ALVA-based medical testing company Omega Diagnostics is in talks with Bank of Scotland over an extra £1 million loan as it prepares for commercial production of a HIV testing device that will be trialed by aid agencies in the new year.

The Clackmananshire company had a tough first half to its financial year with pre-tax profit falling 21.7% to £132,000 after the wet summer reduced pollen levels and hit demand for allergy products. Exchange rate movements also reduced earnings from continental sales.

Omega was left with around £400,000 in net debt as of September 2012. If Bank of Scotland provides it with additional finance the company could have upwards of £2m in headroom on its facilities with which to finance the rollout of its CD4 device for HIV patients.

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Earlier this week, Omega was awarded a £150,000 Regional Selective Grant to back the roll-out of CD4, which could add 40 jobs to its Alva workforce.

Omega finance director Kieron Harbinson said: "We are in the final stages of discussions and I am very confident we will get something of at least £700,000. It will be between £700,000 and £1m as an additional facility.

"What that will mean is we will have sufficient finding in place that is non-dilutive to shareholders to take CD4 to market."

The Clinton Heath Access Initiative and Unicef will test the product in January. If orders come in, Omega could ramp up production from the summer for delivery in the autumn.

The CD4 test was developed by the Burnet Institute in Melbourne, Australia, and was exclusively licensed by Omega earlier this year.

The CD4 determines if a HIV patient's white blood cell count has fallen to a level where retroviral drug treatment is needed.

Omega hopes there will be demand from aid agencies as tests have to be carried out at a hospital, leaving about 17.1 mil-lion HIV-infected people without access to treatment.

It may be lucrative for Omega with tests likely to cost around $5 each from parts costing $1.50.

Chief executive Andrew Shepherd said: "It is a significant potential opportunity."

Mr Harbinson said the underlying health of Omega is good.

The company spent £100,000 overhauling management posts in Germany and Cambridge operations after sales falls on the continent.

Last month Omega warned of delays in launching allergy tests for the automated IDS-iSYS system. It said yesterday that since then there had been "further progress" but it is struggling to source sufficient numbers of patient serum samples.

It is aiming to launch with a panel of around 40 tests by the end of 2013.

Its shares rose 0.13p, or 0.91%, to 13.88p.