Alere (NYSE:ALR) said yesterday that the U.S. Justice Dept. closed a probe into its pain management lab in Texas without taking action against the diagnostics giant, which also reported a nearly 974% increase in 1st-quarter losses.
Waltham, Mass.-based Alere said the Justice Dept. told it June 8 that the investigation into the lab in Austin was closed. The company reported losses of $-64.1 million, or -80¢ per share, on sales of $588.2 million for the 3 months ended March 31. That compared with losses of -$6.0 million, or -13¢ per share, on sales of $589.0 million during Q1 2016.
Alere said the results do not include some $15 million in revenues for its Arriva Medical diabetes division, which had its Medicare enrollment revoked last year after the Centers for Medicare & Medicaid Services accused it of submitting claims for 211 deceased patients. A federal judge upheld the ban in April.
“Our 1st-quarter 2017 results reflect strong U.S. sales growth driven by record influenza and respiratory sales. We achieved Alere i molecular sales of greater than $30 million globally in the quarter. Additionally, it is pleasing to report strong HIV product sales and that our toxicology business returned to growth driven by employer services,” CEO Namal Nawana said in prepared remarks. “We are pleased that our definitive proxy statement was filed last week with a shareholder meeting date set for July 7.”
Alere is also under investigation by the DoJ for the allegedly inappropriate conduct at its South Korean Standard Diagnostics subsidiary. Accounting snafus and a ban imposed on its Arriva Medical diabetes division by the Centers for Medicare & Medicaid Services led to problems with its pending acquisition by Abbott (NYSE:ABT); the companies agreed in April to a lower, $5.3 billion price on the deal, which is slated to close by the end of the month.
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