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."

Labcorp (LH) announced the U.S. FDA has approved its nAbCyte Anti-AAVRh74var HB-FE Assay, a companion diagnostic to determine patient eligibility for treatment with BEQVEZ, Pfizer's (PFE) recently FDA-approved hemophilia B gene therapy. The nAbCyte cell-based neutralizing antibody assay is a component of Pfizer's program to target recombinant adeno-associated virus-based gene therapies to the appropriate patient population. Before infusion with BEQVEZ, patients will require testing for preexisting anti-AAVRh74var antibodies. Labcorp's nAbCyte cell-based neutralizing antibody assay will allow for the accurate detection of preexisting neutralizing antibodies, which could impact patient safety and/or efficacy of the one-time treatment.