Drugs firm agreement
Omega ships Covid test kit and signs materials deal
Alva-based firm making progress
Omega Diagnostics has shipped its first Covid-19 testing kits and has signed an agreement with Mologic which will supply raw materials to build the kits.
The agreement is for an initial period of three years and renewable annually. Both parties will work together to commercialise the tests.
The company has shipped its first order for the COVID-19 ELISA test to Senegal worth £100,000 and is engaged in talks with 15 countries which is expected to lead to orders in the near future.
The antibody test will be able to help identify people that have built up immunity to coronavirus.
It hopes to manufacture up to 46,000 kits every day, equivalent to 16 million tests a year. The tests will be used on patient samples sent by hospitals or GPs for laboratory testing.
Shares in the company rocketed in April from 7.63p to as high as 61p after investors heard that the test had received independent validation by the Liverpool School of Tropical Medicine and St George’s, University of London.
The board of the Alva-based firm also announced today that it has decided to stop on-going development of its allergy product range after a careful and thorough analysis of the best use of the company’s capital, people and assets. An impairment charge of £8.73 million will be recognised in the financial year ended 31 March 2020. This may account for today’s 14.5% slide in the shares to 53p.
The company now expects EBITDA for the year ended 31 March 2020 to be in a range of £850k to £900k, which is slightly ahead of market expectations. This figure excludes the exceptional impairment charge.
Revenue for the company’s food intolerance products in Q1 are likely to be c.70% lower than Q1 last year. The board believes this is a short-term impact due to the COVID-19 pandemic and that the longer term prospects for this business unit remain strong, particularly with the progress made with Food Detective in China.
Any short-term impact on revenue for the year ended 31 March 2021 will be offset by revenue gains from the opportunities that exist with the COVID-19 ELISA antibody test outlined above.
Colin King, CEO, said: “We are pleased that Omega has been able to widen its collaboration with Mologic which should help to expand the number of COVID-19 tests that can be run both in centralised and decentralised settings, which, along with our VISTECT CD4 tests, strengthens our position in Global Health.
“The decision to stop the development of further allergens has not been taken lightly but we recognise we can achieve better returns from directing our development efforts in other areas and we look forward to providing further updates as the opportunities we have in front of us deliver on their undoubted potential.”