RE: Court11 Jun 2024 17:28
Times:
One of Britain’s highest-profile Covid-19 testing companies has agreed to pay the government £5 million as part of a settlement to resolve a long-running High Court dispute.
A trial had been scheduled to begin this week between Novacyt, the London-listed company, and the Department of Health and Social Care. It now will not take place.
The fortunes of Novacyt and its share price were transformed during the pandemic after it secured lucrative work with the department. It became only the second company after Roche, the Swiss multinational, to have its test approved by the World Health Organisation for emergency use and the company struck a partnership to create a testing laboratory in Cambridge with the university and with GSK and AstraZeneca, Britain’s two Big Pharma companies. Novacyt also became one of the top five most-traded stocks on Euronext and Aim, the London Stock Exchange’s junior market, and was closely followed by retail investors.
However, it later became mired in a protracted legal dispute with the government, hitting its shares and profits. Two years ago the government launched a £135 million breach of contract claim in the High Court against Novacyt and Primerdesign, a subsidiary the company acquired in 2016 for £12.3 million. Primerdesign is behind its PCR test and is based near Southampton. The government alleged that Novacyt’s test had failed its validation tests and had “poor sensitivity and false negatives”. Novacyt rejected the claim and launched a counterclaim against the department of £81.5 million for goods and services and for damages for breach of contract. It argued that the tests had “functioned in accordance with the specification”.
As part of the High Court settlement, Novacyt said that “neither party has made any admission of liability or wrongdoing in respect of the claim or counterclaim or otherwise”.
Shares in Novacyt, which were listed on Aim at 59p in 2017, rose from about 13p at the start of 2020 to £11.94 in October that year. The stock has since slumped and it tumbled by a further 17.2 per cent, or 12p, to 57¾p in afternoon trading.
Eight individuals shared stock worth £19 million under a share scheme begun at about the time the company was listed and after the share price had soared. It is unclear to what extent those employees cashed in those shares.
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