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Shares of Alere Inc. (ALR - Snapshot Report) slid 2.8% yesterday after the diagnostics solution provider opted out of the initial public offering (IPO) in the U.K. for the ordinary shares of its subsidiary BBI Diagnostics Group plc.

In April this year, Alere revealed its plan to pursue an IPO for its BBI Diagnostics subsidiary. The company intended to sell a 25% ownership interest in BBI Diagnostics, which offers a broad range of reagents to be used in numerous diagnostic tests and modern laboratory diagnostic instruments, along with other diagnostic products.

In fact, the subsidiary was formed mainly for the purpose of IPO. Alere planned to utilize all of the net proceeds of the offering, as well as the net proceeds of a new debt facility to be entered into by BBI Diagnostics at the time of the offering for paying down its outstanding debt.

Alere has now decided to gain greater value of the business through means apart from an IPO. However, the company continued to pursue its plan to divest the non-core assets in BBI Diagnostics and use the proceeds for curtailing its indebtedness.

Alere's balance sheet is highly leveraged. As of Mar 31, 2014, Alere's long-term debt and capital lease obligations stood at $3,832.4 million, reflecting a long-term debt-to-capitalization ratio of 64.8%.

In the first quarter of the year, Alere posted a 2.0% rise in adjusted earnings per share to 52 cents from 51 cents in the same quarter of 2013. However, revenues in the quarter ebbed 3.1% to $716.6 million and fell shy of the Zacks Consensus Estimate of $740 million.

Adjusted net revenues also declined by 3.1% to $717.0 million from $739.9 million in the year-earlier quarter. The fall in revenues was mainly led by weak U.S. influenza sales and larger-than-expected decline in U.S. healthcare utilization, which primarily impacted Alere’s U.S. infectious disease revenues.

Currently, Alere retains a Zacks Rank #4 (Sell). Some better-ranked stocks in the medical products industry include Cardica Inc. (CRDC - Snapshot Report), NeuroMetrix Inc. (NURO), and St. Jude Medical Inc. (STJ - Analyst Report). All of them sport a Zacks Rank #2 (Buy).

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