Omega in placing to fund HIV technology production

Shares in Omega Diagnostics jumped 5 per cent. Picture: Contributed

The Aim-quoted company is raising £4 million through a placing with investors, including existing shareholder Legal & General, and a share subscription, in which some of its directors have taken part.

Former United States President Bill Clinton’s Health Access Initiative is being lined up as the first body to carry out the first evaluations of Omega’s CD4 test in the field.

Omega chief executive Andrew Shepherd revealed that the company will also use a small part of the cash to develop a smartphone application that will accompany the test.

“The app will use the smartphone’s camera to read the

test result, give a positive or negative diagnosis and trans-mit the information from an African village to the ministry of health,” Shepherd told The Scotsman.

“We’ve talked to a lot of our potential customers and this kind of connectivity was very important to them.”

Omega’s system will help to replace expensive and time-consuming HIV tests with simple kits that can be used in villages rather than in laboratories.

Shepherd said: “We’re also in talks with bodies like Médecins Sans Frontières, Unicef and the World Health Organisation.”

Commenting on the unusual share-price movement following the placing, Omega finance director Kieron Harbinson said: “You would normally expect the shares to head in the opposite direction following a placing.

“But I think that people understand our story and the opportunity we have with CD4, so the placing was over-subscribed.

“We chose to carry out the share placing now because we were being approached by several institutions.”

Harbinson explained that some of the cash would be used to extend the firm’s production facilities in Alva, where a small number of jobs are expected to be created. About 30 of the company’s 120 staff are currently based in Clackmannanshire.

Some of the cash will also be used to develop 40 of the firm’s allergy tests.

Keith Redpath at house broker FinnCa, which ran the share placing, said that the development of the smartphone app for the CD4 test had been a “closely guarded secret”. Redpath added: “If there was any doubt previously about the competitive position of CD4 compared to other developments, we believe this reader and the associated infrastructure creates a major competitive advantage for Omega.”

Shares rose by 1p to 19.38p, valuing the company at about £16.5m. Shareholders will vote on the placing at a meeting on 10 June. The stock had hit 21p earlier in the session, which represented a rise of 18 per cent.