The aggregate purchase price for the Second Territory Business, including the $80.0 million initial payment described above, will be approximately $200.0 million based upon a multiple of either the Second Territory Business' revenue or its pre-tax profits for calendar year 2008, as well as working capital and other customary adjustments. Except as described above, the remaining aggregate purchase price is expected to be paid on a deferred basis. Results of Operations
Net Product Sales, Total and by Business Segment. Total net product sales decreased by $2.3 million, or 1%, to $311.1 million for the three months ended March 31, 2009, from $313.3 million for the three months ended March 31, 2008. Excluding the impact of currency translation, net product sales for the three months ended March 31, 2009 increased by $14.7 million, compared to the three months ended March 31, 2008. Net product sales by business segment for the three months ended March 31, 2009 and 2008 are as follows (in thousands):

                                           Three Months Ended March 31,            %
                                             2009                 2008          Change
 Professional diagnostics               $      253,968       $      252,468           1 %
 Health management                               6,343                5,101          24 %
 Consumer diagnostics                           32,046               35,256          (9 )%
 Vitamins and nutritional supplements           18,707               20,489          (9 )%

 Total net product sales                $      311,064       $      313,314          (1 )%

Professional Diagnostics
Net product sales of our professional diagnostic products increased by $1.5 million, or 1%, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008. Excluding the impact from currency translation, net product sales of our professional diagnostic products increased by $15.4 million, or 6%, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008. Of the currency-adjusted increase, revenue increased primarily as a result of our acquisitions of BBI Holdings Plc., or BBI, in February 2008, which contributed additional product revenue of $3.5 million, and various less significant acquisitions, which contributed an aggregate of $5.1 million of such increase. Offsetting the increased net product sales contributed by acquisitions were lower flu-related net product sales during the three months ended March 31, 2009, as compared to the three months ended March 31, 2008. Net product sales from our North American flu sales declined approximately $12.4 million, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008, as a result of a weaker than normal flu season. Excluding the impact of the decrease in flu-related sales during the comparable periods, the currency adjusted organic growth for our professional diagnostics net product sales, excluding the impact of acquisitions, was 8%.
Health Management
Our health management net product sales increased $1.2 million, or 24%, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008. The increase relates principally to the continued growth of our QAS business.
Consumer Diagnostics
Net product sales of our consumer diagnostic products decreased by $3.2 million, or 9%, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008. Excluding the impact from foreign currency translation, net product sales for our consumer diagnostic products were flat, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008. The decrease was primarily driven by a decrease of approximately $2.6 million of manufacturing revenue associated with our manufacturing agreement with the joint venture, whereby we manufacture and sell consumer diagnostic products to the joint venture. The decrease in manufacturing revenue associated with the manufacturing agreement with the joint venture can be partially attributed to lower product revenues sold by the joint venture during the three months ended March 31, 2009, as compared to the three months ended March 31, 2008.

Vitamins and Nutritional Supplements
Our vitamins and nutritional supplements net product sales decreased by $1.8 million, or 9%, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008.
Services Revenue, Total and by Business Segment. Services revenue was $123.7 million for the three months ended March 31, 2009, as compared to $48.0 million for the three months ended March 31, 2008. Services revenue is principally related to our health management business segment which primarily includes our acquisitions of QAS, Alere Medical, ParadigmHealth and Matria. Services revenue growth in our health management business segment was principally related to our May 2008 acquisition of Matria as well as the continuing shift of QAS home coagulation revenues from a products sales model to a services-based offering. Services revenue also includes revenue generated by our professional drugs of abuse testing and screening business, along with revenue associated with our long-term services agreement related to our consumer diagnostics joint venture formed with P&G in May 2007, pursuant to which we provide certain operational support services to the joint venture.

