Covid test rejection rumour on Twitter sparks share sell-off

Biotech company Avacta has denied it has received an update on a CE mark submission for its Covid test after a Twitter rumour sparked a 5% drop in its share price yesterday afternoon.

A Twitter user, @StickyStock81, published an email that appears to be from the Medicines and Healthcare products Regulatory Agency (MHRA) which said the application had been rejected on May 20.

However the email went on to explain the rejection was because of the documents that had been filed for the application. The apparent administrative error meant the application needed to be resubmitted.

StickyStock81’s tweet was published with a dramatic message: “CE REJECTED. Sorry folks another example of AS [Dr Alastair Smith, Avacta’s chief executive] withholding information to shareholders”.

Avacta’s share price dropped 5% in little more than 30 minutes yesterday after the tweet was published before mostly bouncing back before the close, aided by the Twitter user publishing an image of the email.

Avacta has this morning issued a statement to the stock market in which it “notes speculation regarding the ongoing CE mark submission” by its partner Mologic for the lateral flow test.

It added: “To date, neither Avacta nor Mologic have received any update from the MHRA. Avacta will update the market when it is in a position to do so.”

On May 10 Dr Alastair Smith had hailed the CE mark submission as a “significant milestone” for the company. Avacta had expected to receive confirmation of the registration of the device “in the coming days”. Approval will allow the group to “immediately place the test on the market”, it added.

The potential of Avacta’s Covid test has transformed the Wetherby-based business’s fortunes. Despite yesterday’s wobble, its share price is trading around 15 times higher than it was before the UK entered its first lockdown in March 2020.

StickyStock81, who describes himself as “AIM investor occasional trader” has now protected his tweets.