Member Info for MoreThanMe

Key milestones / barriers will be:
- The company receiving kit this month to enable the increase in capacity to 500k / week for December.
- The company executing their plan to remodel part of their Alva facility and then take delivery for the kit for the February ramp up from 600k / week to 2m+ / week.
- CE marking of the Mologic Antigen LFT and tech transfer of the test from Mologic to the Alva facility.
- Specificity and selectivity of the Mologic Antigen LFT being within suitable limits
- Private sales of the UK-RTC at better margins when the capacity allows for it.
- NGO contracts for the CD4 test.

For those that are interested in higher capacities:

---February at 900k / week:
200k UK-RTC (gov sales) with 85p gross profit / test = £170,000
290k Visitect Triple Antibody LFT with £1.60 gross profit / test = £464,000
400k Visitect Antigen LFT with £2.5 gross profit / test = £1,000,000
10k Visitect CD4 test with £2.80 gross profit / test = £28,000
Food Intolerance = £77,000
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Totalling £1,739,000 gross profit / week or £6,956,000 gross profit / month

---April at 2m / week:
400k UK-RTC (gov sales) with 85p gross profit / test = £340,000
100k UK-RTC (private sales) with £1.50 gross profit / test = £150,000
290k Visitect Triple Antibody LFT with £1.60 gross profit / test = £464,000
1.2mVisitect Antigen LFT with £2.5 gross profit / test = £3,000,000
10k Visitect CD4 test with £2.80 gross profit / test = £28,000
Food Intolerance = £77,000
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Totalling £4,059,000 gross profit / week or £16,236,000 gross profit / month

As per the RNS on the 7th Oct: “Pricing of the tests is confidential, however Omega expects to receive revenue per test which is slightly ahead of market expectations as outlined in 22 June 2020 analyst forecasts”

Original estimate of UK-RTC government orders was a revenue of £1.50 at a 50% margin. So lets assume “slightly higher” means Omega have a gross profit margin of 85p / test instead of 75p. Private orders outside of the UK-RTC will result in greater profit margin with the profit sharing mechanism set up by the UK-RTC members.

Forgetting for a second that capacity will increase to 2m+ tests / year in April. Lets take a look at the business only producing 300k LFTs / week:

Colin stated that the “capacity for November has already been consumed with demand”, there is no way to know the exact make-up of the 300k tests, but here is a conservative example using numbers from the InvestorMeetsCompany presentation and Fincapp:

---LFTs
200,000 RTC LFTs to the UK Gov with revenue of £1.60, gross profit margin of 85p = £170,000 profit / week
90,000 Visitect Antibody LFTs with revenue of £3.2, gross profit margin of £1.60 = £144,000 profit / week
10,000 Visitect CD4 tests with revenue of £4, gross profit margin of £2.8 = £28,000 profit / week

---Food Intolerance
Estimate £4m gross profit / year equivalent of £77,000 / week
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Totalling to £419,000 gross profit / week and £1,676,000 gross profit for the month.

If the business can be throwing off this amount of cash at 300k / week capacity, the amount of cash being generated at 2m+ / week is going to be astounding.

Does anyone know the margins for the Mologic antigen test, I heard Collin say £5 revenue at a 50% margin in the July Investormeetcompany presentation and don’t know if that is still the case. £2.50 gross profit / test would be truly incredible if that is the case. Mologic tests under the Visitect brand are the biggest opportunity we have with Omega.

If the virus starts to mutate, it would have huge implications for the vaccine / herd immunity and ultimately mean that this pandemic would be far longer lived and result in something similar to the common cold, but more deadily. Unfortunately that would be terrible for humanity but good for testing companies as testing would then be the primary method to manage the virus. I really hope this is not how it will play out.

"Book in today for one of our nurses to administer your Antibody Test.

PPE 4 Trade and Screen4 Ltd have teamed up with one of the largest diagnostic businesses across the globe – Omega Diagnostics. Enabling us to offer Practitioners, Clinics, Pharmacies, Occupational Health businesses and teams access to the latest VISITECT® Covid19 Rapid Finger prick Antibody Test.

The only rapid test that identifies all 3 antibodies (IgM, IgA and IgG), increasing the window of detection.

