Biolidics unlikely to be affected by allegations against Covid-19 test kit distributor, say director
Biolidics unlikely to be affected by allegations against Covid-19 test kit distributor, say directors
https://www.straitstimes.com/busine...ected-by-allegations-against-coronavirus-test
SINGAPORE (THE BUSINESS TIMES) - The Singapore Exchange (SGX) has queried Catalist-listed Biolidics over its appointment of a scandal-hit company as an exclusive distributor for rapid Covid-19 antibody test kits.
But the company's board of directors replied in a filing on Sunday night (April 26) that it does not expect a material impact on its business plans from its agreement with Nasdaq-listed Aytu Bioscience.
"The company will continue to monitor publicly available information on Aytu and will take appropriate steps to mitigate any potential negative financial impact on Biolidics arising from such developments," it said, without going into details on what these steps are.
Biolidics, a cancer diagnostics firm, was asked how it came to pick Denver-based Aytu to distribute its rapid test kits for novel coronavirus antibodies last week.
The SGX also asked what the financial impact could be to Biolidics from ongoing probes into claims that Aytu supplied healthcare providers with coronavirus tests from unapproved Chinese manufacturers and may have breached United States securities laws.
Biolidics said that it was introduced to Aytu by a Denver-based business associate in end-March and was aware of media reporting on the alleged distribution of unauthorised test kits.
Still, it went ahead with its distributorship agreement on April 23 because it believed, after carrying out due diligence such as an assessment of Aytu's financial standing and track record, that the company would be a suitable distributor for its own coronavirus test kits.
Biolidics said that it has not verified the claims or sought legal advice in the United States, but added law firms' probes of Aytu "may be considered 'attorney advertising'" under US rules.
"While the company is not privy to the grounds of investigation of potential claims on behalf of purchasers of Aytu against Aytu, the company believes that it would not be impacted by news on such investigation," said Biolidics.
It noted that it can appoint another distributor if a contractual minimum purchase quantity is not met, or immediately terminate the agreement if terms are breached by Aytu or sub-distributors.
Separately, the board told the Securities Investors Association (Singapore), or Sias, that an executive's remark about commissioning some two million test kits in two months "was referring to the intended build-up in inventory in anticipation of orders for the test kits and not firm orders".
"As such, the company would like to clarify that the statement should not be interpreted as a projection by management," Biolidics added.
"The decision on the order volume by the company in the next two months will be dependent on the sales volume as well as availability of capital and human resources."
To another question from Sias, on how Biolidics adds value to test kits that are made by a Chinese supplier in Nanjing, the company said that "such information is commercially sensitive".
"The disclosure of such information may negatively impact the competitive strength of the company," it asserted, while clarifying that the test kits do not make use of Biolidics' patented technology to extract tumour cells from small amounts of blood.
Biolidics reiterated to shareholders that it "is actively developing the market for the test kits" in Singapore, the Philippines, the European Union and the US, and seeking regulatory approval elsewhere, although it also specified that it has not submitted any application to Indonesia.
Biolidics shares saw rapid price swings last week after the announcement of the agreement with Aytu, which it said will likely contribute positively to its revenue for the year to Dec 31.
The counter last shed $0.045, or 9.09 per cent, to $0.45 last Friday.
