Quest Diagnostics Incorporated DGX recently announced participation in a pilot program along with Walmart and DroneUp to provide drone delivery of COVID-19 at-home self-collection kits. The pilot program will serve single-family homes in the North Las Vegas area.
The drone deliveries will launch from the North Las Vegas Walmart store and will deliver the at-home self-collection test kits to households within a one-mile radius of the store.
However, the delivery will depend on weather and visibility as well as the available supply.
The pilot program, through which Quest Diagnostics will receive test samples, will significantly boost the company’s testing business as it will bring more customers under its purview. This will enable the company to fortify its position in its Diagnostic Information Services business across the globe.
Rationale Behind the Pilot Program
The kits delivered through the drones will enable patients to perform a self-administered nasal swab in the privacy of their home. Once done, the samples can be shipped to a Quest Diagnostics lab using the pre-paid shipping envelope provided in the kit. The test results can be accessed through the secure Quest Diagnostics MyQuest online portal or app.
For investors’ note, the at-home self-collection kits are the same that Quest Diagnostics recently made available through its QuestDirect Active Infection Test.
The learnings from the program will aid in determining the role of the drones during any pandemic response, health care delivery and retail.
However, to be eligible for the drone delivery, patients must live within the one-mile radius of the North Las Vegas Walmart store, must meet Centers for Disease Control and Prevention and state and local guidelines for testing, and must be 18 years of age or older.
Notably, the eligible patients will not have to make any payment for the drone delivery of kits through the pilot program.
Per a report by Research And Markets published on GlobeNewswire, the global drone market will expand from $14 billion in 2018 to more than $43 billion in 2024, at a CAGR of 20.5%. Factors like growing demand for instant or same-day delivery, accessibility to remote areas and contactless deliveries for hygienic purposes are likely to drive the market.
Given the market potential, Quest Diagnostics’ participation in the pilot program is expected to significantly boost the company’s testing business.
Other Coronavirus-Related Developments
Of late, Quest Diagnostics witnessed some important developments with respect to its response to the pandemic.
This month, the company announced the availability of two consumer-initiated and physician-ordered COVID-19 diagnostic test options for active COVID-19 infection through its QuestDirect (the consumer-initiated testing business of Quest Diagnostics).
Quest Diagnostics, in July, received the FDA’s Emergency Use Authorization (EUA) for a new laboratory technique to speed up the process of extracting viral RNA from specimens. This will enable the company to expand its daily capacity of COVID-19 molecular diagnostic tests for patients in the United States.
In the same month, the company received another EUA to use specimen pooling with its proprietary molecular diagnostic test for COVID-19. With this EUA, Quest Diagnostics became the first lab provider to receive FDA authorization for the technique for COVID-19 testing in the United States.
Shares of the company have gained 34.5% in the past six months compared with the industry’s 21.5% rise and the S&P 500’s 25.4% growth.
Zacks Rank & Key Picks
Currently, Quest Diagnostics carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are QIAGEN N.V. QGEN, Thermo Fisher Scientific Inc. TMO and Hologic, Inc. HOLX.
QIAGEN’s long-term earnings growth rate is estimated at 22.3%. It currently flaunts a Zacks Rank #1. (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher’s long-term earnings growth rate is estimated at 15.5%. It currently carries a Zacks Rank #2 (Buy).
Hologic’s long-term earnings growth rate is estimated at 16.4%. The company presently sports a Zacks Rank #1.
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