Happy New Year folks- looks like I'm the only one posting.
Whilst waiting for some positive news to turn around the recent falls in the share price to below the last funding excercise at 18.50p I reviewed the final accounts.
Three directors have share options expiring on 10/12/18 at 19p
Numbers as follows:-
representing over 1% of the currently issued shares of 1.3mm with a free float that I estimate at 30-40%. with current price well below the 19p excercise price they have year to get the stock price above the 19p level. It would be nice to achieve the 27p level estimated by the in house broker.
The slow to fruition IDS deal is stated achievable before the financial year end i.e. 31st March 2018 perhaps that announcement will stimulate the price towards the 19p plus they need to make a profit.
On the other hand they may take the opportunity to award themselves new options based on the current 16-17p price level. Lets hope that that Richard Sneller and the other institutional shareholders who own 57% of the company kibosh that idea.
You say the volume of sales has been low, this is true. However even with a higher volume of sales of allergens the fundamental problem of the huge losses of this division remains. Annual losses by the allergy division approach £500,000 sales are only a few million.
At present each sale doesn't cover it's overhead allocation. The million pound grant lessens the development pain.
Infectious diseases loses £250,000 a year. At least something is happening there. The Pune facility is at least up and running although it will take a double shift production schedule to produce profits.
So let's hope for some positive news on the Immunodiagnostics distribution agreement in the New Year.
For those with long memories the share price was 35p s few years ago before the dilutions and Joachim Ganzer purchase.
IDH wanted to buy their allergy business. They had £30,000,000 in cash, £15,000,000 would have been a nice price- resulting in lots of development cash a solid balance sheet.
IDH already had the distribution rights in many geographic areas so they are talking about relatively little. Unless of course they are really talking about the terms of a merger between two or more parties to create critical mass. Then the protracted discussions might be explained.
The hammered share price below the two diluting issues at 23p and 18p says the market does not like it.
"The untoward pie in the sky IDH allergy deal has been in negotiation for over a year! It's like Billy Bunter's postal order never arrives but always promised".
The market is disappointed hence the drop on the news. More allergy tests approved but no deal announced. Surely both together would have been possible instead repeat the grant amount and state that more tests available.
When and where will the sales start flowing?
On what basis? As a long term holder we have been here many times before.
The untoward pie in the sky IDH allergy deal has been in negotiation for over a year! It's like Billy Bunter's postal order never arrives but always promised.
It will be six months before the "headwinds" effect is known. The interim statement of two months ago gave the impression everything was on track- well it wasn't we live with the consequences.
"I think in the 2 weeks of 2018 we will very likely be back to from where we fell."
With just shy of a 10% gain today a few more days like this and it will be back to last weeks levels.
At that point I think the new guys will start to pick up support from investors and the sp will climb.
Out with the old and in with the new.
New guys always want to get all bad, news out.
It then provides them a base from which to build, but also crow about their own success.
Great products, very niche though (Again as already stated) but certainly sound foundations.
The drop knocked me for six a bit, but akin to PMO who fell like a lead balloon 3 weeks ago, those who braved the storm, saw value where others didn't are already in excess of 50% up..
I think in the 2 weeks of 2018 we will very likely be back to from where we fell.
Re the fall in share price to below the offer price. A new CEO airs the dirty washing to establish a low baseline from which to move forward.
Read the last IDH report their new man Jaap is chopping and changing the sales and distribution system. Let's hope he gets it rolling fast their problem is a being a niche player with a narrow range of tests. Allergies are a big one for both companies so what's the problem in doing a deal? Is it personalities? David Evans is common to both companies and has considerable experiences brokering deals.
I am underwater big time being a long term holder but will be buying more at these prices. If they don't sort matters out a bidder will as a as even a 50% premium at these levels is a gift.
Yes I think you may well be right mnbv etc. I think some will say that both Omega and IDS need better strategic thinking and commercial focus and replacing CEOs may achieve this I hope. Developing diagnostic products is a painstaking and slow process by its nature but I think you can argue that Omega needs a leader with a bit more imagination to get things moving.
Funny that both MD's have been shifted out or sideways. There comes a time when their ingrained habits fail to adapt to the needs of the market.
