Key points:
- Omega diagnostics shares plunged 21.9% today, leaving many puzzled.
- The decline was triggered by the HSA’s disapproval of its COVID-19 test.
- However, the company has pivoted to the COVID-19 self-test market.
The Omega Diagnostics Group Plc (LON: ODX) share price plunged 21.9% today after the UK Health Security Agency (HSA) informed it that its VISITECT® COVID-19 Antigen test had been rejected and could not be sold within the UK.
The company expressed its disappointment with the HSA’s ruling, which came about because of the insufficient data released by the company to the regulator.
Also read: The Five Best Pharmaceutical Stocks to Watch in 2022.
Investors were disappointed by the news, but many were relieved that the diagnostics company was discontinuing work on the professional test due to the low market demand.
However, the company said it had switched its focus to the self-test market with significant growth potential and is working extremely hard to meet the 31 March 2022 deadline for submitting the data for its CE Mark application.
The grant of a CE Mark for Omega’s COVID-19 self-test would allow the firm to market its drug across the European Union targeting a more extensive customer base than the UK market.
Investors will be waiting anxiously to see if the firm can meet the 31 March deadline, which is just twenty days away.
Jag Grewal, Omega Diagnostics CEO, commented: “Whilst this is clearly disappointing, our plans do not include any contribution from COVID-19 antigen tests, as we focus the business on driving growth in our Health & Nutrition division.”
Omega Diagnostics shares had recouped a significant portion of their earlier losses at writing. However, ODX shares have fallen 85% in 2022 as investors became impatient with the progress with its COVID-19 tests as the market becomes saturated and starts shrinking.
Luckily for investors, the company has other diagnostic tests for different diseases, including food sensitivity. For example, it tests for acute allergic reactions to over 200 foods using its Food Detective® point-of-care test and its FoodPrint® laboratory-based system.
Omega also sells an advanced CD4 test that test for advanced forms of HIV, which is mainly sold in emerging market countries. However, the demand for such tests is not as high as for COVID-19 tests.
It remains to be seen if Omega’s COVID-19 self-test shall gain CE Mark approval, with many watching to see the company’s next steps as the COVID-19 market changes. As a result, given its uncertain future, I wouldn’t buy ODX shares at current prices.
*This is not investment advice. Always do your due diligence before making investment decisions.
Omega Diagnostics share price.
Omega Diagnostics shares plunged 21.92% to trade at 3.24p, falling from Thursday’s closing price of 4.15p.