The Theranos and Point-Of-Care Testing (POCT) phenomena, coupled with fears that European governments will keep bearing down on lab tariffs, explains why none of the big groups managed to sell in 2014.

The advent of US start-up Theranos, now valued at over $9bn by investors, is likely to affect lab valuations generally. It brings new technology to the market that means tests can be taken from a single drop of blood taken at a pharmacist. This would effectively allow for the routine test market to be “Amazon-ised” and is likely to make margins in run-of-the-mill routine tests vulnerable. General tests also face a threat from POCTs, which can be administered by a doctor or a nurse at the bedside.

Whilst routine lab tests face an uncertain future, the same can’t be said for specialist testing, especially genetic testing. So we might see a bifurcation in values with groups with large reference labs that carry out a wide range of specialist tests and central labs which carry out trials for Big Pharma being more highly valued. That would be good news for groups such as Cerba, Sonic and Biomnis, but not so good for the big routine lab players like Labco, Synlab and Unilabs.

Reference labs are certainly more important within the system. If a large national reference lab, such as Biomnis or Cerba, was to shut tomorrow the French healthcare system would be thrown into chaos. The same could not be said of generalists, such as Labco. Mind you, how you turn that into leverage and influence is another matter entirely….