TIDMOPTI
RNS Number : 9443O
OptiBiotix Health PLC
23 May 2018
OptiBiotix Health plc
("OptiBiotix" or the "Company")
Final Results
OptiBiotix Health plc (AIM: OPTI), a life sciences business
developing compounds to tackle obesity, high cholesterol and
diabetes, announces its audited results for the year ended 30
November 2017.
The Company has made strong progress during this period as it
continues its transition from a development company into a
commercial business. This period has seen the company sign a number
of commercial deals of increasing value across its product range as
it builds multiple revenue streams from manufacturing, application
and distribution partners across the world.
Highlights
-- Two agreements signed with Tata Chemicals - one for
SlimBiome(R) for the Indian market, and the second to scale up and
manufacture the companies cholesterol reducing prebiotic
(LPGOS)
-- Global profit sharing agreement signed with Sacco S.r.l. to
manufacture and supply LP(LDL) (R)
-- Two key Board appointments to support the commercialisation
and global expansion of products.
-- European launch of SlimBiome(R) and LP(LDL) (R) products at
the Vitafoods Europe tradeshow in Geneva in May 2017
-- A total of ten commercial agreements signed in the 12 month reporting period
-- Award winning publications and presentations delivered at major international conferences
-- Award for SlimBiome(R) as 'Best Functional Ingredient for
Health and Wellbeing' at Food Matters
-- FDA registration for LP-LDL(R) and SlimBiome(R) product
ranges allowing access to the US market
-- Admission of majority owned skincare subsidiary,
SkinBiotherapeutics (formerly SkinBiotix), to AIM with an
associated GBP4.5m institutional and private client fundraise in
April 2017.
-- Profit after tax of GBP1.9m reflecting an adjustment of
GBP4.1m for the change in value of the investment in
SkinBiotherapeutics following the listing
Post-period end highlights
-- A US manufacturing, supply and profit sharing agreement with
Cereal Ingredients, Inc for SlimBiome(R)
-- Completion of five successful human taste studies on its
SweetBiotix(R) demonstrating high sweetness and low off
flavours
-- An exclusive royalty bearing agreement with Fine Foods and
Pharmaceuticals for the production and supply of five formulations
containing OptiBiotix's LP(LDL) (R) strain in Europe
-- A five year distribution agreement with Trigen Pharma
Internation (Pvt) Ltd to exclusively distribute and commercialise
OptiBiotix's own label CholBiome(R) products in Pakistan
-- A non-exclusive distribution agreement with Cambridge
Commodities Ltd to distribute SlimBiome(R) weight management
technology in the United Kingdom
-- A five year agreement with Akums Drugs and Pharmaceuticals
Ltd to exclusively manufacture and supply supplements and
biotherapeutic products containing LP-LDL(R) in India
-- The appointment of Neil Davidson as Non-executive Chairman
bringing sector expertise, a network of industry contacts, and over
30 years of operational and Board experience as Chairman and Chief
Executive of FTSE 100, AIM and private companies.
-- Award for SlimBiome(R) as for Weight Management Ingredient of
the Year at Vitafoods 2018 'Best Functional Ingredient for Health
and Wellbeing' at Food Matters
Stephen O'Hara, CEO of OptiBiotix, commented: "OptiBiotix has
made significant progress in the last 12 months which has seen a
growing number of awards for our science and products and an
increased deal flow. We anticipate both the rate and value of deal
flow increasing as we develop new applications, take existing
products into new territories, and leverage our technology
platforms to develop new product opportunities. We are particularly
excited by the interest from partners in developing our products
into biopharmaceuticals and see this as an area of significant
future development and potential value uplift. The last twelve
months has been an exciting period of transition for the Company
with new Board appointments, ten commercial agreements, and an FDA
registration for SlimBiome(R) and LP(LDL) (R) . We have been
pleased with the progress of SkinBiotherapeutics plc, which is
making strong commercial progress and preparing for human studies,
which if successful, should provide a substantive uplift in
valuation. On behalf of everyone at OptiBiotix Health plc, we would
like to thank our investors for their continued support and look
forward to an exciting future in this exciting area of science
which has the potential to revolutionise the future of health
care."
