Shares in medical testing firm take a dive after £7m loss

● Management remains confident of upturn despite losses sustained this year

Shares in a Scottish life sciences company took a hit after the firm swung to a £7 million loss following a reduction in operations and a partial sell-off.

Alva-based Omega Diagnostics saw its shares slump 11.3 per cent to 13.75p after the firm released financial results and an update for the year ending March 2018.

Figures showed a statutory £7.3m loss and included some £6.5m worth of “exceptional costs”, largely from costs associated with the closures of two overseas businesses. The firm announced the closure of its German arm last month and is also shutting down its lossmaking facility in Pune, India.

The firm manufactures diagnostic and testing products for the allergy, autoimmune, and food intolerance sectors. Its flagship product, Visitect CD4, is a testing kit for people living with HIV to assess the progression of the disease.

In June, Omega announced the divestment of its infectious disease business to Lab21 Healthcare, part of the Novacyt Group, for £2.2m, CEO Colin King said par t of the pro - ceeds from this deal would be used to provide short-term capital, while there st will accelerate the firm’s distribution of its next round of CD4 testing kits. It intends to hire more regulatory and sales and marketing support staff at its Alva headquarters to do this.

Despite a gross profit fall of 11 per cent to £8.2m, from £9.2m the previous year, company bosses were confident of future prospects.

King said: “We will be looking to register the CD4 product that is now going through ratification and validation in 132 countries. The quicker we can go through that registration process, the quicker we can start generating revenues.

“We are very much focused on delivering shareholder value and in terms of our three product areas, allergy, food intolerance and CD4, we see great opportunity to deliver that value.”

Chief finance office Kieron Harbinson, said the results were inline with a trading update issued by the firm in April, and attributed the negative market reaction to a full-year 2019 forecast of an adjusted pre-tax loss of £300,000. “This forecast does not include any potential revenues from Visitect CD4, just until we get greater clarity as to what a number might look like.

“We all believe it to be a huge opportunity for the company. We are hopeful that when we come to issue our interim results in November this year, it will leave us better placed to predict that number.”

Chairman David Evans said: “Ultimately, we are judged by our results and it may end up being a rather circuitous route to success, but I do believe that after many years of famine shareholders will see some bread in their basket by this time next year. The key thereafter will be to replenish that basket. I am confident we can achieve both.”

The firm employs around 120 staff in the UK, with roughly two-thirds of these based in Alva. It also has subsidiaries in Cambridgeshire and Devon.