Final LDT rule lifts overhang on Quest and Labcorp, says Jefferies

Jefferies notes that the FDA announced a final rule detailing its planned future regulation of laboratory developed tests, or “LDTs.” While the final rule follows the four-year phase-in from the original proposal, existing lab-developed tests are “grandfathered”, which is a key positive that aligns with the industry’s vision, the analyst tells investors. The firm, which thinks the “industry-friendly” rule lifts an overhang on Quest Diagnostics (DGX) and Labcorp (LH), has Buy ratings on both stocks and calls the LDT rule release “a clearing event for the labs.”