Why Quidel Corporation Is Sinking

After the company announced that it is being sued by one of its customers, shares of Quidel Corporation (NASDAQ: QDEL), a maker of diagnostic testing equipment, fell 10% as of 3:45 p.m. EST on Monday.

Quidel issued a press release today acknowledging that one of its customers -- Beckman Coulter, a division of Danaher (NYSE: DHR) -- plans to sue it; Beckman hopes to sell its B-type Natriuretic Peptide (BNP) assay products directly to customers instead of through Quidel.

Why is a lawsuit necessary for Beckman Coulter to pursue such an action? The reason is that Quidel currently holds an exclusive supply agreement with Beckman that prevents it from doing so (that supply agreement came from its recent deal with Alere, which is now a division of Abbott Laboratories).

Source: Fool.com