Abbott Laboratories and St. Jude Medical Inc. have kept analysts' busy this week, sifting through both companies' third quarter financials, looking for the read-through of Tuesday's $1.12 billion deal with Terumo Corp., trying to make heads or tails of Muddy Waters' latest cybersecurity attacks against St. Jude, all the while getting little clarity about the $5.8 billion elephant in the room otherwise known as Alere Inc.

And yet, after nearly eight months of turbulence related to Abbott's pending merger with Alere, one of the most surprising takeaways from Abbott's call Wednesday was a constrained-but-positive comment from CEO Miles White when analysts prodded rather gently for outlook on that deal.

"First of all, Alere is not a sensitive subject," White said after Larry Biegelsen, of Wells Fargo Securities, prefaced his question with "I know it's a sensitive subject."

The CEO was careful to limit his comments regarding the pending transaction, which was recently the subject of a breach of contract suit filed by Waltham, Mass.-based Alere, but he did provide some insights for analysts to chew on.

"We are pursuing all the necessary regulatory approvals for the deal. And at this point, that is the path," White said. "... We're doing everything we're supposed to do on the contract," he added, and other than that, the company will just have to "see what happens."

Biegelsen's question followed one from Rick Wise, of Stifel Nicolaus & Co., who led into his question by acknowledging there has been "a lot of public noise" about the deal, but said the question he hears most is simply if the long-term, post-merger opportunity that Abbott initially saw in Alere is still there.

"Do you still see it as basically intact, and the plug-and-play for the portfolio – Abbott diagnostic portfolio – still makes sense?" Wise asked, rephrasing the question as "where are you today on Alere?"

White agreed that there has been a lot of noise about Alere, and it has come from a lot of places, but "not us." It's not prudent for Abbott to respond to such noise, he said. As to the strategic rational for continuing to pursue the acquisition, White's short answer is yes, the company does still like what it sees in Alere's products and businesses.

"Is the long-term, post-merger opportunity and fit there? Yes, it is," White elaborated. "And I've never wavered on that. And I believe that right now, even this minute."

While the CEO did not provide any anticipated closing time frame, BTIG's Dane Leone noted in a report after the call that it was "good to hear a more conciliatory tone" from Abbott, but "some of that may have been a function of the recent court mediation."

Alere took its Abbott Park, Ill.-based suitor to court in August for breach of contract, accusing Abbott of dragging its feet in obtaining regulatory approvals for

the deal. (See Medical Device Daily, Aug. 31, 2016.)

The allegations stemmed from what Alere – and several analysts – perceived as waffling on Abbott's part, after Alere failed to file its annual report for last year on time and then found itself in the cross-hairs of federal investigators looking into the company's third party dealings in Africa, Asia, and Latin America as part of a Department of Justice investigation that cited the Foreign Corrupt Practices Act.

Abbott became fairly tight-lipped from that point, and White declined to offer much of an update on the Alere deal during Abbott's second quarter earnings call in July, other than to say that there was "no change" and that he had "no particular predictions to make" about the fate of the deal because he is not an odds-maker. Those remarks came after Alere disclosed in an April SEC filing that it had refused an offer from Abbott to terminate the deal in exchange for a payment of $30 million to $50 million. (See Medical Device Daily, Aug. 31, 2016.)

In early September, the two sides agreed to mediation, and Abbott has since been ordered to alert Alere of any future discussions with antitrust regulators. A preliminary injunction hearing on Alere's claims is scheduled for Jan. 27, if necessary, and Alere stockholders are expected to vote on the proposed merger Friday.

ABT-STJ still on track

White said Abbott is, indeed, on track to close its $25 billion St. Jude acquisition, which St. Jude CEO Michael Rousseau also confirmed during his company's earnings call Wednesday.

While it's too early for Abbott to offer 2017 guidance, particularly as it relates to the deal, White did provide some reassurances that he expects underlying growth to be strong next year and that there is "a lot of growth to be seen" in St. Jude also.

Abbott reported total revenue of $5.30 billion, up 2.9 percent on an as-reported basis and up 4 percent excluding foreign exchange impact, which was just above analyst consensus. St. Jude reported net sales of $1.5 billion, a 12 percent increase on an as-reported basis and 2 percent bump on a comparable constant currency basis.

St. Jude shareholders are expected to vote on the proposed acquisition Oct. 26, and the pair already has identified senior team leadership to take charge upon the deal's closing.

That vote of confidence came a day after the company a $1.12 billion cash deal to sell assets from both companies to Tokyo-based Terumo. (See Medical Device Daily, Oct. 19, 2016.)

The company didn't take questions, saying it has withdrawn its guidance ahead of its anticipated buyout by Abbott.

Muddy Waters strikes again

St. Jude continues to find itself the target of attack by investment research firm Muddy Waters LLC and cybersecurity experts at Medsec, which have made aggressive moves to show St. Jude's implantable heart devices have lax cybersecurity. In August, Muddy Waters reported a "strong possibility" that close to half of St. Jude's revenue "is about to disappear" for roughly two years. The authors also called for a recall of St. Jude's pacemakers and implantable cardioverter defibrillators. (See Medical Device Daily, Aug. 30, 2016.)

Rousseau criticized Muddy Waters and Medsec during Wednesday's call for using tactics intended to "sensationalize, confuse, and misrepresent" in order to enrich themselves. He said the two firms have no regard for patient safety and emphasized that St. Jude takes cybersecurity very seriously, and has a history of working with regulators and other experts to develop standards in this area.

Timed to coincide with St. Jude's earnings call, Muddy Waters, a short-selling firm, and Medsec posted a series of videos to a new website Wednesday, purporting to demonstrate the lack of security of St. Jude's devices. Both Muddy Waters and Medsec stand to gain financially from a decline in St. Jude's share price.

It's not uncommon for cybersecurity researchers to reach out to companies regarding the discovery of possible vulnerabilities, but St. Jude said neither Muddy Waters nor Medsec ever contacted the company with their claims before going public with the concerns.

Analysts on Abbott's call also tried to pick White's brain about the cybersecurity claims and any potential impact it could have on the combined company after the deal closes. White simply said St. Jude has handled the situation "pretty well, pretty thoroughly," not only by taking it seriously and initiating its own investigations, but by keeping Abbott in the loop on the situation.

"I have to say, they definitely put patient safety and patient credibility, and physician credibility and the product performance and so forth, first," White said. "They've done all the right things."

Abbott's stock (NYSE; ABT) slipped 2.82 percent ($1.16) to close at $40.01 Wednesday, while St. Jude's shares (NYSE; STJ) closed at $78.70, down 0.93 percent (74 cents) from its opening price.