Adam H. Schechter
President, Chief Executive Officerand Chairman at Laboratory Co. of America
Thank you, Chas. Good morning, everyone. It's a pleasure to be with you today. Labcorp is carrying on our mission to improve health and improve lives by harnessing the power of science, technology and innovation. In doing so, we're able to execute against our strategy, to deliver strong results for stakeholders and to effectively respond to global challenges like the pandemic. Our company rounded out a historic 2021 with another strong quarter that sets the stage for further success in 2022 and beyond. In the fourth quarter, revenue totaled $4.1 billion, adjusted earnings per share reached $6.77, and free cash flow was $548 million.
For the full year, revenue was $16.1 billion, adjusted EPS totaled $28.52, and free cash flow reached $2.6 billion. Our Base Business continued its progress during the quarter, with Diagnostics and Drug Development revenue growing 8.8% and 8.2%, respectively. In Diagnostics, Base Business organic volume increased as esoteric and routine procedures continued their year-over-year growth. Drug Development ended the year with a solid trailing 12-month net book-to-bill of 1.25 and a strong backlog of $15 billion, representing a $579 million increase in the third quarter. Also decentralized clinical trial awards were up 62% over the prior year.
Moving to the pandemic. Our ongoing response remains an example of how innovation can drive success. For nearly two years, Labcorp has dedicated significant resources to stemming the spread of the virus. We are proud of the progress we've made thus far, though the rise of variants like Omicron and surges in infection rates make it clear that our work is not over. We continue to leverage Labcorp's comprehensive capabilities to expand testing access, to identify and monitor new variants and to advance vaccine and therapy development. In the fourth quarter, COVID testing volumes were greater than anticipated. We have performed over 74 million tests for COVID to date, of which approximately 8.6 million were in the fourth quarter. This heightened demand continued into the new year, although volume is significantly less now than in December or in January. Time to results for COVID PCR test remained one to two days on average even during the latest surge. As we've done throughout the pandemic, we are keeping capacity levels high to quickly respond to spikes and testing needs. We are continuing to invest in equipment, elevated staffing levels and our supply chain. In addition, we remain prepared and staffed to support additional drug development work for vaccines, including boosters, or additional therapies.
The company's COVID-related innovations in the quarter included the rollout of observed self-collection for COVID PCR testing at over 1,000 patient service centers. And at the start of the fourth quarter, we announced the receipt of FDA Emergency Use Authorization for a combined COVID and flu at-home collection kit. These offerings are reflective of our work to make COVID testing faster, easier and more accessible. I'll now turn to our enterprise strategy, where we made significant progress in 2021. I'll provide a few highlights that will give you a sense of our growth and our forward momentum. In oncology, we made significant strides in fortifying our position as a leader by expanding diagnostic offerings and clinical trial opportunities. At the same time, we followed through on our commitment to improve cancer care access. Last year, we formed our oncology business unit, and we introduced our enterprise oncology offering. Genomic profiling of tumors is key to identifying the best targeted therapy for oncology patients. In December, we announced our agreement to acquire Personal Genome Diagnostics, or PGDx. The company has a strong portfolio of innovative liquid biopsy and tissue-based products, which complement our existing capabilities.
Through PGDx' kitted solutions, we can provide oncologists access to tumor profiling at the hospitals where the patients are treated or centralized to one of our laboratories. These solutions may also enable us to expand tumor profiling globally to help our pharmaceutical sponsors find the right novel treatment for patients. We expect the transaction to close in the first quarter of this year. Other exciting expansions of our oncology test menu included clonoSEQ, the first and only FDA-cleared test for monitoring residual blood cancer; and OmniSeq INSIGHT, a pan-cancer tissue-based sequencing test for people with late-stage solid tumors.
All of these offerings can help physicians make more informed decisions about treatments for their patients and help bring new medicines to market for cancer. In 2021, we intensified our customer focus and embedded technology and data throughout our business. This included improvements to the patient experience in our service centers. These upgrades focused on creating a seamless journey from appointment scheduling to service center visits to easier access to results. Our acquisition of Ovia Health enhanced our position as an important source of information for women's health, which we support through diagnostic, genetic and specialty testing expertise as well as clinical trials. We will continue to identify opportunities to enhance Ovia Health's innovative platform that provides family planning, pregnancy and parenting support. Additionally, we began to deploy Labcorp Diagnostic Assistant.
