Optibiotix Health Share Discussion Threads

[f3rdinand] 22/8/2017 07:20

More than a hint of a major deal in the U.S approaching! GLA

[monkeywench1] 22/8/2017 07:14

Excellent news.

[aardvark63] 22/8/2017 07:12

Great rns but I still don't see any numbers relating to revenue. Positive nonetheless, lets keep them rolling in.

[deeppockets] 22/8/2017 07:10

Sacco obviously interested enough to take it global! Here we go!

[john henry] 22/8/2017 07:08

Wakey wakey

[someuwin] 22/8/2017 07:08

OptiBiotix Health plc

("OptiBiotix" or "the Company")

Global manufacturing and supply agreement with Sacco S.r.l.

OptiBiotix Health plc (AIM: OPTI), a life sciences business developing compounds to tackle obesity, high cholesterol, diabetes and skin care announces that, further to the European manufacturing and supply agreement with Sacco S.r.l., ("Sacco") announced on 8 March 2017, the Company has entered into a new agreement to cover the USA and the Rest Of the World ("ROW").



The agreement grants Sacco an exclusive licence to manufacture and supply OptiBiotix's cholesterol and blood pressure reducing LPLDL® strain in the US and ROW, in return for 50% of the profit, with a guaranteed cost of manufacture and minimum sales price per kilogramme to secure against discounting. The agreement brings the following benefits:-

1. Access to the US, the worlds largest probiotic market, with an estimated retail value of $7.1 billion per annum

2. Extension of LPLDL® into dairy applications utilising Sacco's network in the dairy industry to develop commercial opportunities identified by them in the global $35.5 billion probiotic dairy market

3. Economies of scale, significantly reducing the manufacturing cost of LPLDL®, increasing OptiBiotix's profitability, and opening up new application opportunities

4. Long-term security of supply with Sacco's ability to produce at different locations from multiple facilities

5. A commitment from Sacco to support the funding of further developments of LPLDL®, including marketing and human studies, to expand the commercialisation of LPLDL® into new markets

This agreement is a strategic step to access the US probiotic supplement market, and to extend the opportunities offered by LPLDL® into dairy applications, with one of the largest and internationally respected supplier of probiotic ingredients. The US is one of the largest and fastest growing probiotic markets in the world, with supplements alone accounting for $2.06 billion sales, with a projected 55% growth to $3.3 billion by 2021. Extension of LPLDL® into dairy applications widens the commercial opportunity by accessing the $35.5 billion probiotic dairy market.



Market data from 'TRENDS, INNOVATIONS AND OPPORTUNITIES DRIVING THE GLOBAL PROBIOTICS MARKET' (Euromonitor International June 2017).



Stephen O'Hara, CEO of OptiBiotix, commented: "This new agreement with Sacco significantly extends the scale of the commercial opportunity open to LPLDL® to new application areas and territories, and reflects growing confidence from both companies in LPLDL®'s market potential. We chose Sacco as we have been impressed by their ability to introduce LPLDL® to a global network of distributors and believe extending our partnership with them provides the best opportunity of quickly building revenues and developing LPLDL® into a global brand. In addition, the ability to supply competitively priced ingredients from a single manufacturer across world markets simplifies the supply chain and contract negotiations with corporate partners."

[elrico] 22/8/2017 00:26

John - We ultimately benefit by our share of 42% of SBTX once the shares have been distributed. I'm not going to regurgitate my opinion about the handling of or the confusion. In the short term, yes, SBTX IPO investors are under water, me included. However, it is my opinion SBTX shares will, like OPTI ultimately benefit from a progressive rise in the share price as and when it becomes more apparent the company is closer to commercial reality. OPTI will also benefit because of the 42% asset backing. The great unknown is when and how the SBTX shares will be distributed by way of an "in-specie divi." That said, most companies usually retrace by the value of the divi payment. However, in this case, it would be ludicrous because SBTX only cost OPTI £660K and was NEVER in the prospectus/business model, it was a pure investment opportunity. Another benefit to demerging of SBTX in the reduction of the cash burn and reduces funding requirement of the parent company, thus reduces risks associated with any possible failure of SBTX.

As for the other spin-offs...they cost investors nothing, other than patience. It is free money, a vehicle to which we gain a more diverse portfolio at no extra cost.

Another advantage of spinning-out, say SweetBiotix, is it again reduces the cash burn of OPTI while at the same time, creates new funding for SweetBiotix, which in turn, like SBTX, should assist in accelerating commercial progress because it's dedicated BOD is more focused on it's own goals and not that of the group as a whole. I am told the SweetBiotix IPO is tied to a commercial deal. So, the IPO could take place early 2018, possible at a similar time as the SBTX IPO. Just a guess!

I don't view your comments as a moan, they're legitimate concerns. I wish I had more time to offer a more comprehensive, less rushed reply. I need my beauty sleep.

[2350220] 21/8/2017 23:38

Another great article, as always Elrico.
BUT despite being 'in love' with this company, I'm completely confused as to how we as investors benefit from these company 'spin-offs'.
With the first one, SkinBiotix, our holding in Opti seemed to take a hit as a direct result, AND I used funds to buy into SkinBiotix and am now 30% under water into the bargain.
Not moaning, as I'm the only one responsible for my investment decisions, but I'm just not sure as to how this has "de-risked" our Opti holdings, in the words of SoH, and added value.
With each of the proposed Spin-offs, are we expected to find new cash to buy into the new companies?
Please don't take these questions moans, they are just basic concerns, especially given how much of my funds are allocated to both Opti and now Skin.
John

[elrico] 21/8/2017 20:38

OPTI is an unusual company as it has so many facets to it.  This creates difficulties with some investors who only see the first to market opportunity and sometimes miss out on the bigger picture and larger opportunities. If PI's look at other companies in this space they would see each of these areas in their own right could have valuations higher than OPTI has currently.

