NEW YORK, Oct. 21, 2015 /PRNewswire/ -- Palo Alto, CA-based Theranos rose in profile within the clinical lab testing industry with its Edison fingerstick technology, lower pricing, and retail concept, but the firm has now attracted controversy after media accounts casted doubt on its technology. Kalorama Information says that while Theranos' model and specific technologies are being debated, the market is large enough that disruption and innovation should be expected. The healthcare market research firm, specializing in IVD market estimations, values the U.S. clinical lab market at $102 billion. The finding was made in its recent report, Clinical Laboratory Services Market.
"The prize is large enough that there will be innovation and disruption from this firm or another," said Bruce Carlson, Publisher of Kalorama Information. "It's large enough that we can expect new competitors attracting financing based on a long-term play and a grab of some share of that large market. Near –term, though, there are large competitors to contend with and an unclear pathway to significant market share."
Kalorama said the market is dominated by Quest and Lab Corp, who hold over 20% of the market according to Kalorama. There are hundreds of small laboratories earning a small fraction. Theranos' rise to compete with these players was elevated by the recent FDA approval of its fingerstick immunodiagnostic herpes simplex virus-1 (HSV-1) test. The test alone would not be enough to make the company a significant player in the IVD market according to Kalorama Information, but a string of similar tests serviced in an innovative fashion could put the company in contention with the dozen or so major firms servicing lab tests. In addition to Quest and Laboratory Corporation of America competitors include Bio-Reference Labs, Myriad Genetics, Genoptix, Da Vita, Genomic Health, GE Healthcare, and many others.
Recently, the release of a critical Wall Street Journal article including interviews with former employees has focused attention on the company. The Silicon Valley company has released a statement in response to claims in the report. Articles in Fortune and Fox News have also critiqued the company's offering and valuation. Theranos defended the charges on its website. The firm said it was offering prices lower than average, and that over 30,000 people have rated the experience of using their product and the firm averaged a 4.8 satisfaction rating, among other contentions.
"We will be watching with interest along with many in the testing industry about developments with this particular concern, but we do think that disruption in this market should be expected," Carlson said. "Two or three firms cannot dominate any market forever as technologies change."
Kalorama had previously said in a blog post that Theranos' voluntary submission of study data for its laboratory developed test (LDT) was unexpected. FDA approval is required only of medical devices, not test services. The involvement of regulators is also unprecedented from a LDT provider; lab test services from a CLIA-certified lab are otherwise excluded from FDA oversight as long as the tests are not sold as kits or devices to third-party labs. More broadly, Theranos is an intriguing case study within the wider IVD and clinical lab services industries. The company's strategy is to improve the accessibility and convenience of even basic or core lab testing services – immunoassay screens (infectious and non-infectious), clinical chemistry, hematology, drugs of abuse – using proprietary analyzer platforms rather than conventionally procured, and FDA-approved third-party instruments. The extent of the Theranos platform's capabilities remains uncertain; a former employee claimed in the WSJ report that only 15 of the company's offered tests were run using fingerstick samples and/or on the proprietary platform. The firm disputes that allegation.
Clinical Laboratory Services Market provides key market data, including a U.S. clinical laboratory market and forecast, the markets for tissue pathology, the markets for routine chemistry testing, the markets for non-tissue molecular testing, the market for toxicology/drug abuse testing, statistics for hospital, physician and independent labs, and the major tests performed by clinical lab companies. Information is presented as a U.S.-focused market report, with general worldwide market data and a section on key international markets including European, Asian Pacific, and Latin American markets and forecasts. Historical data is provided for the years 2010 through 2014, with forecast data provided for 2016 through 2020. For more information on Clinical Laboratory Services Market visit: http://www.kaloramainformation.com/redirect.asp?progid=87945&productid=9305161.
About Kalorama Information
Kalorama Information, a division of MarketResearch.com, supplies the latest in independent medical market research in diagnostics, biotech, pharmaceuticals, medical devices and healthcare; as well as a full range of custom research services. Reports can be purchased through Kalorama's website and are also available on www.marketresearch.com and www.profound.com.
We routinely assist the media with healthcare topics. Follow us on Twitter, LinkedIn and our blog at www.kaloramainformation.com.
Contact:
Bruce Carlson
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www.KaloramaInformation.com
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SOURCE Kalorama Information
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