RE: British diagnostics5 Dec 2022 07:37
Among the companies in dispute with the government is Omega Diagnostics, which has been based in Alva, Clackmannanshire, since it was founded in 1987. In March, the company was forced into a firesale of its loss-making manufacturing site in Alva and its diagnostics business to a subsidiary of Orient Gene — one of the main Chinese suppliers of lateral flow tests to the government — to prevent the company’s collapse after a deal with the government fell over. The £1 million sale saved 93 jobs and diagnostics manufacturing at the site, but the outcome was bittersweet for Omega.
The company had instead been confident of growing the business by manufacturing Covid lateral flow tests at the site under a potentially transformative government contract.
Omega had used a £2.5 million pre-payment under a contract with the Department of Health and Social Care, alongside £11 million it raised from investors in June 2020, to increase manufacturing capacity and the workforce from 60 to about 200, ahead of the government licensing a test for Omega to make. Government-funded equipment was also installed in preparation.
Instead, the contract expired in October last year without the government licensing a third-party test to Omega. Its costs to support the anticipated manufacturing, meanwhile, had “substantially” increased.
Announcing plans to sell Alva in February, Jag Grewal, Omega’s chief executive and treasurer of the British In Vitro Diagnostics Association, the industry trade body, said it was “hugely disappointing that having acted in good faith to establish UK manufacturing for government-issued Covid tests, we find that these tests are, in the main, sourced from China instead”.
Further damaging relations and Omega’s prospects, the department is pursuing repayment of the £2.5 million funding, which Omega is disputing. The company has launched a “substantial” counterclaim, pursuing an additional £1 million-plus for losses under the contract.
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