Investors who went to early presentations or who were able to read the annual reports will know SOH has structured the company purposely this way to create development platforms with varying risk portfolios. This allowed product launch and revenue generation from lower risk platform (SlimBiome®) whilst the science was developed for the higher risk platforms (OptiScreen®, and OptiBiotics®). The overall strategic aim was to allow investors in OPTI to build up a broad based investment portfolio across a number of areas in the microbiome space. This diversifies risk, whilst offering PI's ‎multiple opportunities in this exciting space. As these platforms mature, OPTI intend to spin-out each with a view of building them into valuable entities in their own right. The first of the spin-outs was SBTX, which is worth £10.5m, not a bad return on £660k. At some point, OPTI holders will get a share of 42% of the market cap, but this is further down the line and one imagines the market cap of SBTX will be c2-3 times greater than today's value.


To reiterate, new PI's and those thinking of jumping aboard should bear in mind OPTI are not building a single product, single technology company, but a number of platforms which are at different stages of development – a point often made by SOH at his presentations. This is why Christina and Per were brought on board. Both have proven sales pedigree in both B2B (Per) and B2C (Christina) consumer markets. The company has just entered the commercialisation phase for SlimBiome and LP-LDL based on a strategy ;continuously repeated (see May’s RNS) where OPTI are trying to build multiple deals with national and international partners in different territories and channels (pharma, retail, online etc). This strategy is on track with HLH and Pharmabio are the first of what is expected to be c10 national agreements. These smaller deals are much quicker to get over the line, but no less important; these type of deals will not only have built-in sales targets, typically 10% growth pa, more importantly, they further validate the science, build IP branding and attract further inquiries with each RNS. Another point worth making, is the high margins and from OPTI's point of view give “medical”; credibility as the company progress into  the higher volume lower margin consumer markets with national retailers (e.g Boots, H&B etc) and larger consumer corporates (Kellogg’s, Nestle, P&G etc).

The strategy is to build multiple partnerships and the £3-6m pa based on approx 10 national partnerships per application areas each delivering £300-£500K per year of existing products which comes from our discussions at Viatfoods, this DOES NOT INCLUDE retail partnerships which in themselves can be worth £5-6m pa, or other application areas such as dairy, snack bars etc or partnerships with global corporates as these are more difficult to forecast both in terms of deal structure and timescale.

If investors go back to the original RNS on THWLC and the launch of SlimBiome, revisit results from last year, they will see get a better handle of the strategy OPTI are employing. For example, OPTI set up THWLC  to incubate new technological solutions, establish early consumer interest and product viability, and act as a “shop window” to attract interest from industry partners who want to use Slimbiome® as a food ingredient in international markets.  This is exactly ;what happened with Tata and will hopefully show to be the case with other geographies. THWLC also provides an online direct sales platform for GoFigure, and potentially other products, in the UK.

Ref SweetBiotix - In riskybusiness excellent post, he highlighted the diverse IP and some of it's possible applications. It is easy to allow this go over ones head. He pointed out SweetBiotix is essentially three sugar platforms/components; microbiome modulation, OptBiotics (targeted pre/probiotics), and SweetBiotix.  "These are currently looking very exciting and our recent RNS has attracted a lot of interest, hence why we have been very busy over the summer." OPTI's aim is to continue to build value in all of these areas.  This will typically involve adding an additional commercial lead similar to Per and Christina and developing the opportunity across the three areas mentioned to commercialisation.  This will require securing manufacturing scale up and securing deal with ingredient suppliers (like the DSM’s and Kerrys of this world) and consumer goods companies (like the Coca cola’s, Kelloggs, Nestle’s, P&G’s etc).


 

[2350220] 21/8/2017 14:53

Nice post Risky.
Ha ha Blooming spill checker!!
Ta,
John

[bernieboy] 21/8/2017 13:04

Thanks Risky. Great post as always!

[onedayrodders] 21/8/2017 12:20

You'll be surprised even at our age Humphries

;o)

[drago] 21/8/2017 10:48

there is a lot of concern about artificial sweeteners too.

thats another massive market imho

[joyjoy13] 21/8/2017 08:50

Someuwin,
Hope it's ok, but I just posted your find over on the LSE Board.

GLA

[parob] 21/8/2017 08:40

I talked myself into buying 10500 more shares earlier.Feels like time is running out to buy in the 60's.Hopefully we'll break the downtrend today.

[bobdown2] 21/8/2017 08:39

Another 3k. It's not very often you can buy a posible sugar replacement before it goes on sale..

[joyjoy13] 21/8/2017 08:37

Wow Someuwin
Asia's leading trade magazine for food and beverage!

Awesome find,
Thank you.

[rafboy] 21/8/2017 08:31

On a personal note, I think the sugar news is massive. Being talked about already so the right people are looking at what OPTI is up to. Further ahead than many of us believe?

[shrewdmole] 21/8/2017 07:28

John

Exactly my point.

For an industry and science publication to be writing articles like that it would appear that line of prInduct/strain is far closer to commercialisation than even the most optimistic had hoped.

S