Key points:
- The Abingdon Health share price surged 18.2% on the Taiwan contract.
- The company has agreed to supply 10 million COVID-19 tests to Arise.
- However, the contract will only move forward if the test is approved.
The Abingdon Health PLC (LON: ABDX) share price surged by 18.2% after signing an agreement with Taiwanese Arise Corporation (Arise) to supply 10 million COVID-19 test kits to be sold by Arise in Taiwan and possibly other Asian countries.
Also read: The Best Healthcare Stocks To Buy Right Now.
The deal requires Abingdon to supply 10 million Abingdon Simply Test COVID-19 antigen tests (Abingdon Simply Test) to Arise after the test is granted Emergency Use Authorisation (EUA) in the country.
However, Abingdon did not disclose the contract’s financial details due to the confidentiality of such commercial transactions but confirmed that its earnings would be substantial.
The company also unveiled plans to launch a new e-commerce site to sell its lateral flow self-tests and professional-use tests under the Abingdon Simply Test brand in the third quarter of this year, which will also include its COVID-19 test.
It is nice to see Abingdon Health moving forward from its botched contract with the British Government and on to other commercial clients who rarely cancel their supply contracts since they are not plagued by the politics that accompanies most government projects.
Abingdon’s agreement with Arise allows the latter to acquire another 20 million tests if the initial contract is implemented successfully. However, the agreement relies on the COVID-19 test being approved for emergency use in Taiwan.
The EUA application has been made, and Abingdon is waiting for the process to be completed since it does not have visibility into how the process unfolds. Investors will also have to wait for the company’s quarterly results to know the actual financial impact if the contract moves forward.
Chris Yates, Abingdon Health’s CEO, commented: “We are delighted to have secured such a significant agreement with Arise Biotech for the supply of Abingdon Simply Test COVID-19 tests for Taiwan. We must be clear with investors that fulfilment of this order depends on the successful completion of the Taiwan EUA application process, and we will update investors as soon as we can on this.”
Investors looking to acquire ABDX shares should find the current prices quite attractive. Still, the shares could fall if the contract does not move forward.
*This is not investment advice. Always do your due diligence before making investment decisions.
Abingdon Health share price.
Abingdon Health shares rallied 18.18% to trade at 13.00p, rising from last week’s closing price of 11.00p.
