The Strategist

Abbott Enters The Express-Diagnostics Market

02/02/2016 - 14:04

American pharmaceutical company Abbott Laboratories announced purchase of a $ 5.8 billion company Alere. The deal will allow the world’s one of the largest pharmaceutical companies to strengthen its position in the lucrative and ever-growing market of harvesting and studying of clinical analysis.

On Monday evening, it became known that the leading US pharmaceutical company Abbott Laboratories acquires Alere Inc. for $ 5.8 billion.

Abbott becomes the largest company in the segment of express-diagnostics through the deal, as Alere’s positions in this area were especially strong. The company's revenue, which is considered a world leader in this market, is $ 2.5 billion.

Alere produces a wide range of products for emergency detection of cholesterol, influenza viruses, HIV and other infections. In addition, the company manufactures products for blood sobriety tests as well as rapid tests for pregnancy.

The market of express tests has often been criticized by some experts for that they show a greater number of errors compared to conventional laboratory tests. Nevertheless, these same critics acknowledge the fact that the express testing market is growing: this type of test is carried out not only in hospitals but also at home, in pharmacies and clinics. Pregnancy tests were the trailblazer on the market, and now express tests are used in such cases as diagnosis of cancer and other serious diseases. According to MarketsandMarkets, the global market for express-diagnostics is growing at an average 9.3% a year, aiming to reach $ 27.5 billion in 2018.

Under the deal, Abbott will pay $ 56 per Alere’s share with a premium of 51% over Alere’s closing stock price on Friday. The company expects Alere’s acquisition to increase Abbott’s earnings by $ 0.13 per share.

After the announcement, Alere’s stocks rose by 45%, Abbott’s - by 1.6%

Last year was a record for mergers and acquisitions in the the pharmaceutical industry. In February, Pfizer agreed to buy Hospira for $ 15 billion and Valeant Pharmaceuticals International bought Salix Pharmaceuticals for $ 10.1 billion. In March, AbbVie announced acquisition of Pharmacyclics for $ 21 billion, and Actavis bought Allergan for $ 66 billion. In June, the UK company Shire expressed desire to buy its Swiss rival Actelion for $ 18.3 billion. Above that, Pharmaceutical company Abbott Laboratories (the largest shareholder of the Dutch generics manufacturer Mylan) - supported Mylan’s plans to buy Perrigo.