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Omega shares slump after warning

OMEGA Diagnostics has seen its shares fall almost 18 per cent after warning it could not accurately forecast how much of its highly anticipated HIV testing kit will be sold this year.

turnover on the up: Staff at work in the laboratory at Omega Diagnostics in Alva, Clackmannanshire where the Visitect CD4 system was evaluated
turnover on the up: Staff at work in the laboratory at Omega Diagnostics in Alva, Clackmannanshire where the Visitect CD4 system was evaluated

The company confirmed field evaluations of the Visitect CD4 system, manufactured at its headquarters in Alva, Clackmannanshire, in Kenya and India have seen 340 patients tested so far.

However, Omega admitted it is difficult to predict when non-government organisations (NGOs) are likely to want to buy it in large quantities.

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House broker FinnCap reduced its expectation for CD4 sales in the 2015 financial year from £5 million to £1.5 million but included the higher sum in a forecast for the following 12 months.

David Evans, Omega chairman, said: "CD4 will, without doubt, be a successful product for the Group, but we would be foolish to believe that our crystal ball is better than yours in being able to forecast with certainty the decision outputs from the NGOs we are working with.

"This is primarily a global tender-based business, with timing driven by the availability of funds and the view of the various governments as to need at that time."

That came as the company, which employs 43 of its 145 staff in Scotland, recorded a three per cent rise in annual turnover from £11.3 million to £11. 6 million.

Pre-tax profits almost doubled from £276,224 to £543,041 in the 12 months to March 31 this year.

Following the trend of recent years the food intolerance division was the star performer with an 18 per cent rise in sales from £4.39 million to £5.18 million with strong sales reported in France, Spain, Brazil and Poland.

The company said it expects double digit percentage growth in this area and is targeting markets such as Mexico, Canada and India.

The allergy and autoimmune segment, mainly based in Germany, fell from £4.16 million to £3.97 million as a result of strict doctor purchasing restrictions operating in its main market.

The infectious diseases arm saw a drop in revenue from £2.71 million to £2.45 million which was attributed to one UK customer which had experienced financial difficulties and reduced its custom.

Omega also outlined a potential pipeline of new product areas including a point-of-care test for syphilis which it has licensed technology from the Burnet Institute in Australia, which was also the originator of the CD4 technology.

Andrew Shepherd, chief executive, said: "It is a test that has great potential from what we are hearing from the global health market."

Trials for a test for schistosomiasis, a disease caused by a worm present in many tropical countries and which it is estimated 200 million people are infected with, could start in the second half of this financial year.

Mr Shepherd said: "Omega is working with an expert in this disease area and good early progress is being made in the development of a new lateral flow test."

Further down the line Omega is also looking into the possibilities for a simple test to determine the amount of the HIV virus in body fluids.

A smartphone app which scans the results of the CD4 tests and uploads them to a central server is also being rolled out and will be customisable for other disease tests.

Shares closed down 5p at 23.25p.

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