"Abbott needs to swallow their pride and put their buyer's remorse to bed and acquire [Alere] for $56 a share," Mark Massaro of Canaccord Genuity Inc. said. "Does [Alere] hurt them? Yes, it absolutely does."
"I do think that some of the potential targets will probably want to think very carefully about how any potential deals are structured," Wang said.
While comments like these can't be good for Abbott from a reputation standpoint, Alere is a unique situation. To be fair, a company set to be acquired by Abbott that has nothing to hide probably wouldn't be too worried about the former pulling out.
From Abbott's standpoint, the Alere situation might also behoove management to think more carefully about what targets they go after and what sort of value could be derived, Wang added. Indeed, investors from the beginning have been wary about Abbott's play for Alere, "even before all the skeletons began falling out of the closet," Wang said.
In late August, short-seller Muddy Waters LLC attacked St. Jude, asserting its implanted heart devices were susceptible to cyberattacks. The firm's director of research, Carson Block, alleged "there is a strong possibility that close to half of STJ's revenue is about to disappear for approximately two years."
The device maker's CEO and president, Michael Rousseau, in two separate statements refuted the accusations, describing the claims as "irresponsible, misleading and unnecessarily frightening patients."
Assuming the successful completion of the St. Jude deal, Abbott will significantly up its standing from a cardiac devices standpoint.
Its future M&A efforts, therefore, might be aimed in the orthopedic area, including a spinal treatment device company or a manufacturer of minimally invasive products that players such as a Boston Scientific Corp. (BSX - Get Report) or C R. Bard Inc. (BCR) already make, Wang noted. Though it already encompasses a diabetes business, Abbott might also think about purchasing a pump technology company that would enhance existing operations, she added.
Abbott and Alere representative did not immediately return requests for comment.—David Marcus contributed to this report.
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