TIDMOPTI
RNS Number : 0753A
OptiBiotix Health PLC
17 January 2020
OptiBiotix Health plc
("OptiBiotix" or the "Company" or "the Group")
Year-end Update
OptiBiotix Health plc, a life sciences business developing
compounds to tackle obesity, cardiovascular disease and diabetes,
provides the following unaudited preliminary revenue figures and a
trading, commercial, and strategic update ahead of the Group's
final results for the year ended 30 November 2019.
Financial Update
The 12 months to 30 November 2019 have seen the transition of
the Company from a research and development business to a company
building commercial revenues and growing the number of geographies
commercialising its products. Agreements signed in 2019 extended
our geographic reach into 24 new countries.
This period has seen 12 agreements start to generate revenue for
the first time and seven others increase sales contributing to an
increase in year on year sales across every division.
Total sales for the year were GBP808k with other income of
GBP617k, including, inter alia, income resulting from the partial
disposal of SkinBioTherapeutics plc shares, bringing the total
amount of income for the year ending 30 November 2019 to
GBP1,426,522 (2018: GBP541,614). In line with previous years, the
majority of income was generated in the second half of the year (H1
2019: GBP148,818). We expect this trend to continue in 2020 with a
gradual smoothing in this second half weighting as income from
ingredient, white label and own label products sold through
retailers or direct to consumers online, provide more evenly
distributed income throughout the year.
We anticipate further revenue growth in 2020 as existing deals
contribute to full year revenues, partners continue to grow sales,
the launch of SlimBiome(R) with Holland and Barrett and AlfaSigma's
launch of Ezimega 3 containing LP(LDL) (R) in Italy contribute to
2020 sales and larger partners like Agropur and Akum commercialise
products in home markets. We also anticipate a contribution from
new agreements to be signed in 2020 and potential retail deals in
international markets, particularly the USA. Whilst there are no
guarantees these will all deliver expected sales revenues, our
focus is on developing each division (Prebiotic, Probiotic, and
Consumer Health) to reach profitability in 2020.
To support this focus, Dr Fred Narbel, Steve Prescott and Steve
Riley who head the Prebiotic, Probiotic, and Consumer Health
divisions respectively have been given P&L responsibility for
each of their divisions to grow revenues and manage costs.
As we enter the next phase of the business cycle in building a
profitable business and sales volumes continue to grow, we intend
to renegotiate supply agreements with partners to reduce the cost
of goods and improve margins. We will seek a reduction in IP and
R&D costs as the needs of the business change.
As at 30 November 2019, the Company had GBP687,699 cash in the
bank with debtors of GBP514,000 totalling GBP1,201,699. Once
R&D tax credits and recoverable VAT repayments are received,
the balance is GBP1.394m (2018: GBP1.67m), excluding creditors of
GBP370k. This is an increase of GBP154k from H1 (H1 2019:
GBP1.24m). We have the option to further reduce our holding (circa
GBP7m) in SkinBioTherapeutics plc if growth capital is
required.
Commercial Update
OptiBiotix signed 18 commercial agreements in the year to 30
November 2019, with a further five deals signed in December 2019,
making a total of 23 agreements for the calendar year. These
include ten for the Probiotic division, and 13 for SlimBiome(R) in
the Prebiotic division. These agreements extended our geographic
reach into 14 new countries entered by SlimBiome (total of 25) and
ten new countries (total of 26) added by ProBiotix Health when
compared to 2018.
The large number of agreements signed (52 to 19 December 2019)
with multiple partners, across multiple application areas and
geographies, is designed to maximize the income potential of each
product, whilst limiting the risk related to any individual deal,
product, or geography. These deals are developing with the
exception of Bened and Formulation Creations. We recognise, from
past experience, that all partners may not meet our expectations
and have mitigated commercial risk where possible by agreeing non
exclusivity or offering exclusivity for a specific formulation,
limited time period, and contract clauses which revert to
non-exclusivity if partners fail to reach minimum order quantities.
This also takes into account our experience that as product and
brand recognition grow, larger retailers and global partners
increasingly request exclusivity for their products and
territories.
Commercially in 2020, we are looking to extend our reach into
new application areas (e.g hypertension, immune health, gut
health), continue to enter new territories, and support partners
like Agropur, AlfaSigma, and Akums in the commercialisation of
products in their territories. We hope to launch a range of new
products on our consumer health online platform including a range
of healthy snacks (e.g gummies, pancake mixes) and porridge
containing SlimBiome. Having achieved FDA GRAS and GMP manufacture
we hope to extend the application of LP(LDL) (R) from its use as a
supplement into use as a food and dairy ingredient in 2020. We are
also exploring opportunities to launch health and wellness products
containing LP(LDL) (R) direct to consumer and retailers in the
United States. This is in line with our strategy of building
revenues and market presence of our patented and trademarked
products (LP(LDL) (R), SlimBiome(R)) as the 'Intel' inside a wide
range of food, beverage, supplement, and medical products around
the world.
