REG - OptiBiotix Health - Commercial and strategy update

OptiBiotix HealthAnnouncement

09/02/2022 07:00

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RNS Number : 0859B  OptiBiotix Health PLC  09 February 2022

OptiBiotix Health plc

("OptiBiotix" or the "Company" or the "Group")

 

Commercial and strategy update

 

OptiBiotix Health plc (AIM:
OPTI), a life sciences business developing compounds to tackle obesity, high
cholesterol, diabetes and skincare, provides a strategic and commercial
update.

 

The Company's strategy is to sell its products globally through a mix of
smaller, quick to market partners, and larger partners who typically enter the
market once product credibility is established. This strategy is supported by
scientific publications in peer reviewed journals, conference presentations
and industry awards which builds industry credibility, brand presence, and
provide valuable marketing assets to support sales. The Company continues its
focus on growing sales of its first-generation functional ingredients
LP(LDL)®, SlimBiome®, OptiBiome® and LeanBiome™ whilst it develops its
pipeline of second-generation products.  The Company now has a solid
foundation having built a recurring revenue base from business to business
(B2B) sales of its first-generation ingredients. This has delivered profitable
independent trading divisions and a healthy balance sheet placing the Company
in a strong position for sustained growth in the years ahead.

 

The next phase of the Company's strategy is to expand the Group's capabilities
by reinvesting proceeds from the recent sale of shares held in
SkinBioTherapeutics plc, which generated approximately £2 million. These
funds have provided growth capital to broaden and expand the Group's sales and
marketing team, accelerate new product development, increase marketing spend
and explore direct to consumer channels in strategic markets. These funds also
allow the Company to invest in acquiring new technologies to create a future
pipeline of products. This supplements existing plans for expanding product
ranges into sports nutrition (LeanBiome™) and healthy ageing (WellBiome®),
extending SlimBiome®, OptiBiome®, and LP(LDL)® product lines and
territories, increasing the number of larger partners, and growing gross
profit by moving up the value chain to sell a greater portion of finalised
products than functional ingredients.

 

The Company expects to release a separate financial update and forecast in the
upcoming weeks.  This update is intended to report progress against that
strategy:

 

Commercial update: The Company signed three deals with market leading partners
in December 2021,  being The Hut Group ("THG"), Apollo Hospitals and Nahdi
Medical.  THG launched LeanBiome™ in its Impact Diet Lean product in
January as part of its My Protein range with territorial expansion across
Europe, Asia, and the USA planned throughout the year.  The in-house launch
of GoFigure products with Apollo Hospitals is expected to take place in H1 and
will progressively expand to other stores as well as online. Nahdi Medical
plan to launch seven products Gofigure® / SlimBiome® Medical products in H1.
OptiBiotix products are now increasingly becoming associated with
internationally recognised retail, pharmaceutical partners and established
brands.

 

The Group' ambition is to secure eight to ten large national or international
partners for first-generation products and two to three partners for each of
the second-generation technologies. This is expected to give the Company a
presence in markets of strategic interest and a level of contingency as
partners change over time.

 

Scientific Update: The Company has a total of 25 publications, eight in peer
reviewed journals and 17 posters/conference abstracts, with another nine
publications (three SweetBiotix, four microbiome modulators, one Slimbiome,
and one LP(LDL)®) in various stages of submission. Scientific and clinical
studies promote the Company's products and when supported by patents and
trademarks are seen as key differentiating features by large partners.  Such
studies help to underpin OptiBiotix's position as an industry leader in the
microbiome space and one of the few microbiome companies to translate
microbiome science into commercial products and sales growth.  The Company
will be investing more in its science during 2022 as it expands the use of its
products into new areas of health (e.g. stress, anxiety, diabetes) and
acquires or in-licenses new technology to further develop its pipeline of
opportunities and maintain its position as a leader in the microbiome space.