Take a look at erstwhile partner for automated allergy tests. They are reorganising their sales function under their new CEO Jaap.
A year ago IDH wanted to buy the allergy business they had £30mm cash to pay for it. At £13mm it would have been 12-13p per share. Instead someone held back from selling I wonder who? Then this extremely protracted negotiation over selling the 40+ tests ready to go. Remember the critical mass was to be 40 tests Omega have exceed that already but negotiations drag on.
IDH it seems are negotiating with several prospective partners does that mean playing one off against another?
Both companies need more sales when will it get through to them to get a move on? Getting ISO 13485 is hardly a milestone it's a basic step permission from the regulator's to sell. Good news flow is desparately needed.
Obviously disappointing, but given the strong core business - which continues to have very good, global growth potential - plus CD4, Allersys, malaria etc I can't see too much downside from the early markdown.
Importantly, ODX are now very well funded. But they have to give investors confidence and reasons to buy. Hopefully a deal will IDH will finally emerge, which would be a start.
Much healthier volumes. :-)
It also helps eradicate the vast great swings we so often see.
Much rather see a steady increase instead of the massive rises followed by the even more dramatic falls we see so often on ramped to death stocks like PYC... (You have to feel sorry for those sucked in and now left holding the baby)
ODX, on the other hand... Has IP that "Is Needed" is required and benefits people.
I have only recently bought back in... I held the stock many many years ago and now is the time I think its due a breakout, and with CE approvals coming thick and fast IMO no better time than now to buy the dream.
Another one I have recently bought into is EMH (European Metal Holdings)
Battery power is hyped to become the new manner in which electricity is provided, cars are powered etc etc... (I dont actually buy that dream, but I will buy the stocks... :-) )
Well, EMH sits on the largest European Lithium deposits... is over 50% off year highs, is financed and has resolved recent spats ....
Very lightly traded and due a massive re-rating IMO straight back to from where it fell (Minimum 100% just to get back there)...
On World AIDS Day 2017, Omega Diagnostics, the medical diagnostics company focused on allergy, food intolerance and infectious disease, has announced with Burnet Institute the commercial release of its VISITECT® CD4 point-of-care test. The CE-Marking follows successful performance evaluations of the test in India and the UK....
....VISITECT® CD4, co-developed with the Burnet Institute, is the worlds first instrument-free and affordable rapid test for determining CD4 threshold in people living with HIV. It is designed for use at the point-of-care and provides a means for decentralisation of CD4 testing capacity to where it is most needed....
....We expect that the VISITECT® CD4 test will make a real difference in HIV treatment and prevention programs that care for many millions of patients worldwide, which is exactly what we set out to achieve.
Stock is very limited in supply.
Certainly no large sells of note.
The small sells that hit the market are I suspect small holders who have held for a few years and suddenly see its passed break even for them.
A little like PYC etc... Some people assign stock to bottom drawer if it doesn't double in a week... lol... and then just sell when a point is met.
The fantastic news we got this week about the CE approval provided better liquidity and allowed a better sell/buy market for the day..
Yesterday we are back to market has no stock.
Today that is even more evident even though the trade volumes are small.
We have results in 2 weeks...... They are going to show even more gains and improvement on sales and revenues.
It is IMO the beginning of a sustained rise. and as the CE approval becomes world wide known to have an Aids test like this how long before a bigger fish comes along to swallow up the IP??
"Yesterday, Omega confirmed that the CE Mark, a certification of quality, was in place after trials in India and Britain had shown that the kit was performing robustly. As a result it is available for sale to businesses in countries not requiring any additional product registration.
The company is now seeking approval through the World Health Organisation, which would allow the test to be made available through public sector procurement.
Finncap, the broker, estimates that annual revenue of up to £10 million could be achieved from the manufacturing capacity at Omegas sites in Scotland and India."
Research analysts at finnCap have GBX 30.00 PT on Omega Diagnostics Group PLC (LON:ODX). finnCaps PT means a potential upside of 42.86% from the companys last close price. The rating was revealed in an analyst report on Wednesday, 29 November.
I tend to agree with your observations. However I think your target price somewhat too high.
