SHARES in Omega Diagnostics have plunged 16 per cent after the firm issued a profits warning following setbacks with a key HIV-testing kit.
The Alva-based company said it does not expect to receive any revenues from the Visitect CD4 test in the current year after recording "sub-optimal performance" in an evaluation of the product in Kenya.
In an update on trading in the six months to 30 September, Omega told investors: "Our future growth continues to be influenced strongly by the prospects for Visitect CD4 but management does not now anticipate receipt of any revenues from this product in the current financial year. Accordingly, management expects that this year's financial performance will be below that envisaged previously."
With Omega facing delays before it can run further tests in Kenya, the company's house broker finnCap said it had removed any revenues from Visitect from its model for the firm for the year to March and the following period.
The update from Omega details the complications the company has faced following the disappointing results it obtained from evaluating Visitect in Kenya in the first half.
Omega believes the test could help revolutionise the care of people with HIV in developing countries by providing a quick method of finding out if their white-blood-cell counts have fallen to levels where retroviral drug treatment is needed.
The company describes Visitect as an instrument-free device that requires no power and no refrigeration facilities and can generate a result in 40 minutes.
But in the company's final results announcement in June, Omega said: "The trial in Kenya has been extended beyond the initial 200 patients because test performance was just below optimal performance on both venous and fingerstick blood, and additional devices have already been sent to Kenya for further evaluation."
Omega said yesterday that an evaluation of 200 HIV-positive patients completed in India demonstrated acceptable performance of the test.
But the company said yesterday that it has yet to determine the root cause of the sub-optimal performance in the Kenyan evaluation.
It does not expect to be able to start further laboratory work in Kenya until late January 2015.
Noting the uncertainties about the timing of further work in Kenya, Omega's finance director Kieron Harbinson said it is not possible to predict when the company will start selling Visitect. He said: "The size of the opportunity remains as large as it ever was." He noted that millions of people in rural areas of Africa lack access to suitable testing facilities.
Omega expects to produce Visitect kits in Alva, where it employs 45 staff out of a global total of 155.
Mr Harbison said Omega's core business is "holding up very nicely". Sales of higher-margin food-intolerance products have gone very well.
Omega said turnover in the six months to September is expected to be £5.69 million, compared with £5.59 million in the first half last year. It said underlying pre-tax profit is expected to increase by 30 per cent, or £130,000, to £560,000, from £430,000 last time.
finnCap reduced its estimate for adjusted profit before tax for the current year by 20 per cent, to £1.2 million. Omega made £1.1m in the year to March.
Shares in AIM-listed Omega Diagnostics closed down 3.125p at 16p.
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