Medical experts believe that the new kit, known as Osteosal, will enable GPs to screen a large number of women quickly and cost-effectively. It could save the National Health Service hundreds of millions of pounds by reducing the need for hospital visits from women suffering from the condition.
The disease is estimated to affect around 3 million women in Britain. Men are much less prone to the condition. Recent research showed that around one in three women over 50 is at risk of developing osteoporosis, which can be particularly painful as it eats away at the bones' texture, doctors say.
Cortecs shares are trading at a low of 46p after hitting a peak of 195.5p earlier this year. The company, which floated in London in 1994, has been rocked by a boardroom battle which led to the departure of its chairman, Glen Travers. He is suing Cortecs for pounds 1.5m compensation.
Osteosal is similar to easy-to-use pregnancy tests. It involves inserting a small urine sample into a hand-held device which is then put into a desktop reader. The kit measures the level of a biomarker which regulates bone breakdown and is able to produce a result in around five minutes.
Cortecs says that at first the test will be used to monitor the effectiveness of osteoporosis treatments such as hormone replacement therapy by measuring whether the drug is slowing the breakdown in bones.
"It will tell both doctor and patient whether the drug is effective and whether the patient is taking the drug," said John Curtis, managing director of Cortecs Diagnostics.
Mr Curtis said the test, which will be sold to GPs for around pounds 100, will offer doctors valuable information on ways to treat the disease. At present, women need X-ray scans known as Dual Energy X-Ray Absorptiometry (DXA) to diagnose osteoporosis. The high cost of these machines - round pounds 20,000 each - has forced many health authorities to ration tests.
Mr Curtis said Cortecs was talking to the authorities about reimbursement of the kit's costs to lighten the load on GPs' funds.
He added that the company is carrying out tests on the use of the kit to predict onset of the disease. If these are successful, Osteosal could be used on young women to assess the risk of contracting the condition.