By Kristy Dorsey

Shares in Omega Diagnostics fell by more than 4 per cent yesterday as investors were left hanging for further clarity on the scale of future sales of Covid-19 test kits.

Posting its financial results for the year to March 31, the Scottish biotech firm described the outlook for the coming 12 months as “excellent”. However, its revenue forecast excluded all but one of the various coronavirus development projects that have driven its share price higher since the beginning of April.

Asked about this decision, finance director Kieron Harbinson told The Herald that Omega chose to take a “cautious” approach by including only sales of the lab-based ELISA antibody test developed in partnership with Bedfordshire-based Mologic. This kit has been CE marked, meaning that it is approved for use in the EU.

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The Mologic ELISA test is being evaluated in 18 countries including India, where it recently received approval from health authorities there. The kit is expected to generate sales of £2 million in the coming year, with an initial £100,000 order shipped to Senegal in June.

Omega is projecting total revenues of £12.6m for the coming year, more than £8m of which will be generated by sales of food intolerance testing kits. The remainder is expected to be roughly divided between its CD4 diagnostic for HIV and Covid-19 antibody tests.

House broker finnCap said the scope for this forecast to be beaten is “very possible”, but depends on regulatory clearances both in the UK and internationally. Omega’s revenue guidance does not include its part in the UK Rapid Test Consortium (UK-RTC), which is expected to begin shipping kits in September, nor its three other Covid-19 development projects with Mologic.

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“The ELISA antibody test is the only one that is CE marked at this time,” Mr Harbinson said.

“We would rather give cautious guidance than find ourselves in a position of trying to roll back on previous statements.”

Omega posted a pre-tax loss of £8.3m for the year to March 31 as it took a £7.7m exceptional hit from the decision to scrap its allergens research division. That compared to the previous year’s profit of £1.2m.

The AIM-listed company announced on June 9 that it would halt further development of new allergy products to focus on areas where it can achieve better returns. It will, however, continue production of 69 existing allergens.

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“We continued to be disappointed with sales progress in this area,” interim chairman William Rhodes said.

“Given the costs to develop additional allergens, the slow pace of increasing sales, and the need for us to focus our resources on areas that promise to yield higher near-term returns, such as Covid-19 test development and production, we have taken the necessary steps to discontinue development of additional allergens.”

Revenue was broadly in line with that of the previous year at £9.8m, which included a 14% increase in food intolerance sales to £9.2m. This was driven by its first shipments of its lab-based Food Detective diagnostic, which tests for intolerance against a panel of 59 foods that can trigger irritable bowel and other chronic conditions.

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Omega is anticipating a return to growth for its Visitect CD4 testing kits, which slowed as countries around the world focused health efforts on combating the pandemic. These include Visitect Advanced, used with those whose disease is more severe and require routine monitoring, and Visitect 350, a test for those living with HIV but whose condition is better controlled.

Chief executive Colin King said the long-overdue move of the company’s food intolerance unit is now expected to take place in the final quarter of this year after delays to construction of a new 35,000sq ft purpose-built facility in Ely. This will become home to 65 of Omega’s 135 UK-based employees, with the others based out of the company’s Alva headquarters and Littleport facility in Cambridgeshire.

The company’s shareholder register remains dominated by retail investors despite last month’s placing and open offer that raised £10.5m net of expenses, which attracted new institutional investors. The stock closed yesterday’s trading 4.74%% lower at 36.2p.