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Inverness Medical Innovations Inc. has terminated a distribution agreement with Thermo Fisher Scientific Inc. involving its suite of Biosite diagnostic products, opting instead to deliver the health-care devices and tests directly to consumers.
The decision is a blow to Thermo Fisher, which expects to generate roughly $200 million in revenue from the resale of Inverness’ Biosite line. Inverness’ move to terminate the contract is effective July 1, 2010.
As a result, Waltham-based Thermo Fisher said Biosite-related revenue will likely total around $100 million next year and “minimal” thereafter. The company (NYSE: TMO) booked $7.2 billion in revenue during the nine months ended Sept. 26.
Thermo Fisher said Inverness’ termination of the agreement likely was prompted by Thermo’s recent decision to expand its product offerings in order to provide “its customers with a broader menu of diagnostic solutions.” Inverness (NYSE: IMA), also based in Waltham, is expected to manage the distribution of its Biosite line in house, Thermo Fisher said in a regulatory filing Tuesday. Thermo Fisher said its new line of diagnostic products should result in $40 million in new revenue in 2010.
Inverness generated $1.4 billion in revenue in the nine months ended Sept. 30.
Among Inverness’ Biosite-branded products are devices to screen for drugs as well as cardiac-related ailments. It formally notified Thermo Fisher of the contract termination Nov. 4.
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