Omega loses quarter of value over contract dispute
Omega’s lawyers insist the firm does not need to pay
Drugs testing developer Omega Diagnostics lost more than a quarter of its value yesterday after the Scottish company was handed a £2.5 million bill for equipment to produce unwanted Covid tests.
Omega received the pre-production funding towards manufacturing lateral flow antigen tests for the Department of Health and Social Care (DHSC).
However, the contract has expired and will not proceed into Phase 2.
The DHSC has now asked Omega to submit a proposal for returning the £2.5m pre-production payment made last year to purchase equipment for high-volume manufacturing at its headquarters in Alva.
Omega, which saw its shares rise more than 600% at one point last year as it adapted its testing capabilities to provide coronavirus tests, said it has taken legal advice and does not believe it is required to repay the money.
Chief executive Colin King said: “It is clearly disappointing to receive this request for repayment given the efforts we have gone to ensure manufacturing capacity for Covid-19 lateral flow test was available for the DHSC and that we did not progress to Phase 2 of the contract due to the lack of confirmation from the DHSC regarding which test they require us to manufacture.