Q&M Dental and its Catalist-listed associated company, Aoxin Q&M, are suspending Acumen Diagnostics’ laboratory business with “no immediate plans” to reapply for its laboratory licence after it expired on Sep 15 this year.
Acumen is a 51 per cent subsidiary of Q&M Dental, with the remaining 49 per cent held by Aoxin Q&M.
Its business segments comprise the lab business as well as offering Covid-19 vaccinations to the Singapore public under its tender contract with the Ministry of Health (MOH) at its joint testing vaccination centre (JTVC) in Sengkang.
On Monday (Oct 28), Q&M said that while the licence is necessary for the operations of Acumen’s lab business, its business volume has been “small” since the shift away from polymerase chain reaction testing in Singapore for Covid-19 in late 2022.
It further emphasised the lab business’ loss-making position for FY2023 and the first half ended Jun 30, 2024. Income from the Sengkang JTVC had managed to cover the losses incurred by the lab business over this year period, said the group.
Q&M also cited potential cost savings from its suspension of the lab business, which it said could be directed to support and develop new businesses related to medical diagnostics, or other future businesses of Acumen.
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Sengkang JVTC closure
Q&M has further received the directive from MOH to close its Sengkang JTVC from Dec 1, in line with the ministry’s Oct 25 announcement that it was closing all remaining JTVCs. This would leave Acumen without any contributions from its sole revenue and income stream, noted the group.
It nonetheless said Acumen’s board would continue to actively monitor and tender for new MOH contracts as and when suitable tenders become available. This is in light of Acumen’s renewed off-site medical licence that will continue to be in force until September 2026, added Q&M.
Additionally, the group said Acumen may “explore the possibility of applying for a new laboratory licence from MOH for the resumption of the clinical testing services in the future”.
Though Q&M Dental noted that Acumen’s contribution to the group’s operating profit as at end-June 2024 was “not material”, the group expects a non-recurring material adverse financial impact should Acumen’s businesses are ceased.
Aoxin Q&M is also anticipating a material impact on its earnings per share and net tangible assets per share for the current financial year ending Dec 31, 2024, assuming the cessation of Acumen’s businesses.
Both entities said they would consult with each other’s boards and auditors, if required, along with the Acumen board to evaluate the financial impact “depending on the future plans” that the Acumen board has for the company.
Acumen chief executive dismissed
Prior to the lab licence’s expiry, its principal officer required alongside a clinical governance officer was the Acumen’s chief executive, Dr Ong Siew Hwa.
Q&M disclosed that Dr Ong’s employment as Acumen’s chief executive was contractually terminated on Oct 26 this year. On Oct 27, Aoxin requested Ong to resign from its board, along with Acumen’s board and the board of directors of Acumen’s subsidiary, Acumen Research Laboratories.
This comes after the doctor had been placed on a leave of absence in June this year, with Acumen commencing investigations related to Dr Ong’s acquisition of an indirect interest in the assets of a supplier of Acumen.
It was noted that CLA Global TS Risk Advisory, which was appointed to conduct a fact-finding and review exercise to assist in the investigation, had “not provided any conclusions up to this point regarding Dr Ong’s involvement in any misconduct under any relevant laws and regulations”.
Considering the recent lab business suspension, the impending cessation of the Sengkang JTVC, Dr Ong’s termination as well as additional time and costs required to conduct the investigations, Acumen’s board has decided not to pursue the matter further.
“Nevertheless, Acumen reserves the right to resume the investigations should any new material evidence arise,” it said.
Shares of Q&M Dental ended Friday S$0.005 or 1.6 per cent lower at S$0.30, while Aoxin Q&M was flat at S$0.048.
