the United States. Additionally, Quest has been named a preferred lab services partner for PathAI's biopharmaceutical clients, and the two companies may collaborate on developing new AI algorithms for potential research and clinical applications.
Quest has a history of integrating AI, digital, and automation technologies in various laboratory and business operations, aiming to enhance quality, efficiency, and the experiences of customers and employees.
This transaction is expected to bolster Quest's capabilities in providing diagnostic insights and may contribute to more accurate and timely diagnoses for patients.
The information in this article is based on a press release statement.
In other recent news, Quest Diagnostics has announced several notable developments. The company recently reported a quarterly cash dividend of $0.75 per share, demonstrating its ongoing commitment to shareholder value. In leadership news, Quest Diagnostics has welcomed Robert B. Carter, currently the Executive Vice President and Chief Information Officer at FedEx Corporation (NYSE:FDX), to its Board of Directors.
Additionally, Haystack Oncology, a subsidiary of Quest Diagnostics, conducted a study suggesting that ctDNA testing for minimal residual disease could potentially reduce health plan costs by up to 21% for stage II colorectal cancer patients. In another strategic move, Quest Diagnostics acquired select assets from PathAI Diagnostics, including a digitized laboratory in Memphis, Tennessee, which will function as Quest's hub for AI and digital R&D.
In executive appointments, Murali Balakumar has been named Senior Vice President and Chief Information and Digital Officer, a role expected to enhance the company's digital transformation efforts.
InvestingPro Insights
In light of Quest Diagnostics' (NYSE: DGX) latest strategic acquisition aimed at bolstering their AI and digital pathology capabilities, it's insightful to look at the company's current financial health and market performance. Quest has shown a commitment to shareholder returns, as evidenced by their 12 years of consecutive dividend increases and a consistent policy of share buybacks. The management's confidence in the company's value is reflected in their aggressive share repurchase program, which is an InvestingPro Tip highlighting the company's proactive approach to capital allocation.
From a valuation perspective, Quest Diagnostics currently trades at a P/E ratio of 18.75, with an adjusted P/E ratio for the last twelve months as of Q1 2024 at 17.6. This indicates a relatively high valuation when considering near-term earnings growth, which is another InvestingPro Tip that suggests investors are expecting continued profitability and potentially more growth opportunities ahead.
InvestingPro Data further reveals that the company maintains a solid market capitalization of $15.72 billion USD and has demonstrated financial stability with a gross profit margin of 33.08% over the last twelve months as of Q1 2024. Additionally, Quest's dividend yield stands at 2.12%, reinforcing its appeal to income-focused investors.
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