Testing Laboratories

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 5,200 testing labs in the US perform physical, chemical and other analytical testing services to evaluate products, substances, or systems and provide certification for manufacturers and other industries. Labs may also provide independent data to support a product’s claims.

Dependence On Highly Skilled Workers

Testing labs require the skills of highly educated scientists, engineers, and technicians.

High Capital Requirements

The fixed costs associated with establishing a testing lab can be high.

Industry size & Structure

A typical testing lab operates out of a single location, employs 32-33 workers, and generates $4-5 million in annual revenue.

    • The testing lab industry consists of about 5,200 companies that employ 171,700 workers and generate $23 billion annually.
    • The testing lab industry is concentrated with the top 50 firms accounting for 46% of industry revenue.
    • Customer industries include defense, aerospace, telecommunications, automotive, consumer products, agricultural products, and industrial products.
    • Large domestic companies include KBR, TestAmerica Laboratories, and Pace Analytical Services. Some large international labs, such as Bureau Veritas, have US operations.
                                Industry Forecast
                                Testing Laboratories Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 10, 2023 - Software Enables Analysis from Mass Spectrometry
                                • A global team of scientists led by Tomáš Pluskal of the Institute of Organic Chemistry and Biochemistry of the Czech Academy of Sciences recently announced the latest iteration of open-source software that enables analysis of large amounts of data gathered from mass spectrometry, a method that separates chemicals by weight. The software project, MZmine, was started in 2005 to help scientists automate the processing of data gathered by analytical devices. The latest version of MZmine can process thousands of samples per hour, whereas the prior version could analyze hundreds of samples over the course of several days. The breakthrough will speed up the investigation of the causes and mechanisms of diseases, and detect as-yet undiscovered chemical structures which could lead to the development of new drugs.
                                • Researchers at Rice University and Tulane University are working to develop a material that could one day end dependence on human volunteers and animal subjects when conducting mosquito biting research. Mosquitos carry several diseases – including malaria, dengue fever, and Zika - that affect millions each year. Bringing new mosquito repellants to market is critical to reducing the impact of such illnesses, but development is challenged by the need for living subjects. The researchers developed a platform that combines 3D bioprinted hydrogels that are similar to human skin with computer vision and video monitoring technologies that analyze the gathered data.
                                • In December, President Biden signed the Consolidated Appropriations Act, which included a provision that removes the requirement that new drugs be tested on animals before receiving approval from the US Food and Drug Administration (FDA). The new law allows drugs or biologics to progress to human trials after animal or non-animal testing. Animal welfare proponents celebrated the move, noting researchers should rely more on newer testing technologies, including computer modeling, “organ chips,” and other nonanimal methods. Others are more skeptical, suggesting it could take years for nonanimal testing to reach its full potential. The FDA retains the discretion to require animal testing for some medications.
                                • Medical researchers are working to develop new antiviral drugs that can prevent the transmission of mutated SARS-CoV-2 viruses. A key springing-off point to is to learn if any already-developed drugs could be useful. The problem was that after narrowing the field, scientists still had more than 7,800 potential candidates, and studying them all would take a long time. A new database, CovidRx, was developed by a team of researchers led by Honorary Professor Sashadri Vasan at the University of York’s Department of Health Services, and it trimmed the list of candidates to a “top 200.” CovidRx presents the properties of each drug, any relevant data from COVID-19 experiments and trials, and similar drugs in use.
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