This announcement contains information which, prior to its
disclosure, was considered inside information for the purposes of
Article 7 of Regulation (EU) No 596/2014 (MAR).
For further information, please contact:
OptiBiotix Health plc www.optibiotix.com
Stephen O'Hara, Chief Executive Contact via Walbrook
below
Cairn Financial Advisers LLP Tel: 020 7213 0880
Liam Murray / Jo Turner
finnCap (Broker) Tel: 020 7220 0500
Adrian Hargrave / Scott Mathieson / Kate Bannatyne
(Corporate Finance)
Abigail Wayne (Corporate Broking)
Walbrook PR Ltd Tel: 020 7933 8780 or optibiotix@walbrookpr.com
Anna Dunphy Mob: 07876 741 001
Chairman's and Chief Executive Statement
We are pleased to present OptiBiotix Health plc's annual report
and accounts for the year ended 30 November 2017.
OptiBiotix has made strong progress during this period in its
strategy of developing compounds which modify the human microbiome,
developing partnerships with industry, and broadening its position
in the microbiome space. This period reflects the transition of
OptiBiotix from a research and development company into a
commercial business, with the appointment of a Commercial Director,
Per Rehne, and Sales & Marketing Director, Christina Wood, who
both joined us in March 2017. Since joining Per and Christina have
led product launches of SlimBiome(R) and LP(LDL) (R) and concluded
a total of ten commercial agreements with manufacturing,
application and distribution partners. This period has also seen
additions to OptiBiotix's intellectual property portfolio, FDA
registration for the LP(LDL) (R) and SlimBiome(R) product ranges
allowing access to the US market, expansion of products into new
territories, and a pipeline of commercial agreements which will
provide future revenue streams. As the promise of the microbiome
materialises into products across an increasing number of
OptiBiotix's platforms, and industry interest translates into
multiple revenue streams from royalties and supply agreements,
there is potential for a significant enhancement in the value of
the Company.
Key Achievements
During the period to date we have achieved a number of key
objectives which continue to build shareholder value. These
include: -
-- Two agreements with Tata Chemicals, one of India's leading
suppliers of food ingredients, to develop weight management
products containing SlimBiome(R) for the Indian market, and the
second to scale up and manufacture the companies cholesterol
reducing prebiotic LPGOS
-- The appointment of Per Rehne as Commercial Director, and
Christina Wood as Sales & Marketing Director, to support the
commercialisation and global expansion of OptiBiotix products
-- A global profit sharing agreement with Sacco S.r.l., one of
Europe's leading probiotic manufacturers, to manufacture and supply
OptiBiotix's cholesterol reducing strain, LP(LDL) (R)
-- Launch of OptiBiotix's SlimBiome(R) and LP(LDL) (R) products
at the Vitafoods Europe tradeshow in Geneva in May 2017
-- The signing of ten commercial agreements: -
-- Two for the manufacture, supply and distribution of
SlimBiome(R)
-- Seven for the manufacture, supply, and distribution of
LP(LDL) (R)
-- One for the manufacture and supply of LPGOS
-- Presentation of OptiBiotix's science at international
conferences including: the European MicroBiome Summit (November
2016); ProBiota (February 2017); the MicroBiome R&D and
Business Collaboration: Asia (March 2017); International Scientific
Conference on Probiotics and Prebiotics in Budapest (June 2017),
and MicroBiome R&D and Business Collaboration (USA)
-- FDA registration for LP-LDL(R) and SlimBiome(R) product
ranges allowing access to the US market.