                                     Three Months Ended March 31,            %
                                       2009                 2008           Change
       Professional diagnostics   $         7,470       $       7,167            4 %
       Health management                  115,824              40,129          189 %
       Consumer diagnostics                   442                 751          (41 )%

       Total services revenue     $       123,736       $      48,047          158 %

Professional Diagnostics
Services revenue provided by our professional diagnostics business segment increased by $0.3 million, or 4%, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008. Health Management
Services revenue provided by our health management business segment increased by $75.7 million, or 189%, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008. Services revenue increased primarily as a result of our acquisition of Matria in May 2008, which contributed services revenue of $70.6 million during the three months ended March 31, 2009. Contributing to the increase in health management services revenue was organic growth from QAS, Alere Medical and ParadigmHealth totaling $3.9 million. Consumer Diagnostics
Services revenue provided by our consumer diagnostics business segment decreased by $0.3 million, or 41%, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008. Services revenue provided by our consumer diagnostics business segment represents revenue related to our long-term services agreements with our 50/50 joint venture with P&G formed in May 2007, pursuant to which we provide certain operational support services to the joint venture.
License and Royalty Revenue. License and royalty revenue represents license and royalty fees from intellectual property license agreements with third parties. License and royalty revenue decreased by approximately $1.8 million, or 17%, to $9.1 million for the three months ended March 31, 2009, from $10.9 million for the three months ended March 31, 2008. Included in license and royalty revenue for the three months ended March 31, 2009 was a $5.0 million royalty received in connection with a license arrangement in the field of animal health diagnostics. The comparable period in 2008 also benefited from a royalty received in connection with a license fee from a non-exclusive licensing agreement in the amount of $3.4 million. Offsetting the net benefit of these royalties was an overall decrease in royalty payments received under existing licensing agreements during the three months ended March 31, 2009, as compared to the three months ended March 31, 2008.
Gross Profit and Margin. Gross profit increased by $53.8 million, or 30%, to $234.2 million for the three months ended March 31, 2009, from $180.4 million for the three months ended March 31, 2008. Gross profit during the three months ended March 31, 2009 benefited primarily from the additional gross margin provided by Matria, which totaled approximately $41.9 million for the three months ended March 31, 2009. Restructuring charges associated with our various restructuring plans to integrate our businesses totaling $2.0 million were included in cost of net revenue during the three months ended March 31, 2009, representing a decrease of approximately

$7.7 million from the comparable period in 2008. Cost of net revenue during the three months ended March 31, 2008 included a write-off in the amount of $1.7 million relating to inventory write-ups recorded at fair value in connection with the acquisitions of Panbio Limited, or Panbio, and BBI during the first quarter of 2008.
Cost of net revenue included amortization expense of $10.0 million and $11.9 million for the three months ended March 31, 2009 and March 31, 2008, respectively.
Overall gross margin for the three months ended March 31, 2009 was 53%, compared to 48% for the three months ended March 31, 2008.
Gross Profit (Loss) from Net Product Sales, Total and by Business Segment. Gross profit from net product sales represents net product sales less cost of net product sales. Gross profit from net product sales increased by $9.0 million, or 6%, to $157.8 million for the three months ended March 31, 2009, from $148.8 million for the three months ended March 31, 2008. Gross profit (loss) from net product sales by business segment for the three months ended March 31, 2009 and 2008 are as follows (in thousands):

                                                          Three Months Ended March 31,          %
                                                            2009               2008           Change
Professional diagnostics                                     $152,958           $138,266          11 %
Health management                                               1,856              2,011          (8 )%
Consumer diagnostics                                            3,225              5,417         (40 )%
Vitamins and nutritional supplements                             (229 )            3,098        (107 )%

Total gross profit from net product sales                    $157,810           $148,792           6 %

