Q&M Dental Group announced, on Oct 28, that it has decided to suspend Acumen’s laboratory business after its clinical laboratory service licence expired on Sept 15. This is due to the loss-making position of Acumen’s laboratory business for FY2023 ended Dec 31, 2023, and 1HFY2024 as well as the shift away from conducting Covid-19 polymerase chain reaction (PCR) tests by the Singapore government.
Furthermore, Q&M sees that any potential cost savings and resources derived from suspending the laboratory business can be used for other businesses related to medical diagnostics or other future business of Acumen.
As at Oct 28, Acumen’s reportable segments comprise its laboratory business and offering Covid-19 vaccinations to the public under the tender contract with the Ministry of Health (MOH) at the Sengkang joint testing and vaccination centre (JVTC).
According to Q&M, the business volume for Acumen’s laboratory business has been small since Singapore no longer needed to conduct as many PCR tests for Covid-19 in late 2022. Accordingly, the non-Covid-related PCR tests undertaken by this business saw losses in FY2023 and 1HFY2024. However, Acumen remained profitable in FY2023 and 1HFY2024 as income from the Sengkang JVTC covered the losses incurred by the laboratory business.
However, with more Healthier SG GP clinics and polyclinics now providing Covid-19 vaccination services, MOH announced that it will close its five remaining JVTCs, including Sengkang. The Sengkang JVTC will be closed from Dec 1 onwards.
“Notwithstanding this, the Acumen board will continue to actively monitor and tender for new MOH contracts as and when suitable tenders become available, given that its off-site medical licence was successfully renewed recently and will continue to be in force till September 2026,” says Q&M in its Oct 28 release. “The Acumen board may also explore the possibility of applying for a new laboratory licence from MOH for the resumption of the clinical testing services in the future.”
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Acumen has since temporarily ceased its business and operations related to the licence on Sept 15 as well. The licence was issued by the MOH to Acumen’s CEO, Dr Ong Siew Hua. It will need to be supported by a principal officer (PO) and a clinical governance officer (CGO), with the appointment of a new PO and CGO subject to MOH’s approval. Before the expiry of the licence, Acumen’s PO was Dr Ong, who was placed on a leave of absence in June due to investigations by Acumen’s board into her acquisition of an indirect interest in the assets of a supplier of Acumen.
In its Oct 28 update, Q&M says Dr Ong and Acumen have decided to exercise Acumen’s contractual right to terminate the former’s employment as CEO of Acumen. The company will provide Dr Ong with two months’ salary in lieu of notice on Oct 26 without any compensation or damages payable by Acumen to Dr Ong. Dr Ong is also required to resign from the boards of Aoxin, Acumen and the board of directors of Acumen’s subsidiary, Acumen Research Laboratories Pte. Ltd., within seven days from Oct 27.
Q&M adds that its fact-finding and review exercise pertaining to Dr Ong’s leave of absence has not provided any conclusions regarding her involvement in any misconduct under any relevant laws and regulations. The group says it has decided not to continue with the investigations after the suspension of the laboratory business, the impending cessation of the Sengkang JVTC, Dr Ong’s contractual termination as well as the additional time and cost needed to pursue the investigations.
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Further to its statement, Q&M notes that Acumen’s contribution to the group’s operating profit in 1HFY2024 was “not material”.
As at 10.06am, shares in Q&M are trading flat at 30 cents.
