Shares of Alere Inc Plunge on U.S. Criminal Probe but Bounce Back Again
Reports surfaced on Wednesday that Federal investigators are seeking information from Alere Inc regarding the company's government billing practices. It comes at a time when the Waltham, Massachusetts based diagnostic-testing company as trying to complete a deal of selling itself to Abbott Laboratories.
Reports citing sources said that the Justice Department's criminal-fraud section has sent a subpoena to Alere asking for patient-billing records.
According to people familiar with the matter, the investigators are seeking information regarding Alere's effort of collecting copayments from patients and also the company's involvement in submitted forms on their behalf to government programs like Medicare, Medicaid and Tricare.
The subpoena was sent to Alere's Toxicology unit on July 1 and the information that the investigating agency is searching for dates back to records of patients in 2010 for samples tested at the Texas pain management laboratory of the company.
The company's shares had dropped 28.6 percent closing at $31.47 after the news of the subpoena surfaced on Wednesday, but again climbed twenty one percent during the extended trading following statements from the company which is cooperating with the investigators.
Bill Bonello, Analyst of Craig Hallum said "They got hit by a negative news story and people completely misinterpreted. That turned out to be sort of nothing. So, the shares are actually recovering from getting crushed earlier in the day."
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