1. Not many closely follow individual shares relying on witchcraft like charts others look at fundamentals ratios betas etc. This share needs to be looked at from its medical perspective i.e. what the products can do for people which requires a little knowledge of science, medicine and in this case epidemiology.
2. Looking at the fundamentals and using parameters for values of similar businesses I value the shares somewhat lower than you 50-60p. They CD4 sales when they come in bulk will be on contracted tenders to international bodies like the WHO the Gates foundation and Governments like the Republic of South Africa so there will not be super profits to be had.
3. To achieve the levels you aspire to would require a bid from a major Health Care business who understand the potential and have synergies with their existing product portfolios.
4. The IDS situation is curious the allergy business would have been worth as much or more than the capitalisation of the company. IDS had £30 million in cash to spend but instead a very protracted period of negotiation still ongoing.
No doubt some news release can be expected on the allergens which have better short term prospects in my opinion.
Quite often especially when dealing with exploration stocks such as Oil, Gold etc, the word "Transformational" is used.
Along with ODX current armoury of tests, todays announcement sets ODX firmly on the "Transformational" route.
When I look at the "Total trades" today and the limited bias towards buys, its pretty easy IMO to see that people are not getting just what the news means.
IMO this should be much nearer to 50p than to 20p and with results due in 2 weeks time, another repeat of last years growth figures should be propelling it to nearer 80p - £1.00p (From 50p)
Instead we languish at this pitiful level....
Only 10% above the recent oversubscribed placement level....
The ISO 13485 Certification has been a long time coming. Now the next hurdle is the WHO approval for resource poor countries.
Sales can take place in middle income countries who shadow the European Medical Device Directives. One such country is South Africa where 1 in 8 is HIV positive.
According to a 2015 UNAIDS report there are 7 million people living with HIV in the country.
If only 10% are CD4 tested annually that's 700,000 tests at a price of $5 makes $3,500,000 that's the potential on these conservative estimates. The GDP per capita is $11,000 approx. So the cost of the tests is not stratospheric.
And with such a tightly held stock with such limited free shares it not outside the realms of possibility.
Results in 2 weeks..... :-)
Omega Diagnostics Gp
VISITECT® CD4 CE-Mark
RNS Number : 7714X
Omega Diagnostics Group PLC
29 November 2017
Omega Diagnostics Group PLC
("Omega" or the "Company")
VISITECT® CD4 CE-Mark
Omega (AIM: ODX), the medical diagnostics company focused on allergy, food intolerance and infectious disease, announces that it has CE-Marked its VISITECT® CD4 test for helping to manage people living with HIV, following successful performance evaluations in India and the UK.
The successful completion of the CE-Mark process means these tests, which indicate whether a person's CD4 count is higher or lower than 350 cells/mm³, are available for general sale through business to business channels in countries not requiring individual product registration. The technical file forms the basis of the additional regulatory approval the Company will seek through the World Health Organisation Prequalification programme which assesses in vitro diagnostics tests for priority diseases and their suitability for use in resource-limited settings. A successful completion of this process will enable Omega to become eligible for public sector procurement. The Company anticipates that this process is likely to be completed during the second half of the next financial year.
In addition, the Company is looking to expand its VISITECT® product portfolio and is working on an additional version of the VISITECT® CD4 test which utilises a 200 cells/ mm³ cut-off. Recent global health guidelines confirm an opportunity also exists for a test that can indicate advanced HIV disease (a CD4 cell count which is lower than 200 cells/mm³) and the Company is working to ensure it has a product portfolio encompassing both existing and new opportunities.
Andrew Shepherd, Chief Executive Officer of Omega, commented: "We are pleased to have achieved this major milestone and whilst the early opportunities are likely to lead to modest sales during the next twelve months, we anticipate generating significant demand once we have completed all the regulatory hurdles. We look forward to providing the global health community with unique point-of-care tests which address a significant unmet need."
"Omega (AIM: ODX), the medical diagnostics company focused on allergy, food intolerance and infectious disease, announces that it has CE-Marked its VISITECT® CD4 test for helping to manage people living with HIV, following successful performance evaluations in India and the UK."
I like the phrase "significant unmet need", which indicates substantial revenues for this still micro-cap company from around a year's time.
