Omega Diagnostics sells testing business for £6.1m to Chinese-owned firm that bought Alva site

Omega Diagnostics has sold its CD4 testing business to the same Chinese-owned firm that bought its Clackmannanshire manufacturing facility earlier this year.

The group confirmed that it had completed the disposal of the loss-making CD4 operation to Accubio, a wholly-owned subsidiary of Zhejiang Orient Gene Biotech, for a total cash consideration of up to £6.1 million, before costs.

Accubio acquired Omega’s Alva site in early March and has been providing manufacturing services to the group for its CD4 operation since that date.

CD4 is the part of the business that manufactures and supplies tests of Visitect CD4, which measures the amount of CD4 protein in human cells.

Omega reiterated its belief that the operation would be more successful under new ownership, “with an owner that has a greater capacity to invest in production capabilities and future product development”.

Having announced the withdrawal from Covid-19 testing in March, the disposal of the CD4 business means the group no longer operates in the global health market.

Jag Grewal, chief executive of Omega, said: “We are extremely pleased to complete the sale of our CD4 business to Accubio, with whom we have worked closely with since securing the sale of our Alva site in March this year.

“The disposal of our CD4 business completes the first phase of our turnaround plan, addressing the unsustainable cost base in Scotland and divesting our loss-making businesses.

CD4 is the part of the business that manufactures and supplies tests of Visitect CD4, which measures the amount of CD4 protein in human cells.

“The sale now allows us to focus all our efforts on the profitable and cash generative health and nutrition division, maintaining our leadership position and targeting organic growth through geographical expansion, a broadening of our product offering and embracing digital technologies.

“We have refocused our business and are dedicated to delivering personalised nutrition diagnostics going forward,” he added.

Omega told investors: “The disposal leaves the group well-funded and solely focused on its profitable and cash generative health and nutrition division, where there are significant opportunities for investment to accelerate growth.

“The group intends to retain the net proceeds of the sale for use as general working capital in support of the planned expansion.”

The firm is due to release its annual results on August 18 and hold its annual meeting in Edinburgh on October 5.