ODX.L Share News (ODX)

(Sharecast News) - Medical diagnostics company Omega updated the market on its UK government manufacturing contract on Monday, reporting that it remained in regular dialogue with the Department of Health and Social Care (DHSC) to provide manufacturing capacity for Covid-19 lateral flow antigen tests.
The AIM-traded firm said the capacity would use the "key pieces" of manufacturing equipment loaned by the UK government for that purpose.

It explained that it was still waiting for confirmation on which test it would be required to manufacture, adding that it was not in control of the process, which was taking longer than originally expected.

The company said it would provide a further update once a test was confirmed.

It said the ability to supply tests that were produced within the UK remained a "key priority" for the DHSC, and to that end the DHSC had facilitated initial commercial discussions between Omega and potential partner companies with lateral flow antigen tests to potentially provide UK manufacturing services.

In the meantime, Omega was currently supporting the government with additional cassetting and pouching services for other Covid-19 antigen lateral flow tests that are being deployed in the UK.

The company also confirmed that, as part of the UK government manufacturing contract announced on 11 February, it had received cash pre-production payments totalling £2.5m excluding VAT, with £2.0m of that cash payment received after the year-end on 31 March.

It said it expected that an amount per test, sufficient to recover the pre-production payment, would be deducted until such time as the funds had been repaid.

"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," said chief executive officer Colin King.

"Obviously as soon as this is confirmed we will update shareholders."

At 1546 BST, shares in Omega Diagnostics were down 3.33% at 60.9p.