Alere Inc (ALR)

• Inverness Medical Innovations (IMA)
• Meridian Bioscience (VIVO)
• Quidel (QDEL)

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Corinne Tu

Alere Inc., develops diagnostic tests and health management solutions. The company was formerly known as Inverness Medical Innovations, Inc., but changed its name in 2010 (it acquired Alere Inc. in 2007). Alere develops solutions for infectious disease, cardiology, oncology, drugs of abuse and women's health. The company has operations in North America, Europe, the Middle East, Asia Pacific, Latin America and Africa.^[1]

Alere's largest business area is focused on developing tests that can be used near patients, deemed point of care testing (POCT). This close proximity testing allows for immediate diagnosis and treatment of patients, without having to wait hours or even days for results from central laboratories. Alere is the dominant player in the POCT space, competing in almost every testing area.^[1]

The company's strong position in infectious diseases, especially influenza testing led the company to benefit strongly from the 2009 H1N1 outbreak (also known as swine flu). Additionally, a global aging population will continue to effect the need for diagnostic testing.

Business Growth

Since 2006 Alere has acquired over 20 companies, gaining strength in almost all POCT disease areas. The acquisition of Alere Inc. by Inverness Medical has given the company the ability to be involved in more aspects of patient care.^[1]

During the 2009/2010 flu season (Q3 2009- Q1 2010) Alere saw a sharp increase in sales due to a high number of infections and awareness in testing by the public. The company continues to expand from just a test provider to health services and full patient solutions^[1]

Trends and Forces

New outbreaks and infectious diseases continue to arise

Infectious diseases are particularly prone to outbreaks due to strain mutations, lack of immunizations, and development of new diseases.

As an example, for influenza in just the U.S. alone, according to the CDC, every year 5 to 20 percent of the U.S. population gets the flu, causing more than 200,000 hospitalizations and about 36,000 flu related deaths.^[2] In 2009, this average was driven higher due to the emergence of the 2009 H1N1 virus (also know as "Swine Flu"). Average estimates for the impact of 2009 H1N1 between April and mid December of 2009 had 55 million people infected, of which 246,000 were hospitalized and over eleven thousand people died due to the virus. Infections were much higher outside of the U.S. and along with it also was testing.^[2]

In comparison to seasonal influenza, 2009 H1N1 affected a much different patient population, which also fueled concern and drove testing. According to the CDC, for seasonal flu about 60 percent of hospitalizations and 90 percent of deaths occur in people 65 years and older. While for 2009 H1N1, approximately 90 percent of estimated hospitalizations and 88 percent of estimated deaths occurred in people younger than 65 years old.^[2]

Expanded testing needs due to growing aging populations

The diagnostic testing market will continue to be impacted by increases in the aging and treatment populations. According to the U.S. Census Bureau in 2008, over 94 million people, roughly 31 percent of the population, was over the age of 50. This population is growing at just under three percent. Unfortunately, chronic diseases affect older adults disproportionately and, as a result, the U.S. will be increasingly pressured to handle a growing sick population.^[3] Even with over 225,000 physician offices in the U.S., the American College of Physicians forecasts an estimated shortage of 44,000-46,000 physicians by 2025.^[4] According to the American Hospital Association (AHA), at least half of the emergency departments are at or over capacity, citing a lack of beds as the main reason.^[5] The increase in acutely ill patients, coupled with personnel shortages, is straining clinical laboratory resources from providing test results in a timely manner. In order to relieve the growing burden on clinical laboratories, POCT is becoming increasingly adopted to diagnose and treat patients rapidly for improved patient outcomes.

Competition

The U.S. POCT market is highly fragmented, with several types of competitors vying for business with hospitals, physician office labs, community health clinics and fairs, and self-testing patients. It is made up of large multinational diagnostics companies, specialized POCT firms and participants tend to focus on certain market segments.

• Quidel (QDEL)- Although not as big as Alere, Quidel competes strongly with Alere in all of its major testing segments.
• Beckman Coulter (BEC)- competes with Alere in pregnancy and fecal occult blood testing.
• Meridian Bioscience (VIVO)- is a quickly growing player that competes directly with Alere in the infectious disease space.
• Roche Pharmaceuticals (RHHBY)- although largely a drug company, Roche has a large diagnostic group, which competes in many of the largest diagnostic testing segments.
• Abbott Laboratories (ABT)- although largely a drug and research technology company, Abbott has a large diagnostic group, which competes in many of the largest diagnostic testing segments.

References

1. ↑ ^{1.0 1.1 1.2 1.3} Alere Inc. 2010 10k
2. ↑ ^{2.0 2.1 2.2} Updated CDC Estimates of 2009 H1N1 Influenza Cases, Hospitalizations and Deaths in the United States, April 2009 – April 10, 2010, CDC.gov, May 14, 2010
3. ↑ An Aging Wolrd: 2008 Census.gov
4. ↑ Worsening Primary Care Shortage Predicted American College of Physicians, December 2, 2008
5. ↑ Ehrhardt, Jane Psychiatric Patients Wait in Overcrowded ERs birminghammedicalnews.com, Accessed on May 25, 2011