When you really need an answer -- fast -- toss out the crystal ball and bring in Alere. The company offers both professional and consumer diagnostic 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. The company's branded products include Actim (early pregnancy detection), Cholestech (lipid and cholesterol testing), and Determine (HIV, tuberculosis, hepatitis B, and syphilis detection). Acquisitive Alere was founded in 2001.
Alere's smaller consumer diagnostics business, which distributes tests to consumers through retail drug and grocery retailers, are handled through a joint venture with Proctor & Gamble that was formed in 2007. 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.
The US accounts for about 60% of Alere's sales. The company maintains its primary manufacturing sites in China, Japan, Norway, 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.
Acquisitions made in 2013 contributed about $167 million in sales to Altere's professional diagnostics group, which made overall revenue rise 9% to more than $3 billion for the year. A 15% increase in consumer diagnostics sales also helped out. The gains marked the fifth year of rising revenue but a $71 net loss signaled the company's fourth year in the red. Though Alere continues to post a net loss, the numbers are going in the right direction as the loss gets smaller each year. It fell by 9% in 2013 due to higher revenues. Cash from operations fell $75 million due to cash used in deferred income taxes and inventory.
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. To reflect its growing diversification, the company changed its name to Alere in 2010 and rebranded many of its products and services.
In 2013 the company was awarded a grant of up to $21.6 million and debt financing of as much as $20.6 million from the Bill & Melinda Gates Foundation to fund the development of a tuberculosis assay. The same year it made five acquisitions and launched the first FDA-approved point-of-care HIV test to detect all sub-types of the virus.
In a turnaround from its previous efforts to diversify operations, Alere has been divesting non-core operations. 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 deal marked Alere's strategy to focus on its core growth area of diagnostics; the company is using funds from the sale to repay debt (its long-term debt stands at around $3.8 billion). 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 2015, it agreed to sell its BBI business (which it was previously planning 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. The company then acquired US Diagnostics.
Mergers and Acquisitions
In 2013 Alere's big buy was Epocal, a Canadian maker of blood analysis systems, for $166 million; the deal was first arranged in 2010 when the companies struck a five-year distribution agreement for Epocal's Epoc blood analysis system for blood gas and electrolyte testing at the point-of-care (hospitals and physicians' offices).
Other 2013 deals included Discount Diabetic in Arizona, the Medicare fee-for-service assets of Liberty Medical (diabetes testing supplies) in Florida, assets of Simplex Healthcare (home delivery of diabetes testing supplies) in Tennessee, assets Mega Medika (medical distributor) in Indonesia, 75% interest in Pantech Proprietary Limited (rapid diagnostic tests) in South Africa, and 51% of Cardio Selfcare (healthcare software) in the Netherlands. These smaller deals totaled about $58 million.
Alere expanded its toxicology business in 2012 when it acquired employee drug testing firm eScreen for some $270 million. The purchase added an automated technology platform that allows for optical scanning of urine samples, with results reported electronically to employers within minutes of testing. Other recent purchases include Avee Laboratories, a privately-owned provider of drug testing services based in Tampa, Florida.
Late in 2012 the company bought Arriva Medical, a provider of diabetes testing supplies to individuals in their homes for about $65 million.