-- The admission of OptiBiotix's majority owned skincare
subsidiary, SkinBiotherapeutics (formerly SkinBiotix), to AIM with
an associated GBP4.5m institutional and private client
fundraise
-- A profit after tax of GBP1.9m reflecting an adjustment of
GBP4.1m for the change in value of the investment in
SkinBiotherapeutics following the listing on AIM in April 2017
Subsequent to the year end a number of further key agreements
were reached which continue to build shareholder value: These
include:-
-- A US manufacturing, supply and profit sharing agreement with
Cereal Ingredients, Inc for SlimBiome(R)
-- An exclusive royalty bearing agreement with Fine Foods and
Pharmaceuticals for the production and supply of five formulations
containing OptiBiotix's LP(LDL) (R) strain in Europe
-- A five year distribution agreement with Trigen Pharma
Internation (Pvt) Ltd to exclusively distribute and commercialise
OptiBiotix's own label CholBiome(R) products in Pakistan
-- A non-exclusive distribution agreement with Cambridge
Commodities Ltd to distribute SlimBiome(R) weight management
technology in the United Kingdom
-- A five year agreement with Akums Drugs and Pharmaceuticals
Ltd to exclusively manufacture and supply supplements and
biotherapeutic products containing LP-LDL(R) in India
Research and Development (R&D) strategy
To exploit the diversity of opportunities, the Company has
developed a number of pharmaceutical level technology platforms
using different approaches to modulate the microbiome. These
technology platforms have now moved through the development process
of laboratory studies, independent human studies with
world-renowned key opinion leaders and manufacturing scale up.
These platforms provide a proven systematic approach to the
development of products with the science winning awards at major
international scientific conferences and the products they produce
awarded industry prizes for innovation. The validation of these
technology platforms has substantially reduced investor technical
and clinical risk and created industry leading capability for the
development of further products by OptiBiotix and its partners
both.
OptiBiotix's R&D strategy has been designed to create
technology platforms and intellectual property which provide
multiple product and partnering opportunities both within each
platform, and by combining platforms. For example, by combining our
cholesterol reducing strain, LP(LDL) (R) , with
galacto-oligosaccharides (LPGOS) produced from it, we can
selectively enhance its growth and increase cholesterol reduction
threefold. This means that for a limited amount of extra
investment, we have the potential to create large amounts of
additional value and expand the market opportunities. Whilst this
approach has complexity, it has been designed to mitigate
development risk in the evolving microbiome field and provide a
cost-effective way to build overlapping intellectual property
("IP") and exploit the many opportunities offered by the
microbiome.
The other advantage of this approach is that as these platforms
are structured under separate divisions, each containing its own
technology platform, IP portfolio and partner agreements, they
could in due course become separate legal entities with the
potential for investment or a public listing. This strategy allows
investors in OptiBiotix to build up a broad-based investment
portfolio across a number of areas in the microbiome space which
diversifies risk, whilst offering shareholders multiple
opportunities in the microbiome space. Whilst each division has a
different technological base they are united by a common theme of:
-
-- Understanding the underlying science and mechanism of action
in laboratory studies. This allows us to optimise our products and
identify multiple application opportunities
-- Proving our products are safe and that they work in humans by
carrying out independent clinical studies and publishing them in
leading peer reviewed journals authored by leading academics well
known to industry
-- Working with world renowned key opinion leaders who support the science behind our products
OptiBiotix's technology platforms have now moved through the
development process of laboratory studies, human studies and
manufacturing scale up and this has substantially reduced technical
and clinical risk. This changes the risk reward ratio leading to
both an increase in value and greater interest from corporate
partners in the Company's technology, products and assets. Our
deals with Tata Chemicals (December 2016 and July 2017) and
Galenicum (October 2017) reflect this progression of our
technology. These platforms have been designed around
pharmaceutical drug discovery approaches creating the potential to
extend existing products beyond functional ingredients into
biopharmaceuticals and into the drug market.
OptiBiotix is rapidly transitioning from a product development
company to the commercial stage of the Company's development. This
started with the European launch of SlimBiome(R) at Vitafoods in
May 2017 and continued with the USA launch in late September 2017
at Supply Side West. Since then, the Company has been developing a
deal pipeline which we believe will build into significant revenues
over time.
The key to establishing the scientific maturity and credibility
of our technology is the reporting and peer review of our data in
scientific journals and at international conferences by independent
key opinion leaders. The last twelve months has seen an increase in
the number of these presentations and publications reflecting the
maturity of our science. One of the most significant of these was
the publication of our human studies on LP(LDL) (R) , in the peer
reviewed scientific journal PLOS-One by Professor Glen Gibson, one
of the world's leading authorities in this field. Another
significant presentation was give by Professor Bob Rastall, an
international key opinion leader and expert on prebiotics at the
MicroBiome R&D and Business Collaboration (USA) in San Diego in
November 2017. Professor Rastall presented the Company's research
programme on its OptiBiotics(R) concept: a combination of a
probiotic and a targeted prebiotic specifically designed to
selectively enhance the growth rate and health benefits of
probiotic products.
