Abingdon Health plc

("Abingdon" or "the Company")

Trading update

York, U.K. 12 August 2021:  Abingdon Health plc (AIM: ABDX), a leading international developer and manufacturer of high quality and effective rapid tests, provides a trading update for the year ended 30 June 2021 (FY 20/21).

Trading performance FY 20/21

Abingdon generated revenues of circa £11.6m in the year ended 30 June 2021 and an adjusted EBITDA loss of £3.3m which was in line with the guidance given in April 2021. As at 30 June 2021 the Company had net cash of £4.9m.

Revenue growth year-on-year was 123% (FY20: £5.2m) and excluding any revenues in either year from the Department of Health and Social Care ("DHSC") revenue growth was 138% reflecting the strong underlying performance of the business.

AbC-19^TM rapid test

As has been previously highlighted much of the focus to date has been on antigen testing within the UK and overseas. However, there is significant evidence building on the link between neutralising antibody generation and immunity. Recent data released by Abingdon on the AbC-19^TM test has shown its ability to work with COVID-19 variants as well as underlining its strong performance in monitoring vaccine response. Based on this building evidence, the use cases for AbC-19^TM continue to grow. In addition, Abingdon intends to make a supplementary score-card product available alongside AbC-19^TM, initially for research use only in August, which provides a semi-quantitative result to indicate the strength of antibody response and possibly immunity.

Abingdon continues to work on registering the product in a range of territories. All of the tier one territories noted in the April 2021 trading statement remain active and we anticipate further registrations in the first quarter of FY 21/22. The Company has not seen significant commercial traction with the AbC-19^TM product to date but remains encouraged by the ongoing discussions in various overseas territories as well as the potential development of a consumer market, both within the UK and internationally, with the general public wanting to know their antibody status. Abingdon is actively working with commercial partners on securing these opportunities.

Contract manufacturing

Abingdon also announces that in recent months it has signed four manufacturing agreements; two for COVID-19 antigen tests, one for a COVID-19 antibody test and one for a non-COVID-19 test. The Company recently announced its exclusive manufacturing agreement with BioSure for their COVID-19 test and also a 10-year manufacturing agreement with Bioporto to manufacture lateral flow strips for Bioporto's Generic Rapid Assay Device (gRAD) platform. Abingdon is also working on the transfer of two COVID-19 antigen tests to manufacture.

The Board anticipates all of these products will contribute meaningfully to contract manufacturing revenue growth in FY 21/22.

Manufacturing capacity

Abingdon has completed the second stage of its manufacturing build at both its York and Doncaster sites. This significant investment has provided the Company with state-of-the-art manufacturing capability and significant manufacturing capacity. The Doncaster site is focused on the first stage of the manufacturing process, making lateral flow test strips and cards, with the York site focused on both the first and second stage of manufacturing; the second stage being the assembly of tests strips into housed devices and packing to final kit specification. Abingdon is seeing demand both for the full service as operated at York as well as card production which can be provided at both Doncaster and York sites.

Product development

Abingdon continues to explore opportunities to broaden its portfolio of own-branded products. The focus here is on building complementary product lines within specific segments of the infectious disease market. The Company is currently collaborating with a partner on the development of a non-COVID blood-borne virus self-test.

DHSC outstanding payments and the judicial review process

As at 30 June 2021 Abingdon is owed a total of £6.7m plus interest from the DHSC for components that Abingdon has procured on the DHSC's behalf (£1.5m) and for AbC-19^TM kits (£5.2m inc. vat) the Company has delivered to the DHSC in the period November 2020 through to January 2021.

Despite having been informed by the DHSC in January 2021, verbally and in writing, that payment for the 1m tests had been cleared, the Company understands that the DHSC has now chosen not to pay any of these outstanding sums until after the completion of the Judicial Review proceedings (the "JR") initiated by the Good Law Project ("GLP"). The DHSC has also stated that, if Abingdon commences legal proceedings to recover the outstanding sums, it will apply to have those proceedings stayed until after the determination of the JR. The DHSC seeks to avoid its contractual obligations despite having accepted delivery of the products the Company have supplied, and which it is using, and for components purchased on behalf of the DHSC at its request.  Abingdon therefore continues to pursue the DHSC for payment. 

