Market in dark over problems at Anagen

MD kept quiet about difficulties with blood analysis system

The managing director of quoted healthcare company Anagen confirmed yesterday that he had decided not to tell the Stock Exchange last year that it was having "serious problems" developing its core product.

Managing director Mervyn Sennett also said he also decided not to correct press reports that the product, Auraflex, was "selling well" when no sales have yet been completed.

Anagen's shares have had a roller-coaster ride since flotation in 1993. They soared last summer on hopes for AuraFlex, a system which hospitals would use to analyse blood samples. They then crashed in October when Organon Teknika - part of Dutch chemicals giant Akzo Nobel - pulled out of a deal to act as worldwide distributor.

Anagen has still not sold an AuraFlex system, nor - in results brought forward to 25 April - did it inform investors it was in dispute with former partner Integrated Technologies Ltd. ITL has issued a writ, alleging misrepresentation and bad faith in terminating their joint venture last December.

Anagen shares closed at 69p on Friday - valuing the company at pounds 32m - after a recent rally prompted by comments in the results.

The company's accounts last year said that "the system was launched in February 1995". But documents obtained by the Independent on Sunday show that up until it pulled out, Organon had, in fact, put the launch on hold.

On 29 August last year project experts met Organon executive Ton Stap and ITL representatives to discuss serious problems.

In a letter to ITL dated 27 September, Stap stated: "We are attempting in these evaluations to prove the reliability of the instrument. All that has been proven is that the instrument is unreliable. We simply cannot launch a product as unreliable as AuraFlex currently is."

Two days after the date of that letter, Auraflex was reported to be "selling well". After five days Anagen technical director Dr Gordon Forrest sold 150,000 shares at for personal reasons at 95p. And nine days after the letter Organon pulled out and the shares dropped.

Mr Sennett said there was a "technical argument" about what the word "launch" actually meant. He also said press comments that AuraFlex was "selling well" were justifiable.

"Sales were pleased with the prospects and the interest they were getting. It's down to the definition of selling. If you give me an order I have sold it."

But he admitted: "By and large you have got to take the view that if there are misleading statements that lead to a substantial rise or fall in the share price you have got to do something about it. If it is definitely wrong and is causing a movement then you are legally bound to do something about it."

He said that problems discovered in the AuraFlex trial conducted last summer were "unacceptable" and "did cause concern at our end, to put it mildly". But at the time the board was confident that the problems were temporary.

The Stock Exchange investigated Dr Forrest's share sale and wrote to Anagen on 6 March saying it would not be taking action.

Mr Sennett said there were still "minor software irritations" with AuraFlex and that Anagen is looking to correct them. He said the firm was in "detailed discussions with a number of companies to act as distributors".

PROMOTED VIDEO
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Life and Style
techCould new invention save millions in healthcare bills?
Voices
A meteor streaks across the sky during the Perseid Meteor Shower at a wind farm near Bogdanci, south of Skopje, Macedonia, in the early hours of 13 August
voicesHagel and Dempsey were pure Hollywood. They only needed Tom Cruise, says Robert Fisk
News
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
News
Jermain Defoe got loads of custard
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

C#.NET Server Side Developer (C#, XML, WCF, Unit Testing,SQL)

£30000 - £40000 per annum + benefits+bonus+package: Harrington Starr: C#.NET ...

Junior Database developer (SQL, T-SQL, Excel, SSRS)

£20000 - £30000 per annum + benefits+bonus+package: Harrington Starr: Junior D...

Business Analyst - Banking - London - £550 - £650

£550 - £650 per day: Orgtel: Business Analyst - Traded Credit Risk - Investmen...

Data Centre Engineer - Linux, Redhat, Solaris, SAN, Puppet

£55000 per annum: Harrington Starr: A financial software vendor at the forefro...

Day In a Page

All this talk of an ‘apocalyptic’ threat is simply childish

Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
Mafia Dons: is the Camorra in control of the Granite City?

Mafia Dons: is the Camorra in control of the Granite City?

So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Once the poor relation, the awards show now has the top stars and boasts the best drama
French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

Radio 1’s new top ten

The ‘vloggers’ signed up to find twentysomething audience
David Abraham: Big ideas for the small screen

David Abraham: Big ideas for the small screen

A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
Eden Hazard: Young, gifted... not yet perfect

Eden Hazard: Young, gifted... not yet perfect

Eden Hazard admits he is still below the level of Ronaldo and Messi but, after a breakthrough season, is ready to thrill Chelsea’s fans
Tim Howard: I’m an old dog. I don’t get too excited

Tim Howard: I’m an old dog. I don’t get too excited

The Everton and US goalkeeper was such a star at the World Cup that the President phoned to congratulate him... not that he knows what the fuss is all about
Match of the Day at 50: Show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition

Tom Peck on Match of the Day at 50

The show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition
Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?