Amidst a slew of disappointing IPOs, the moderate success of Genomic Health's IPO signals investor interest in a new diagnostics model: a combination product/service business -- technologically agnostic -- focused on coming up with an answer to a specific yes/no question that will either lead to or discourage an expensive therapy by a specialty physician audience. Several other start-ups are following the same model.

For the past several years, Quest has successfully embarked on a consolidation strategy designed to serve its goal of gaining a competitive advantage, in laboratory testing, with superior distribution strength and increased patient access in a high-volume, low-margin industry. Quest's acquisition of LabOne is consistent with those objectives.

Exact Sciences and its distribution partner, LabCorp are on the verge of launching a new molecular test for colon cancer screening. They've taken deal-making in diagnostics to a new level, but now they have to deliver on their promises.

LabCorp.'s proposed purchase of Dianon Systems, followed by the announcement of Welsh Carson's bid for AmeriPath, reflect different paths taken by two fierce competitors.They are also the inevitable consequence of rapid laboratory consolidation at the national level. LCA wants Dianon so that it can expand its position in cancer testing. Welsh Carson, in contrast, is a financial buyer who would have to "clean up" AmeriPath, which has run into difficulties due to its physician practice management business model.