H1 results (30 November 2015) noted that the Allersys allergy system could launch in spring 2016, with 37 optimised assays out of 40 targeted for launch. Omega’s Visitect CD4 test to monitor HIV patients shows a variability related to the ambient temperature. The cause is now known and a solution is being developed; the launch date is still uncertain. An Indian production facility in Pune starts operation in FY17 and should lead to sales gains in infectious disease products. Overall H1 sales were up 8% at £6.2m. Adjusted EPS was higher at 0.6p vs 0.5p due to a £135k tax credit.
The Allersys range runs on the Immunodiagnostic Systems (IDS) iSYS system using modern chemistry and magnetic particles. An initial customer evaluation in Spain on 10 allergens with 400 samples showed a linear relationship with ImmunoCap. Italian, German and French studies are planned, some with IDS. There are now 37 optimised allergens with 26 fully verified; 40 are being targeted for launch. IDS’s partners have developed autoimmune tests that run on iSYS and complement allergy tests. Management indicates a spring 2016 launch.
Visitect: Temperature variability being resolved
Visitect is a point-of-care test to detect the threshold level of CD4+ immune white cells in HIV patients, both to establish if antiretroviral therapy is required and to monitor existing therapy. There is an ongoing issue with the test read-out related to the ambient temperature when the test is run. A solution has been identified, but needs testing and validation. In our view, it seems unlikely that any new field trials can be underway before H216. Visitect is a robust test for use in the field; this has presented challenges given the sophisticated chemistry and materials involved.
H1 sales were up 8% to £6.15m; 11% at constant currency. Food Intolerance grew 20% to £3.34m, while subsectors Food Detective grew 15% to £1.2m and Genarrayt grew strongly to £1.5m (up 34%). This was offset by a fall of 13% to £1.59m in Allergy, reflecting the weaker German market. Infectious Disease generated £1.22m, up 13%, and should grow faster in FY17 as a low-cost manufacturing plant in Pune, India becomes operational. Allersys now appears on track for initial sales in FY17. Visitect sales are not in our forecasts. Management guides cash for March 2016 at £1.4m after R&D investment of about £1.2m; cash at 30 September was £1.6m. Omega trades on a FY16e P/E of 14x, but this should rise as Allersys and Visitect enter commercialisation. Our forecasts have been updated to reflect H1 tax.