PCR Test Vendors Make Mega Profits During COVID-19 Years

The latest annual reports from three major pathology firms that have been conducting large-scale PCR testing during the pandemic show record profits from the years of COVID-19.

Global pathology provider, Sonic Healthcare, reported record net income of $1.46 billion ($950 million) — up 11 percent year-on-year — while its revenue also grew seven percent to 9, $3 billion rose.

The company is the largest medical laboratory and pathology service provider in Australasia, Europe and the third largest in the United States.

“Sonic’s balance sheet is very strong after two years of exceptional earnings and cash flow generation,” Chairman Mark Compton said in the company’s annual report.

“Twelve months ago we never expected our COVID-related revenue to increase by 13 percent in 2022. It remains difficult to predict future revenue from COVID-19 testing; However, we expect continued demand coupled with seasonally weighted increased testing for other respiratory viruses.”

In Australia, Sonic operates brands such as Sullivan Nicolaides, Douglass Hanly and Melbourne Pathology. The group was a major provider of PCR testing services, which became mandatory for people wishing to work or travel, especially before the results of rapid antigen tests were widely accepted.

Local residents queue in their cars for PCR tests at St Vincent’s Bondi Beach COVID-19 drive-through testing clinic ahead of Christmas in Sydney, Australia, December 22, 2021. (Mohammad Farooq/AFP via Getty Images)

Meanwhile, Healius Pathology, which operates 2,000 patient collection centers across Australia, including brands QML, Laverty, Dorevich and Western Diagnostic Pathology, also had a record year.

“We’re sure most readers are fed up with COVID-19, but we have to thank our teams for their exceptional response during the challenges of the Delta and Omicron outbreaks. During the year, our pathology teams performed a record 65,000 daily COVID-19 PCR tests, an incredible feat,” said Chairman Robert Hubbard and CEO Malcolm Parmenter in the company’s annual report (pdf).

The company estimates that around 13 million COVID-19 tests have been carried out so far.

Healius managed to double its net income to $309.3 million from $148.4 million last year. At the same time, the company reported a 30 percent increase in revenue from $1.45 billion to $1.89 billion in June 2022.

The company’s annual report also says that since February, PCR testing has steadily declined to about 10,000 to 12,000 tests per day, especially as Omicron becomes endemic.

Healius also noted that pathology testing related to non-COVID-related conditions has declined due to the impact of “government lockdowns, restrictions on elective surgery and isolation requirements,” and that with the aging population going forward, the number of tests performed will decline out in these areas could climb.

The company’s assessment comes as the Australian Bureau of Statistics recorded a spike in deaths from conditions like cancer, dementia and diabetes in 2022, which some medics warn could be due to patients simply not seeing their doctor more regularly during the period COVID-19 years.

Meanwhile, Australian Clinical Labs, which operates 1,336 collection centers nationwide, saw its after-tax profit soar by 101 percent, jumping from $60.4 million to $178.2 million by June 2022 – a 48% increase in revenue percent from $647 million to $996 million.

“The COVID-19 pandemic has effectively halted growth in non-COVID testing revenue,” the company’s annual report (pdf) reads.

“This was due to lockdowns, problems accessing doctors, lower levels of testing for non-COVID services (e.g. flu) and social factors (reluctance to visit doctors). As the impact of the pandemic wears off, there should be a rebound in non-COVID testing revenue as the underlying drivers remain in place.”

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