SGX queries Biolidics on timing of disclosing local approval for its Covid-19 test kits
BIOLIDICS Limited believes that it became material to disclose that the firm had received approval for its virus test kits from Singapore's Health Sciences Authority (HSA) only after it was certain that the kits could be commercialised.
In addition, Biolidics only received approval for the product to be manufactured and marketed under its own brand some time later, the firm clarified in an exchange filing late on Thursday.
The Catalist-listed medical technology firm was responding to the Singapore Exchange's (SGX) queries as to why it disclosed receiving HSA's approval on only March 30, despite the information being already announced by HSA at least a week earlier, especially in light of "the seriousness of the Covid-19 situation" and a "worldwide shortage of Covid-19 test kits".
Biolidics replied that it was looking to commercialise the test kits, and this required product liability insurance coverage, in addition to an executed manufacturing agreement and HSA approval. The company obtained the insurance only on March 30.
Hence, Biolidics said: "As the company only intended to commence production and commercialisation of the Biolidics test kits upon procurement of the product liability insurance, the board believes that an announcement on the receipt of the HSA approval with no certainty of commercialisation may be misleading to shareholders and potential investors."
Also, the company clarified that the provisional authorisation it received from HSA on March 20 was for the Nanjing Vazyme 2019- nCOV IgG/IgM Detection Kit, which is manufactured by Nanjing Vazyme Biotech Co.
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Biolidics obtained approval only on March 27 for the product to be manufactured and marketed under its own brand, as the Biolidics 2019-nCOV IgG/IgM Detection Kit, and therefore could not announce any earlier.
The company said it intends to clarify with HSA as to why the information was issued earlier than this.
Before Biolidics' announcement on March 30 that it was set to launch the test kits, its counter had closed up 7.3 per cent to S$0.22. The next day, shares of the Catalist-listed firm surged, jumping 22.7 per cent to S$0.27.
SGX also asked why Biolidics' announcement was made at 5.10pm that day, instead of after trading hours.
The company replied that it had cleared the announcement on or about 4.40pm that day and instructed the company secretary to release the announcement, "with the understanding that it would be done after trading hours".
But as the secretary did not receive any specific instruction as to the timing, the secretary may have simply released the announcement after 5pm.
Biolidics has said the provisional authorisation from HSA will allow the firm to export the product and market it in Singapore. However, the firm will need to comply with standard post-market duties and obligations, as well as maintain distribution records.
Among other conditions, the firm will also need to submit the results of additional clinical evaluations of the test, if available. Any incorrect or inaccurate test results from the test also have to be reported as and when the firm becomes aware of them.
Biolidics said it had not received any firm orders for the test kits nor commenced manufacturing of the test kits and therefore cannot ascertain the financial impact of these developments. It has not made further updates since then.
Biolidics' counter last closed on Thursday at S$0.265, down 1.85 per cent before its replies to SGX.
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