Omega Diagnostics Share Discussion Threads

[dibs61] 14/12/2019 15:09

Also, re bomber post 2177 note the following excerpt from the recent interim report:

‘Following receipt of ERPD approval announced in September, we are in discussions with the Clinton Health Access Initiative ("CHAI") who act on behalf of UNITAID to implement their Advanced disease initiative. CHAI has identified four countries to act as early adopters of our VISITECT® CD4 Advanced Disease test, providing a test bed to implement CHAI's advanced disease programme. CHAI are currently working with these countries' Ministries of Health to identify how they will execute this programme. Once this task is complete, we expect to receive indication of demand from each of these countries.’

There’s no question in my mind we’ve sold this product to CHAI. The issue is how quickly can they execute the programme and what the initial demand will be from each country - initially four.

Without a doubt exciting times for investors here.

[dibs61] 14/12/2019 15:05

bomber - I’d say we are in with a very good shout of grabbing a chunk of both those markets. We have a unique competitive advantage. In terms of cost we are cheap and note that cost of commodities for POC tests has been something of a block to procurement but, like I say, we are not expensive.

[cheshire man] 14/12/2019 12:40

Made several attempts to buy yesterday and could only get £100 worth so gave up in the end !

[bomber13] 14/12/2019 11:39

Worth reading and inwardly digesting the CHAI report , which Dibs61 has kindly found for us .

If nothing else , look at Figure 46 on page 21 , it is the forecast of demand for CD4 tests up to 2023 . Whilst the forecast for 2023 at 10m tests pa is lower than 2018's 14m tests , these tests would be performed on machines requiring power of some kind , and probably in a laboratory . Therefore , not quite as convenient as a unique lateral flow test requiring no power , and no laboratory .

Furthermore , look at the forecasts for unmet need . This figure amounts to about 5m tests pa in 2023 on top of the 10m test forecast . Surely there has to be a good chance that a user friendly product like Visitect might actually bring some of that unmet need into the equation ?

[upomega] 14/12/2019 06:45

Upupup
And away.who said Mary Poppins is only for what we call children. Sorry are we aloud to say that .any one below the challenge age of thirty

[dibs61] 13/12/2019 23:46

Thanks bomber for your helpful response

[upomega] 13/12/2019 18:32

Thanks bomber and dibs for the posts great update

[gwr7] 13/12/2019 18:26

The sunlit uplands are distant, but it's good to see them again from above the 200 day moving average.

[bomber13] 13/12/2019 18:16

Hi Dibs61 again .

In the August investor briefing this year , I asked about capacity , and Colin King declared that the Alva plant could produce 2m-3m tests pa on a single shift basis , but he also said that production could easily be scalable in terms of better labour utilisation ( double shifts ? ) , automation and increased space .

Although not repeated or asked at the most recent briefing , it does sound like Omega is aware that they may need to double production , and may indeed have already made costings to do so ?

[dibs61] 13/12/2019 17:43

Thanks guys.

bomber - you throw up (not literally) a good question. Do we know what their current annual manufacturing capacity is going to be for the Visitect 350/200 Tests?

And assuming they can meet the demand you suggest bomber yes I do think they could be being quite conservative with their demand forecasts given the urgent clinical need for this product. As you say they have a 2020 target to meet for starters and I am sure the Visitect Advanced Test will be a key part of that strategy going forward particularly for rural and resource limited settings.

[bomber13] 13/12/2019 17:26

Great detective work Dibs61 .

The strong message seems to be that we could go from zero to , say , 3m tests pa extremely quickly , and in a shorter timescale than the CEO's forecast of Y3 , the financial year to June 2022 .

Even at 3m tests pa we would still be well short of the 6m tests pa that the WHO thinks should be needed . How can they hope to halve mortality rates amongst AIDS sufferers to 500/- pa without an easy to use point of care test like Visitect ?

[barrywhit] 13/12/2019 16:41

Good posts Dibs, all looking very good..

[dibs61] 13/12/2019 15:01

Visitect CD4 Test in CHAI Report Sept 2019

If there were any lingering doubt about the market demand for Omegas Visitect CD4 Advanced Test it gets a special mention (a whole paragraph actually) in the Clinton Health Access Initiative HIV Report in Sept 2019!

One product that may improve rates of AHD identification is the Visitect CD4 Advanced Disease test from Omega Diagnostics. This is a semi-quantitative device-free assay that can detect if a patient’s CD4 levels are below 200 cells/µL (WHO threshold for AHD). In mid-September, the Global Fund Expert Review Panel for Diagnostics (ERPD) announced that the product will be eligible for procurement following a review of the procurement request and the issue of a no-objection letter from the Global Fund.xxxi Funds from both UN bodies and the Global Fund may be used to procure this product. The product has also been submitted for WHO prequalification. Médecins sans Frontières (MSF) is currently conducting field evaluations to assess both
product performance and usability

hxxp://clintonhealthaccess.org/wp-content/uploads/2019/12/2019-HIV-Market-Report.pdf

[dibs61] 13/12/2019 14:47

Todays research reveals:

Médecins Sans Frontières issued a report on 1.12.2019 about a new HIV model of care. MSF are currently evaluating Visitect CD4 Advanced Test out in the field concurrent to the WHO prerequisite process. Here is the link:

hxxps://www.msf.org/aids-death-toll-stagnates-due-lack-community-level-testing

Some highly relevant and significant comments that relate to ODX are for example:

'A new report by Médecins Sans Frontières (MSF) presents a dashboard of the status of 15 countries in terms of policies, implementation and funding to address AIDS.
The report shows that governments are slow to adopt WHO guidelines on the disease and recommended rapid tests are almost never available at the community level.
Early detection of the disease saves lives.'

I wonder who could help there?

