Post Abbott Consent Decree; A Changed World for Immunoassay Vendors
Abbott's prolonged problems with the FDA in the immunoassaay diagnostics market obviously created opportunities for competitors. Critics say, however, their response has been slow and none are able to step directly into Abbott's shoes. Companies initially viewed the situation as a short-term opportunity, but now they may become more aggressive as Abbott's grip on the market weakens.
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Biosite is one of a few diagnostic companies that has had to grapple with a literal run on its product--a point-of-care proprietary cardiovascular test that took off in the marketplace almost immediately after it was introduced in 2000. Now, it faces two challenges: the advent of competition from large in-vitro diagnostic companies and following up with a seond act as its explosive growth slows to more normal levels.
Abbott Laboratories' acquisition of i-Stat for $392 million reflects the promise and limitations of point-of-care diagnostics. A decade ago, i-Stat was a giddy startup, on a mission to revolutionize laboratory medicine with a handheld diagnostics system that could run basic blood tests rapidly at the patients' bedside. While it has accomplished much, it is far from creating a revolution. Meanwhile, the timing of the deal comes as Abbott emerges from a four-year nightmare with the FDA in which the FDA forced it to pull many of its important immunoassay tests off the market.
Roche's $1.4 billion acquisition of Igen left Igen shareholders gleeful and some Roche observers a bit wary of the high price tag. But by ending protracted litigation between the two companies, the deal protects one of Roche Diagnostics' core franchises, the central laboratory business.