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Personally chapsville i am happy for the share price to continue to be undervalued as i am still a buyer not a seller. Adding more this week.

It is clear to see Omega are heading in the same direction.

It is clear to see that the lateral flow testing market is going to kick into play in 2021 if not earlier.

It is clear to see that Omega are extremely well positioned in the Covid lateral flow testing market

Lateral flow testing will bring rewards far beyond 14 weeks. The year Novacyt had this year, Omega can exceed next year when lateral flow tests will likely be part of our every day lives.

Comp - Look at Novacyt. The financials will eventually catch up. Selling tests will put money in the bank and profit into the accounts. The thing that trumps any news is an outstanding set of results, and Omega will produce that with what they have.

100k per week until the end of nov, 200k thereafter.

200k tests per week, going to assume £2 per test, nearly £21m in revenue. If the supply agreement was written like that, ODX supply at least £21m of goods to Abingdon a year for 2 years it would have been a huge day. But that is what it is. And that is only for 10% of our total testing capacity.

We went through this around the 50's when news was being underappreciated and it eventually caught up and got to £1. Same will happen. It should be nearer £2 on what has been delivered. It' will get there and beyond.
The news Omega are delivering may not be the explosive RNS people are looking for, but they are all important milestones.

We are promised a trading update in Oct. I'm expecting some positive news on sales of Visitect and Lab tests. Also CK promised news on a plan to further increase capacity this month. At 2m tests per week, 104m per year, it really doesn't matter if ODX get 1 big contract for the lot or sell them ion small batches. We are in a global pandemic with a testing shortfall. Omega are positioned as well as anybody in the lateral flow market, which hasn't even got going yet.

Okehurst - we do not need trials of the test. It is approved for professional use and is CE marked. It can be sold. I don't know if they are seeking home test approval, but i would assume they are.

UK Government is a tiny part of the testing market. How many private health organisations are there in the UK that would benefit from these tests? Companies could buy them and have them administered by a professional. The UK Mass testing strategy isn't the only market. I see more sales oversees with this test so any sales in the UK will be a bonus. But the potential for this test is vast. The triple antibody test is the USP and with high performance its a good test. CK has reserved 80% of our testing capabilities for Visitect tests for a reason.

200k tests per week is the UK RTC capacity.
We should already be at 200k per week for Visitect tests. So we should be at least 400k by Nov.

Okehurst - have you read the Fincapp note they refer to in the presentation? We are told selling price of UK RTC is higher, therefore margin will be greater than 50%. The Mologic test is self branded as Visitect. The numbers in that Fincapp report make a very profitable and substantial business. Any improvement on that then I am very happy. It really is just a numbers game, capacity and utilisation. We are now expecting a plan for further capacity increase any day.

Lets say selling price is £1.75 in to Omega in the supply agreement with Abingdon. This is only the sealed cassette. So £1 profit per test. What happens to the other £11.25p of the £13 selling price? Firstly it wont be £13 to UK Gov. Secondly there are other costs for the lancet and solution and packaging. Also the development costs. Selling costs distribution and logistics. Legal costs. And various other costs. I've always thought it would be cleaner to just say every test produced by Omega is worth x amount to Omega. It would appear that figure is around £1 per test.

The Mologic test fully complete and branded will be worth significantly more. The FIncapp note can guide on this but i expect that profit will again exceed expectations. There are less layers between Omega and the end consumer so naturally there are less parties to share the pie. It remains to be seen where the demand for the Visitect test will come from. But if demand for the UK RTC cannot be met because the UK Gov are absorbing them, then the Visitect test could be the perfect alternative. It remains to be seen where sales of the Visitect test will be driven from Geographically, which could be a factor in profitability if selling price in different locations is different.

The simple maths is that even on the numbers per the original Finncap note, 2m tests per week is worth a substantial amount of money. This is a high volume low cost play. Anyone looking at the selling price of £13 or £19 and thinking it costs less than £1 so we make the difference has no clue or is just ramping.

Okehurst - you have that wrong.

The Mologic/VIsitect test will be higher margin and more profitable. Omega are only manufacturing the sealed cassette for the UK RTC, whereas for the Visitect test it is a completed packaged and branded product ready to market as their own. This is why 80% of the capacity is reserved for their own tests. Manufacturing your own branded product is always going to be more beneficial than manufacturing part of a product. You have to understand that from an on the shelf selling price to a manufacturing cost, there are lots of layer with different markups at different stages.

What happens when customers cant get the best product on the market.... they go to the second and third best, and the Visitect tests are up there and also have the triple antibody play. We want the UK RTC to be big enough but not too big.

