By Matthias Blamont and Sudip Kar-Gupta
High-flying shares in Novacyt dropped as much as 12% on Tuesday after the healthcare diagnostics firm said a French regulator had decided against approving the company's coronavirus test for reimbursement by the state.
France, like other countries, is betting on mass testing for COVID-19, the respiratory illness caused by the new coronavirus, as part of its strategy to emerge safely from the pandemic.
City laboratories in France that do the bulk of testing use kits that are approved by the Haute Autorite de Sante regulatory body for reimbursement via the social security system.
Novacyt said that although the regulator had not approved its test for reimbursement in France, it could still sell the product there for private patient testing.
Reimbursement was refused because Novacyt's test was developed with a single gene target, the company said. Other methods usually involve a DNA screening method known as generation sequencing, with samples that are larger and require lengthier reviews.
Novacyt has singled itself out with a test able to detect the new coronavirus in less than two hours. Standard testing, which also identifies other strains, takes up to a day.
Novacyt shares were down 9.8% at 3.51 euros at 1045 GMT, although they are still up by more than 2,000% since the start of this year, spurred by a wave of orders for its tests.
The company said on Tuesday it had total sales and confirmed orders worth 135 million euros for the product, with new deals in Zimbabwe and across Latin America.
As of May 14, Novacyt's test had been approved in more than 16 countries. The product has also received an Emergency Use Authorization (EUA) from the United States' Food and Drug Administration.
(Reporting by Sudip Kar-Gupta and Matthias Blamont; Editing by Barbara Lewis and Mark Potter)