Alere
Alere Inc. was an American multinational corporation specializing in the development, manufacturing, and distribution of rapid point-of-care diagnostic tests and related medical devices for detecting conditions in areas such as cardiology, infectious diseases, toxicology, and women's health.[1][2] Founded in 1991 and headquartered in Waltham, Massachusetts, the company grew through numerous acquisitions, establishing itself as a leader in decentralized diagnostics before its acquisition by Abbott Laboratories in October 2017 for approximately $5.3 billion following renegotiated terms from an initial $5.8 billion offer.[3][4] Alere's product portfolio included innovative devices like the INRatio PT/INR monitor for anticoagulation therapy monitoring and a range of rapid tests for drugs of abuse, cardiac markers, and infectious diseases, enabling quicker clinical decisions outside traditional laboratory settings.[1] The company's emphasis on portability and speed positioned it to serve healthcare professionals, consumers, and institutions worldwide, with operations spanning multiple continents and a focus on expanding access to diagnostics in resource-limited environments.[2][5] Despite its technological advancements, Alere encountered significant regulatory and legal challenges, including multiple settlements with the U.S. Department of Justice totaling over $200 million for allegations of billing Medicare for defective point-of-care devices, such as the faulty INRatio system prone to inaccurate readings that persisted uncorrected until 2016, and improper practices like uncollected copayments and kickbacks through subsidiaries.[6][7][8] The acquisition by Abbott also involved antitrust divestitures mandated by the Federal Trade Commission and a contentious lawsuit from Alere accusing Abbott of attempting to renege on the deal amid disclosures of these liabilities.[9][10]
History
Founding and Early Development
Alere traces its origins to SelfCare, Inc., founded in 1991 by entrepreneur Ron Zwanziger, who had previously established MediSense, Inc. in 1981 as a pioneer in electrochemical glucose monitoring technology.[11][12] SelfCare initially concentrated on developing and marketing over-the-counter, self-administered diagnostic tests for consumer health needs, including pregnancy detection kits and ovulation predictors, aiming to empower individuals with accessible point-of-care testing outside traditional clinical settings.[13] The company achieved initial growth by leveraging rapid immunoassay technologies to produce affordable, user-friendly diagnostics that required minimal training, targeting markets underserved by laboratory-based testing. SelfCare went public on the NASDAQ in 1996 under the ticker symbol "CART," raising capital to fuel product development and early commercialization efforts amid rising demand for home health monitoring in the late 1990s.[14] This IPO marked a pivotal step, enabling expansion of its portfolio to include tests for infectious diseases and women's health, while establishing a foundation in professional point-of-care diagnostics for physicians' offices.[13] By the early 2000s, SelfCare had restructured through strategic asset sales, including its diabetes monitoring division to Johnson & Johnson in 2001 for approximately $1.3 billion, which provided resources to refocus on core rapid diagnostics.[13] In 2003, following the acquisition of Inverness Medical Technology, the entity rebranded as Inverness Medical Innovations, Inc., shifting emphasis toward integrated professional and consumer diagnostics platforms, including cardiology and toxicology assays, setting the stage for broader market penetration before the formal adoption of the Alere name in 2010.[14][15] This period of early evolution emphasized innovation in lateral flow technologies, with annual revenues reaching around $70 million by the mid-2000s, driven by regulatory approvals from the FDA for key products like the Clearblue pregnancy test line.[13]Growth Through Acquisitions and Expansion
Alere, operating as Inverness Medical Innovations until its rebranding in 2010, adopted an aggressive acquisition strategy to rapidly expand its portfolio in point-of-care diagnostics, professional laboratory testing, and related healthcare services. From 2000 to 2016, the company executed 24 acquisitions totaling approximately $2.4 billion, targeting firms that enhanced its rapid diagnostic technologies and market access.[16] This approach complemented organic growth by integrating complementary technologies in areas such as cardiology, infectious diseases, and toxicology, enabling Alere to scale from a niche player to a global leader with revenues exceeding $2 billion by 2010.[17] Notable early acquisitions in the mid-2000s included the diagnostic business of ACON Laboratories in 2005, which provided manufacturing capabilities in China and expanded Alere's presence in emerging markets for infectious disease testing.[18] In 2007, Inverness acquired Cholestech Corporation, adding point-of-care systems for lipid profiling and metabolic screening, and Quality Assured Services to bolster health management offerings.[19] The landmark 2008 purchase of Matria Healthcare for $900 million introduced remote monitoring and disease management services, diversifying revenue streams beyond pure diagnostics.[20] Subsequent deals, such as Kroll Laboratory Specialists in February 2010 (renamed Alere Toxicology), strengthened forensic and workplace drug testing capabilities.[21] Further expansion in the early 2010s included the 2011 acquisition of Axis-Shield plc for approximately £240 million, which added specialized assays for conditions like cobalamin and folate deficiencies, enhancing Alere's laboratory diagnostics segment.[17] By 2015, Alere acquired U.S. Diagnostics Inc. for $60 million, gaining entry into the at-home testing market for conditions like cholesterol and drugs of abuse.[22] These moves not only broadened product lines—incorporating brands like BinaxNOW for malaria and influenza detection—but also extended geographic reach into Europe, Asia, and Latin America through facilities and distribution networks acquired from targets like Promesan and Gabmed.[23] Overall, this serial acquisition model fueled a compound annual revenue growth rate exceeding 20% in the latter 2000s, positioning Alere as a diversified diagnostics powerhouse prior to its eventual sale to Abbott Laboratories.[24]Pre-Acquisition Financial and Operational Difficulties
