PAML, the national medical-testing laboratory based in Spokane, is on the brink of sale to LabCorp, the world’s leading health care diagnostics company, reports an independent news site covering the Northwest health care industry.
Pathology Associates Medical Laboratories is owned by Providence Health & Services and Catholic Health Initiatives, two of the nation’s largest health care systems. The 60-year-old PAML employs over 1,600 people, tests samples collected in eight states and generates about $300 million a year in revenue.
The sale could affect over 500 employees in the Spokane area, and no other buyers were solicited, according to the Lund Report.
The report has sparked a flurry of questions among PAML employees who work at the corporate headquarters in the University District, the lab near Providence Sacred Heart Hospital and patient service centers around the Spokane area, an employee who asked not to be identified told The Spokesman-Review on Wednesday.
Company officials are not answering questions, and Dr. Francisco Velazquez, PAML’s president and CEO, did not return a call seeking comment.
“We have heard that there was an online post that has created questions. However, at this time we don’t have any information to share,” PAML said in a statement to The Spokesman-Review.
Providence Health Care spokeswoman Elizabeth DeRuyter said, “We have heard there are questions circulating, but do not have information to communicate.”
Based in Burlington, North Carolina, Laboratory Corp. of America Holdings (LabCorp) has been on a buying spree. The company paid $371 million for genetic testing lab Sequenom last fall, and in January it reached a deal to buy several clinical laboratories from Mount Sinai, a major health system in New York City. In 2015, LabCorp acquired New Jersey-based drug development firm Covance for about $5.7 billion.
Earlier this month Reuters reported that LabCorp is in talks to acquire contract researcher Pharmaceutical Product Development LLC for more than $8 billion. That would be LabCorp’s largest acquisition ever.
In a conference call with market analysts Thursday morning, LabCorp Chairman and CEO David King said the company doesn’t address speculation about possible deals.
“We look at a lot of things,” King said about potential acquisitions. “We end up passing on most of them.”
LabCorp on Thursday reported record-high revenue of $9.4 billion in 2016, up 11 percent from 2015, and profits of $732 million, compared to $437 million in 2015.
“We had a strong finish to a record year,” King said in a statement. “On the strategic front, we continue to establish ourselves as a global life sciences company, deeply integrated in guiding patient care.”
LabCorp operates a national network of primary clinical laboratories and specialty testing laboratories. It processes tests on about 470,000 specimens daily. The S&P 500 company is listed on the New York Stock Exchange under the ticker symbol LH.
PAML in 1986 was on the verge of being sold by its then-owner, Nashville-based International Clinical Laboratories Inc. Sisters of Providence, which owned Sacred Heart Medical Center, intervened to buy PAML through a for-profit subsidiary called Bourget Health Services Inc. Sacred Heart is now part of Providence Health & Services, which offers health care services in Oregon, Washington, Alaska, Montana and California.
Denver-based Catholic Health Initiatives paid $37 million for a 25 percent stake in PAML in 2009.
Considered one of the top reference laboratories in the country, PAML has been an industry leader in joint venture partnerships with community-based hospitals. It also provides blood and diagnostic tests for clinics and employers across the West.
PAML is a co-founder of PACLAB Network Laboratories, which provides laboratory services throughout Seattle and Western Washington, and is a partner in several other hospital-based laboratory joint ventures. Those include Alpha Medical Laboratory, a venture with Kootenai Health in North Idaho; Tri-Cities Laboratory serving central Washington; Treasure Valley Laboratory serving southern Idaho and northeastern Oregon; and MountainStar Clinical Laboratories serving Utah.
Velazquez was hired from Quest Diagnostics, where he served as managing director and vice president of two institutes owned by the company. He recently was appointed to the advisory board for the University of Washington School of Medicine-Gonzaga Regional Health Partnership.
The Lund Report, based in Oregon, is followed by elected officials, policymakers, industry leaders and consumer advocates.