 

The recently published study on LP(LDL)® is a good example of how OptiBiotix
has developed a unique probiotic for cardiovascular health, an area outside
traditional probiotic gut health and general wellbeing areas. This study
showed a large and statistically significant reduction in LDL-C (bad)
cholesterol and Apolipoprotein B (widely accepted as the most important causal
agent of atherosclerotic cardiovascular disease). The results of this and
other studies with LP(LDL)®, suggest efficacy similar to many statins and
treatments more typically associated with pharmaceuticals and a potential
role in the use of probiotics like LP(LDL)® in individuals who are unwilling
or unable to tolerate existing treatments. The Company believes these findings
are unique for a probiotic and now has evidence comparable to phase 1-2
pharmaceutical studies opening up further partnering or out licensing
opportunities either as an OTC product used by itself or in combination with
existing treatments (e.g. statins), or a drug biotherapeutic in markets
outside the USA.

 

 The result of this study is being supported by animations (see LPLDL® - The
Probiotic That Supports Cardiovascular Health - YouTube
(https://www.youtube.com/watch?v=ZGtOp3XLjNE) ), videos (Lactobacillus
plantarum LPLDL Showcases Statistically Significant Reductions In 'Bad'
Cholesterol - YouTube (https://www.youtube.com/watch?v=lAQ5hawNqbA)   ) and a
series of radio interviews by Dr Ranj Singh, a doctor, television presenter,
and author (see
https://www.listennotes.com/podcasts/modern-mindset/279-dr-ranj-singh-on-GIg7hz9x-6U/
(https://www.listennotes.com/podcasts/modern-mindset/279-dr-ranj-singh-on-GIg7hz9x-6U/)
. This is all part of a greater investment in sales and marketing post
Covid-19 as we look to increase final product recognition and sales.  The
Company anticipates increased media coverage and scientific publications in
2022.

 

Sales and Marketing: As part of the increased investment in sales and
marketing, the Company is establishing a sales infrastructure for its B2B
ingredients in the USA and investing in growing e-commerce sales for its D2C
brands in Europe and Asia. The Company views D2C brands as a significant
growth opportunity for its products and is exploring inhouse and outhouse
solutions in different markets.

 

In support of this investment the Company has appointed Karl Burkitt as
Director of Marketing on a consultancy basis.  Karl was Director of Marketing
at divisions of AB Foods, Kerry Foods and Novartis Consumer Health. The
Company is in discussions to appoint a Managing Director for ProBiotix Health
Limited, a direct to consumer (D2C) business manager, a business development
director for the strategically important North American market, and a
Marketing manager. Discussions have been taking place since late 2021 and we
expect to be announcing details of appointments in the next few weeks. This
complements the recent addition of a scientific and technical support
specialist, Christopher Stephenson, and the appointment of Paul Cannings as
Head of Operations and Quality in January 2022.

 

Steven Riley, OptiBiotix's Director of Marketing and Consumer Sales, will
leave the Company at the end of February. Steven has been a valuable member of
the team and the board would like to express their thanks for all his work in
building OptiBiotix's brands and developing the Consumer Health side of the
business.

 

New Product Development: The Company has expanded its first-generation
products to include LeanBiome™, a scientifically formulated sports nutrition
ingredient developed to support athletes increase lean muscle mass and change
their body composition. LeanBiome™ contains a patented combination of
fibres, prebiotics and minerals aimed at supporting the microbiome diversity
of athletes on a high protein diet.  This is a new opportunity in a market
where LeanBiome™ adds differentiation to existing protein products and
builds on the growing scientific evidence of an anecdotal link between the
microbiome and athletic performance (Do microbes affect athletic performance?
(nature.com) (https://www.nature.com/articles/d41586-021-00821-6) .

 

The Company has reformulated 'WellBiome®' with new ingredients allowing new
health claims.  WellBiome® will form the basis of a science backed health
and wellness platform with a range of products to improve cognitive, immune,
bone, digestive, and cardiovascular health to support 'healthy ageing'.

