The lawsuit in Delaware Chancery Court comes at the same time Alere has more bad news: a Class I designation from FDA for a recall involving a quarter of a million handheld blood clot monitoring devices.
Alere said Friday that it is suing Abbott in Delaware Chancery Court in order to compel Abbott to complete its planned $6 billion merger.
The diagnostic company's complaint seeks to get Abbott to promptly obtain all the required anti-trust approvals. For their part, Abbott officials have been lukewarm about the deal, first announced in January, ever since Alere disclosed a federal grand jury subpoena related to a U.S. Foreign Corrupt Practices Act investigation involving sales practices from 2013 to 2015 in Asia, Africa, and Latin America. Abbott even offered up to $50 million to walk away from the proposed merger, but Alere's board rejected the offer.
Alere recently released delayed financial reports for the fourth quarter and full year of 2015. The reports say the overseas sales problems will not materially impact previous reports, but Abbott has still been saying it wants more information.
In a statement shared by an Abbott spokesperson, Alere's lawsuit was described as without merit. "Abbott is compliant with its obligations under the merger agreement and continues to work toward regulatory approvals, despite Alere's nearly six month delay in filing its 2015 10-K," Abbott officials said in the statement.
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FDA meanwhile has issued a Class I designation for a previously announced Alere recall involving 236,345 INRatio or INRatio2 handheld monitors in the U.S., as well more than 2 million test strips used with the devices. Used by both health care professionals and patients in the home, the INRatio devices monitor blood clotting time--measured in PT/INR values--for people taking the anticoagulant warfarin.
The INRatio devices are being recalled because of the discovery that they may produce INR results lower than the result expected using a plasma-based laboratory INR method, according to FDA. By potentially failing to alert the warfarin takers of potentially high INR, which indicates dangerous lack of blood clotting, those relying on the tests could be in danger of major or fatal bleeding. FDA data, in fact, shows one patient died and others were hospitalized following such readings.
FDA says problems with results appear to crop up in people with certain medical conditions, or when instructions for performing the test are not followed. Said FDA: "Alere was unable to develop an adequate modification that ensured the safety and effectiveness of the INRatio System."
Alere's recall has those taking warfarin to transition off the INRatio devices to alternative blood clotting testing methods, with manufacturing and distributing of the INRatio test strips continuing until the transitions are complete.
Alere previously announced that it expected to take a $70 million to $90 million hit from the recall this year.
The company's stock was down more than 3% in value in Friday morning trading.
The news came about a week after Alere reported lackluster first quarter earnings, with revenue down $35 million year-over-year, to $578 million, and a loss of 18 cents per share versus a loss of 14 cents per share a year before.
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[Image courtesy of Salvatore Vuono on FreeDigitalPhotos.net]