Alere Gets DoJ Subpoena

Brian Buntz

March 15, 2016

2 Min Read
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Shortly after Abbott announced its desire to acquire Alere for $6 billion, Alere revealed that it received a grand jury subpoena from U.S. Department of Justice.

Brian Buntz

Alere recently announced that it had received a DoJ subpoena on January 14 related to its international sales practices. As a result of the development, Alere also said that it would be delaying its annual report.

The subpoena specifically results to sales practices in Asia, Africa, and Latin America and matters related to the U.S. Foreign Corrupt Practices Act.

Alere announced on March 15 that, although it expects its merger with Abbott to close by the year's end, that it would not be able to file its annual report for 2015 in the 15-day extended timeline because it was researching its revenue cutoff figures for sales to Africa and China from 2013-2015. It did not provide an estimate of when it would file the 2015 report.

In 2012, Alere received a federal subpoena from the HHS Office of the Inspector General related to the quality control of its Alere triage tests, which it recalled following the subpoena. The company made changes to its quality control measures following that news and saw its stock precipitously on the heels of the news. Later that year, the company received a warning from FDA related to its response to manufacturing defects also related to its Triage devices.

Alere's stock was down nearly $4.00, falling 7.5% at 2 p.m. ET to $49.45. The company's stock had dramatically increased following the Abbott acquisition, from $37.20 to $54.11 between February 29 and March 1.

Early in February, Canaccord Genuity downgraded Alere's stock to its "Hold" rating. 

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