And per today's news there's another test in the pipeline too.....
The registered office has moved to London.
£4,000,000 raised in July - but no major projects announced.
CD4 CE accreditation by end of calender year.- this is not rocket science just a paper audit of systems. Presumably Omega have ISO 9008 so it's the ISO 13485 medical devices compliance that we are expecting. There is a world wide shortage of qualified auditors on top of increase regulatory requirement so this isn't likely to be an internal hold up.
Allergies and IDS deal to complete this financial year! That's going to be over a year in the making. Now this seems like looney tunes who is delaying agreement and why? Is there a third party?
Last year the financial results for the ye 30th. September were issued
On the 21st. November 2016.
The 2017 results will be issued nearly a month later. This suggests that there are some causes for this slight delay in making the announcement.
The recent trading statement has had very little impact on the share price which seems to move on relatively small trades. A few thousand shares maybe a £2,000 worth will move the price of a company with 130,000,000 in issue. My estimates are that the majority are closely held some 70,000,000 - 80,000,000 held by financial institutions and large shareholders.
So let's look at possible reasons for the months delay.
1. Finalising the IDS deal. - little immediate impact on revenue.
2. CE marking of new products. The company could be waiting on Certification which may be contingent on Corrective Action Reports issued by their notified body.
3. Progress on the CD4 trials.
David Evans referred to matters out of the companies control. Success being dependent on one or more factors outside of the companies control.
So has anyone else got any ideas on what these might be?
Ok so rain in Germany meant fewer allergens triggering allergies. Hence consumption of manual tests is down.
The Immuno Diagnostics tie up seems to be wading through treacle. Nearly a year on from the initial approach to buy the allergy business from Omega. Instead protracted negotiations over co operation. Another two meetings scheduled. IDS need to be able to run more tests on their equipment to improve their product offering Omega want to sell their allergy tests. No done deal as yet means potential sales for the benefit of both are not being made.
CD4 crawling forward very cautiously. Let's see what the half year results bring by way of announcement. Some indication of how the diluting fund raising is paying off perhaps?
Today is to show they are executing on one of the reasons for the funding round.
Investors paid their money, ODX has started to deliver one item. Expect the others to follow in time.
"1. Increase FoodPrint® traction in the USA by increasing sales and marketing resource, developing product enhancements that meet the US lab environment and investing into more automated manufacturing capacity.
2. Increase the number of allergens in the Allersys product range from 41 to 100 over the next four years. Since December 2016, the Company has been seeking to agree global distribution terms with its Allersys licensor (Immunodiagnostic Systems Holdings plc "IDS"). The Company believes that it has made good progress and the Directors believe that once the Company gets beyond the contractual process, the sales and marketing teams of both organisations will be capable of making a success of the Company's allergy products.
3. Fund certain identified investment opportunities for Allergodip which involve adding new panels and developing a mobile phone App. The enhanced product will be targeted at developing countries given its ease of use and low cost application. The Company has identified a partner company in China which believes the market size in China to be 5 million tests alone.
4. Accelerate the pipeline of launching a range of Rapid Diagnostic Tests ("RDTs") to two or three per year to include tests for Syphilis, Dengue, S.typhi, Leptospirosis and Brucella. The Company recently launched its Malaria RDTs and is confident that its Visitect CD4 test will launch in late calendar year 2017. The facility in Pune has current capacity for 6 million RDTs per annum and is only currently operating on a single shift basis."
A trading statement is due about now. Shareholders have been waiting to hear the extent of progress over the relationship with Immuno Diagnostic
's and the outcome of negotiations. It's nearly a year since the approach to buy the allergy business. The price would have been not too far from the entire market capitalisation but no deal.
The company raised capital and hired more staff I am looking forward to hearing more news. Today's is more like a token offering.
Forget about 40-50p. Within 18 months if CD4 is commercialised and at a potnetial sale of 7m units (at £5 each) you are looking at a 90-100p share price even if ODX trades at sector multiples which given its gorwth rate is being conservative. This is a four to five fold play within 18-24 month time period. I am a BIG BUYER at these levels. Also this assumption does not factor in the potential growth of allergens etc!! Bring it on
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