SINGAPORE (THE BUSINESS TIMES) - Aytu Bioscience will be the exclusive distributor of Biolidics' Covid-19 rapid test kits in the US.
Both parties on Thursday signed the distribution agreement for a one-year duration, with an option for an additional one-year term.
In the US, Nasdaq-listed Aytu will handle all inbound logistics, sales and marketing operations as well as regulatory matters.
Biolidics retains the right to sell the Covid-19 test kits directly to certain clinical partners in the US.
Under the terms of the agreement, Aytu must purchase from the medtech firm an initial 500,000 Covid-19 test kits within one business day from the date of the agreement.
Thereafter, within the first three months, Aytu is required to buy at least 1.25 million of the test kits in order to remain as the exclusive distributor. All third-party orders arising from Biolidics' own referrals and sales will not be included in this minimum exclusive commitment.
During the term of the agreement, Aytu will also pay for and lead the clinical trials' processes, to complete and obtain regulatory clearance from the US Food and Drug Administration (FDA) for the test kits under Section 510(k) of the US Federal Food, Drug and Cosmetic Act.
If Aytu completes this clearance, the US company will maintain exclusivity for the remainder of the term of the agreement.
Completing the clearance allows Biolidics to sell its Covid-19 test kits in the US under Section 510(k). This will be in addition to the completed Section IV.D of the FDA's guidance document Policy for Diagnostic Tests for Coronavirus Diseases-2019 during the Public Health Emergency, which was implemented to help rapidly expand testing capacity during the pandemic, and may be terminated after the period of the public health emergency.
Biolidics said the Aytu distribution deal is likely to contribute positively to its revenue for the current financial year ending Dec 31, 2020.
"However, the company is unable to quantify the financial impact as there are no minimum purchase quantities beyond the first three months of the agreement," Biolidics added.
The cancer diagnostics company said shareholders and investors should note that policies relating to testing or detection of the coronavirus may change in response to developments in the rapidly evolving situation.
Aytu is a speciality pharmaceutical company focused on the global commercialisation of products addressing medical needs such as hypogonadism (low testosterone), cough and upper respiratory symptoms, insomnia and male infertility.
On Wednesday, Biolidics disclosed that it was in the final stages of negotiations with a potential distributor for the sale of its Covid-19 rapid test kits in the US. The Catalist-listed firm was responding to queries from the Singapore Exchange about the unusual price movements in its stock in the morning.
Biolidics also said it is pursuing regulatory authorisation for the Covid-19 test kit in certain other jurisdictions, and has been "actively developing the market" for the product in Singapore, the Philippines, the European Union and the US after having obtained the relevant approvals for those jurisdictions.
Alongside other healthcare-related plays, the company's shares had jumped 54.6 per cent to hit an intraday high of 82.7 cents on Wednesday, before calling for a trading halt after the midday break. It requested to lift the halt on Thursday at 2.10pm.
Meanwhile, Biolidics' substantial shareholder Clearbridge Health extended its rally, soaring 43.1 per cent or 11 cents to trade at 36.5 cents as at 2.27pm on Thursday. By volume, Clearbridge is the most active counter on the Singapore bourse, with 135.3 million shares changing hands.
Clearbridge Health's wholly-owned subsidiary Clearbridge BSA had a 24.8 per cent stake in Biolidics as at March 18, going by Biolidics' annual report.
