Alere offers both professional and consumer diagnostic health tests. Its professional diagnostic products include tests for cancers, cardiovascular disease, drugs of abuse, infectious diseases, and women's health, including pregnancy tests and fertility monitors. Alere also makes consumer diagnostics, including First Check drug tests, through a venture with Procter & Gamble. Branded products include Cholestech (lipid and cholesterol testing) and Determine (HIV, tuberculosis, hepatitis B, and syphilis detection). Abbott Laboratories is buying Alere for $5.8 billion.
Alere is organized into three segments: Professional Diagnostics, Patient Self-Testing, and Consumer Diagnostics. The Professional Diagnostics segment accounts for the lion's share of earnings and includes tests that are conducted in hospitals, labs, and medical offices, as well as at home under a medical professional's supervision. Patient Self-Testing (formerly Health Information Solutions) consists primarily of the Alere Home Monitoring lines, which support anti-coagulation management to help prevent stroke and clotting disorders.
The smaller Consumer Diagnostics business, which distributes tests to consumers through retail drug and grocery retailers, are handled through a 50/50 joint venture with Proctor & Gamble (P&G). Alere put all of its OTC pregnancy and fertility test brands into the pot and agreed to do all of the manufacturing while P&G tossed in $325 million. Operating under the name SPD Swiss Precision Diagnostics, the venture took over the marketing of such brands as Clearblue Easy, Fact Plus, and Accu-Clear.
In 2014, the company sold more than 1 billion rapid diagnostic tests; more than half of its revenue stems from products for outpatient settings.
The US accounts for more than half of Alere's sales. The company maintains its primary manufacturing sites in Canada, China, Germany, Japan, Norway, Scotland, South Korea, and the US. It has secondary manufacturing facilities in parts of Europe, Australia, India, Israel, and South Africa. Alere conducts its main research and development in Germany, the UK, and the US. It maintains more than 30 distribution operations in in Asia, Europe, North America, Africa, the Caribbean, and South America.
Sales and Marketing
Alere's professional products are sold through the company's sales force, as well as through distribution networks, to hospitals, laboratories, and physicians' offices. Its First Check consumer drug testing products are sold throughout the US in drugstores, grocery stores, and by mass merchants, as well as drug wholesalers.
The company markets its health management services primarily to government and commercial health plans.
(Note: Alere restated its financials for fiscal 2014 in mid-2016, citing revenue-recognition issues in China and Africa.)
Revenue, which had been increasing since 2010, took a slight dip of 1% to $2.6 billion in 2014 and a 5% dip to $2.5 billion in 2015. This was largely due to the negative impact of foreign currency exchange rates, as well as lower sales in international markets driven by a decrease in infectious disease product sales. The divestitures of Alere Health, BBI, and Bionote also led to the drop in earnings.
Net income rose from $9.9 million in fiscal 2014 to $206.4 million in 2015. Factors contributing to that growth included a dramatic drop in loss from continuing operations and an increase in income from discontinued operations. Meanwhile, cash flow from operations fell 11% to $207.3 million as less cash was provided by discontinued operations; an increase in deferred income taxes also led to the drop.
Alere has grown significantly through what can only be described as an acquisition rampage. Since 2003 the company has bought up consumer and professional-grade diagnostic product lines and entire companies to establish its dominance in the diagnostics market. Acquisitions brought in diagnostics for home use, point-of-care tests, drug and parasite screening products, and cholesterol and cancer diagnostics among others.
In a turnaround from its previous efforts to diversify operations, Alere has been divesting non-core operations in order to concentrate on diagnostics, particularly in the areas of cardiometabolic disease, infectious disease, and toxicology. In 2015 the company sold its Alere Health operations (case management, condition management) to UnitedHealth Group's Optum division in a $600 million transaction. The company is using funds from that sale to repay debt (its long-term debt stands at around $3.8 billion). Also that year, it sold its BBI business (which it had previously planned to spin off in an IPO) to Exponent Private Equity for $164 million, the proceeds of which it will use to further pay down debt. Other recently divested operations include health information exchange system ACS, vet business unit Bionote, and even the firm's 40% stake in diagnostic test maker Vedalab.
In early 2016 Alere agreed to be acquired by Abbot Laboratories. Through the deal, Abbott will become the leader in the point-of-care diagnostics market. Alere's offerings complement Abbott's, and will provide the latter with entry to new customer channels.
Mergers and Acquisitions
In 2015 the company acquired US Diagnostics for $60 million. That purchase added drug testing devices to Alere's coffers; those operations are now part of the firm's Professional Diagnostics segment.