A Massachusetts medical testing company that beat out Brea’s Beckman Coulter Inc. in an acquisition bidding war three years ago is feeling the wrath of Wall Street’s disappointment.
Waltham, Mass.-based Inverness Medical Innovations Inc. took a hard fall earlier this month after lowering its earnings outlook for the year.
The maker of diagnostic devices said at a healthcare investment conference that it expected a full-year profit of $222.9 million, down from an earlier forecast of $248.6 million, because of lower-than-expected demand and higher research and development spending.
Investors slammed Inverness after the revision, sending its shares down nearly 20% on June 8, the day of the announcement. Since the start of 2010, Inverness’ shares are down 30% with a market value of about $2 billion at recent check.
Beckman’s shares saw a 2% rise on the day of Inverness’ announcement on speculation it could benefit from its rival’s issues.
But shares of Beckman also have been caught in a larger downdraft, falling 10% since the start of the year with a recent market value of $4.2 billion.
Beckman has had to deal with its own issues, primarily a recall of a profitable heart test after the Food and Drug Administration said changes were made to the test without proper regulatory clearance.
Beckman lowered its outlook earlier this year because of the testing issues.
Inverness and Beckman squared off in 2007 for the right to buy Biosite Inc., a San Diego maker of medical tests.
The pair publicly vied for Biosite during a six-week period and had faced off behind the scenes for a year or so.
Beckman, which had a four-year collaborative relationship with Biosite on heart disease diagnostic tests, started the public bidding with a $1.55 billion offer.
Inverness then came in with a $1.6 billion unsolicited bid that was eventually matched by Beckman when Biosite said it would consider Inverness’ bid.
Beckman bowed out when Inverness upped the ante to $1.67 billion. Beckman said a higher offer for Biosite would not have been in the best interest of its shareholders.
Gathering in Anaheim
In other medical diagnostic news, Orange County is set to play host to the American Association for Clinical Chemistry’s annual meeting in Anaheim.
The meeting is set to run July 27 to 29 at the Anaheim Convention Center.
It includes a clinical lab exposition with more than 650 companies exhibiting. Several OC-based companies are signed on to participate, including Beckman.
Smaller participants include Horiba Medical, an Irvine unit of Japan’s Horiba Ltd., and Garden Grove-based Hycor Biomedical Inc.
Speakers include former U.S. senator Bill Frist, who now is a professor of business and medicine at Vanderbilt University in Tennessee. Frist will discuss challenges surrounding improving healthcare in countries with limited resources.
Other sessions will address the continued use of performance-enhancing drugs in sports; measuring low concentrations of protein to predict the risk of heart disease; and an update on the move to replace blood sugar testing with hemoglobin testing for diabetes.
Tenet Upgrade
Tenet Healthcare Corp., a Dallas company that owns three OC hospitals, received a ratings upgrade from Moody’s Corp.
The ratings agency said it upgraded Tenet to a “B2” corporate family rating from “B3” because of an overall improvement in its operating results.
Tenet said earlier this month that it expected earnings before interest, taxes, depreciation and amortization for 2010 to come in at $1.04 billion to $1.1 billion, up from a previous forecast of $985 million to $1.05 billion.
The hospital operator said it expected lower operating costs and a smaller decline in the number of paying patient admissions.
Even though Tenet was upgraded, the company’s rating remains in Moody’s speculative category, meaning it’s a high credit risk. The company said that Tenet’s rating reflects the challenges facing the healthcare sector, including the cost of care provided without reimbursement from insurers or government.
Tenet, which has sold off most of its local hospitals in recent years, owns Fountain Valley Regional Hospital and Medical Center, Los Alamitos Medical Center and Placentia-Linda Community Hospital.
Bits and Pieces
Biomerica Inc., an Irvine maker of diagnostic tests, said it bought patent and manufacturing rights for a test that identifies people at risk of developing severe side effects from taking drugs that suppress the immune system. Biomerica did not identify the company it bought the rights from or disclose financial terms of the deal … Joe Kiani, chief executive of Masimo Corp., an Irvine maker of patient monitoring devices, recently completed a three-year term as chairman of the Medical Device Manufacturers Association, a Washington, D.C.-based trade group … Aileen Anderson, a professor at the University of California, Irvine, participated in a panel on cellular reprogramming at the International Society for Stem Cell Research’s annual meeting in San Francisco earlier this month.