Following on from winning the best scientific abstract at
ProBiota 2017 we were pleased to win the best scientific abstract
at ProBiota 2018 for the identification and development of a
prebiotic which selectively enhances the growth of Lactobacillus
rhamnosus GG ("LGG(R) ") in the gut. LGG(R) is contained within
DSM's Culturelle(R) probiotic range which is the best-selling
probiotic supplement brand in the world. These presentations and
publications raise OptiBiotix's profile and reputation, attract
commercial interest in our technology and products and provide the
scientific evidence for sales and marketing literature in support
of product commercialisation.
As the Company transitions from a technology company to a
product company, it will continue to present its science at
international conferences and in leading peer reviewed journals
around the world.
OptiBiome(R) (SlimBiome(R), CardioBiome, ImmunoBiome,
WellBiome(R) and PsychoBiome)
OptiBiome(R) is a range of products developed as functional
ingredients to help prevent and manage many of today's chronic
lifestyle diseases. SlimBiome(R) , the first product in the range,
is a patented weight management formulation scientifically
formulated by experts in weight management to reduce hunger,
leading to less snacking and easier weight loss. This is a new
approach to weight loss and contrasts with existing 'diet' products
which typically rely on customers' self-control to restrict
calories and as a consequence have a high failure rate.
The ingredients in SlimBiome(R) are backed up by over one
thousand publications and developed such that each of the
ingredients work synergistically, in that they act at different
parts of the gut in three different ways. These being:-
i. They make you feel full, and hence less likely to eat as much
food, or to snack between meals.
ii. They control blood sugar peaks and troughs reducing sugar cravings.
iii. They increase the diversity of microbes (microbiome) in the
gut which helps people loose weight more quickly and most
importantly sustain this weight loss.
SlimBiome(R) is sold as an ingredient, in white label products,
and in OptiBiotix's own brand of GoFigure(R) range of shakes and
bars. We are pleased that Tata Chemicals, one of India's leading
suppliers of food ingredients, signed an agreement in December 2016
to develop weight management products containing SlimBiome(R) for
the Indian market. With India ranked second in the world with 30m
overweight people and Tata's local knowledge, reputation and sales
& distribution capability, this has the potential to develop
into a healthy future revenue stream as Tata commercialises
OptiBiotix's and its own label products across it developing B2C
network in India.
Christina Wood is leading the commercialisation of SlimBiome(R)
and has made strong progress since commencing her role as Sales and
Marketing Director in March 2017. Christina has been working with
manufacturers, application developers and retailers to expand the
range of application opportunities. This has led to a profit
sharing agreement with Knighton Foods (November 2017) a wholly
owned subsidiary of Premier Foods plc, and Cereal Ingredients
(December 2017), a speciality ingredients manufacturer based in the
USA. Further developments are on-going with other partners to
develop applications for breaded products, biscuits, dairy, gummies
(children's products), muesli pots, porridge pots, healthy snacks,
and a range of cereals in puff, flakes and crisp format. This
creates the opportunity for multiple revenue streams from sales of
ingredients to food manufacturers, white label products to large
retailers, and branded products in multiple presentations to meet
the needs of a diverse range of national and international markets.
This is all part of a series of ongoing developments with a number
of international partners and large retailers to extend
SlimBiome(R) application into a broader range of 'Health &
Wellbeing' food and beverage products. This is to coincide with
increased consumer awareness of using functional natural
ingredients as part of a healthy lifestyle to manage and reduce the
risks of illness and disease.
In addition to the commercialisation of SlimBiome the Company is
extending its OptiBiome(R) range beyond weight management
(SlimBiome(R)) to include cardiovascular health (CardioBiome(R)),
immune health (ImmunoBiome(R)), cognitive health (PsychoBiome), and
general health (WellBiome(R)).
