OMEGA Diagnostics shares rose more than one per cent as the Scottish biotech business said it secured a 200,000-unit order for HIV tests from Nigeria in interim results.

The company said orders are also expected to accelerate in the medium-term with the prospect of further licence approvals set to be in place in Africa by the summer.

The Alva-based company said revenue from continuing operations increased by 6% to £4.46 million up from £4.22m, for the six months ended September 2019.

Reported revenue reduced by 15% at £4.46m and there was a “significant improvement” in gross margin from continuing operations, up by 5.8 percentage points to 67.5%.

The statutory loss for the period of £290,000, against a profit of £1.04m and the adjusted loss before tax of £350,000 was narrowed from £510,000.

READ MORE: Omega secures first order for HIV test kit from Zimbabwe

Its divisions include allergy testing, food intolerance and HIV testing.

Colin King, Omega chief executive, said: “We are making great progress in all three divisions, and especially in the near-term are well-placed for growth in both food and CD4 units and also our financial performance was in line with our expectations.

“So overall it is a positive set of results coming out, helped by the second order from Nigeria which is subject to approval from the ministry of health but gives a good indication of the demand for the CD4 test and that has now taken us up to 250,000 tests.

We have submitted all our technical documentation, that has been approved, we have concluded an evaluation in Nigeria very successfully and positively.

“The lead investigator has submitted the report to the ministry of health with the recommendation that the test is included in their national HIV programme."

READ MORE: Omega shares rise after news on HIV kit

He said: “So we are waiting on the minister of health to put ink to paper to sign it and are expecting that quite soon.

“Our partner in Nigeria has done a lot of work in terms of the national HIV programme in terms of getting our test known and there is a wide acceptance that this test will make a positive difference to people living with HIV in Nigeria.

“So there is definitely encouragement there.”

Mr King added: “We have received our first order from Zimbabwe and are working through about another nine countries and expect relatively modest sales in this FY but it is the platform to build the following FY.

“All going well by June we should have the approval.
“Our estimate is probably by June we will have received World Health Organisation pre-qualification and then that allows all the Non-Governmental Organisations to procure our test.”

READ MORE: Food-intolerance test developer unveils £400,000 order for China

He said: “To summarise, this FY we get the Nigerian approval it will be 200,000-300,000 tests, next FY you are probably heading towards the million mark and then the following FY you are into millions, somewhere round about two to three million.

“It has been a long journey but the fact [is] this test makes a huge difference to people’s lives who are less fortunate.”

Kieron Harbinson, chief financial officer, said the gross margin “vindicates the decisions we have taken over the last 18 months or so”.

FinnCap said the interim results were in line with the October trading update, “reflecting the financial benefits of closing its German business and selling the infectious disease business”.

Mr King added: “Cleaning up our business has helped our cost base and our margin has gone up as well as we focus on higher-margin products.” 

The firm’s Visitect CD4 Advanced Disease kit detects when CD4 cell counts in HIV patients have fallen to such a level that they should be taken off drugs.