By Kirell Lakhman

One small point appears to have been missed in reports about last week's announcement that LabCorp has penned an international drug-testing partnership with Clearstone Central Laboratories, a central lab that provides services for late-stage clinical drug trials.

The deal, which will involve LabCorp's Esoterix Clinical Trials Services division, enables the reference lab to provide testing results to the firms' respective customers.

But what's missing in the press release in which the news appears, as well as in the handful of mainstream and trade reports that covered the agreement (see here, here, and here), is that the deal could also have a clinical diagnostic component for LabCorp.

At its most basic, the Clearstone deal allows LabCorp to dip its toes into clinical diagnostics markets in Canada, Belgium, France, Singapore, and China. This alone could enable it to catch up with its biggest rival, Quest, which already has a number of international diagnostic plays as well as a robust clinical trials division.

Terms of the open-ended deal call for LabCorp to provide "safety, diagnostic, and specialty-testing services" to support Clearstone's drug-development and clinical-trial efforts.

The deal will also allow clients of both companies to access LabCorp's assay menu and Clearstone's central-lab protocol-management system, called APOLLO CLPM.

As Clearstone CEO Lewis Cameron rightly notes in the statement announcing the agreement, LabCorp "is well established in the diagnostic and clinical trials markets," and the alliance provides the reference lab "with an expanded international presence to serve the global clinical trials market."

Others could also see the deal as one that might animate LabCorp's oft-touted goal of expanding its diagnostic capabilities overseas, which would also help it to catch up with Quest. As a knowledgable source told me today, "it's possible the drug-testing deal could blossom into an expansion of LabCorp's diagnostic-testing business overseas."

It makes sense: As recently as last October LabCorp CEO David King said the company "would like to be able to compete for large international trials in addition to being an esoteric niche lab, and to do that we need more international reach in the clinical trials business." The Clearstone deal certainly fits that bill.

Upping the ante, one month after King made his remark a Quest official said his company "expects to expand our international operations, which today accounts for around 3 percent of our total revenues, to approximately 10 percent of our revenues, over the next several years."

Quest, whose web site says it is "actively working to expand our global presence," currently offers diagnostic testing services in Brazil, India, Ireland, Mexico, Puerto Rico, and the UK. None of these countries include the markets in Canada, Belgium, France, Singapore, and China that the LabCorp-Clearstone deal aims to reach.

One strong hand LabCorp has now been dealt is that it couldn't ask for a better partner. Clearstone has more than 20 years of drug-development CRO experience in "mature and emerging markets."

The company, which began a six-month reorganization in April, also offers CAP-accredited "lab testing, project and data management, and logistical support to leading pharmaceutical and biotech companies around the world."

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