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The Alere-Abbott Labs Merger: Understanding the Alere Side


Feb. 9 2016, Updated 1:49 p.m. ET

Alere is a major player in healthcare diagnostics

Alere (ALR) provides diagnostic solutions for the healthcare industry, primarily in infectious disease, cardiometabolic disease, and toxicology applications. Professional diagnostics are used to assist medical professionals in both preventative and interventional medicine, and these include testing and monitoring performed in hospitals, laboratories and doctors’ offices, and, increasingly, patient self-testing. But Abbott Laboratories (ABT) is buying Alere in an effort to bolster its diagnostics line.

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Segmental breakdown

Cardiometabolic Disease: Cardiometabolic disease encompasses both cardiovascular conditions and diabetes. Cardiovascular diseases include high blood pressure, high cholesterol, metabolic syndrome, coronary artery disease, heart attack, heart failure and stroke. Their diabetes products measure a patient’s A1C levels (which measure a patient’s blood sugar levels over time) at a doctor’s office.

Toxicology: These products are largely used by employers and the government to test employees and potential employees for drug abuse. Future applications will include saliva tests for law enforcement officials to detect impaired driving.

Patient self-testing: These are generally home diagnostic tests, primarily for drug abuse and cholesterol monitoring. The majority of this segment is within a joint venture between Alere (ALR) and Proctor & Gamble Company (PG).

Other merger arbitrage resources

Other important merger spreads include the deal between Cigna (CI) and Anthem (ANTM), which was slated to close 2H15. For a primer on risk arbitrage investing, read Market Realist’s series Merger Arbitrage Must-Knows: A Key Guide for Investors.

Investors interested in trading in the healthcare sector should consider checking out the S&P SPDR Healthcare ETF (XLV).


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