Omega Diagnostics saw its shares climb yesterday after the life sciences firm signed a supply agreement with a laboratory testing group in the United States.
The Clackmannanshire-based group’s FoodPrint product will be used by the unnamed company in its work on gut health.
Omega is perhaps best-known for its work in developing a product to test HIV patients in remote areas but the group also specialises in allergies and food intolerance, a market predicted to be worth $25 billion by the end of the decade.
The agreement for FoodPrint, which is a microarray-based food intolerance testing product, is for an initial term of three years and is automatically renewable if both parties agree.
Omega said the deal will enable it to gain further traction in the US for FoodPrint, and it will make a modest contribution in the current financial year.
It is the second deal signed by Omega for FoodPrint in the US this year, and the company has noted that the North American market is an increasingly important area for long-term growth.
In its most recent financial results, for the year ending March 31, Omega grew food intolerance sales by 13 per cent to £8m, driven by strong growth in FoodPrint sales, which increased by one third to £4.7m.
The United States represents the largest food intolerance market worldwide, led by the ongoing trend of selective food avoidance among more affluent and health conscious consumers.
Analysts at FinnCap noted that Omega management believes there to be up to 30 laboratories in the US which could benefit from FoodPrint, with that number increasing each year.
FinnCap forecasts sales in Omega’s food intolerance business will grow to £13.4m in the 2019 financial year, with FoodPrint forecast to grow 54 per cent to £2.5m.
The technology provides laboratories with a food sensitivity testing solution, which uses microarrays to detect food specific antibodies. The FoodPrint solution enables laboratories to test up to 200 foods, including vegan and vegetarian options.
The global market for food allergy and intolerance products is being driven by the rise in food hypersensitivity, allergies and associated anaphylaxis as a result of changes in diet and sensitivity to food additives.
The increased use of sulphur dioxide and sulphites as preservatives is also believed to play a part in the rising intolerance of certain foods across the developed world.
Andrew Shepherd, Omega chief executive said: “We are pleased to have signed this agreement that enables us to broaden our food intolerance product offering in the important US market. We are excited by the prospects for this relationship and believe the capabilities of our chosen partner will enable us to deliver better health outcomes for patients.”
Omega also focuses on infectious diseases and is developing a product which will enable field operators to assess the health of HIV-patients in remote areas.
In June Omega raised £2.6 million in a share placing, two-thirds of its target. The cash injection is being used to get the Visatect CD4 product to market.
After technical challenges in its development Omega is targeting commercialisation by the end of 2017.
In the year to March 31, Omega saw a fall in underlying profits, which were down to £1.13m from £1.35m. The company cited an increase in overheads as its turnover increased to £14.2m from £12.7m.
Shares in Omega ended the day at 22.75p, up 3.4 per cent from 22p.
They have fallen from a high of 26.9p at the end of May.
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