Weak sterling pushes Omega Diagnostics revenue higher

Medical diagnostics company Omega Diagnostics announced on Tuesday that results for the year to 31 March would be in line with market expectations.

The AIM-traded firm said revenues for the year were expected to be £14.3m and adjusted profit before tax was expected to be £1.1m.

That revenue growth reflected a 3% year-on-year improvement in constant currency terms and 12% ahead of last year's result on an actual basis, which the board said resulted from the weakening of sterling throughout the period.

On a segmental basis, revenue in the food intolerance operations was expected to rise 13% to £8m, wile allergy and autoimmune was ahead 14% to £3.59m and infectious disease was 5% firmer at £2.66m.

In the allergy operation, Omega said it was continuing to have discussions with IDS on how best to commercialise the ‘Allersys’ range of reagents, with the board believing it could achieve an outcome that will benefit both parties.

It said the time taken on the discussions to date reflected the importance on achieving the right balance for both parties on what it anticipated would be a long term relationship.

“We have continued to develop the allergen range and we have now optimised a further nine allergens, in addition to the 41 allergens which are CE-Marked for use on the IDS-iSYS automated instrument,” Omega’s board said in a statement.

In infectious disease, the board confirmed it had now attained formal design freeze with its ‘VISITECT CD4’ test following the successful manufacture of three pilot batches.

Devices from those batches were tested at three UK hospital sites, on sufficient numbers of patient samples to demonstrate that the company now had a method for manufacturing devices which consistently meets design goal specifications regarding sensitivity and specificity.

“Achieving this significant milestone means we have now progressed into the formal verification and validation phase, the board explained.

“We will use the chosen design to manufacture three validation batches which will be sent for field trial evaluation at selected sites in the UK and India.

“The field trial results, combined with a number of planned internal experiments to support product claims will, if successful, enable us to CE-Mark the test after conclusion of these activities.”

Omega said it reached a “significant milestone” in achieving design freeze with its ‘VISITECT CD4’ development programme, and remained confident in completing the verification and validation programme to deliver a “unique product” which it believed would meet a large unmet medical need for people living with HIV infections in resource-limited countries.

The company was also successful in achieving full operational capability with its manufacturing facility in Pune, India.

Whilst it already indicated it expected to achieve modest sales with its ‘Malaria’ range of tests this year, the board believed it had created a “valuable asset” which could grow shareholder value in the years ahead.

“We are encouraged by the ongoing performance of our core business.

“Our Food Intolerance division continues to grow at a healthy rate and we are reviewing initiatives as to how we may grow this business in North America.

“Our allergy business in Germany achieved a 3% increase in euro denominated turnover, reversing a declining trend in recent years.”

Omega said it expected to announce its financial results for the year ended 31 March by mid-July.