Alere

Alere is a manufacturer of medical diagnostic equipment. The company produces rapid tests that allow you to diagnose infectious diseases, conduct molecular studies, cardiometabolic and toxicological studies. In 2015, Alere delivered more than 1.4 billion tests to medical institutions that detect HIV, tuberculosis, malaria, dengue fever, influenza, etc.

2021

Abbott to pay $160 million for kickbacks Alere gave when supplying diabetic tests

In early August 2021, Abbott agreed to pay $160 million for kickbacks given by its subsidiary Alere in the supply of diabetes tests. Abbott acquired Alere in 2017.

Alere's Arriva Medical unit, which delivers diabetes tests by mail and ceased operations in December 2017, paid kickbacks to beneficiaries of the Medicare insurance company. Arriva Medical, with the knowledge of Alere, provided "free glucometers" and supplies for diabetic tests between April 2010 and the end of 2016. In addition, Arriva Medical systematically charged Medicare, an insurance company, for glucometers provided to patients who did not have benefits to receive them or who had already died at the time of the alleged provision of the product.

Abbott to pay $160 million for kickbacks Alere gave in diabetic test deliveries

The payment of illegal incentives in the form of free goods led to the embezzlement of taxpayer funds, - said a spokesman for the Ministry of Justice.

The founders of Arriva Medical, David Wallace and Timothy Stocksdale, agreed in April 2019 to pay $500,000 to settle the Justice Department's claims in connection with the alleged kickbacks. In a statement, Abbott did not comment on the settlement but said Alere provided all explanations in the financial documents. The defendants did not admit liability.

The $160 million payment marks Abbott's latest trial against Alere. In June, the company also had to pay $38.75 million to settle another Alere-related lawsuit alleging that the company knowingly sold faulty INRatio blood clotting monitors to people taking anticoagulant drugs from 2008 to 2016.^[1]

Abbott to pay tens of millions to sell notoriously defective medical devices

In July 2021, Abbott agreed to pay $66 million to settle litigation initiated by the US Department of Justice against its own subsidiaries under the False Claims Act.

In particular, the manufacturer of medical equipment will pay $38.75 million at the request of the federal court of Newark (New Jersey) to settle a lawsuit related to a subsidiary of Alere, and $27 million to settle a lawsuit in the case of a subsidiary of St. Jude Medical in federal court of Maryland. Read more here.

2017: Abbott buys Alere for $5.3bn

In April 2017, Abbott Laboratories announced the purchase of Alere at a price $500 million lower than previously announced. The discount is associated with a number of unpleasant events for Alere.

According to Reuters news agency, in February 2016, Abbott announced the acquisition of Alere for $5.8 billion or $56 per share, while in April 2017 the amount was reduced to $5.3 billion or $51. However, the final price still turned out to be much better than the exchange value of securities ($42.31 by the end of trading on April 13, 2017).

Abbott logo near one of the company's offices

It is noted that in the negotiations held in December 2015, Abbott offered from $49 to $53 per Alere share. At the same time, Abbott did not conduct a process of comprehensive research of Alere's business, its financial condition and market position (due diligence), which turned into a lot of problems.

Abbott intended to walk away from the deal and even sued in court after revelations about Alere's withholding of information about material and regulatory issues at hand. The proceedings lasted about a year, during which time Alere received several more lawsuits in cases of bribery and recall of products.

Thomson Reuters estimates the amount Abbott valued Alere at about 26.84 times future earnings, whereas rival companies have a higher average of about 37.9 times.

The revised price as a whole is at the level of investor expectations and, apparently, reflects the impact of a number of problems on Alere's business in the last 12 months, says Raymond James analyst Nicholas Jansen.

After the deal is completed, Abbott is expected to become a leading provider in medical diagnostics with annual sales of more than $7 billion in related solutions.^[2]

2016

Abbott goes to court to withdraw deal

On December 7, 2016, it became known that the American manufacturer of medical devices and drugs Abbott Laboratories filed a lawsuit to cancel the acquisition of Alere. The buyer changed his mind about entering into the transaction due to a significant decrease in the market value of the company being absorbed.

Alere is no longer the company Abbott agreed to buy 10 months ago, says Abbott spokesman Scott Stoffel. - These numerous negative events are unprecedented and are not isolated cases. For months, we have been trying to get information to assess these issues and Alere has blocked all these attempts. This, combined with a lack of transparency, led us to file this complaint.

Abbott goes to court to cancel $5.8 billion Alere purchase

Abbott decided to reconsider Alere's purchase after the U.S. Department of Justice opened an investigation into Alere's sales and billing practices for patients related to Medicare, Medicaid and Tricare medical programs. In addition, Abbott's decision was influenced by Alere's revised revenues and the withdrawal of one of the products from the market.

The complaint, which Abbott sent to the Delaware Chancery Court, says the company has the right to terminate the deal because the cumulative negative effect significantly changes Alere's prospects.

Alere previously filed a lawsuit against Abbott, demanding that the company obtain all necessary approvals from antitrust regulators to complete the transaction.

The scandal surrounding Alere and Abbott's refusal to buy this company brought down its quotes. By the close of the exchange on December 7, 2016, the value of one Alere share amounted to $36.67, a decrease of 8% compared to the previous year. Abbott made an offer to buy Alere for $56 per security.^[3]

Threat of disruption to Abbott deal

In March 2016, Abbott Laboratories attempted to pull out of a deal to acquire Alere after the U.S. Department of Justice opened an investigation into Alere's suspicion of corruption in arranging sales in Africa, Asia and Latin America. After some time, the American authorities initiated a new investigation into Alere, which complicated relations with the future buyer.

Problems were added by the publication of Alere's financial report for 2015, postponed for six months. He was sent to the US Securities and Exchange Commission only in August 2016. Alere reported that the report corrected "insignificant errors" in the results for the 2013 and 2014 fiscal years, as well as for the three quarters of 2015.

Abbott may refuse to buy medical express test manufacturer Alere for $5.8 billion

The report released did not address Abbott's concerns about business management and working practices given the extensive list of issues that came to light following the announcement of our agreement, Abbott said.

To this statement, Alere responded with a message that Abbott had "absolutely no reason" to withdraw from the deal. On this score, Abbott representatives did not comment on the request of Western media.^[4]

Abbott announces $5.8 billion Alere purchase

On February 1, 2016, American medical device manufacturer Abbott Laboratories announced the purchase of Alere for $5.8 billion. The transaction will cost $56 per Alere share, which is 1.5 times the value of the company's securities by the time the exchange closes on January 29, 2016.

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