Diagnostics company Labcorp plans to spin off its unit focused on clinical drug trials, the Wall Street Journal reported on Thursday, citing people familiar with the matter.
Labcorp will continue to focus on its core diagnostic-testing business and will also retain two related pieces of its drug-development unit, the report said. (https://on.wsj.com/3cMDVEh)
The move is expected to be unveiled on Thursday when the company announces its second-quarter results, the report said.
The business that is being spun off reported a revenue of roughly $3 billion in the 12 months ended in June, a figure that is expected to grow at a high-single-digit rate, as per the report.
The company ventured into the clinical-development segment in 2014 with its $6.1 billion purchase of Covance Inc.
Labcorp initiated a strategic review last year after investor pressure from Jana Partners, but that ended without a merger or an acquisition as Labcorp offered its shareholders dividend and approved a $2.5 billion buyback program.
Labcorp did not immediately respond to Reuters’ request for a comment. (Reporting by Akriti Sharma in Bengaluru; editing by Uttaresh.V)