The Novacyt share price (LON: NCYT) (NCYT.L) has declined by around 40% in the past month. Meanwhile, the FTSE AIM All-Share Index (INDEXFTSE: AXX) to which it belongs has risen by around 3% in that time.
In the past four weeks, the clinical diagnostics specialist released a trading statement. Its 9 April release included an update regarding its discussions with the UK Department of Health and Social Care (DHSC) about an extension to the previously announced supply contract for Covid-19 direct kits and other products.
An extension between the two parties has not been agreed, with them now in dispute regarding the contract. According to Novacyt, this could have a material impact on Q4 2020 revenues, although it stated it believes it has strong grounds to assert its contractual rights having taken legal advice.
The firm’s trading update also stated that revenue in Q1 2021 was £72.6 million. Approximately half of that was driven by sales to the DHSC, with international sales and the expansion of the company’s private sector testing operations contributing the rest.
The company reiterated its limited visibility over future sales due to the fluid nature of the pandemic. It also stated that revenue and profit for 2021 may be lower than market expectations due to the absence of the DHSC contract extension. It added that it believes it is in a good position to capitalise on future growth opportunities.
In addition to its trading update, Novacyt released an R&D and UK operational update on 23 April. This included news of an expansion of its lateral flow test (LFT) portfolio with Covid-19 tests. For example, it plans to launch an LFT to detect and differentiate between SARS-CoV-2 IgG antibodies in the third quarter of 2021.
The firm also announced an expansion of its UK commercial infrastructure in addition to its inclusion in the Public Health England (PHE) National Framework Agreement. This allows PHE and NHS hospitals to purchase its accredited products without the need for direct contract awards.
In the past month, the company has not announced any director deals. In the past year, the Novacyt share price has gained 2%. The FTSE AIM All-Share Index to which it belongs has risen by 57% over the same time period. Its shares currently trade at 420p at the time of writing.