British government sues Covid-19 test manufacturers for £135 million

Biotech company Novacyt will appear before the English High Court in June to defend itself against the British government's £135 million lawsuit over Covid testing.

The molecular diagnostics company is being sued by the British Department of Health and Social Care over the supply of rapid PCR test kits.

The British government filed a lawsuit against the British-French company and PCR manufacturer Primerdesign in the Technology and Construction Court (TCC) in April 2022. Primerdesign became part of the Novacyt Group in May 2016.

The claim is said to be worth £135 million as the government claims the company supplied instruments that did not work properly. The claim concerns the second supply contract with the UK Department of Health and Social Care (DHSC).

In September 2020, Novacyt announced that it had signed a new supply agreement with the DHSC for its q16 and q32 rapid PCR instrument platforms, Exsig COVID-19 direct kits and Genesig SARS-CoV-2 Winterplex kits.

Under this contract, Primerdesign was to supply the DHSC with its products for up to six months. The first phase of the contract included the immediate provision of 300 PCR instruments, associated kits and support services, valued at a minimum of £150 million for the first 14 weeks.

There was an option to extend the contract for a further ten weeks for at least £100 million. However, an agreement on the extension was never reached and instead a legal dispute developed.

In an update to its shareholders this morning, Novacyt announced that a trial in an English court has been scheduled for June 10, 2024 and is expected to last until July 4.

The parties will appear in court later this month for a pre-trial review, scheduled for April 30.

The company announced on Friday morning that the court would also hear an application from the DHSC for summary judgment in relation to one aspect of its claim, in which the DHSC would like to enter judgment on the full value of its claim.

Novacyt stated that “having taken legal advice, the company considers this application to be very weak and has little prospect of success and is confident that the court will dismiss the application.” According to the High Court's claims system, the company is being defended by London law firm Stephenson Harwood.

However, as the company noted, it is not known when the court will rule on the motion.

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