Alere

ALR : NYSE : US$34.75
BUY 
Target: US$45.00

COMPANY DESCRIPTION:
Alere is the largest provider of rapid point-of-care (POC)
diagnostic products and the second largest disease
management franchise. Its product line-up includes areas
such as infectious disease, cardiology, oncology, drugs of
abuse, and women’s health. The company operates
through three business segments — Professional
Diagnostics Products, Consumer Diagnostics, and Health
Management — while addressing more than 100
diseases

Life Sciences — Biomedical Devices and Services
TRANSITION WILL TAKE TIME – Q2 WAS WEAK,
BUT SELL-OFF LOOKS OVERDONE; REITERATE BUY
Investment recommendation
Alere reported an ugly Q2 that missed our/Street expectations on both
the top and bottom line. While admittedly the company is on a slower
path to operating improvements than we were expecting, we believe an
Alere under new management is better positioned to unlock shareholder
value by divesting noncore assets and paying down debt. Reiterate BUY

Investment highlights
Empowering Namal. For the first time, interim CEO Namal Nawana
has been empowered by the board to drive change and will now be
tasked to oversee asset divestitures. While we expect ongoing slow
growth in the short term, we believe the company’s strategy is
sound and will likely take through 2015 to fully realize the changes.

A strong divestiture message. Alere announced it plans to divest HM
by the end of 2014, which helps eliminate an albatross around the
board’s neck and better enables the company to focus on its core.

Ugly Q2. Q2 Adj. EPS of $0.42 missed our/Street’s $0.58. Revs of
$738M (-3%) missed our $750M/Street’s $747M

Pipeline. On a positive note, ALR filed CLIA waiver for influenza and
looks to commercialize the first CLIA-waived MDx flu test in time for
the 2014-2015 flu season

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s