Agilent's PD-L1 Assay Certification: A Breakthrough in Gastric Cancer Diagnostics

Agilent Technologies (NYSE: A) has taken a major step forward in the fight against gastric cancer, recently securing European IVDR certification for its PD-L1 IHC 22C3 pharmDx assay. This approval positions the assay as a critical tool in guiding treatment decisions for patients with gastric or gastroesophageal junction (GEJ) adenocarcinoma, marking a pivotal moment for precision oncology. The certification not only expands the assay’s clinical utility but also underscores Agilent’s growing influence in the high-stakes diagnostics market.

Clinical Impact: Precision Medicine for a Deadly Disease

Gastric cancer is the fifth leading cause of cancer-related deaths globally, with a 5-year survival rate of just 26% in Europe. Over 130,000 Europeans were diagnosed with gastric cancer in 2022, underscoring the urgent need for targeted therapies and accurate diagnostics. Agilent’s PD-L1 IHC 22C3 assay addresses this gap by identifying patients eligible for Merck’s anti-PD-1 therapy, KEYTRUDA® (pembrolizumab).

The assay’s certification allows it to serve as a companion diagnostic (CDx) for gastric/GEJ adenocarcinoma, specifically for patients whose tumors exhibit a PD-L1 CPS score ≥1. This aligns with KEYTRUDA’s approvals in Europe, where it is combined with chemotherapy or trastuzumab (for HER2-positive cases). Clinical data from the phase 3 KEYNOTE-811 trial highlights the assay’s value: patients with PD-L1 CPS ≥1 treated with pembrolizumab saw a median progression-free survival of 10.9 months versus 7.3 months for placebo, with similarly improved overall survival.

Regulatory and Market Advantages

The PD-L1 IHC 22C3 assay is now IVDR-certified for seven cancer indications, including gastric/GEJ adenocarcinoma, NSCLC, and cervical cancer. Crucially, it is the only IVDR-certified CDx specifically approved for gastric cancer in Europe, giving Agilent a first-mover advantage. The assay’s exclusivity with Agilent’s Autostainer Link 48 advanced staining system creates a synergistic sales opportunity: labs adopting the assay must also purchase the hardware and consumables, driving recurring revenue.

The certification also ensures compliance with the stringent European In Vitro Diagnostic Regulation (IVDR), which replaced the older IVDD in 2022. Legacy devices face transition deadlines by 2027–2029, but Agilent’s proactive certification avoids these risks, enabling uninterrupted market access.

Financial Implications: Strong Fundamentals and Growth Catalysts

Agilent’s Q1 2025 results demonstrated resilience, with $1.68 billion in revenue and $1.31 EPS, both exceeding analyst expectations. The Life Sciences and Diagnostics Markets Group (LDG), which includes diagnostics tools like the PD-L1 assay, grew 4% year-over-year, signaling strong demand for clinical solutions.

The PD-L1 certification’s timing—announced in April 2025—positions it to influence Q2 2025 results, which the company will report on May 28. Analysts will scrutinize revenue growth in the LDG segment and Europe, where gastric cancer is a major public health concern. The assay’s exclusivity with the Autostainer Link 48 could also boost sales of the instrument and its consumables, supporting recurring revenue streams.

Agilent’s financial health further supports its ambitions: the company maintains a “GOOD” credit rating, 14 consecutive years of dividend growth, and a 54% gross profit margin. These strengths provide a stable foundation for investing in diagnostics innovation.

Risks and Considerations

While the PD-L1 assay’s certification is a win, challenges remain:
- Adoption Lag: Even with regulatory approval, widespread lab adoption may take time, delaying near-term revenue impact.
- Competitor Actions: Rivals like Roche and Danaher are also advancing IVDR-compliant diagnostics, intensifying competition.
- Cost and Access: The assay’s pricing and reimbursement policies in European markets remain unspecified, which could limit uptake.

Conclusion: A Strategic Win for Agilent’s Future

Agilent’s PD-L1 IHC 22C3 assay certification represents a strategic triumph in oncology diagnostics. With gastric cancer’s high mortality rate and the assay’s exclusivity with its Autostainer platform, Agilent is well-positioned to capitalize on a $23 billion global in vitro diagnostics market, projected to grow at a CAGR of 6.5% through 2030.

The certification’s alignment with Merck’s KEYTRUDA—a drug with over $20 billion in annual global sales—creates a synergistic partnership that could amplify both companies’ reach. For investors, the Q2 earnings report on May 28 will be critical to gauge the assay’s early financial impact, but the long-term outlook is compelling. Agilent’s early IVDR compliance, coupled with its leadership in precision oncology tools, positions the company to drive sustained growth in one of healthcare’s most dynamic sectors.

In a market where 1 in 10 Europeans will face a cancer diagnosis, Agilent’s PD-L1 assay is more than a diagnostic tool—it’s a lifeline for patients and a strategic asset for shareholders.