Professional Diagnostics
Gross profit from net product sales for our professional diagnostics segment increased by $14.7 million, or 11%, to $153.0 million for the three months ended March 31, 2009, compared to $138.3 million for the three months ended March 31, 2008. Restructuring charges associated with our various restructuring plans to integrate our newly-acquired businesses totaling $2.0 million were included in cost of net product sales for our professional diagnostics business segment during the three months ended March 31, 2009, representing a decrease of approximately $7.7 million from the comparable period in 2008. Additionally, the cost of net product sales for our professional diagnostics segment during the three months ended March 31, 2008, included a write-off in the amount of $1.7 million relating to inventory write-ups recorded in connection with the acquisitions of Panbio and BBI during the first quarter of 2008. The increase in gross profit was also impacted by the additional net product sales generated by our acquisition of BBI and various less significant acquisitions.
As a percentage of our professional diagnostics net product sales, gross margin for the three months ended March 31, 2009 and 2008 was 60% and 55%, respectively.
Health Management
Gross profit from net product sales for our health management segment decreased by $0.2 million, or 8%, to a gross profit of $1.9 million for the three months ended March 31, 2009, compared to a gross profit $2.0 million for the three months ended March 31, 2008.
As a percentage of our health management net product sales, gross margin was 29% for the three months ended March 31, 2009 and 39% for the three months ended March 31, 2008.
Consumer Diagnostics
Gross profit from net product sales for our consumer diagnostics segment decreased by $2.2 million, or 40%, to $3.2 million for the first quarter of 2009, compared to $5.4 million for the first quarter of 2008. The decrease in gross profit is primarily a result of decreased net product sales during the three months ended March 31, 2009, compared to the three months ended March 31, 2008.
As a percentage of net product sales, gross margin from net product sales for our consumer diagnostics business segment was approximately 10% and 15%, for the three months ended March 31, 2009 and 2008, respectively.

Vitamins and Nutritional Supplements
Gross profit (loss) from our vitamins and nutritional supplements business decreased by $3.3 million, or 107%, to a gross loss of $0.2 million from a gross profit of $3.1 million, comparing the three months ended March 31, 2009 to the three months ended March 31, 2008. The decrease is primarily the result of product sales mix during the three months ended March 31, 2009, compared to the three months ended March 31, 2008.
As a percentage of net product sales, gross margin for our vitamins and nutritional supplements business was a negative 1% for the three months ended March 31, 2009 and 15% for the three months ended March 31, 2008.
Gross Profit from Services Revenue, Total and by Business Segment. Gross profit from services revenue increased by $44.0 million, or 177%, to $68.8 million during the three months ended March 31, 2009, compared to $24.8 million for the three months ended March 31, 2008. Gross profit from services revenue represents gross profit related to services revenue associated with our health management business segment, which primarily includes our acquisitions of QAS, Alere, ParadigmHealth and Matria, our professional drugs of abuse testing and screening businesses, and our long-term services agreement related to our consumer diagnostics joint venture formed with P&G in May 2007.

                                                           Three Months Ended March 31,           %
                                                             2009                2008           Change
Professional diagnostics                                        $2,533              $3,765         (33 )%
Health management                                               65,804              20,293         224 %
Consumer diagnostics                                               442                 751         (41 )%

Total gross profit from services revenue                       $68,779             $24,809         177 %

Professional Diagnostics
Gross profit from services revenue for our professional diagnostics business segment decreased by $1.2 million, or 33%, to $2.5 million during the three months ended March 31, 2009, compared to $3.8 million for the three months ended March 31, 2008. Gross profit from services revenue represents gross profit related to the services provided by our professional drugs of abuse testing and screening business.
As a percentage of our professional diagnostics services revenue, gross margin was approximately 34% and 53% for the three months ended March 31, 2009 and 2008, respectively.
Health Management
Gross profit from services revenue for our health management business segment increased by $45.5 million, or 224%, to $65.8 million during the three months ended March 31, 2009, compared to $20.3 million for the three months ended March 31, 2008. Gross profit from services revenue for our health management business segment increased primarily as a result of our acquisition of Matria in May 2008, which contributed gross profit from services revenue of $41.9 million during the three months ended March 31, 2009. Contributing to the increase was incremental gross profit generated by organic growth in our services revenue from QAS, Alere Medical and ParadigmHealth totaling $1.4 million.
As a percentage of our health management services revenue, gross margin was approximately 57% and 51% for the three months ended March 31, 2009 and 2008, respectively.
Consumer Diagnostics
Gross profit from services revenue for our consumer diagnostics business segment was $0.4 million and $0.8 million for the three months ended March 31, 2009 and 2008, respectively, and represents gross profit from services revenue related to our long-term services agreements with the joint venture, pursuant to which we provide certain operational support services to the joint venture. We presently do not allocate any cost of goods sold to the services revenue related to this long-term service agreement. All associated costs are recorded in gross profit from net product sales.

