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".

voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
Life and Style
fashion Designs are part of feminist art project by a British student
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
Arts and Entertainment
Residents of Derby Road in Southampton oppose filming of Channel 4 documentary Immigration Street in their community
voicesSiobhan Norton on why she eventually changed her mind
ebookA unique anthology of reporting and analysis of a crucial period of history
Scottish singer Susan Boyle will perform at the Commonwealth Games opening ceremony in Glasgow
commonwealth games
Arts and Entertainment
Dwayne 'The Rock' Johnson stars in Hercules
filmReview: The Rock is a muscular Davy Crockett in this preposterous film, says Geoffrey Macnab
Life and Style
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it