quest diagnostics 6_25Jefferies6_26_07


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quest diagnostics 6_25Jefferies6_26_07

  1. 1. Jefferies Healthcare Conference June 26, 2007
  2. 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. 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. 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. 5. A Leader Across All Product Lines » » $ in millions Based on 2006 Actual Results, proforma for AmeriPath acquisition Patients Growth People
  6. 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. 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. 8. 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
  9. 9. Electronic Connectivity: Care360 Network » » >100,000 Physician Users and Growing by >1,000 Physicians Each Month Patients Growth People
  10. 10. Preferred by Physicians » » Recent Nationwide Survey Completed by National Analysts Worldwide Asked If Physicians Had a Preference Between 2 Largest Labs: Majority Had a Preference Overwhelmingly Chose Quest Patients Growth People
  11. 11. Health Plan Contracting Approach » » Focused on Maintaining Mutually Beneficial Relationships Customize Solutions for Each Health Plan Offer Differentiated Service and Convenient Access for Their Members Price Competitively Patients Growth People
  12. 12. Approach to Driving Profitable Growth » » Building a Sustainable Competitive Advantage Provide Differentiated Service at Competitive Prices Focus on High Growth Segments Cancer Diagnostics Cardiovascular Disease Infectious Disease Molecular Diagnostics Introduce Important & Unique Tests & Services Expand Geographic Scope Expand Diagnostic Scope – Near Patient Testing Increasing Loyalty with Patients, Physicians and Payers Patients Growth People
  13. 13. AmeriPath Acquisition » » Creates Leader in Cancer Diagnostics with 900 MDs and PhDs AmeriPath has National Scale with Significant Local Presence • Approximately 400 Pathologists and Clinical Scientists • Over 200 Hospital Contracts in 22 States • Approximately 40 Outpatient Facilities in 19 States Strengthens Leadership in Hospital and Esoteric Testing Strengthens Relationship with Physicians and Payers Accelerates Revenue and Earnings Growth Patients Growth People
  14. 14. Financial Considerations » » Enhances Long-term Shareholder Value and EPS Growth Leverage AmeriPath Brands and Pathologist Relationships Accelerate Overall Growth Through Cross-selling Clinical and AP Services Realize Economies of Scale on Esoteric Testing Business $2 Billion Total Transaction Value with Multiple of ~10x 2008 EBITDA Driven primarily by growth opportunities Cost synergies focused at Specialty Laboratories Rationalize capacity, logistics rationalization, improve purchasing capabilities, eliminate duplicate corporate costs Maintained Investment Grade Ratings Patients Growth People
  15. 15. 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
  16. 16. Improving Revenue Mix to Higher Margin, Differentiated Services » Quest Diagnostics 2006A Revenue Pro Forma Quest Diagnostics Revenue » Other Other 8% 7% Gene-based and Esoteric Gene-based and Esoteric Drugs of Abuse Drugs of Abuse 16% 17% 4% 3% Anatomic Pathology Anatomic Pathology 10% 17% Routine Routine 62% 56% Total Quest Revenue: $6.3 Billion AmeriPath 2006A Revenue Total Pro Forma Revenue: ~$7.0 Billion Other 2% Esoteric 20% Anatomic Pathology 78% Total AmeriPath Revenue: $752 million Patients Growth People
  17. 17. 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
  18. 18. » » Patients Growth People