One of the companies tasked by the UK government with creating a rapid coronavirus antibody test had “all outstanding orders” cancelled this month, a development it did not disclose to the market when it issued a trading update on Tuesday. Abingdon Health leads the UK Rapid Test Consortium formed by a group of manufacturers in response to the government’s request to develop a homegrown test to reliably measure who has previously been infected by coronavirus.The Yorkshire-based biotechnology group listed on London’s Aim in mid-December, raising £22m and telling investors that the contract with the Department of Health and Social Care was critical to its business.The contract was for an initial 1m tests, with the possibility of millions more orders worth up to £75m. The company said on Tuesday it had delivered the initial batch on January 8. Three days later, DHSC cancelled “all outstanding orders” for Abingdon’s test, according to a letter seen by the Financial Times, citing the company’s failure to win approval from the medicines regulator for home use of the test by a Christmas deadline.“Abingdon Health did not obtain . . . approval for home use of its antibody lateral flow test (“LFT”) devices by 25 December 2020,” the government said in the letter to non-profit legal advocacy group the Good Law Project. “As a consequence, on 11 January 2021 the secretary of state exercised his contractual right under the August contract to cancel with immediate effect all outstanding orders placed with Abingdon Health.” The letter left open the possibility of the government buying Abingdon’s tests in future through its “dynamic purchasing system”, under which it buys from bidding companies on an ad hoc basis.

The Good Law Project has been suing the government in judicial review proceedings to shed light on billions of pounds of contracts handed out by the UK government during the pandemic. It has challenged the way Abingdon’s was awarded, claiming the government did not sufficiently assess the accuracy of the tests and that there was not sufficient bidder competition. The government has denied the claims.

The DHSC said that while it did not comment on ongoing legal proceedings, “we have always been clear that government contracts must deliver value for taxpayer money and we will take action in instances where this does not happen”.

Abingdon said on Wednesday that as there had been no orders to cancel it had decided not to issue a statement to the market.

“In consultation with advisers, the decision was made that there was not a statement to make as there were no outstanding orders with the DHSC and therefore no orders to be cancelled,” the company said in a statement to the Financial Times.

It added: “Abingdon continues to manufacture the product for potential public and private sector use in the UK and internationally.”Abingdon’s December 11 prospectus said the government had not issued additional orders beyond the initial 1m but warned about the government’s termination rights in the event the company missed the Christmas approval deadline.“If the DHSC were to exercise such right, it could have a significant negative impact on the group’s results, overall financial condition and prospects,” the prospectus said. If no further orders were made, Abingdon’s board believed a similar volume could be sold to other buyers at the same or a higher price, according to the listing document.

In Tuesday’s trading update Abingdon — whose shares are up 36 per cent since its float last month, valuing the business at £125m — said it expected revenues for the six months to the end of December to be in line with expectations at about £7.7m. “Regarding the current DHSC contract, as noted previously, this will expire on 14 February 2021 and, in line with the government’s shift to a dynamic purchasing strategy, the board expects that any future orders will be received via an application by the company to future DHSC tender notices,” the company said.

Abingdon came under scrutiny last year after Public Health England researchers found its antibody test to be less accurate than the company’s 99 per cent claim. The group in November questioned the researchers’ methodology and said: “Our customer, DHSC, is satisfied with the performance of the test.”