OPTISCREEN, CHOLESTEROL REDUCTION AND LPLDL(R)
OptiBiotix's first product developed using its OptiScreen(R)
platform is a bacterial strain targeting cholesterol and blood
pressure reduction. The strain, registered under international
treaty's as Lactobacillus plantarum ECGC 13110402 and branded
LP(LDL) (R) , was selected by OptiBiotix's proprietary
OptiScreen(R) technology platform from over 4,000 candidate
strains. The product has successfully undergone independent human
studies showing high levels of efficacy for both cholesterol and
blood pressure reduction. The reduction of both cholesterol and
blood pressure is a significant advantage over existing cholesterol
products as the ability to reduce both LDL cholesterol and blood
pressure has a multiplicative effect in reducing cardiovascular
risk.
Per Rehne is leading the commercialisation of LP(LDL) (R) and
has made strong progress since commencing his role as Commercial
Director. Since Per's appointment, LP(LDL) (R) has undergone rapid
commercial development with the announcement of seven
manufacturing, application and distribution agreements since its
launch at VitaFoods in May 2017. Per has been working with partners
to develop around 30 formulations containing LP(LDL) (R) which have
the science, cost structure and synergistic mode of action to
create a broad product range to meet the needs of international
markets. This approach allows OptiBiotix to present product
solutions to consumer health, pharmaceutical and retail companies
to generate multiple revenue streams from ingredient sales, white
label and own branded products. This is all part of a process of
building multiple revenue streams using LP(LDL) (R) as the 'Intel
inside' different presentations and formulations developed with
industry partners to access consumer and pharmaceutical markets
around the world.
We are pleased that Sacco S.r.l. ("Sacco"), one of Europe's
leading probiotic manufacturers, signed a global profit sharing
agreement with us to manufacture and supply OptiBiotix's
cholesterol reducing strain, LP(LDL) (R) . We chose Sacco from a
number of interested manufacturers due to their industry
reputation, extensive global network of distributors and track
record in building sales for what have become some of the world's
best selling probiotic strains. The ability to supply competitively
priced ingredients from a single manufacturer across world markets
simplifies the supply chain and contract negotiations with
corporate partners. Our agreement with Sacco extends LP(LDL) (R)
into dairy applications leveraging Sacco's network to access the
global $35.5 billion probiotic dairy market. Our agreement, an
extension of an existing European agreement, was a strategic step
to access the US probiotic supplement market, and to extend the
opportunities offered by LP(LDL) (R) into dairy applications, with
one of the largest and internationally respected supplier of
probiotic ingredients.
Sacco produce LP(LDL) (R) as an ingredient which can be sold
directly to companies or as the functional active within different
formulations and presentations of both white label and branded
products. One example of this is the non-exclusive agreement with
Nutrilinea - one of Europe's fastest growing providers of food
supplements- for the production and commercialisation of products
containing OptiBiotix's LP(LDL) (R) strain in Europe. Under the
terms of the agreement, Nutrilinea will produce, promote, market
and commercialise OptiBiotix's CholBiome(R) and CardioBiome(R)
products to their European network with the aim of maximizing the
financial return for both parties. Similarly, Galenicum, one of
Spain's leading pharmaceutical groups with an annual turnover of
over EUR100 million and a year-on-year double-digit growth, have a
non-exclusive license to commercialise Cardiocare(TM), a
nutritional supplement containing OptiBiotix's LP(LDL) (R) strain
in Spain, Chile, Peru and the Middle East. Galenicum has an
international reputation for high quality innovative products and
was awarded the prestigious European Business Award of "Business of
the Year" in 2013/2014.
We believe that working with industry leading partners like
Sacco, Nutrilinea and Galenicum provides the best opportunity of
rapidly building LP(LDL) (R) into a leading global brand. We see
LP(LDL) (R) , as the 'Intel' inside a range of products for
cardiovascular health across both consumer and pharmaceutical
markets. The overall aim is to achieve a multiple deal structure
where we get revenues from manufacturers who produce LP(LDL) (R) ,
and application and formulation partners who formulate and package
the product, as well as distributors who distribute the product.
This creates the opportunity for multiple revenue streams from
sales of the strain and white label and branded products to
consumer and pharmaceutical companies around the world.
This division has a broad deal pipeline and we would anticipate
further agreements with product formulation groups and distributors
both within Europe and other territories in the forthcoming
months.
MICROBIOME MODULATORS, OPTIBIOTICS(R), AND SWEETBIOTICS(R)
The Company has made significant progress in its scientific
programmes to develop compounds which modify the human microbiome
to prevent, manage and treat disease and create natural high
intensity sweeteners and sweet healthy fibres (SweetBiotix(R)).
