Laser based gas detection company acquired

Avacta Group, which develops detection and analysis technology aimed at the defence and biopharmaceutical markets, announces the acquisition of Oxford Medical Diagnostics

Oxford Medical Diagnostics (OMD) is a specialist in high sensitivity laser based gas detection technology, a company that spun out from Oxford University in 2004.

The OMD applications are synergistic with the existing Avacta products and customers and the technology is complimentary, providing gas phase detection capabilities to work alongside the Avacta core strengths in liquids and solids analysis.

The initial purchase consideration of GBP3 million will be satisfied by a small cash payment and the issue of approximately 43.9 million ordinary shares at 5pence per share and options over a further 14.8million ordinary shares with a weighted average exercise price of 0.6pence per share.

Additional options will be granted at nominal value in respect of an incentive scheme for key personnel up to the value of GBP1.9 million subject to the satisfaction of certain operational and commercial milestones over a period of up to four years.

The OMD patented technology uses infrared absorption spectroscopy and is targeted at two major markets: industrial process monitoring and, in the longer term, clinical diagnosis through the rapid analysis of breath samples.

Industrial Process Monitoring.

The OMD laser based gas analysis device has reached the final prototype stage and the first product, which will provide a measurement of moisture content in natural gas which drives gas value, will reach the market in nine months time.

OMD technology will provide quick and sensitive measurements in a cost effective product.

This equipment is expected to position Avacta as a leading developer of this type of technology.

The market for gas analysis technology is large, at approximately GBP1 billion and includes security and defence applications, toxic gas detection in a range of industries, and gas quality analysis in sectors such as the petrochemical industry.

OMD already has a commercial partner to address the natural gas market and several other partnership deals under discussion.

Point of Care Clinical Diagnostics.

A growing number of diseases, such as tuberculosis, asthma, lung cancer and some ulcers, can be diagnosed through presence of certain molecules in the breath.

At present such analysis is carried out using large, expensive and complex mass spectrometers.

OMD has a strong patent position to use its technology to analyse breath for diagnostic purposes and Avacta believes that the equipment under development will lead to lower cost, portable devices which can be used easily by clinicians to give accurate, rapid diagnoses.

Professor Alastair Smith, Chief Executive, Avacta, commented: "OMD is a perfect fit for Avacta.

It brings a highly complimentary capability that has applications in our core markets of biopharmaceuticals, defence and healthcare and brings with it new routes to market for us in industrial process monitoring.

The Oxford founders, led by Professor Graham Hancock, and the operational team are a huge asset to the wider Group".

The long term goals of the two companies are also perfectly aligned - to provide high value products for the lucrative clinical diagnostics market.

Point-of-care health diagnosis is increasing in importance, driven by the need to effect more immediate treatments.

We believe that the OMD technology, which has a well protected position in this application area, will become an important tool for clinicians helping to make breath diagnostics a routine method of health assessment in the future.

With the exception of any director who is involved in the transaction as a related party, the directors of Avacta consider, having consulted with their nominated company adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

Back to top