The laboratory services joint venture that IQVIA and Quest Diagnostics have operated for the past six years is moving under the full control of IQVIA in a $760 million transaction.
The cash sum is what IQVIA paid to acquire Quest’s minority stake in the business, called Q2 Solutions. In 2015, IQVIA and Quest combined the global clinical trial laboratory operations of their respective companies, forming Q2. IQVIA held a 60% stake in the joint venture; Quest owned 40%. According to Quest’s 2015 annual report, the value of its investment in the joint venture was $416 million.
Q2 Solutions provides laboratory services, such as collecting samples from clinical trial sites and analyzing specimens. That analysis has become more complex as drug development increasingly requires genomic analysis and the development of companion diagnostics. In addition to labs in the U.S., Q2 has sites in the U.K., Singapore, India, Japan, and China.
In 2019, Q2 announced plans to expand its genomics capabilities with a new laboratory facility in Durham, North Carolina, supporting the development of new precision medicines. The expansion received state economic incentives in the form of grants pegged to job creation targets. Q2 pledged to invest $73 million and create 749 jobs over seven years.
IQVIA, which has a headquarters in Durham and in Danbury, Connecticut, is the biopharmaceutical industry’s largest contract research organization (CRO) providing clinical trial services for biopharmaceutical companies. Quest is a laboratory testing giant based in Secaucus, New Jersey. Their formation of Q2 came amid of a wave of business combinations involving companies that provide services to the biopharmaceutical industry.
In 2015, lab-testing giant LabCorp acquired Covance, a CRO, in a $5.7 billion merger that gave that combined company the largest central lab services business in the industry. The following year, IQVIA, then known as Quintiles Transnational, merged with IMS Health to form Quintiles IMS in a $23 billion deal. That company changed its name to IQVIA in 2017.
Though Quest no longer owns a piece of Q2, it will still be involved in its central laboratory operations. Under a multi-year agreement, the companies said Quest will remain the preferred provider of lab testing services that complement or augment what Q2 offers to its clients.
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