By Kristy Dorsey

Omega Diagnostics is set for full marketing launch later this month of one of its leading Covid-19 tests following its approval for use in GP surgeries and other professional settings.

The CE Marking for its lateral flow antibody test developed in partnership with Bedfordshire-based Mologic makes Omega the legal manufacturer of the test, which will be sold under its Visitect brand. Visitect is also the branding for Omega’s CD4 test for monitoring HIV patients, which was last month granted prequalification status by the World Health Organisation (WHO).

The Mologic point-of-care (POC) test is different form others in that detects three different antibodies, meaning that it can pick up positive patients at an earlier stage than most other tests. Mologic is currently applying to have the test listed for “emergency use” by the WHO, which would create further sales outlets.

As things stand, Omega is preparing for initial manufacturing of up to 100,000 of the tests per week at its headquarters in Alva, scaling up to 200,000 tests per week in October. The facility has been undergoing refurbishment to increase its capacity.

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House broker finnCap has estimated that Omega will receive approximately £3.20 for each packaged and labelled test, with a gross margin in the region of 50 per cent. This would imply peak weekly revenues of approximately £300,000.

“We leave forecasts unchanged and our target price under review, given the inherent challenges of modelling potential Covid-19 related revenues,” finnCap said in a note to investors. “However, previous sum-of-the-parts analyses indication a potential valuation that is substantially in excess of the current market capitalisation.”

Earlier this year, the Omega management team led by chief executive Colin King said it would halt development of new allergy products to focus on areas where it can achieve better returns, such as its Covid-19 portfolio. This led to the company posting a pre-tax loss of £8.3m for the year to March 31 as it took a £7.7m exceptional hit on its decision to scrap the allergens division.

At that time, the company described the outlook for the coming 12 months as “excellent”. Speaking yesterday, Mr King welcomed the latest progress.

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“We are pleased to have reached this significant milestone of CE-Marking Mologic’s lateral flow antibody test as we continue to support efforts to combat the effects of Covid-19,” he said.

“This approval will allow us to commence in-country registrations and product evaluations. We also look forward to WHO emergency use approval in due course, which will open up opportunities for the test to access global tenders where this approval is required.”

Approval for the POC test, which determines whether a person has been infected with the virus, follows CE marking in April for the Covid-19 ELISA antibody test, which was also developed jointly by Omega and Mologic. The latter is a laboratory-based test to identify people who have built up immunity to the coronavirus.

The ELISA test will be made at Omega’s facility in Littleport, Cambridgeshire, which has the capacity to produce up to 46,000 tests per day. Initial shipments have been sent to Senegal, with the test under evaluation in more than a dozen other countries around the world.

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The Mologic partnership is also separate from Omega’s work with the UK Rapid Test Consortium (UK-RTC), which announced at the end of July that it had secured CE Marking for its AbC-19 Rapid test for professional use.

Omega’s share of production in this partnership will also take place at its Alva facility, with capacity for up to 100,000 tests per week in September, rising to 200,000 per week in October. The company has said that if demand through the UK-RTC was to go above that upper limit, either from the UK Government or from other third parties, it will allocate additional capacity to meet that demand.

The UK-RTC is being led by York-based Abingdon Health. Other partners include BBI Solutions, CIGA Healthcare and the University of Oxford.

Omega is projecting total revenues of £12.6m for the current year, more than £8m of which will be generated by sales of its food intolerance testing kits. The remainder is expected to be roughly divided between its CD4 diagnostic for HIV and the Covid-19 test for immunity that was CE Marked in April. No other potential Covid-19 test sales have been factored into current market guidance.

Shares in AIM-listed Omega closed 1.25p lower yesterday at 57p.