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Novacyt in Dispute with UK Department of Health and Social Care Over Coronavirus Test Contract

NEW YORK — Novacyt said on Friday that it has been unable to secure an extension for its SARS-CoV-2 test supply contract with the UK Department of Health and Social Care (DHSC), threatening one of the French diagnostic firm's key revenue drivers.

About a year ago, Novacyt struck a deal to supply SARS-CoV-2 assays to the DHSC for an initial term of six months. According to Novacyt, active discussions to extend that contract have failed, although it did supply its Promate SARS-CoV-2 detection workflow in the first quarter of this year at DHSC's request.

Novacyt noted that it generated €83.0 million ($98.5 million) in the first quarter of 2021, about half of which came from sales of Promate and other products to the DHSC. The remaining revenues were from international sales and private sector testing operations. 

Novacyt said it is disputing the contract with DHSC, which may negatively impact its fourth quarter 2020 revenues. The firm added that it has "strong grounds to assert its contractual rights."