These now cover three areas with each developing into a
substantive opportunity in its own right: -
Microbiome modulators: OptiBiotix R&D teams have used gut
models to demonstrate the ability to increase the growth rate,
biological activity and health effect of specific microbial species
in the human microbiome and in doing so, manipulate both the
microbiome's composition and its function. This has now been
demonstrated in multiple species, including OptiBiotix's
cholesterol reducing LP(LDL) (R) strain and partner strains such as
DSMs Lactobacillus rhamnosus GG (LGG(R) ), contained within its
Culturelle(R) range. The results of this study were reported with
DSM as co-authors at ProBiota 2018 where it was awarded the prize
for best scientific abstract. We believe this is the first reported
publication of an optimised prebiotic for LGG(R) .
OptiBiotix reached an agreement with Tata Chemicals in September
2017 to scale up and exclusively manufacture
galacto-oligosaccharide produced by OptiBiotix's LP(LDL) (R) strain
(LPGOS) for the use in food and 'over the counter' (OTC) products.
The agreement brought together Tata's expertise in the manufacture
of galacto-oligosaccharides (GOS) with OptiBiotix's microbiome
modulation expertise. LPGOS is heat resistant and stable during
processing and has been shown to reduce cholesterol by up to 22% in
gut models. OptiBiotix believes this creates opportunities to use
LPGOS in a wide range of food products to help reduce
cardiovascular risk factors and improve health.
The ability to develop designer prebiotics, which can modify
both the microbiome's composition and its function, creates the
potential for designer ingredients or supplements which can modify
an individual's current microbiome to improve health and the
potential for precision microbiome medicine. This is an area of
growing scientific and commercial interest with increasing evidence
that the microbiome plays an important role in how the body
metabolises pharmaceutical products, influencing their
effectiveness and the potential for adverse reactions. The ability
to create designer ingredients which can modify an individual's
microbiome to improve health places OptiBiotix at the forefront of
global microbiome research and product development and has the
potential to substantially increase the company's value.
OptiBiotics(R) : OptiBiotix's R&D teams have demonstrated
that by combining our cholesterol reducing strain LP(LDL) (R) ,
with galacto-oligosaccharides produced from it, we can selectively
enhance its growth and increase cholesterol reduction threefold.
Work in the last 12 months has led to the development of new high
throughput carbohydrate screening platforms which have allowed the
extension of these concepts to other probiotic genera and species.
To the best of our knowledge, our presentations at international
conferences and partner discussion lead us to believe we are one of
the world's leaders in this field. We see the development of
species or genera specific prebiotics which can selectively enhance
the growth and health benefits of existing probiotic products as a
growing area of interest to the probiotic industry, a market
expected to be worth more than $46.5bn by 2020 (Markets and
Markets)
SweetBiotix(R) : SweetBiotix(R) are an innovative concept with
the potential to address a global requirement, addressing
international concerns over the impact of sugar on obesity, with
the prospect of replacing 'unhealthy' sugars in existing products
with non-digestible, low calorie, healthy SweetBiotix(R) . These
sweet natural healthy sugars are not digested in the human gut and
hence calorie free. In the last 12 months, we have accelerated our
development programmes in this area and carried out five successful
independent human studies in which OptiBiotix's products and
commercially available comparator samples were tested by an expert
panel of 11 panellists who rated 11 products attributes (e.g.
sweetness, aftertaste, off- flavour, bitterness etc) compared to
sucrose as a benchmark. OptiBiotix's products were created by two
development programmes which showed: -
i. Natural high intensity sweeteners with improved flavour
profile and microbiome modulating functionality. Independent human
studies have demonstrated these have a good flavour profile and
sweetness of between 140x and 223x of sucrose at equivalent
concentrations.
ii. Sweet natural healthy fibres being developed as potential
bulk sugar replacements which are not digested in the human gut,
and hence calorie free. Human studies have demonstrated these sweet
fibres had the highest sweetness and lowest off-flavours when
compared to a wide range of existing sugars and fibres and
sucrose.
