Abingdon Health sees revenue fall from £7.7m to £1.7m following dispute with Department of Health

The York-based firm said the year-on-year decrease was predominantly linked to no Department of Health and Social Care (DHSC) revenues being recognised in the period, as well as other non-recurring Covid-19 related sales falling in the prior year.

The decrease in revenue versus the board's prior expectations was caused primarily by the lack of use of the AbC-19 Rapid Test by DHSC against initially forecasted sales and also in a period when the company continued to develop new products and invest in its operating infrastructure, with a consequential impact on the level of losses incurred.

Abingdon says it has not been paid invoices totalling £8.45m by the DHSC for lateral flow devices delivered in January 2021 and for components purchased on behalf of the DHSC at its request in 2020.

Following mediation, the company agreed non-binding heads of agreement with the DHSC on November 9, however, Abingdon said it still awaits payment and closure of the matter.

The firm said it is looking forward to the judicial review scheduled for May 2022 on this matter.

Dr Chris Hand, chairman of Abingdon Health, said: “The period has been a difficult one for us as we move to re-establish the growth of our company following the focus we put into antibody testing and scale up of manufacturing systems at the request of DHSC during 2020 and early 2021.

"It is disappointing that DHSC have still not paid Abingdon for products and services delivered over 12 months ago even though we reached a non-binding agreement nearly four months ago

"It is a testament to the robustness of our staff, company and shareholders that we remain well placed to execute the next phase of the company’s growth in spite of this behaviour by DHSC which has hampered our progress."

Abingdon said it will continue to offer its contract service customers development, technical transfer and manufacturing solutions.

It is also in the process of developing and launching an enhanced version of its business to consumer e-commerce website, due for completion in the second quarter of 2022. The directors believe that the direct to consumer lateral flow test market will grow significantly.

The firm says it is also focusing on new product development.

Chris Yates, CEO of Abingdon Health, said: “The Covid-19 market for lateral flow tests has been unpredictable against the constantly evolving pandemic situation.

"In the UK, the Covid-19 antigen test market has been dominated by overseas manufacturers and there has been no Government support to date for Covid-19 antibody testing.

"Although it still remains an opportunity for the business, it is clear that we can no longer rely on the Covid-19 market to meet our growth plans.

"It is also important we respond to fundamental changes in our market which support a greater adoption and broader utility for lateral flow testing as a core diagnostic away from centralised labs. Therefore, I am pleased to set out our strategic and commercial update today.

“Our focus will continue to be on serving our contract customers in bringing their products to market, in both Covid and non-Covid indications. We have world-class facilities in both York and Doncaster, with leading-edge high throughput automation and significant in-house expertise in developing, transferring in and scaling-up lateral flow test production.

"We will also continue to market the AbC-19 test for individuals who want to know their antibody status, while remaining ready to scale-up our supply as and when national testing strategies focus on an individual’s antibody levels as a proxy for immunity.

“We strongly believe the lateral flow self-test market will expand significantly, and therefore we are investing in a state-of-the-art e-commerce site to allow B2C distribution of our own and third-party tests, supported by our own in-house validation of these third-party tests.

"In addition, we have made good initial progress in the development of our own self-tests with an initial focus on Influenza, Lyme disease and Hepatitis C."

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