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Inverness Medical Terminates Supply Contract With Thermo Fisher

Thermo Fisher Scientific Inc. (Thermo Fisher) has announced that Inverness Medical Innovations, Inc. (Inverness Medical), has terminated its supply contract with the company covering Biosite products, effective July 1, 2010. Under this contract, the company’s healthcare market business purchases Biosite products for resale to third-party customers.

Thermo Fisher believes that Inverness Medical’ decision to terminate the contract and sell direct to customers was made in response to the company’s recent strategic decision to expand its product offerings in order to provide its customers with a broader menu of diagnostic solutions. The company expects approximately $200 million in revenue from the sale of Biosite products in 2009. As a consequence of the termination, the company expects that sales of Biosite products in 2010 will be less than half of the 2009 level and will be minimal in 2011 and beyond. The company has signed an agreement with another supplier of diagnostic products and expects to sell approximately $40 million of these and other products from the new supplier in 2010, offsetting a portion of the anticipated drop in revenue from the Biosite products.