After an uneventful time on AIM, the company is suddenly flavour of the month.
Last week, I talked about stocks - some small, some very large - that are involved either in supplying or developing tests for Covid-19, or working on a vaccine. Share prices for most had rocketed. But that list was not exhaustive, and there’s another company that deserves a mention after some spectacular activity today.
Starting the month at 7.63p, Omega Diagnostics (LSE:ODX) shares traded as high as 61p Monday morning after investors heard that a test for Covid-19 it had wanted to make at its manufacturing facility in Littleport, Cambridgeshire, has received independent validation by the Liverpool School of Tropical Medicine and St George's, University of London.
That means Omega has now been able to CE Mark the Covid-19 first generation ELISA1 diagnostics test, just one week after agreeing to let the test’s developer Mologic Ltd make it at the Littleport site.
Part-funded by the government, this antibody test will be able to help identify people that have built up immunity to coronavirus.
The pair will now finalise a longer-term supply agreement to commercialise the test and manufacture up to 46,000 every day, equivalent to 16 million tests a year.
The tests will be used on patient samples sent by hospitals or GPs for laboratory testing.
Source: TradingView Past performance is not a guide to future performance
Today’s news is completely separate from the UK Rapid Test Consortium (UK-RTC), which Omega set up with three other companies - Abingdon Health, BBI Solutions, CIGA Healthcare - and the University of Oxford on 9 April.
The idea here is to “jointly develop and manufacture a Covid-19 Point of Care antibody test as part of the government's five pillar national testing strategy for Covid-19.”
This test could be used 'at-home' and will be made in Omega's Alva facility in Scotland.
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Omega Diagnostics has been around since 1987, but only listed on the junior AIM market in 2006 when it reversed into a cash shell company called Quintessentially English.
The medical diagnostics business has been focussed on infectious diseases, food intolerance and allergy testing, but, in the 13 or so years since joining AIM, the share price has rarely done much.
Buyers chased Omega’s share price up as much as 60% in early deals Monday, extending gains made in the past few weeks. It takes the rally for April to a sensational 699.47%.
Omega shares haven’t been close to this since February 2007, when they were still in the rapid decline phase following the listing on AIM in September the year before.
Mark Brewer, analyst at Omega's broker finnCap, said: "Until we have better visibility over potential orders we are not changing forecasts, which exclude any Covid-19 ELISA revenues, and are underpinned by Food Intolerance and VISITECT CD4 [used for HIV patients].
"With the potential production capacity able to generate up to an estimated £30 million of revenues, there is clearly upside to [our current] 25p valuation. How much will depend on the orders received and the sustainable or recurring nature of those revenues."
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