Research and Development Expense. Research and development expense decreased by $3.9 million, or 13%, to $27.1 million for the three months ended March 31, 2009, from $30.9 million for the three months ended March 31, 2008. Restructuring charges associated with our various restructuring plans to integrate our newly-acquired businesses totaling $0.5 million were included in research and development expense during the three months ended March 31, 2009, representing a decrease of approximately $2.9 million from the comparable period in 2008. Additionally, research and development expense during the three months ended March 31, 2009 benefited from approximately $2.0 million in exchange rate differences, as compared to the three months ended March 31, 2008. Amortization expense of $0.9 million and $0.8 million was included in research and development expense for the three months ended March 31, 2009 and 2008, respectively.
Research and development expense as a percentage of net revenue decreased to 6% for the three months ended March 31, 2009, compared to 8% for the three months ended March 31, 2008.
Sales and Marketing Expense. Sales and marketing expense increased by $19.4 million, or 24%, to $99.4 million for the three months ended March 31, 2009, from $80.0 million for the three months ended March 31, 2008. The increase in sales and marketing expense partially relates to additional spending related to newly-acquired businesses. Amortization expense of $41.4 million and $27.0 million was included in sales and marketing expense for the three months ended March 31, 2009 and 2008, respectively.
Sales and marketing expense as a percentage of net revenue was 22% for each of the three months ended March 31, 2009 and 2008.
General and Administrative Expense. General and administrative expense increased by approximately $24.9 million, or 46%, to $79.6 million for the three months ended March 31, 2009, from $54.7 million for the three months ended March 31, 2008. The increase in general and administrative expense relates primarily to additional spending related to newly-acquired businesses. Amortization expense of $6.0 million and $0.1 million was included in general and administrative expense for the three months ended March 31, 2009 and 2008, respectively. Contributing to the increase in general and administrative expense for the three months ended March 31, 2009, as compared to the three months ended March 31, 2008, was a write-off in the amount of $4.7 million for acquisition-related costs recorded in connection with our adoption of Statement of Financial Accounting Standards ("SFAS") No. 141-R, Business Combinations, on January 1, 2009.
General and administrative expense as a percentage of net revenue increased to 18% for the three months ended March 31, 2009, compared to 15% for the three months ended March 31, 2008.
Interest Expense. Interest expense includes interest charges and the amortization of deferred financing costs associated with our debt issuances. Interest expense decreased by $7.8 million, or 30%, to $17.9 million for the three months ended March 31, 2009, from $25.7 million for the three months ended March 31, 2008. Such decrease was principally due to lower interest rates charged during the three months ended March 31, 2009, compared to the three months ended March 31, 2008.
Other Income (Expense), Net. Other income (expense), net includes interest income, realized and unrealized foreign exchange gains and losses, and other income and expense. The components and the respective amounts of other income (expense), net are summarized as follows (in thousands):

                                           Three Months Ended March 31,
                                             2009                 2008           Change
 Interest income                        $           289       $       3,816     $ (3,527 )
 Foreign exchange gains (losses), net            (3,030 )              (240 )     (2,790 )
 Other                                              (59 )             1,322       (1,381 )

 Total other income (expense), net      $        (2,800 )     $       4,898     $ (7,698 )

Interest income of $0.3 million for the three months ended March 31, 2009 decreased $3.5 million, compared to the three months ended March 31, 2008. This decrease is primarily the result of lower interest earned on lower cash balances. The increase in foreign exchange gains (losses), net was primarily a result of realized and unrealized foreign exchange losses associated with changes in exchange rates during the quarter. Other income of $1.3 million

for the three months ended March 31, 2008, includes a $1.5 million royalty payment received for settlement of prior period royalties due.
Provision (Benefit) for Income Taxes. The provision (benefit) for income taxes increased by $4.6 million, to a $3.7 million provision for the three months ended March 31, 2009, from a $0.9 million benefit for the three months ended March 31, 2008. The effective tax rate was 37% for the three months ended March 31, 2009, compared to 17% for the three months ended March 31, 2008. The income tax provision for the three months ended March 31, 2009 relates to federal, foreign and state income tax provisions. The income tax provision for the three months ended March 31, 2008 relates to federal, foreign and state income tax provisions and income tax benefits for various foreign subsidiaries. The income tax provision increase is primarily due to the federal and state income tax provisions as a result of increased domestic earnings. . . .