key supplier of polymerase chain response (PCR) Covid-19 tests kits is in dispute with the Government around a £150 million deal.
Novacyt produced one of the UK’s 1st coronavirus tests kits in partnership with AstraZeneca, GlaxoSmithKline and the College of Cambridge in April 2020.
It led to the signing of a multimillion-pound deal with the Division of Well being and Social Care (DHSC) afterwards that thirty day period to source 288,000 checks for every week for NHS team.
A next contract signed in September last year is now in dispute, the firm has uncovered, relating to 300 PCR testing equipment, examination kits and help expert services.
Novacyt claimed in a assertion to the stock sector: “The corporation has taken legal tips in relation to the dispute and believes it has strong grounds to assert its contractual rights.”
Bosses at the organization, which has offices in the Uk and France, had hoped to win further contracts with the DHSC.
The September offer ran until eventually the conclude of previous yr and was value a minimum £150 million, with the choice to increase it for a even further 10 months for at the very least £100 million. The option was not taken up by ministers.
A next phase of the deal was currently being negotiated to deliver 700 added PCR instruments, kits and assistance services, with Novacyt indicating at the time “the contract could generate significantly extra product sales than the to start with period”.
But last thirty day period the business claimed talks had ended and the deal covering the 14 months to the conclude of 2020 was now in dispute.
The make any difference is in the fingers of organization lawyers even though no action has been brought before the courts.
As a final result of the dispute and failure to negotiate a new contract, Novacyt mentioned over-all revenue at the agency would just take a sizeable strike, with 50% of revenues because of to have occur from the DHSC.
PCR tests have primarily been applied for tests men and women demonstrating symptoms of Covid-19 and are thought of to be the most dependable.
But they are inclined to be much more pricey and lateral movement tests are utilised much more widely for those obtaining frequent checks – such as college lecturers and pupils – or these not showing symptoms.
Primary Minister Boris Johnson mentioned before this yr that mass rollouts of lateral movement checks would play a vital purpose in the Uk coming out of lockdown.
The DHSC has been approached for comment.