This Qualitative rapid diagnostic test detects IgM, IgA and IgG antibodies. The manual lateral flow immunoassay is for professional use only and is not to be used for self-testing."

link: https://www.ppe4trade.com/visitect-rapid-finger-prick-antibody-kit

Increasing capacity further, is there anything stopping the company from producing through the night instead of the current 7AM to 7PM? It seems like taking production 24hr a day would be a great way to increase capacity, but would they struggle to hire skilled workers that would be willing to work night shifts?

https://www.brrmedia.co.uk/broadcasts/5f84724bc4d0076f2b93e3c5/omega-diagnostics-group-product-sector-overview-cd4

78p has been a major resistance point the whole of this week, if we can break this level today and it looks promising, we have a clear road to 90p and 108p.

With the unprecedented scale, it is so important to be using tried and tested methods that have been around for a long time, the majority of lab testing is achieved with PCR a 35 year old technology that is highly robust, has a strong history of reliability and has the industrial infrastructure behind it to support a large scale up.

For rapid testing, LFT is the answer, it is circa 60 years old, is highly reliable, portable, cheap, has the industrial infrastructure to scale quickly, is backed by decades of science and is very easy and robust for the user to operate.

Earlier in the year, there were three tests trialled at Heathrow:

- *i-Abra: "Machine will cost less than $20,000, with cartridge testing kits about "the price of a paperback book", so expensive initial outlay and still costs around £10 for a test.
- *RT-LAMP: "Experts put the cost of ‘lab in a box’ (LAMP) tests at around €40 to the consumer", provides results in 30 minutes and has great accuracy.
- *Mologic: Results in 10 minutes, cost will be under £10 with no initial capital outlay to buy a machine.

I-Abra was widely discredited as first reported by FT
source: https://www.ft.com/content/e7a279df-3239-4e00-be29-f38d98f4d730

Today large doubts have been raised about the technique of RT-LAMP which has been reported to have missed over 53.3% of cases in the Greater Manchester Operation Moonshot pilot.
source: https://www.theguardian.com/world/2020/nov/05/operation-moonshot-rapid-covid-test-missed-over-50-of-cases-in-pilot
source: https://www.cambridge-news.co.uk/news/uk-world-news/boriss-moonshot-20-minute-covid-19231528

By process of elimination, the Mologic test is starting to look like the favourite going forward.

The longer there is a demand for covid testing, the higher the p/e ratio will be when the market is valuing Omega. Most of the future valuations of the company here use very conservative p/e ratios such as 3-5 x earnings, so if the p/e ratios are more generous, the valuation could be incredible here.

"Moreover, the top-down, state-led approach to testing has consistently proven too slow and centralised to be effective, as well as eye-wateringly expensive.

The next important part will be deregulating testing so people can use tools to regularly self-test and determine their risk. Want to visit your elderly relatives for Christmas? Pay around £5-£10 for an antigen strip test to keep your family safe. Want to host a business conference, theatre show, club night or business meeting? Price in an antigen strip test for all participants.

The public may forgive Boris Johnson’s Halloween lockdown. A third lockdown, however, would be a national embarrassment. Thankfully, we now have a way out of this mess."

source: https://www.telegraph.co.uk/news/2020/11/05/plans-mass-test-liverpool-game-changer-fight-against-covid-19/

There will have been a lot of people waiting on the sidelines for the seller to finish, which now looks like the case. There is very little resistance until 90p and 108p, so if we can break 78p we will rise quickly. Omega is stupidly undervalued down at these levels.

This rise is long overdue, it should have never dropped below the placing price, but that is always the way of placings. The quality of the new IIs taken on during the placing will be of a completely different level than the last placing, so I can see us popping up quite quickly from these levels. It will be interesting to get the results of the p2 trial published soon.

With so much talk in government and the media about lateral flow testing, it is clearly going to be a critical part of the future battle against the spread of covid. Lateral flow testing is a tried and true method of POC testing, much like PCR is for lab testing in that has many decades of research, industry and expertise built up around it. This is essential when scaling up to the numbers that will be required in the years to come. This is another de-risking event as it is becoming crystal clear that lateral flow testing is going to be one of the dominant testing methods for the POC setting going forward. Omega has come so far since the start of the year, a big well done to the team.

There must be a lot of people waking up to the realization of how important this treatment will get as we get further into winter. With rates of hospitalization and death rising everyday, there is no way the governments are not going to push approvals through, the moment p3 is showing sufficient evidence.

What other industry is going to have such exponential demand growth in the product they manufacture as LFT rapid tests. When the public start to comprehend how useful these tests can be, there is no way supply will keep up with demand for years to come. All this at a time where the broader economy will be seeing reduced demand for consumer products.

Sub £2 will be all but history by the end of the week is my guess.

Moving upwards here, might get interesting if we can break 175p. This deserves to be a lot higher and there is a lot of news flow to come that will catalyses a move to the upside