With growing concerns over traditional sugars and artificial
sweeteners these results create the prospect of SweetBiotix(R)
replacing 'unhealthy' sugars in existing products with
non-digestible, low calorie, healthy SweetBiotix(R) . Given that
the global sweetener market, currently dominated by sugar, is
forecast to reach $112bn by 2022 (Mordor Intelligence, 2017), the
Company believes these developments have the potential to greatly
enhance shareholder value. Publication of the results on our human
studies and accompanying media report in national newspapers such
as The Times has stimulated high industry interest and we
anticipate further developments and announcements in this area in
the future.
SKINBIOTHERAPUETICS PLC
In April 2017, OptiBiotix's majority owned skincare subsidiary,
SkinBiotherapeutics (formerly SkinBiotix), was admitted to AIM with
an associated GBP4.5m fundraise, supported by institutional
investors. This is part of OptiBiotix's strategy of building value
in each of its divisions with some of this value, when realised,
being returned to shareholders and reinvesting some of the gains to
develop other divisions so they, in due course, can become separate
legal entities with the potential for a separate public
listing.
The admission to AIM of SkinBiotherapeutics plc attributes value
to a part of the business in which a 52% stake was acquired for
GBP250K in March 2016 and 12 months later listed at a valuation of
GBP11m, with OptiBiotix(R) owning a 41.9% shareholding. OptiBiotix
believes that there is potential for substantive future value
enhancement in SkinBiotherapeutics using the GBP4.1m raised at
listing allowing it to fully exploit the potential of this exciting
technology.
As SkinBiotherapeutics plc grows in value, OptiBiotix
shareholders will benefit from the appreciation of this asset. This
is an innovative business model which over time looks to give
OptiBiotix shareholders a position in multiple companies, and with
it the prospect of multiple returns.
SkinBiotherapeutics plc is at an early stage in its development,
similar to the beginnings of OptiBiotix in August 2014, and
continues to make solid progress building relationships with
potential commercial partners and progressing towards the start of
human studies, which if successful, should provide a substantive
uplift in valuation. The Board remain optimistic on the future of
SkinBiotherapeutics plc as it has good technology and is targeting
multi-billion dollar global markets, where there is a real need for
new science.
Results
OptiBiotix results for the 12 months ended 30 November 2017 are
set out in the Consolidated Statement of Comprehensive Income.
Administrative expenses were GBP2,244,169 (2016: GBP1,765,736)
including a number of non-recurring costs associated with listing
SkinBiotherapeutics in April 2017.
The accounts show a profit after tax of GBP1.9m following the
successful listing of SkinBiotherapeutics plc. The income statement
includes an adjustment of GBP4.1m for the change in value of the
investment in SkinBiotherapeutics immediately following the
listing. This is an accounting adjustment and as an unrealised
profit on the investment is not taxable. Since that time the value
of SBTX shares and thereby OptiBiotix's holding in SBTX has
increased representing a valuable current and future asset.
After accounting for the adjustment, operating loss for the
period is GBP2.13m (2016: GBP1.52m). Following the listing of
SkinBiotherapeutics and the diluting of Optibiotix plc's
shareholding, the company now has to account for its share (41.9%)
of future profits and losses. As this is an accounting adjustment,
there is no impact on the Groups cash balance. Cashflows remain
tightly controlled, with a focus on building shareholder value
through investment in R& D, IP and in-licensing opportunities.
The Groups cash position remains strong at GBP1.25m at the year
end.
Board and Management
We continue to evolve the Board in line with the Company's
development. The last 12 months has seen a number of Board
additions to reflect the increased commercial focus.
We were pleased to announce the appointment of Per Rehne as
Commercial Director and Christina Wood as Sales and Marketing
Director, who joined us in March 2017. Both come with a wide
network of contacts in the food industry and a track record of
working with manufacturers, distributors and retailers to rapidly
grow sales revenues in international markets. Per has taken
responsibility for leading the commercialisation of LP(LDL) (R) ,
and Christina responsibility for SlimBiome(R) . Their addition to
the Board increases the company's capacity and capability to better
exploit the opportunities created by our growing pipeline of
products in international markets. We anticipate seeing the benefit
of these appointments in the next six to 12 months.
