Trading Update and Notice of Interim Results

RNS Number : 1695V

Omega Diagnostics Group PLC

24 October 2014

 



Omega Diagnostics Group PLC

("Omega" or "the Company")

Trading Update and Notice of Interim Results

Omega (AIM: ODX), the medical diagnostics company focused on allergy, food intolerance and infectious disease, announces the following trading update for the six months to 30 September 2014, in advance of releasing its interim results on Wednesday 26 November 2014.

Financial update

Turnover is expected to be £5.69m, slightly ahead of last year's first-half result (30 September 2013: £5.59m).  Due to careful management of costs and an improved segmental mix of business, profit before tax (before acquisition costs, share based payments, IFRS-related discount unwinds and amortisation of intangible assets) is expected to be approximately £0.56m, some 30% ahead of the £0.43m earned in the previous half-year period to 30 September 2013.

Segmental revenues are expected to be as follows:

	Revenue to 30 September 2014	Revenue to 30 September 2013	% increase
Food Intolerance	£2.78m	£2.25m	+ 24%
Allergy/Autoimmune	£1.83m	£2.06m	- 12%
Infectious Disease/Other	£1.08m	£1.28m	- 16%
TOTAL	£5.69m	£5.59m	+ 2%

The food intolerance division has benefited in particular from a number of key customers delivering organic growth over the prior year period.

Allergy Development - IDS-iSYS automation update

We have made good progress in the period with our allergy development programme. Since the last update, a further eight allergens have completed claim support work increasing the aggregate total to 16 allergens. We have completed the transfer of all on-going optimisation work from our external contractor to our newly recruited in-house scientific team and in addition to the aforementioned 16 allergens, a total of 11 allergens have completed optimisation. We continue to use our external contractor to undertake on-going claim support work and we will provide a further update at the interim results release.

Infectious Disease - CD4 update

Since the last update, an evaluation of 200 HIV positive patients was completed at the YRG Centre for AIDS Research and Education in Chennai, India comparing the performance of the Visitect® CD4 to flow cytometry, and the evaluation demonstrated acceptable performance of the test.

However, we have yet to determine the root cause of the sub optimal performance in the Kenyan evaluation, which was reported previously on 23 June 2014. This trial used the same batch of product as in India, and we need to determine to what extent the product, the site, or both contributed to the test's sub optimal performance. At present, the Kenyan trial investigator has agreed that, once product becomes available, Omega staff will be on site and have full access to laboratory facilities in Kenya to first demonstrate acceptable performance of the test on 100 patients, after which, the original 200 patient evaluation will be repeated.  It is likely that the earliest this will happen will be late January 2015.

We have also been fine tuning the test in order to achieve comparable results between finger-prick and venous blood samples. During this work we have seen variable results with batches of devices which have required further investigative work to be undertaken by us.  In order to address this, we have undertaken a rigorous programme to investigate for root cause and correct.  In addition we have engaged experts in lateral flow diagnostics development and scale-up to assist in these programmes.  We anticipate this will address and resolve any remaining issues in manufacture and scale-up of finished product which will demonstrate satisfactory performance with both venous and finger-prick samples.

Outlook

First half trading performance is in line with management expectation, and ahead of last year, despite the strengthening effect of sterling reducing reported revenue by £0.25m in the period, as compared to the prior period.  Our future growth continues to be strongly influenced by the prospects for Visitect® CD4 but management does not now anticipate receipt of any revenues from this product in the current financial year. Accordingly, management expects that this year's financial performance will be below that previously envisaged. While it is not uncommon that issues are discovered as one moves from small batch production to large-scale manufacturing, these are certainly frustrating events for both management and shareholders.  However, we must deal with these issues and solve them prior to launch, to ensure that only high quality, reliable product enters the market. The engagement with high level expertise is a significant step that we feel will be instrumental in achieving resolution of the current issues.  We are convinced that Visitect® CD4 remains in a strong prospective position with regard to the competition and will be a major success for the Group.  We will however, continue to operate in an environment of timing uncertainty until we resolve the issues we face and evaluations lead to full market acceptance of the product.

Contacts:

Omega Diagnostics Group PLC	Tel: [phone]
Andrew Shepherd, Chief Executive	www.omegadiagnostics.com
Kieron Harbinson, Group Finance Director
Jag Grewal, Group Sales and Marketing Director
finnCap Ltd	Tel: [phone]
Geoff Nash/Christopher Raggett (Corporate Finance)
Mia Gardner (Corporate Broking)
Walbrook PR Limited	Tel: [phone] or [e-mail]
Paul McManus	Mob: [phone]
Lianne Cawthorne	Mob: [phone]

 

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