The laboratory activities of the Q&M unit remain suspended; to close the Sengkang vaccination center

Q&M Dentistry and its Catalist-listed associated company, Aoxin Q&Mare suspending Acumen’s laboratory operations with “no immediate plans” to reapply for the laboratory license after it expired on September 15 this year.

Acumen is a 51 percent subsidiary of Q&M Dental, while the remaining 49 percent is owned by Aoxin Q&M.

Its business segments include its laboratory operations and offering Covid-19 vaccinations to the Singaporean public under its procurement contract with the Ministry of Health (MOH) at its joint trial vaccination center (JTVC) in Sengkang.

On Monday (Oct 28), Q&M said that while the license is necessary for the operations of Acumen’s laboratory business, business volume has been “small” since the shift from polymerase chain reaction testing in Singapore for Covid-19 in late 2022.

It further stated that the laboratory business was in a loss-making position for FY 2023 and the first half ended on June 30, 2024. Revenue from the Sengkang JTVC had managed to cover the losses incurred by the laboratory business this year, the group said.

Q&M also cited potential cost savings from the suspension of its laboratory operations, which it said could be focused on supporting and developing new medical diagnostics businesses, or other future Acumen activities.

Sengkang JVTC closure

Q&M has further received MOH’s directive to close its Sengkang JTVC from December 1, in line with the ministry’s announcement on October 25 that it would close all remaining JTVCs. This would leave Acumen without any contribution from its sole income and revenue stream, the group noted.

Nevertheless, the Acumen board said it will continue to actively monitor and issue tenders for new MOH contracts as soon as suitable tenders become available. This is in light of Acumen’s renewed off-site medical license which will remain in effect until September 2026, Q&M added.

Additionally, the group said Acumen “may explore the possibility of applying for a new laboratory license from MOH for the resumption of clinical testing services in the future.”

Although Q&M Dental noted that Acumen’s contribution to the group’s operating profit was “not material” at the end of June 2024, the group expects a one-off material negative financial impact if Acumen’s operations were to cease.

Aoxin Q&M also expects a material impact on earnings per share and net tangible assets per share for the current fiscal year ending December 31, 2024, assuming the cessation of Acumen’s operations.

Both entities said they would consult with each other’s boards and auditors as necessary, along with Acumen’s board to evaluate the financial impact “depending on the future plans” the Acumen board has for the company.

Acumen CEO fired

Before the laboratory license expired, the key officer besides a clinical governance officer was Acumen CEO Dr Ong Siew Hwa.

Q&M announced that the employment of Dr. Ong as CEO of Acumen was contractually terminated on October 26 this year. On October 27, Aoxin requested Ong to resign from the board, along with Acumen’s board and the board of directors of Acumen’s subsidiary, Acumen Research Laboratories.

This comes after the doctor was placed on leave in June this year, with Acumen beginning investigations in connection with Dr.’s acquisition. Approximately an indirect interest in the assets of an Acumen supplier.

It was noted that CLA Global TS Risk Advisory, which was appointed to conduct a fact-finding and evaluation in support of the investigation, “had not yet drawn any conclusions regarding Dr. In the event of any misconduct under relevant laws and regulations. regulations”.

Considering the recent suspension of laboratory activities, the impending discontinuation of the Sengkang JTVC, the termination of Dr. Due to the additional time and costs required to conduct the investigations, the Acumen board has decided not to investigate the matter further.

“Nevertheless, Acumen reserves the right to resume the investigation if new material evidence emerges,” the report said.

Shares of Q&M Dental ended S$0.005 or 1.6 per cent lower at S$0.30 on Friday, while Aoxin Q&M was flat at S$0.048.