Q&M Dental and its associated company listed on Catalist, Aoxin Q&Mis suspending Acumen’s lab activity with “no immediate plans” to reapply for the lab’s license after it expired on September 15 of this year.

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

Its business segments include laboratory work as well as the provision of Covid-19 vaccines to the Singaporean public under its tender contract with the Ministry of Health (MOH) at its joint vaccination testing center (JTVC) in Sengkang.

On Monday (Oct 28), Q&M said that while the license is required for the operations of Acumen’s laboratory business, its business volume has been “low” since switching from Singapore’s polymerase chain reaction testing for Covid-19 to end of 2022.

It also said the laboratory enterprise’s loss-making position for the 2023 financial year and the first half ended June 30, 2024. Revenue from Sengkang JTVC was able to cover the losses incurred by the laboratory business this year, the group said.

Q&M also noted potential cost savings from the lab shutdown, which it said could be directed toward supporting and developing new medical diagnostics businesses or other future businesses of Acumen.

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Sengkang JVTC closing

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

However, it said the Acumen board will continue to actively monitor and bid for new MOH contracts as suitable bids become available. This is due to Acumen’s renewed off-site medical license, which will continue to be in place until September 2026, Q&M added.

In addition, the group said Acumen may “explore the possibility of applying for a new laboratory license from the MS to resume clinical testing services in the future.”

Although Q&M Dental noted that Acumen’s contribution to the group’s operating profit at the end of June 2024 was “not material”, the group expects a material non-recurring negative financial impact should Acumen’s business cease.

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

Both entities said they will consult with each other’s boards and auditors, if necessary, along with Acumen’s board to assess the financial impact “based on the future plans” Acumen’s board has for the company.

Acumen’s CEO has been fired

Before the laboratory license expired, its required lead director alongside a clinical governance officer was Acumen’s chief executive officer, Dr Ong Siew Hwa.

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

This comes after the doctor was placed on leave in June this year, with Acumen launching investigations into Dr Ong’s purchase of an indirect interest in the assets of an Acumen supplier.

It noted that CLA Global TS Risk Advisory, which was appointed to conduct a fact-finding and review exercise to support the investigation, “has not provided any findings to date as to Dr Ong’s involvement in any misconduct under any relevant law and regulations”.

In view of the recent suspension of laboratory activity, the impending termination of JTVC Sengkang, the termination of Dr. Ong, and the additional time and costs required to conduct the investigations, the Acumen board decided not to pursue the matter further.

“However, Acumen reserves the right to reopen investigations should new material evidence emerge,” the statement said.

Shares of Q&M Dental closed down $0.005, or 1.6%, at $0.30 on Friday, while Aoxin Q&M was flat at $0.048.