Skip to main content
Premium Trial:

Request an Annual Quote

Alere Posts Q3 Revenue Decline of 7 Percent; Misses on Estimates

NEW YORK (GenomeWeb) – Alere reported that its third quarter revenues fell 7 percent year over year and decreased 2 percent on an organic basis due in part to currency effects and lower international sales.

For the quarter ended Sept. 30, the medical diagnostics firm reported net revenue of $602 million compared to $649.2 million in Q3 2014, and below analysts' consensus estimate of $646.3 million.

"This is not the revenue result we were planning for ... the miss is very disappointing. We understand it, and the team is extremely engaged in reversing this and getting to market growth, which we believe we can deliver," Alere CEO Namal Nawana said during a conference call recapping the results.

The firm said its results were negatively impacted by a $33 million foreign currency exchange effect, as well as decreased sales in Africa of the firm's malaria and CD4 products, and a longer ramp on tenders in both Africa and Asia.

In Q3, sales of infectious disease diagnostic products decreased 11 percent from $184 million to $163.7 year over year. Sales of Alere's toxicology testing products declined two percent to $162.6 million from $166.4 million, while cardiology diagnostics were $208.3 million, essentially flat compared to Q3 2014.

Sales of other diagnostics products were $45.3 million, down from $65.2 million, although the firm noted that parts of the business that are currently being divested are grouped into this category.

In the firm's flu business, total sales were $20 million, including $5 million from its CLIA-waived Alere i isothermal point-of-care molecular diagnostics platform.

"The focus of our sales force in Q3 was to get Alere i in place ahead of the flu season ... We've now achieved more than 2,800 instrument placements around the world year to date, and we believe we'll exit the year with more than 4,000," Nawana said, adding, "This sets the stage nicely for future kit revenue, whether it's for flu, Strep, or any of the future analytes."

In the quarter the Waltham, Massachusetts-based firm received a CLIA waiver for its Strep A rapid molecular test, and it agreed to sell BBI Group and acquired US Diagnostics, as previously reported.

Alere also received clearance to use its Alere i flu assay with viral transport medium, "and this additional claim enables us to better serve our hospital customers," Nawana said. The firm intends to begin clinical trials to expand the Alere i menu with a respiratory syncytial virus assay in Q4, and it is making progress on Clostridium difficile, and chlamydia and gonorrhea as new analytes, he said.

The firm has also shipped over $1 million in Alere q products over the past two quarters, Nawana further noted. An HIV detection assay on the Alere q, a rapid molecular platform that performs multiplexed real-time PCR, was CE marked earlier this year.

Alere reported Q3 net income of $195,000, or $.00 per share, compared to a net loss of $89.4 million, or $1.08 per share, for Q3 2014. On an adjusted basis, it had Q3 2014 earnings per share of $.54, below the average Wall Street estimate of $.61.

The company reported a 7 percent decrease in R&D spending from $38.7 million to $36 million, as well as a 9 percent decrease in SG&A from $227.6 million to $207.8 million.

Alere finished the quarter with $479.4 million cash and cash equivalents, $430.8 million in restricted cash, and $157,000 in marketable securities.

During the call, the firm provided a revised guidance range of $2.48 billion to $2.50 billion on the top line, and between $2.20 and $2.25 non-GAAP adjusted earnings per share.

"Over the longer term, we believe the financial pieces for Alere remain fully intact," Nawana said. "We've done the checks and believe markets are still growing organically in the mid-single digits, and we fully expect to return the company to organic revenue growth in Q4 and next year."