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Oxford Nanopore Technologies Settles Contract Dispute With UK Department of Health and Social Care

NEW YORK - Oxford Nanopore Technologies (ONT) announced on Friday that it has reached "an amicable resolution" with the UK Department of Health and Social Care (DHSC) on a contract dispute relating to the supply of LamPore devices, testing kits, and associated services by ONT to DHSC.

The UK sequencing company said it has entered the settlement agreement with DHSC "without any admission of liability." The two parties agreed to bring the contract, dated July 30, 2020, to an end, with a payment of £50 million (about $65.5 million) due to ONT.

According to ONT's 2020 Directors' Report filed with the UK government agency Companies House in August 2021, ONT entered into a contract with DHSC in July 2020 to deliver LamPore kits for SARS-Cov-2 testing as part of the UK government's Test and Trace strategy. While "a number of kits" were sold to the DHSC in 2020 (and paid for in 2021), DHSC determined in April 2021 that the agency "no longer had a requirement for [ONT's] product and terminated the contract before taking the maximum quantity allowable under the contract," the report stated.

The EU contract award database showed that the original contract between ONT and DHSC had a total value of £112.7 million. According to the company's statement following the original contract, an initial 450,000 LamPore SARS-CoV-2 tests were to be made available for use by "a number of NHS testing laboratories" with ONT also "providing a large number of tests for existing labs" to help determine different use cases for the technology such as the potential asymptomatic screening of frontline staff.

ONT said it expects the payment to be treated as "non-recurring COVID-19 testing revenue" in 2022, and as such its prior guidance for life science research tools revenue in 2022 remains unchanged. Last month, ONT said that it expects 2022 life science research tools revenue to be in the range of £145 million to £160 million amid a "significant decline" in COVID-19 sequencing revenue.

In October 2020, ONT obtained the CE mark for its LamPore SARS-CoV-2 sequencing test, which combines loop-mediated isothermal amplification (LAMP) with its GridIon or MinIon Mk1C platforms. However, the company said it terminated the test in 2021 as a result of improvements in the availability of PCR supplies and does not anticipate any further sales of the test.