This new tool delivers a detailed view of a patient's lab history along with clinical insights directly to the point of care to inform diagnostic decisions. We opened an automated kit production line in Belgium in the spring. And in the fourth quarter, we opened an integrated laboratory in Singapore, which strengthens our bioanalytical services in the Asia Pacific region. And just this month, we announced the launch of Labcorp OnDemand, which builds on the success of Pixel by Labcorp. This suite of health tests and services offers easy and convenient access to a wide variety of trusted tests. It's another way that Labcorp is meeting people where they are and offering more options for people to stay healthy. We pursued numerous opportunities throughout the year that have long-term and high-growth potential.
We did this through tuck-in deals and strategic acquisitions, including: OmniSeq; Ovia Health; PGDx; and Myriad Autoimmune's Vectra test, which analyzes biomarkers to measure rheumatoid arthritis. Yesterday, we announced a comprehensive strategic agreement with Ascension, one of the largest health systems in the United States. Through our new long-term relationship with Ascension, we will manage its hospital-based laboratories in 10 states, and we will purchase select assets of its outreach laboratory business for approximately $400 million. We expect the first year annualized revenues to be between $550 million and $600 million from the combined hospital business and lab asset acquisition. While operating margins are expected to be less than segment margins initially, they are expected to improve each year. The transaction is expected to be accretive to our earnings and cash flow in year one and should return its cost of capital by year two.
This is a notable opportunity for us and one of the most significant deals of its kind in the sector. It expands our clinical services in several states across the country, and it builds on our strong track record of building similar relationships. The deal with Ascension also underscores our ability to help health systems manage industry-wide shifts. As part of the collaboration, we will explore clinical trial and oncology opportunities that enhance patient access. We look forward to this new partnership and ultimately to welcoming new colleagues to Labcorp. We also reached agreements with other hospitals and hospital systems, including Minnesota-based North Memorial Health.
We continue to be excited about our robust M&A pipeline and expect more activity in the coming months. In 2021, we provided the highest-quality service to customers and patients, and we made meaningful investments in our people. In fact, Labcorp has consistently been recognized for the impact of our work and for the value we place on our employees. We were recently named again to Fortune magazine's list of World's Most Admired Companies.
And for the fifth consecutive year, the Human Rights Campaign Foundation designated Labcorp as the best place to work for LGBTQ+ equality. We were also deemed one of America's most responsible companies for 2022 by Newsweek. Importantly, in 2021, management and the Board of Directors, working with outside advisers, thoroughly reviewed our structure and capital allocation. As part of the comprehensive review of our structure, we had extensive discussions with third parties, and the Board considered a wide range of options, including significant acquisitions, divestitures, spinning off businesses as well as spinning and merging those businesses with strategic partners. The Board unanimously concluded that the company's existing structure is in the best interest of all stakeholders at this time. That said, we continue to believe that Labcorp shares are not fully valued in the marketplace. To that end, we announced several actions designed to further enhance shareholder value.
Among them are the initiation of a dividend starting in the second quarter of 2022 as well as a $2.5 billion share repurchase program, $1 billion of which is being repurchased on an accelerated basis. We are also implementing a new LaunchPad business process improvement initiative that targets $350 million in savings over the next three years. And today, in addition to giving 2022 guidance, we will also share a longer-term outlook. And beginning with first quarter results, we will provide additional business insights through enhanced disclosures. Moving forward, we are committed to profitable growth through investments in science, innovation and new technology.
As we execute on our strategy, management and Board will continue to evaluate all avenues for enhancing shareholder value. In conclusion, our strong Base Business performance, coupled with formidable progress against our strategic priorities in 2021, sets us up for long-term success. This gives us great confidence in our longer-term, growth-oriented, bright outlook, which Glenn will take you through, along with our 2022 guidance. I am proud of what the team at Labcorp accomplished together in 2021, and I am excited for all that's to come this year and into the future as we continue to deliver for all of our stakeholders.
Now I'll turn it over to Glenn.