The company undertakes a project to develop new test kits with Aytu Bioscience.
Biolidics Limited and Aytu Bioscience have mutually agreed to terminate the agreement for the distribution of the COVID-19 Antibody Test Kits in the US with effect from 27 June, according to an announcement.
The company voluntarily withdraws its application to the US Food and Drug Administration (US FDA) for Emergency Use Authorization (EUA) pursuant to the FDA Serology Test Policy. Thus, the current COVID-19 Antibody Test Kits will no longer be available in the US market.
This comes as Biolidics observed increased competition in the US market for serology kits. The company will process a full refund to Aytu for all deposits paid with respect to undelivered orders.
On the other hand, the company will undertake a new joint development project in collaboration with Aytu to develop a new COVID-19 test kit. Biolidics believes that offering a serology test kit with broader use and applications may present a better commercial opportunity for the company compared to the current test kits, which are meant for use only in laboratories or by healthcare workers at the point-of-care.
Both companies are in the process of negotiating the terms of their proposed collaboration on the development project and have signed a non-binding letter of intent (LOI).
Biolidics had assessed that the distribution agreement with Aytu would likely have contributed positively to its revenue for the current financial year. However, revenue from sales of the said test kits was not material and the company's decision to terminate the distribution agreement, and enter into the non-binding LOI, is not expected to have any material impact on the earnings per share and net tangible assets per share of the group for the financial year.
At present, the company intends to continue to distribute, market, and sell its COVID-19 Antibody Test Kits in the markets outside of the US. Biolidics notes that the results from all serology test kits are not to be used for confirmatory testing or as the sole basis for diagnosis. The results will have to be interpreted together with clinical presentation and are to be confirmed with supplementary testing.
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