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Regulators Clear Way for Abbott to Complete Alere Acquisition

NEW YORK (GenomeWeb) – Abbott said today that it intends to close the acquisition of Alere on Tuesday, Oct. 3, after receiving all needed regulatory clearances.

The announcement follows a flurry of activity on Thursday that saw Abbott and Alere receive clearances, some conditional, from the US Department of Justice, US Federal Trade Commission, and the US Securities and Exchange Commission.

Late on Thursday evening, Alere said it had reached an agreement in principle to settle with the DOJ and resolve potential civil claims, including claims under the False Claims Act, relating to Alere Triage cardiac and toxicology products sold between January 2006 and March 2012.

The firm said that the settlement relates to matters arising from an FDA inspection in 2012 of Alere's San Diego facility and an Office of Inspector General subpoena. Alere said that if the ongoing discussions with the DOJ are successfully concluded, it believed the total combined payment to the DOJ and participating states will be within a $35 million loss contingency reserve previously taken by the company.

Today, Alere further noted that the DOJ has closed its investigation. 

Earlier on Thursday, the FTC said it had provided approval of the Abbott-Alere deal on the condition that the firms divest two Alere point-of-care testing businesses.

The FTC noted it worked with antitrust agencies in Canada and the European Union to analyze the proposed conditions to approval.

The FTC had filed a complaint stating that the proposed acquisition would result in market concentration and likely harm competition in the US for sales of two types of devices — point-of-care blood gas testing systems and point-of-care cardiac marker testing systems, both provided by Alere.

Siemens is buying the firm's blood gas testing systems, which measure blood pH, oxygen, carbon dioxide, and electrolyte levels. Quidel is buying the cardiac marker testing systems, which measure specific proteins in the blood to assess whether a patient is having a heart attack.

Siemens will also take ownership of two of Alere's facilities in Ottawa, Canada, and Quidel will take ownership of Alere's facility in San Diego, California.

Also on Thursday, Alere agreed to pay $13 million to the US Securities and Exchange Commission, ending an investigation by the agency into certain accounting practices by the company's foreign subsidiaries. Alere consented to an administrative cease-and-desist order without admitting or denying the findings of an investigation by the SEC.

In February 2016, Abbott offered to buy Alere for $5.8 billion, but sales and accounting issues at Alere slowed progress. In April 2017, the firms amended the terms of their acquisition agreement and dismissed lawsuits they had filed against each other. Under the amended terms, Abbott said it would buy Alere for a new price of about $5.3 billion.

In an explanation of its requirement that Alere divest two of its businesses, the FTC said that Abbott and Alere are the only significant suppliers of point-of-care blood gas testing systems in the US, and they are each other’s closest competitors as the only suppliers of handheld systems in the relevant market. Abbott's market share is about 82 percent, and Alere's is about 15 percent, the complaint noted.

They are also "the only significant competitors in the US market for point-of-care cardiac marker testing systems," the FTC complaint added. Abbott's share of that market is about 87 percent, and Alere's share is about 13 percent, the complaint said.

Abbott said today that the deal establishes it as the global leader in point-of-care testing and further strengthens the company's diagnostics presence. The firm noted that with the addition of Alere, it has about $7 billion in diagnostics sales worldwide, including about $2.5 billion in point-of-care testing.

In early morning trading on the New York Stock Exchange today, shares of Abbott were down less than 1 percent to $53.48. Alere's share price was up less than 1 percent this morning to $50.98, just below the transaction price of $51 per share.