With regard to the JR, which was initiated by GLP as a challenge to the Secretary of State for Health and Social Care, Abingdon is participating as an "Interested Party".  In addition to correcting inaccurate statements made by GLP in the JR, Abingdon wishes to ensure that inaccurate statements do not go unchallenged in the public domain. On 9th August 2021 Abingdon announced that it had made publicly available its Detailed Grounds of Resistance and a letter which was sent to GLP on 4th May 2021 which clarified the facts of the matter.  These documents are available to view on the Company's website to highlight to Abingdon shareholders and employees that the Company have been actively seeking to provide clarity and to seek a resolution to these matters and correct a number of factual inaccuracies.

The JR is scheduled to be heard in early December 2021.

The lack of payment has already had significant implications for Abingdon, a Northern Powerhouse company, and its employees and, due to the need to contain costs and manage cash, the Company's workforce has reduced from 190 to 130 employees over the past four months with a number of valued employees having to be made redundant. The pressure on cash flow will increase the longer that payment by DHSC is outstanding. As a small UK company that stepped up to support the UK Government when asked and a Company that has no political affiliations at all it feels that the only people directly affected by the judicial review process are Abingdon's employees, investors and other stakeholders.

Chris Yates, Chief Executive Officer of Abingdon, commented:

"Abingdon continues to see material opportunities for the AbC-19™ rapid test both in the UK and internationally and we anticipate the onus switching to a more integrated testing approach which utilises the potential cost and practical benefits of neutralising antibody testing alongside both PCR and antigen testing. We have worked hard with our academic partners to build a robust bank of data that supports the performance of the AbC-19™ test and its potential role in a range of use cases. In addition, Abingdon has continued to build its contract manufacturing customer base with the signing of several important manufacturing contracts both within and without COVID-19 which we believe will contribute meaningfully to our FY 21/22 revenues. Our operational expansion has provided us with significant manufacturing capability and our key priority now is to grow our manufacturing volumes with existing and new customers to maximise our utilization of this capacity."

Dr Chris Hand, Chairman of Abingdon, commented:

"This has been a year of tremendous effort by employees of Abingdon Health as we stepped up to what was asked of us at a time of national emergency. Some of our employees have unfortunately lost their jobs as a direct consequence of the DHSC not paying for products they have taken delivery of, are using and told us were passed for payment in January 2021. I apologise to those colleagues who have left the Company. I thank all our employees for their sustained effort, skills and hard work. I also thank shareholders for continuing to support the Company and we look forward to the next phase of the Company's growth as we continue to manufacture an increasing portfolio of products."  

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About Abingdon Health

Abingdon Health is a world leading developer and manufacturer of high-quality rapid tests across all industry sectors, including healthcare and COVID-19. Abingdon is the partner of choice for a growing global customer base and takes projects from initial concept through to routine and large-scale manufacturing and has also developed and marketed its own labelled tests.

The Company offers product development, regulatory support, technology transfer and manufacturing services for customers looking to develop new assays or transfer existing laboratory-based assays to a lateral flow format.  Abingdon Health aims to support the increase in need for rapid results across many industries and locations and produces lateral flow tests in areas such as infectious disease, clinical testing including companion diagnostics, animal health and environmental testing. Faster access to results allows for rapid decision making, targeted intervention and can support better outcomes. This ability has a significant role to play in improving life across the world. To support this aim Abingdon Health has also developed AppDx^®, a customisable image capturing technology that transforms a smartphone into a self-sufficient, standalone lateral-flow reader.

Founded in 2008, Abingdon Health is headquartered in York, England.

https://www.abingdonhealth.com/