The Race Toward the Antibody Test Kits
Omega Diagnostics Group PLC is a UK-based holding company. The company, along with its subsidiaries, is principally engaged in the manufacture, development and distribution of medical diagnostic products.
Omega has a Market Cap of £48m (at the time of writing), the company ticker is #ODX and the shares trade on the AIM market on the London Stock Exchange.
On April 9th, 2020, the company announced it has signed a Memorandum of Understanding ("MOU") with three other companies from across the UK, in conjunction with the University of Oxford to form the UK Rapid Test Consortium ("UK-RTC") in order to jointly develop and manufacture a COVID-19 Point of Care antibody test as part of the Government's five pillar national testing strategy for COVID-19.
Photo by CDC on Unsplash
The UK-RTC which was announced by the UK Government on April 8th, 2020, comprises:
Omega Diagnosics "ODX",
Abingdon Health Limited,
BBI Solutions Limited,
CIGA Healthcare Limited,
and the University of Oxford.
The consortium was formed at the request of the UK Government to support the development and manufacturing scale-up of a COVID-19 lateral flow antibody test ("COVID-19 Rapid Test") to determine whether people have developed immunity after contracting the virus.
The MOU is for an initial six months period, all parties will work together and utilise their combined flow test design and manufacturing expertise to optimise the design and accelerate the scale-up and manufacturing of the COVID-19 Rapid Test.
Requirements, Specification & Design Phase
Colin King CEO of Omega Diagnosics has confirmed that the requirement and specification of the product has already been set, they include, time, i.e. duration between test and results, reliability/accuracy of results, size etc. The consortium is currently working on the design and will soon need to agree and freeze the design to start the Verification and Validation phase, which basically ensures the product meets all requirements and can achieve its purpose.
According to the specifications the test results will be in minutes, however the exact time will be determined during development. The COVID-19 Rapid Test is an antibody test, it will show if a person has had the virus and recovered. Antibodies will be present which in theory demonstrates that person will have immunity. The thinking is based on that COVID-19 will behave in a similar way to how SARS behaved. These test kits will be key to helping ease the lockdown and see the UK slowly and gradually return to normality, which adds to the urgency and speed at which the UK-RTC is working on.
Over last few weeks the UK Government spent over £16m on test kits that were found to be insufficiently accurate by a laboratory at Oxford University, over 500,000 of these test kits are now of no use to the UK. The UK government is now looking at the recently formed UK-RTC to deliver a test kit that can provide high accuracy.
The UK-RTC are looking for a very high specificity (i.e ensure that they minimise the number of false positives) as close to 98% as possible and also the sensitivity ideally would need to above 90%. This is still being worked on in conjunction with Medicines & Healthcare products Regulatory Agency (MHRA).
The test will be based on an assay initially developed by Professor Sir John Bell.
Once the design freeze have been reached, Abingdon Health Care being the lead developer, will be begin verification in earnest, whilst all 4 members of the consortium will complete the validation.
Manufacturing Capability:
Omega Diagnosics expect to produce around 100,000 kits per week and are looking at all other options on how to increase that.
Today (April 20th 2020) the company have also released an update that it has signed a Material Transfer Agreement with Mologic Ltd, to formalise a partnership to provide manufacturing capability for Mologic's COVID-19 first generation ELISA1 diagnostics test.
Mologic has now submitted its test to Public Health England and NHS Scotland for formal validation. Once validated, Omega and Mologic will enter into a longer-term supply agreement with Omega manufacturing up to 46,000 COVID-19 tests per day.
The arrangement with Mologic is separate from, and additional to, the announcement made by the Company on 9 April 2020 relating to the UK Rapid Test Consortium (RTC), which is to jointly develop and manufacture a Point-of-care COVID-19 lateral flow antibody test which could be used 'at-home' and which will be manufactured in Omega's Alva facility in Scotland. Mologic's COVID-19 ELISA diagnostic test is also an antibody test but will be used on patient samples sent by hospitals or GPs for laboratory testing.
Abingdon Health announced on April 14th a significant expansion to its lateral flow (rapid test) manufacturing capacity via the acquisition of the Doncaster-based lateral flow manufacturing facility of Concepta plc. This emphasis on how all parties are expecting a quick turn around, moving from design and concept to actually manufacturing the COVID-19 antibody tests.
Funding:
One of the key questions in the mind of any investor right now is funding, how will Omega fund the development and manufacturing of these COVID-19 antibody tests? when asked, Colin King pointed out that the company is looking to fully utilise the various Government funding and bank support available to undertake the development and manufacturing of the COVID-19 antibody test.
Future Developments:
As things stands the consortium still haven't made a decision if they will seek FDA approval, however, as and when the design is matured and manufacturing starts, the UK-RTC will review this and make a decision accordingly.
Currently there is no exclusivity to only deliver this product to the UK Government, however once the consortium understands that demand and capacity available within the UK, it will allow them to decide on how to meet global demand.
Recent Sellers:
Over last week, ORYX INTERNATIONAL have reduced their holding considerably with Octopus Investments selling out completely. When Colin King was asked if he had any idea why these funds were selling, he replied that he hasn't had any direct communication with them, and his guess is that they may have suffered losses elsewhere and were using this as an opportunity to make some gains to offset.
Richard Sneller, the company biggest shareholder has also reduced his holding, however as pointed out in the RNS his shares have been gifted to charity
What matters for many investors is that these sellers have provided the perfect opportunity for retail investors to load up and take a position in a company that is on the verge of making
PR and Future Updates:
Colin King made it clear that although no time frame can be set at this stage, all parties are working together and significant resources are being applied to ensure they are efficient and effective in delivering the test kits as soon as possible.
The company made it clear they plan to update shareholders on all developments including when they reach design freeze and any other major milestones.
Colin King confirmed that Omega have already undertaken a number of interviews with all the UK broadsheets and had a interview with the New York Times.
Conclusion:
To recap:
1-Specifications have been set
2-ODX is seeking government funding as well as using current Bank facility.
3-ODX have a capacity of up to 100,000 kit per week and are looking at ways on how to increase that
4-ODX have partnered with Mologic's, to produce 46,000 kits per day
5-ODX have undertaken many interviews with all major UK newspapers including an interview with the New York Times.
6-ODX will provide regular updates on progress
7-The COVID-19 Antibody tests will give results within minutes.
8-UK-RTC are seeking 98% accuracy
9-UK-RTC will first develop these test for the UK government but they are not limited to it.
10-the UK-RTC will make a decision accordingly when the times comes to either seek FDA, WHO approval etc.
Note:
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The writer (@Belcourtoi) currently own shares in ODX.