In early 2016, Alere delayed filing its 2015 Form 10-K with the SEC, citing the need for an internal review of revenue recognition practices and other accounting matters, which postponed submission until August 8, 2016.[25] The company corrected immaterial errors in its 2013 and 2014 financial statements, as well as the first three quarters of 2015, primarily involving the timing of revenue recognition, though these adjustments did not affect previously reported cash flows, balance sheet totals, or net income.[25] Despite the immaterial classification, Alere disclosed material weaknesses in its internal controls over financial reporting, specifically related to revenue recognition processes and income tax accounting, which raised ongoing concerns about the reliability of its financial statements.[25][26] These control deficiencies stemmed from broader operational lapses in international subsidiaries, where Alere improperly recognized over $260 million in revenue prematurely between 2011 and 2016, including schemes such as falsified delivery documents at its Standard Diagnostics unit in South Korea and improper bill-and-hold arrangements in China, Israel, South Africa, and Ireland.[26] The SEC's subsequent enforcement action highlighted failures in oversight and compliance, with revenue misstatements shifting recognition to later periods and contributing to inaccurate financial reporting.[26] Additionally, Alere violated the Foreign Corrupt Practices Act through improper payments totaling approximately $425,000 to government officials in Colombia (2011–2013) and India (2012), generating about $3.3 million in illicit profits, further eroding operational integrity in its global sales practices.[26] Operationally, these financial reporting issues coincided with U.S. Department of Justice investigations into Alere's overseas business conduct and domestic billing practices, disclosed in March 2016, which exacerbated delays and uncertainty in its merger with Abbott Laboratories.[25] The internal control weaknesses and revenue irregularities strained Alere's ability to maintain timely and accurate disclosures, leading to heightened scrutiny from regulators and investors, though the company maintained that core operations remained intact.[25] These pre-existing challenges, rooted in decentralized subsidiary management and inadequate auditing, ultimately prompted Abbott to invoke a material adverse change clause in an attempt to terminate the agreement.[26]Business and Operations
Core Products and Diagnostic Technologies
Alere specialized in rapid point-of-care (POC) diagnostic tests designed for use in clinical, physician office, and remote settings, delivering results in minutes without requiring laboratory infrastructure.[3] The company's portfolio emphasized immunoassay-based technologies, particularly lateral flow assays, which employ capillary action and antibody binding to detect analytes like antigens or antibodies in samples such as blood, urine, or swabs.[27] These tests supported over 1.4 billion annual diagnostics in areas including infectious diseases, cardiometabolic conditions, and toxicology, with annual sales reaching $2.5 billion by 2015.[3] Infectious disease diagnostics formed a cornerstone of Alere's offerings, featuring products like the Determine HIV-1/2 Ag/Ab Combo test for early HIV detection via fingerstick blood and the BinaxNOW series for malaria antigens and respiratory pathogens such as influenza.[28][29] Additional tests targeted tuberculosis, dengue, and filariasis, often using simple lateral flow strips for resource-limited environments.[3] For molecular detection, the Alere i platform provided CLIA-waived POC testing for influenza and streptococcus, yielding results in under 15 minutes through isothermal nucleic acid amplification.[30] Cardiometabolic products included the Cholestech LDX analyzer for quantitative lipid panels, glucose, and related markers from fingerstick samples, aiding cardiovascular risk assessment.[29] The Afinion series of compact analyzers supported multi-assay testing for hemoglobin A1c, C-reactive protein, and albumin-to-creatinine ratios, using cartridge-based photometry for near-patient precision.[31] Cardiac-specific tests, such as the Triage system for biomarkers like NT-proBNP and troponin, enabled rapid heart failure and myocardial infarction evaluation.[3] Toxicology solutions encompassed urine and oral fluid screening, including the iScreen cassette for detecting drugs of abuse like opioids and amphetamines, and the SoToxa device for non-invasive saliva-based workplace testing.[28][32] Alere also offered niche diagnostics, such as the NMP22 BladderChek for bladder cancer recurrence via urine nuclear matrix protein detection.[33] Complementary technologies like the Alere Reader enhanced objectivity by digitally interpreting lateral flow results, reducing user variability.[27] Overall, these products prioritized simplicity, portability, and cost-effectiveness, though some faced scrutiny for accuracy in certain applications prior to enhancements.[3]Market Focus and Global Reach
Alere's professional diagnostics segment, which constituted the majority of its operations, concentrated on rapid point-of-care testing for cardiometabolic conditions such as cardiovascular diseases and diabetes, infectious diseases including HIV/AIDS, influenza, malaria, and viral hepatitis, as well as toxicology applications like drugs-of-abuse screening.[34] The company also maintained a consumer diagnostics segment, primarily through a joint venture producing over-the-counter products for pregnancy and ovulation detection, alongside niche areas in women's health and oncology diagnostics.[34] These offerings targeted healthcare settings emphasizing quick, actionable results to support clinical decisions, with a strategic emphasis on decentralization from centralized labs to near-patient environments.[3] Alere's global operations spanned manufacturing facilities in the United States, Canada, China, Germany, Japan, Norway, South Korea, and the United Kingdom, enabling localized production and distribution of diagnostic kits.[34] The company conducted sales in multiple regions, with a presence in key international markets beyond North America, though its revenue remained heavily weighted toward the U.S.[3] In 2015, approximately 44% of net revenue derived from international operations, reflecting growth efforts in Europe, Asia, and other areas despite foreign currency headwinds.[34]| Geographic Region | 2015 Net Revenue Share | Approximate Amount (USD millions, total $2,463) |
|---|---|---|
| United States | 56% | $1,379 |
| Europe | 18% | $443 |
| Other | 26% | $641 |