quest diagnostics 9_21UBSConf9_24_07Update9_21_07

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  • 1. UBS 2007 Global Life Sciences Conference September 24, 2007
  • 2. Safe Harbor Disclaimer » » The statements in this presentation which are not historical facts or information are forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. Certain of these risks and uncertainties are described in the Quest Diagnostics Incorporated SEC filings, including our latest Form 10-K. Additional risks may arise from unanticipated events. A copy of this presentation is available on our website at Patients Growth People
  • 3. Who is Quest Diagnostics? » »Leader in Providing Healthcare Insights and Solutions Comprehensive Diagnostic Testing Routine ——» Esoteric • Diagnose • Monitor • Predict • Prevent Advanced Information Technology Solutions Improve Care and Efficiency Facilitate Introduction of New Therapeutics Clinical Trials Testing Touching the Lives of Patients >150 Million Times in 2006 Patients Growth People
  • 4. Quest Diagnostics: The Leader » » DiagnosticBTesting US Market: ~$45 Source: Washington G-2 Reports and company estimates Quest Diagnostics data is proforma for AmeriPath acquisition Patients Growth People
  • 5. A Leader Across All Product Lines » » $ in millions Based on 2006 Actual Results, proforma for AmeriPath acquisition Patients Growth People
  • 6. Favorable Industry Trends » » Essential Healthcare Service Growing and Aging Population Innovations in Science & Medicine Personal Interest in Health Convergence of Technologies • Genetic Predisposition • Diagnostic Testing • Diagnostic Imaging • Information Technology Influences >70% of Healthcare Decisions Patients Growth People
  • 7. Why Quest Diagnostics? » » Unique Value Proposition Superior Patient Experience Six Sigma Quality Unparalleled Access and Distribution Innovative Science & Medicine Advanced Information Technology Sustainable Advantage Patients Growth People
  • 8. Expanding Usage by Patients of PSC Appointment Scheduling » » Only Laboratory with Appointment Scheduling at All PSC’s Reduces Patient Wait Time Improves Patient Convenience Patients Growth People
  • 9. Unparalleled Access and Distribution » » Serving 50% of US Hospitals & Physicians 31 Regional Laboratories 2 Comprehensive Esoteric Laboratories 150 Rapid Response Laboratories 40 Outpatient AP Facilities in 19 States ~2,100 Patient Service Centers - serving 45 million patients each year 4,000 Vans and 20 Airplanes - making 95,000 stops each day 45,000 Dedicated Employees Touching the Lives of Patients >150 Million Times in 2006 Patients Growth People
  • 10. Patient Service Centers and Laboratory Network » » PSCs IOPs RRLs ∃ Main Labs ∃ ~2,300 Laboratories and Patient Service Centers Serving Half of US Physicians Patients Growth People
  • 11. Innovative Science and Medicine » » Broadest Product and Service Offering Multiple Channels to Access New Technology Internal Development – Nichols Institute Joint Development Relationships Licensing/Distribution Relationships Most Comprehensive Test Menu Disease State – CVD, Cancer & Infectious Disease Technology Leading Experts for Medical Consultation 900 MDs & PhDs >30 Academic Associates Unmatched Medical & Technical Expertise Patients Growth People
  • 12. The Leader in Cancer Diagnostics » » Improving Detection & Monitoring National Network of ~800 Board Certified Pathologists & Dermatopathologists Centers of Excellence & Strong Local Presence Consultative Services Comprehensive Menu Unique Medical & Reporting Capabilities Chart from American Cancer Society: Facts & Figures 2007 Patients Growth People
  • 13. Enabling More Targeted Medicine » » Improving Patient Care Better Select Appropriate Drug Therapy Rituxan® Rituxan® Sensitivity (CD20) Herceptin® Her2 Campath® Campath Sensitivity (CD2) Irinotecan UGT1A1 Warfarin CYP2C9 Better Manage Treatment Leumeta ™ Hepascore Potential to Reduce Medical Cost Patients Growth People
  • 14. Expanding Near Patient Testing » » An Opportunity to Improve Patient Care and … Attractive benefits for hospitals and physician offices Enables more timely and effective decisions Expanding product menu Combine with central lab results to create complete patient testing record available to physicians and plans …to Reduce Medical Costs Patients Growth People
  • 15. Advanced Information Technology Solutions » » Solutions for Physicians, Hospitals and Payors Physician Offices: Labs and meds orders and results • 115,000 physician users management • 50,000 physician offices • 300,000 registered caregivers Hospitals: Health Information Exchange • > 120 hospital customers (HIE) system and KLAS award • 125,000 clinical & administrative users winning document management solution Nationwide professional services: • Deploy product to >200 physician offices support, training and deployment every week • Customer Call Centers 7x24 Solutions are highly scalable, • 1MM transactions processed daily reliable and secure • System availability of >99.995% Patients Growth People
  • 16. Electronic Connectivity: Care360 Network » » >115,000 Physician Users and Growing by >1,000 Physicians Each Month Patients Growth People
  • 17. Approach to Driving Profitable Growth » » Building a Sustainable Competitive Advantage Provide Differentiated Service at Competitive Prices Focus on High Growth Segments Introduce Important & Unique Tests & Services Expand Geographic Scope Expand Diagnostic Scope – Near Patient Testing Increasing Loyalty with Patients, Physicians and Payers Patients Growth People
  • 18. Moving to Higher Growth, Differentiated Services » » 2002 Revenue 2006 Pro Forma Revenue Other Other 3% 7% Drugs of Abuse Gene-based and Esoteric Drugs of Abuse Gene-based and Esoteric 4% 16% 3% 17% Anatomic Pathology Anatomic Pathology 10% 17% Routine Routine 67% 56% Total Revenue: $4.1 Billion Total Pro Forma Revenue: ~$7.0 Billion Patients Growth People
  • 19. 2007 YTD Results * » » A Challenging Environment in 2007 Revenues $3.2 billion Operating Income 14.9% EPS $1.32* Cash from Operations $280 million CapEx $ 89 million Performance impacted by efforts to retain UNH business. Returning to Revenue and Earnings Growth in 2008 *Excludes $0.04 EPS in Q1 charges. Patients Growth People
  • 20. Reducing Costs by $500 Million » » Using Lean Six Sigma to Improve Efficiency Streamline Lab Operations Optimize Logistics Routes and PSC Resources Improve Call Center and Billing Operations Leverage Purchasing Capabilities Maintaining High Service Levels Patients Growth People
  • 21. Building on Strength » » Industry Leader in a Vital and Growing Industry −Leadership in All Major Segments Unique Value Proposition A Proven Track Record of Integrating Acquisitions Proven Management Team Strong Cash Generator A History of Disciplined Growth Patients Growth People
  • 22. » » Patients Growth People