By Kristy Dorsey

Shares in Omega Diagnostics slid by nearly 4 per cent yesterday after the company admitted that the UK Government is taking longer than expected to decide which Covid test it wants the firm to manufacture under a lucrative contract with the Department of Health and Social Care (DHSC).

Omega, led by chief executive Colin King, said it remains in “regular dialogue” with the DHSC but emphasised that it is “not in control of this process”. It added that the ability to supply tests that are produced in the UK remains a “key priority” for the government.

Alva-headquartered Omega confirmed in February that it had been selected as a supplier on the contract, which is expected to generate substantial revenue growth in the current financial year. The company could earn a maximum of £374 million from the deal over the lifetime of the contract.

READ MORE: Rapid Covid test from Omega stacks up well against ‘gold standard’ PCR

Omega indicated at that time that it would have capacity in place to begin producing up to two million tests per week by the end of April. In lieu of a decision on which test the DHSC favours, the company has in the meantime been supporting government efforts with additional cassetting and pouching services for other antigen tests that are being deployed in the UK to determine if someone is currently infected with Covid.

One of the tests under consideration by the DHSC is that from Bedford-based Mologic, with whom Omega is already partnered in a separate manufacturing agreement. If the Mologic test is selected, Omega will produce it both for the government and for Mologic.

“Whilst confirmation from the DHSC of which test to produce has taken longer than we had expected, we are confident that we have the capacity to produce significant volumes of tests once we receive the requisite confirmation from DHSC,” Mr King said.

READ MORE: Omega to receive up to £374m from UK test deal

“Obviously as soon as this is confirmed we will update shareholders.”

As part of the manufacturing contract, Omega has received £2.5m in pre-production payments from the government to buy in the additional equipment needed. Of this, £2m was received after the close of the company’s financial year on March 31. The entire sum is expected to be repaid through a reduction on the amount Omega is paid to produce each test.

Shares in Omega closed yesterday’s trading 2.5p lower at 60.5p.