Key points:
- Abingdon Health shares rallied 45.4% ahead of a crucial court ruling.
- Investors hope for a ruling against the DHSC on the COVID-19 tests.
- However, it is unclear how the ruling will affect Abingdon Health.
The Abingdon Health PLC (LON: ABDX) share price rallied 45.4% as investors await a judgement on the Judicial Review proceedings instigated by the Good Law Project Limited (GLP) against the UK Department of Health and Social Care (DHSC).
The rally in Abingdon Health shares indicates that most investors expect a ruling in favour of the firms that the DHSC contracted to provide COVID-19 lateral flow tests at the start of the pandemic in 2020. However, the government department later cancelled the orders due to a public outcry and refused to pay for the delivered tests.
Also read: The Best Healthcare Stocks To Buy Right Now.
At the bare minimum, investors expect the courts to rule that the DHSC must pay for the tests delivered before the contract cancellations. In the most optimistic scenario, investors hope the judge shall rule that the DHSC compensates the affected firms for the losses incurred due to the contract cancellation.
Abingdon Health is an interested party in the proceedings. A ruling against the DHSC could open the door for the company to make claims against the government department and seek further compensation based on the ruling.
The ruling will be delivered at noon UK time, and many will be watching to hear what the judge says. Abingdon Health settled its case against the DHSC earlier this year and has already received a £6.3 million cash payment from the DHSC on 7 July 2022.
It is unclear how Abingdon Health could benefit from today’s ruling, given that it had already settled its case against the DHSC and has been paid. In the absence of the DHSC contract, Abingdon Health’s performance in its 2022 fiscal year, which ended on 30 June 2022, was abysmal as it generated £2.8 million in revenues.
Investors are counting on the ruling to boost Abingdon Health shares significantly. Still, we’ll have to wait and see whether the ruling will positively or negatively impact the company.
*This is not investment advice.
Abingdon Health share price.
Abingdon Health shares rallied 45.38% to trade at 9.45p, rising from Thursday’s closing price of 6.50p.