Quest Diagnostics seeing a rise in Covid tests as delta variant spreads, CEO says

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Quest Diagnostics CEO Steve Rusckowski told CNBC on Thursday the company is seeing an increase in Covid-19 tests as the more contagious delta variant spreads across the country. 

“We said our Covid-19 testing business would go down as we saw the recovery, if you will, from the pandemic and it has gone down throughout the first half,” Rusckowski said on “Closing Bell.” “In the last couple of weeks, and we think it’s related to the delta variant, we started to see a slight increase actually in that Covid testing volume as well.”

Rusckowski, who was CEO of Dutch health technology company Philips Healthcare before joining Quest in 2012, said Quest uses next-generation sequencing to provide Covid test results to the Centers for Disease Control and Prevention. The majority of the positive tests identified by the company this week were of the delta variant, he said. 

The highly transmissible delta strain is causing cases and deaths to increase again in the United States, particularly across largely unvaccinated communities. This has sparked concerns among health experts and local officials across the country, some of whom have begun to reimpose and advise indoor mask mandates for both vaccinated and unvaccinated people. 

More than 162 million people in the U.S. are fully vaccinated — about 49% of the nation’s population — despite the rate of daily administered shots continuing to see a sharp decline, according to a CDC tracker.

While Rusckowski noted an uptick in Covid testing, Dr. Scott Gottlieb told CNBC on Thursday morning that while he believes the current spike in delta infections may be over sooner than expected, it’s hard to confirm because people are getting tested a lot less frequently now than before. 

“Vaccinated people aren’t presenting for testing, and a lot of young and healthy people who are predominantly being infected right now also aren’t presenting for testing,” Gottlieb, a former chief of the Food and Drug Administration, said. 

As the American health-care system sees people return for in-person medical visits, Quest also posted higher-than-expected second-quarter results with business recovering in its non-Covid services, such as tests for cancer, cardiovascular diseases, infectious diseases and neurology. 

The New Jersey-based medical testing company reported adjusted earnings per share of $3.18 on revenue of $2.55 billion. Analysts expected EPS of $2.87 and revenue of $2.38 billion, according to Refinitiv. Revenue was up 39.5% from a year earlier, when the company reported adjusted EPS of $1.42.

The company forecasts full-year revenue between $9.54 billion and $9.79 billion.

“Our base business dropped considerably in April of last year. Our base business was not above 50%, and we just started in March of last year bringing up our Covid testing,” Rusckowski said. “Today, we actually have around 300,000 test capacity per day. That was zero back in March of last year. So in the second quarter of last year, our base business was down and we’re just starting to bring up our Covid testing.”

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