A British biotech company that produced thousands Covid-19 tests for the pandemic agreed to pay £5m in settlement of claims that they were defective.
Novacyt announced that it had reached a settlement with the Department of Health and Social Care in advance of a High Court case scheduled for this week.
Novacyt will pay £5m to the government as part of the settlement. The news caused Novacyt’s shares to drop by almost a fifth.
Since early 2020, the company’s value has dropped by 95pc.
The Government and Novacyt have ended a bitter and long-running dispute over the Covid-19 test. This was based on the claim that the tests had “failed an unacceptable rate”.
In early 2022 the Department of Health and Social Care filed a lawsuit for £145m against Novacyt and its subsidiary Primer Design Ltd, alleging that they had breached a contract with the Government in 2020 by selling thousands of PCR test results which were “unreasonably high”.
At the height of pandemic, Novacyt received payment to deliver 288,000 kits a week to the NHS.
The Government’s validation team raised concerns regarding the kit, which evaluated how sensitive the tests were and whether or not they produced false-negatives.
Adam Heppinstall, KC, who represents the government department said in April the failure rate was “far beyond” what could be tolerated.
He said: “Time is crucial and the robustness and quality of the test are very important.” “A false negative can be very dangerous to public health.”
The NHS never conducted the tests.
Novacyt, Primer Design and others claimed that their tests had failed to detect Covid-19 as “seriously flawed”.
They claimed that mistakes had been made when assessing laboratory results.
Novacyt and Primer Design filed a counterclaim for £70m in relation to three unpaid bills.
After the settlement, these cases will no longer be brought to trial.
Aside from the counterclaim, neither party admitted any liability or wrongdoing.
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