Omega Diagnostics Group PLC Completion of Sale of the CD4 Business (6907U)
August 03 2022 - 2:00AM
UK Regulatory
TIDMODX
RNS Number : 6907U
Omega Diagnostics Group PLC
03 August 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014. Upon the publication
of this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
OMEGA DIAGNOSTICS GROUP PLC
("Omega" or the "Company" or the "Group")
Completion of Sale of the CD4 Business
Notice of Results & Annual General Meeting
Further to the announcement on 4 July 2022, Omega (AIM: ODX),
the specialist medical diagnostics company focused on
industry-leading Health & Nutrition products, confirms it has
completed the disposal of its loss-making CD4 business to Accubio
Limited ("Accubio"), a wholly-owned subsidiary of Zhejiang Orient
Gene Biotech Co. Ltd ("Orient Gene") for an aggregate cash
consideration of up to GBP6.1m, before costs. Accubio acquired the
Company's Alva manufacturing site on 7 March 2022 and has been
providing manufacturing services to Omega for its CD4 business
since that date.
As previously indicated the Board believes that the CD4
business, which manufactures and supplies VISITECT(R) CD4 and
VISITECT(R) CD4 Advanced Disease tests (the "CD4 Business"), would
be more successful under new ownership, with an owner that has a
greater capacity to invest in production capabilities and future
product development. The EBITDA loss attributable to the Global
Health division, of which CD4 was a major component, for the year
ended 31 March 2021 was GBP2.3m and for the six months to 30
September 2021 the associated EBITDA loss was GBP2.9m. The Company
has not historically allocated the shared facility costs, direct
labour and overheads associated with the Alva site between its
COVID-19 operations and its CD4 Business. Subsequent to the sale of
the Alva site in March, the CD4 Business has been operating at a
loss of approximately GBP0.3m per month.
Under the terms of the sale the Company will receive an
immediate cash payment of approximately GBP1.1m for fixed assets
and inventory, representing the book values of these assets.
Furthermore, the Company expects to receive up to an additional
GBP4.0m for the intellectual property, which includes capitalised
research and development expenditure, contingent on the successful
outcome of an ongoing clinical study in Kenya which is anticipated
to conclude in the Autumn. It should be noted that the VISITECT(R)
CD4 test is already fully commercialised, being distributed in 29
countries and the performance of the test has previously been
independently verified in several external clinical studies.
Accordingly, the Board is confident as to the outcome of the
clinical study in Kenya. Omega will also receive a royalty of 4% of
Accubio's future CD4 revenues for the period to 31 December 2026,
capped at GBP1.0m in aggregate.
Having announced the withdrawal from COVID-19 in March 2022, the
disposal of the CD4 Business means the Group no longer operates in
the Global Health market. As such, the Global Health division will
be treated as a discontinued activity in the financial statements
for the year ended 31 March 2022, with the CD4 assets, including
the associated research and development assets, being written down
to their recoverable amount and reclassified as assets held for
re-sale. 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.
Notice of Preliminary Results
The Company will issue its financial results for the year ended
31 March 2022 on Thursday 18 August 2022.
Notice of Annual General Meeting
The Company will hold its Annual General Meeting on 5 October
2022 at 1 Exchange Crescent, Conference Square, Edinburgh EH3 8UL
at 11:00am.
Jag Grewal, CEO of Omega, commented: "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. 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."
Contacts:
Omega Diagnostics Group PLC www.omegadx.com
Jag Grewal, Chief Executive Officer via Walbrook PR
Chris Lea, Chief Financial Officer
finnCap Ltd Tel: 020 7220 0500
Geoff Nash/Edward Whiley/George Dollemore
(Corporate Finance)
Alice Lane/ Harriet Ward (ECM)
Walbrook PR Limited Tel: 020 7933 8780 or omega@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Applegarth Mob: 07584 391 303
Sam Allen Mob: 07502 558 258
About Omega Diagnostics Group PLC
Omega manufactures and distributes high quality in-vitro
diagnostic products for use in hospitals, clinics, laboratories and
healthcare practitioners in over 70 countries and is now focused on
the health and nutrition sector.
www.omegadx.com
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