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Alere Reports 2 Percent Dip in Q2 Revenues Despite Lift in Infectious Disease Sales

NEW YORK (GenomeWeb) – Alere today filed its financial results for the second quarter of 2016, reporting a 2 percent decrease in revenues year over year.

For the three months ended June 30, Alere reported revenues of $611.0 million, down from $623.0 million in the prior year period. The firm said that the revenue decrease was primarily due to a $16.0 million decrease in revenue related to the November 2015 divestiture of its BBI business, a $10.0 million decrease in revenue related to its mail order diabetes business, and $10.0 million decrease in revenue related to the negative impact of foreign currency exchange.

The firm added that the Q2 revenue dip was partly offset by a $17.0 million year-over-year increase in infectious disease product sales; $5.0 million in revenue associated with the acquisition of US Diagnostics; and $4.0 million associated with patient self-testing revenue.

Alere said that Q2 organic growth was 2 percent.

The firm reported a 4 percent dip, year over year, in cardiometabolic disease revenues to $204.0 million from $212 million; a 20 percent fall in consumer diagnostics revenues to $20.0 million from $25.0 million; a 56 percent fall in license and royalty revenues to $3.0 million from $5.0 million; and a 29 percent decrease in other revenues to $36.0 million from $51.0 million. Infectious disease revenues were up 10 percent, Alere said, to $190.0 million from $173.0 million, and toxicology business revenues were almost flat at $158.0 million compared to $157.0 million.

Net loss from continuing operations for Q2 2016 was $35.0 million, or $0.46 per share, compared to a net gain of $15.0 million, or $0.11 per share, in the prior-year period.

“With the filing of our second quarter 2016 Form 10-Q, we are now current in our financial filings and are on track to report our third quarter 2016 results within the normal time frame,” Alere's CEO, Namal Nawana, said in a statement.

Alere is in the process of being acquired by Abbott, which agreed earlier this year to pay $5.8 billion to buy the company. Uncertainty emerged around the acquisition when Alere delayed filing its 10-K report with US securities regulators. Abbott then requested termination of the deal, which Alere refused. Alere has also received a grand jury subpoena from the US Department of Justice over sales practices and dealings in Africa, Asia, and Latin America.

In August, the firm reported a 7 percent dip in revenues year over year for the fourth quarter of 2015, and said that it had finished analyzing certain aspects of revenue recognition for 2015, 2014, and 2013, and each of the quarters during those years.

Around mid-August, Alere filed its financial results for the first quarter of 2016, reporting a 6 percent decrease in revenues year over year.

Towards the end of the month, Alere sued Abbott in a move designed to push its potential acquirer to fulfill its obligations under the terms of their merger agreement and act promptly in obtaining the required anti-trust approvals.

According to multiple reports, the unsealed lawsuit revealed that Alere accused Abbott of trying to thwart the merger because of "buyer's remorse," and Abbott CEO Miles White vowed in a meeting with Alere's top executives that if the deal was not terminated he would spare no expense, make life a "living hell" for Alere, and drown it in a "sea of forensic-level informational demands."

Abbott said Alere's lawsuit had no merit and was a publicity stunt.

Alere's shares were up more than 2 percent at $39.94 in early afternoon trading on the New York Stock Exchange. Abbott's shares were up a fraction of one percent at $42.15.