Also this...

'The WHO guidelines recommend the roll-out of easy-to-use rapid tests to assess the status of people’s immune system (the CD4 cell count), and to diagnose the most common and deadly opportunistic infections, such as tuberculosis (TB-Lam urine test) and cryptococcal meningitis (CrAg test). These tests can deliver results in a matter of hours and, combined with proximity to patients, the days saved can make the difference between life and death for many.

Yet, MSF found that the rapid tests are almost never available at the community level, despite the fact that early detection could save many lives.

“There is no way the world will reach the target of less than 500,000 deaths from AIDS in 2020 without decisive action on dealing with retention to care, treatment interruptions and resulting mortality,” says Dr Gilles Van Cutsem, MSF Senior HIV Adviser. “In the past, the very sick patients we saw were those who did not know they had HIV. Today we see more and more people who have been treated before, but stopped taking their medication and fell seriously ill, and people whose treatment stopped working.”

More than two-thirds of patients with advanced HIV that are admitted to the MSF-supported hospital in Nsanje (Malawi) arrived already very ill and have been on antiretroviral (ARV) treatment before. At MSF’s Kinshasa hospital (DRC) this figure is at 71%. Among these, more than one in four people will die because the disease was too advanced when they reached the hospital. These deaths could have been prevented."

Again, ODX Visitect CD4 Advance Test can fill a vital gap here.

It is absolutely plain, the evidence is all there that there is a significant market demand by NGO's for Visitect CD4 Advance Test. I believe we could see a scale up of pent up demand quicker than we believe on the basis of the above certainly before the end of next year.

[longshanks] 13/12/2019 14:39

Not enough sellers by the look of it. Market is short and stock is very well bid. Market makers are keen to avoid taking a hit so have put a tight cap on filling buy orders.

[dibs61] 13/12/2019 13:10

Supply still tight despite sellers. Every share price rise needs sellers.

[longshanks] 13/12/2019 08:01

The emergence of a strong Conservative government today should bolster many shares and I expect Omega to be amongst them.The business is very much geared to a post-Brexit future already with enough diversity to de-risk delays on any one of the three growth fronts.A GBP100m valuation within three years seems about right to me.

[upomega] 12/12/2019 19:58

bomber/dibs

you are not rampers just as I am not. inmo the company have so far delivered on everything that they said they would do after the strategic review. personally I likened omega to protherics before buying and still do . just hope this stays independent for a while yet

[bomber13] 12/12/2019 19:44

I totally agree Dibs61 , I think the upside should and could be to at least a £100m valuation .

Look at the barriers to entry , look at the many years of development in allergies and Visitect without profit , look at the turnaround potential at Immunodiagnostics , look at the uniqueness of Visitect , look at the potential of China in Food Intolerance from a standing start , look at the CEO's incentives , and look at the growth rate in the markets in which they operate . That is surely why someone like Richard Sneller owns nearly 25% of Omega .

We are confidently promised around 70% gross margins in all 3 business segments ( it was mentioned many times at the recent presentation ) , and why should they not achieve that ? After all , we are there already in Food Intolerance , and , if achieved for the group as a whole , those sort of margins put Omega in a league with the likes of pharmaceutical companies such as Glaxo and Astra-Zeneca . Those 2 companies have EV/Sales ratios of over 4X , but , because of their size , they do not have the sort of growth potential that Omega has . If my stats are correct Thermo-Fisher in allergies etc trades on a EV/Sales ratio of just under 6X and a 35X P/E .

I have no good reason to doubt Colin King's targeted sales numbers for the 3 divisions in the next 3 - 5 years , and , if he were to achieve £12m revenue for allergies , £14m for Food Intolerance , and £14m for Visitect , all at 70% margins , why should Omega not trade on at least 3X/4X EV/Sales ? By then , the market would surely have rerated Omega as a genuine growth stock ?

I am not a ramper either , and I have been a shareholder in Omega for over 5 years .

[dibs61] 12/12/2019 15:50

A gaze into the future. I've seen this as a potential take over target in the past from a larger diagnostics player. I see that as a prospect again. If we look at Finncaps prediction of potential annual demand of c.6m tests - that equals around £25m pa revenue at around a 60% margin for Visitect CD4 tests alone - not even including Food Intolerance and Allergy potential. The company has a MC of just £18m - woefully undervalued based on these prospects.

CD4 is no longer a pipedream the project is reaching commercialisation after years of development. Its a unique product - nothing else like it on the market - no competitor. Its a potential cash cow with NGO's being a reliable consistent buyer for possibly years to come.

IMHO on the basis of Visitect CD4 alone its future projected valuation on a VERY conservative basis is 3 x Annual Sales = £75m. Thats a share price of 50p. I accept its not worth that yet but I am talking about projections 3/5 years ahead.

I'm not even bothering to factor in the value of Food Intolerance but, if you did, we are looking at nearer a £100m valuation. I'd be interested in other peoples thoughts. This may seem like ramping at first glance but I believe the figures are realistic.

I believe the Visitect CD4 project has been almost entirely derisked. Its already received EPRD approval and it seems to me highly unlikely that having achieved that status it will not get WHO Prerequisite and once it does we are truly over the line and off to the races. And its only around 6 months away.

[longshanks] 12/12/2019 13:32

Agree with you Dibs. Very tight indeed. Question is if Oryx are still happy to fill the MMs short position. If not then we could see this rise to a new trading range.

[barrywhit] 12/12/2019 11:35

There is always someone ready to sell though Dibs...

[barrywhit] 12/12/2019 11:13

When Nigerian approval finalised I think that will kick start a substantial rise in share price.............

[rivaldo] 12/12/2019 10:46

Great to see the price ticking up just on a 5k buy. Not much stock around?