Strategic Update
OptiBiotix's strategy is to develop multiple opportunities
within the microbiome space across all its platforms by creating
food ingredients, supplements and pharmaceutical products with
partners. This approach allows OptiBiotix to present product
solutions to consumer health, pharmaceutical and retail companies
providing multiple revenue streams from ingredient sales, white
label and own branded products across multiple channels. We
anticipate continued execution of this strategy in 2020 generating
revenues against a continued low-cost base creating profitable
divisions across all areas of the Company. We will continue to
explore acquisition opportunities where there is an opportunity to
accelerate market entry, build sales more quickly, and a
commonality in strategic focus.
OptiBiotix announced the appointment of goetzpartners securities
Limited in 2019 to improve international buy side access,
particularly from within Europe, and as a strategic step to broaden
the Company's investors base and reduce market volatility from low
liquidity on the AIM market. As an extension of this strategy,
OptiBiotix has commissioned advisors to explore the potential of a
dual NASDAQ listing. Whilst there is risk and increased cost
associated with a potential dual NASDAQ listing, the high level of
investor and consumer interest in the microbiome in the USA, the
potential for greater liquidity and valuation, and the OptiBiotix's
growing presence in the USA through its partners (Seed Health,
Agropur) suggest that there is sufficient potential to continue
exploring this path.
Investor and consumer interest in the microbiome is a growing
trend and, as a result, our market opportunity is large and
expanding. We will continue to invest our efforts in increasing the
range of applications, products, and territories to capitalise on
this opportunity. As we sign more agreements, and more agreements
start to translate into revenue streams, there is potential for a
significant enhancement in the value of the Company. We believe
this strategy will continue to generate industry interest and
create an extensive pipeline of opportunities across all our
platforms in the months and years ahead.
Stephen O'Hara, CEO of OptiBiotix, commented: "This year has
seen strong commercial progress with OptiBiotix extending its
geographic reach and brand presence to 24 new countries and more
agreements generating revenues for the first time or growing sales.
As in previous years, the majority of income was generated in the
second half of the year with total income for the year of just over
GBP1.4m. We anticipate further revenue growth in 2020 as a UK
launch of SlimBiome with a major UK retailer and LP(LDL) (R) with
AlfaSigma contributes to full year revenues, large corporate
partners (e.g Agropur, Akums) commercialise products, and we extend
the application of our products into new areas (e.g dairy, healthy
snacks, and breakfast cereals). We believe interest in the
microbiome will continue to grow and the market opportunity
increase. Given high investor and consumer interest in the
microbiome in the USA and growing sales the board OptiBiotix has
commissioned advisors to explore the potential of a dual NASDAQ
listing."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Forward-Looking Statements
Certain statements made in this announcement are forward-looking
statements. These forward-looking statements are not historical
facts but rather are based on the Company's current expectations,
estimates, and projections about its industry; its beliefs; and
assumptions. Words such as 'anticipates,' 'expects,' 'intends,'
'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions
are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject
to known and unknown risks, uncertainties, and other factors, some
of which are beyond the Company's control, are difficult to
predict, and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements.
The Company cautions security holders and prospective security
holders not to place undue reliance on these forward-looking
statements, which reflect the view of the Company only as of the
date of this announcement. The forward-looking statements made in
this announcement relate only to events as of the date on which the
statements are made. The Company will not undertake any obligation
to release publicly any revisions or updates to these
forward-looking statements to reflect events, circumstances, or
unanticipated events occurring after the date of this announcement
except as required by law or by any appropriate regulatory
authority.
For further information, please contact:
OptiBiotix Health plc www.optibiotix.com
Stephen O'Hara, Chief Executive Contact via Walbrook
below
Cairn Financial Advisers LLP (NOMAD)
Liam Murray / Jo Turner / Ludovico Lazzaretti Tel: 020 7213 0880
finnCap (Broker)
Geoff Nash / Kate Bannatyne (Corporate Finance)
Camille Gochez (Corporate Broking) Tel: 020 7220 0500
goetzpartners securities Limited Tel: 020 3859 7725
Ulrich Kinzel
Walbrook PR Ltd
Anna Dunphy Mob: 07876 741 001
About OptiBiotix - www.optibiotix.com
OptiBiotix Health plc (AIM: OPTI), which was formed in March
2012, brings science to the development of compounds which modify
the human microbiome - the collective genome of the microbes in the
body - in order to prevent and manage human disease and promote
wellness.
OptiBiotix has an extensive R&D program working with leading
academics in the development of microbial strains, compounds, and
formulations which are used as active ingredients and supplements.
More than twenty international food and healthcare supplement
companies have signed agreements with OptiBiotix to incorporate
their human microbiome modulators into a wide range of food
products and drinks.
OptiBiotix is also developing its own range of consumer
supplements and health products. The Company's current areas of
focus include obesity, cardiovascular health, and diabetes.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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