Another box ticked. Omega keep delivering exactly what they say they will.

Again it’s not the huge news that will grab the headlines but some important points.

Revenue per test will be better than expected therefore margin will be greater than 50% as costs won’t change.

Sales to third party if government allow. If they don’t allow then that implied they will be taking up as many as can be made. It’s win win either way. Remember we have own branded tests that are more profitable.

Willgroup - no thanks

So many people are missing the value of what Omega already have. This is massively undervalued for what has already been achieved. People are looking for big large contracts to validate the model. It doesn't need it. Run the numbers at 1m tests per week or 2.5m tests per week. That is not a lot of tests to try and sell in a pandemic with a testing shortfall. ODX are extremely well placed in the lateral flow testing market, which is where all the action will be end of this year and certainly into 21/22. ODX are well versed with distribution to market, and i'll sit back let the distributors do their thing. Larger contracts will come. UK RTC mass testing will come, but only when the government want it ready. Antigen tests are certainly top of my Christmas list and we can tap into santa's grotto and get the elves on the production line, with CK dressed on standby as santa with his reindeer delivering tests to every door. Might have got carried away a bit there, but would make a good xmas movie for next year save watching home alone again. I'll leave you with that thought.... and back to work.

Not a chance i am selling any time this year. I'm waiting for 2.5m tests a week in full flow before even thinking about taking some profit.

Been busy working financial models for my employer until early hours every day, not been looking at this BB i literally just opened it up for first time since last week and this is the first thing i saw.

JAdam - That was the assumptions i was making yesterday, then came to a conclusion today that more likely it was a simple supply agreement. It would be nice to finally get one of the material items ticked of so we don't have to speculate!!!

ll these delays due to the government, the timing of the supply agreement they should be able to control and annoying they couldn't do this before the MOU ended! I guess the other parties are not listed. I'll be surprised if we don't see it by Tuesday morning latest.

Hi JAdam - Is that know fact? I dont believe that is in the public domain if so.

So it sounds like then the £1.50 quoted in the original Finncap report could be the profit per unit each of the manufactures makes, and then on top of that there is a profit share?

Consider the 2 different lateral flow antibody tests:

UK RTC test:
ODX:
Cost of materials and labour £0.75
Price per unit £2.00
ODX profit per unit £1.25

Abingdon and other
Cost per unit sealed device £2.00 (£0.75p for the units it produces itself)
Cost of the rest of the product £3.00
Total cost per unit £5.00
Selling price to distributor £10.00
Profit per unit £5.00
Other costs - Marketing, development etc.

Visitect test:
ODX:
Cost of materials and labour £5.00
Selling price to distributor £10.00
Profit per unit £5.00
Other costs - Marketing

Makes some assumptions that they are similar price, but just a basic like for like on made up figures to show the Visitect tests is where we should benefit from sales the most.

Consider the 2 different lateral flow antibody tests:

UK RTC test:
ODX:
Cost of materials and labour £0.75
Price per unit £2.00
ODX profit per unit £1.25

Abingdon and other
Cost per unit sealed device £2.00 (£0.75p for the units it produces itself)
Cost of the rest of the product £3.00
Total cost per unit £5.00
Selling price to distributor £10.00
Profit per unit

Okehurst - been over a few things since yesterday about how it will be structured. I think it's likely we will just sign a supply agreement with the UK RTC to supply tests at x price. I think a complicated profit share wont happen and may not be the best result. The price the UK RTC pay the manufacturers per test can be set at a calculated rate assuming a profit per unit. For example, they could be paid £2 per unit regardless of UK gov or other sales. UK RTC may only breakeven on UK Gov sales but will make it up on other sales. The gap between the £13 per test and the £1.50 quoted for supply of the device is not as big as you might think. The solution, finger prick device, packaging all have a cost, plus distributor costs etc. There will also be some sunk development and central marketing and admin costs too. Abingdon appear to be taking the risk so expect they will share more profit. I think that should suit ODX as all they have to worry about is churning out tests at the required rate, and enabling to focus more effort on Visitect tests which will be more lucrative as they are own brand. Especially when the Antigen test come online.

So i expect the agreement will be for X number of tests at Y price for Z period of time. I hope the plan to expand to 2.5m tests is announced with it.

People seem to be forgetting Visitect Triple antibody tests are also out there going for £16 a pop retail.

Mologic should be confirming antigen test development any time as well.

I dont care where they make them, they can set up a production line in my house if it means they can get up beyond 2m a week!