(Reuters) - Diagnostic-testing company Alere Inc has received a U.S. Department of Justice subpoena seeking patient-billing records related to Medicare, Medicaid and Tricare, the company said on Wednesday.
The subpoena, which was sent to Alere’s Toxicology unit on July 1, asked for billing records dating back to 2010 for patient samples tested at the company’s Texas pain management laboratory, Alere said in a statement.
The company's shares jumped 21 percent in extended trading following the statement. They had fallen 28.6 percent to close at $31.47 after the Wall Street Journal reported news of the subpoena earlier on Wednesday. (on.wsj.com/2av4Jag)
“They got hit by a negative news story and people completely misinterpreted. That turned out to be sort of ... nothing,” analyst Bill Bonello of Craig Hallum said in a telephone interview. “So, the shares are actually recovering from getting crushed earlier in the day.”
Alere said it was fully cooperating with the investigation and believed that matters related to the subpoena were not material.
A DOJ spokesman declined to comment.
Alere said in March it had received a grand jury subpoena from the Department of Justice seeking documents relating to its sales practices.
Alere said in April its board had rejected a request by Abbott Laboratories Inc to call off its $5.8 billion offer to buy Alere in exchange for a breakup fee.
Reporting by Ankur Banerjee and Rishika Sadam in Bengaluru; Editing by Richard Chang