- Abingdon Health’s share price crashed 24.4% after revenue fell by £6million.
- The company has yet to be paid by DHSC for its 2021 deliveries.
- Therefore, the company changed its strategy to focus on selling to consumers.
Abingdon Health PLC (LON: ABDX) share price slumped 24.4% after reporting that revenue for the six months to December 31, 2021 fell from £6m to £1, £7 million.
The company that develops rapid tests has revealed that the decline in revenue was due to lack of sales of its AbC-19™ rapid test from the UK Department of Health and Social Sciences (DHSC) and lower sales of its test. Lateral Flow COVID-19.
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Abingdon Health’s share price fell 74.2% in 2022 after its COVID-19 test failed to identify the Omicron variant, which currently accounts for most new cases.
The company is also suffering from an expected drop in demand for coronavirus tests as the UK government eases its testing requirements for travelers and UK citizens.
Abingdon had £5.9m in cash at the end of 2021 after raising £6.1m through a share placement which significantly diluted existing shareholders. However, the company hit a cash crunch after the DHSC refused to pay for the AbC-19™ rapid tests it had delivered.
The company reminded investors that the DHSC had reduced to pay an outstanding amount of £8.45 million for the rapid tests delivered in January 2021 before the government authority terminated its supply contract.
Abingdon Health signed a non-binding terms and conditions agreement with DHSC on November 9, 2021 following mediation efforts, but has yet to receive any payment from the government entity.
The company looks forward to the judicial review scheduled for May 2022, when full details of its DHSC contract will be made public as it fights for DHSC payments.
The company believes antibody testing is the future of COVID-19 testing, but is currently focused on three strategic growth areas identified by its board.
One of the growth areas identified includes its contract manufacturing services, which it offers to other companies that need to produce lateral flow tests. The company can produce both COVID-19 and non-COVID-19 lateral flow tests.
Abingdon is currently working with Vatic Health Limited (Vatic) to begin production of its Know-Now™ COVID-19 rapid antigen test after completing a large-scale transfer of its technical specifications and technology.
Vatic’s test is nearing approval after reporting positive clinical trial results and is about to submit the results to the US FDA for emergency use authorization.
Abingdon faced another challenge after Avacta refused transfer of its AffiDX® SARS-CoV-2 antigen lateral flow tests after successfully preparing three batches of the product.
The company is currently working on its self-testing e-commerce store, which it will launch soon as it focuses on its direct-to-consumer business instead of its B2B business, where it previously targeted large medical organizations.
The company’s focus on the B2C market is informed by research that indicates the B2C market for COVID-19 lateral flow testing will reach $11 billion by 2030.
Abingdon is also focused on developing its brand of lateral flow self-tests that consumers can use from the comfort of their homes.
Chris Yates, CEO of Abingdon Health, said: “The COVID-19 lateral flow testing market has been unpredictable in the face of the ever-changing pandemic situation. In the UK, the market for COVID-19 antigen tests has been dominated by overseas manufacturers, and there has been no government support to date for COVID-19 antibody tests. While this remains an opportunity for the business, it is clear that we can no longer rely on the COVID-19 market to deliver on our growth plans. It is also important that we respond to fundamental changes in our market, which are driving greater adoption and broader utility of lateral flow testing as a basic diagnostic away from centralized laboratories. Therefore, I am pleased to present our strategy and business update today.
Abingdon Health shares fell 74.2% in 2022, and we cannot rule out further declines. Hopefully, the company’s new strategy will start paying dividends quickly, pushing its stock price higher. Until then, I will stay away from the company.
*This is not investment advice. Always exercise due diligence before making investment decisions.
Abingdon Health share price.
Abingdon Health’s share price tumbled 24.44% to trade at 8.50p, down from Tuesday’s close of 11.25p.