 

SweetBiotix®:  There has been good progress from the Company's US
manufacturing partner who have successfully manufactured SweetBiotix using an
industrial scale process. The partner is now optimising yields and reducing
wastage. This is a significant step in the commercialisation of SweetBiotix®
with the partner bearing the costs of manufacturing scaleup of one type of
SweetBiotix(®) whilst paying annual royalty fees.

 

OptiBiotix is also working with a second partner, one of the world's leading
companies in taste and sweetness on jointly scaling up and commercialising
another group of SweetBiotix products.  There is a good relationship with
this partner and overlapping strategic intent to combine world leading taste
and sweetness expertise with OptiBiotix's prebiotic knowhow and valued IP
portfolio in the microbiome space. The Company believe that a deal is likely
to be achieved.

 

Microbiome Modulators (MM's): The Company has developed an innovative approach
to allow it to precision engineer the microbiome.  This is one of the most
exciting areas of microbiome therapeutics as it creates the potential for
targeted treatment of a range of human diseases. The Company has demonstrated
it can selectively enhance a probiotic and enhance its health benefit
demonstrating proof of concept for using MM's as a microbiome therapeutic.
Development work was impacted by COVID reducing access to Universities and
CRO's in 2020 and early 2021.  This work has now progressed and we are
pleased to report the Company has produced microbiome modulators using a
process suitable for industrial scale up. Work is ongoing to optimise the
process and test whether the functionality has been retained before initiating
full scale up and commercialisation. This is a really exciting area of
development which if successful, the Company believes could revolutionise the
use of the microbiome therapies in healthcare. The Company will be increasing
its investment in Microbiome Modulators to accelerate the development
activities taking place.

 

Investor update: The Company has increased its investor activity with the
re-engagement of Proactive Investors, the continued use of the Investor Meet
Company for more substantive news, and positive features in The Daily Mail and
This is Money.  This is being paralleled with regular meets with
Institutional Investors and a Capital Markets day with a number of
Institutional Investors in February.  The Company is setting up podcasts to
directly respond to investor questions and address misinformation on many
BB's.  Investors can submit questions to  Investor@optibiotix.com.  These
will be collated and form the basis of themed podcasts throughout the year.

 

2020 and 2021 have been difficult years for many companies with an
unprecedented trading environment created by COVID-19.  Despite the
challenges OptiBiotix reported year on year revenue growth of 104% in 2020 ,
as well as 44.5% growth in H1 2021 compared to H1 2020.  It also succeeded in
its stated aims of attracting a number of larger partners, achieved Health
Canada and BRC accreditation, won the award for best weight management product
in the USA, created a new subsidiary in India, and added significant
commercial expertise to its team.  With more large partners, new product
platforms in new markets, extensions of product lines and territories with
existing partners, a greater focus on D2C, and greater investment in sales and
marketing 2022 should be a year of strong growth.

 

Stephen O'Hara, CEO of OptiBiotix Health plc commented: "This strategic and
commercial update demonstrates the strong progress OptiBiotix has made against
its stated aims.  We are particularly pleased at concluding three commercial
agreements at the end of 2021 with well-known national and international
partners which create the potential for volume sales and help enhance the
reputation of OptiBiotix and its products around the world.  We believe new
product launches in 2022, the extension of territories with existing partners,
new product platforms, and the commercial realisation of our development
pipeline, allow us to look forward with confidence to further commercial
progress of the Group in the current year and beyond."

 

 

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.

 

For further information, please contact:

 

 OptiBiotix Health plc                                     www.optibiotix.com (http://www.optibiotix.com/)
 Stephen O'Hara, Chief Executive  Contact via Walbrook below

 Cairn Financial Advisers LLP (NOMAD)                      Tel: 020 7213 0880
 Liam Murray / Jo Turner / Ludovico Lazzaretti

 Cenkos Securities plc (Broker)                            Tel: 020 7397 8900
 Callum Davidson / Neil McDonald
 Michael Johnson / Russell Kerr (Sales)

 Walbrook PR Ltd                                           Mob: 07876 741 001
 Anna Dunphy

 

 

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.

 

 

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