We believe with the addition of Per and Christina, we have a
well-balanced Board with scientific and commercial expertise in the
founder and Chief Executive Stephen O'Hara and market expertise in
Non-Executive Director Dr Gareth Barker and Peter Wennström, one of
the world's leading experts in functional food innovation and
marketing. Dr Sofia Kolida as Director of Research and Development
brings specialised expertise in prebiotics. They are complemented
by our CFO Mark Collingbourne and Adam Reynolds as our interim
Chairman.
At the end of the accounting period we announced Adam Reynolds
would step down as Non-Executive Chairman on 31 December 2017 and
be replaced by Neil Davidson. This was part of a strategy to
supplement the existing Board with sector specific commercial
leadership. Neil brings a network of industry contacts and over 30
years of operational and Board experience as Chairman and Chief
Executive of FTSE 100, AIM and private companies in both an
executive and non-executive capacity.
We anticipate further additions and changes to the management
team and the Board as we extend the global reach of our products
and in-line with the continued growth and expansion of the
Company.
Outlook
OptiBiotix is continuing its strategy of developing microbiome
modulators for large markets (>GBP100m) where there are high
growth opportunities (CAGR >10%), and a large unmet need.
The last 12 months has seen the transition of OptiBiotix(R) from
a research and development Company to a commercial business, with
the appointment of a commercial team, product launches of
SlimBiome(R) and LP(LDL) (R) at Vitafoods and Supply Side West,
followed by the signing of 11 commercial agreements. This is all
part of a commercial strategy based on closing out deals across
multiple levels of the value chain, starting from manufacturing
agreements such as the profit sharing agreement signed with Sacco
for the production of LP(LDL) (R) and Knighton Foods for the
production of SlimBiome. This is complemented by royalty bearing
license deals with formulation partners for the supply of white
label and branded products to food producers and consumer health
companies, and distribution agreements directly with retailers.
Whilst this strategy takes longer to develop than single license
deals, this multi-channel approach enables OptiBiotix to maximize
the income potential of each product, whilst limiting the risk
related to any individual deal. This approach also allows
OptiBiotix to operate on a very asset-light infrastructure. Product
manufacturing, regulatory approvals, and costly sales and marketing
infrastructure are funded by OptiBiotix's partners meaning that
license and royalty fees are largely cost free and enter the bottom
line. This is a low risk, low cost approach to accessing multiple
consumer healthcare and pharmaceutical markets around the world,
and if successful, has the potential to cumulatively generate
substantive revenues and profitability in the forthcoming
years.
Key to this commercial strategy is the appointment of industry
leading partners like DSM, Tata, Sacco, Nutrilinea and Galenicum
who provide the best opportunity of rapidly building our products
into global brands. We were pleased at the high level of interest
in both LP(LDL) (R) and SlimBiome(R) at Vitafoods and Supply Side
West and hope the rich deal pipeline we have created will translate
into material revenue growth in the next financial year against a
continued lean cost base.
As we extend our reach into new application areas and new
territories, the scale of the opportunity enlarges. The US is one
of the largest and fastest growing probiotic markets in the world,
with supplements alone accounting for US$2.06bn sales, and a
projected 55% growth to US$3.3bn by 2021. The extension of our
products into other application areas reflects a growing confidence
in our products and the scale of the opportunity. We would hope to
see the expansion of territories and application areas leading to
announcements of deals with a number of national and international
partners in the forthcoming months.
Whilst initial products are targeted at the ingredient and
supplement markets, the gaps between neutraceuticals and
pharmaceutical is narrowing. Given OptiBiotix's products have been
developed using pharmaceutical platforms and our clinical studies
have been designed to be consistent with phase 1 and phase 2
pharmaceutical studies, OptiBiotix has received partner interest to
license LP(LDL) (R) to extend our products into biotherapeutics.
This is a path OptiBiotix has explored provided the substantive
investment in the development of a biopharmaceutical was supported
by a suitable pharmaceutical partner. If this is achieved this has
the potential to create significant value uplift given the high
value deal structure typical in drug development and pharmaceutical
industries. The deal announced with Akums in May 2018 is an early
example of such a deal whereby the partner provides all funding for
drug registration, phase 3 and 4 clinical studies, in return for
exclusivity and royalty payments based on future product sales. We
anticipate future high value deals for use of LP(LDL) (R) as a
biotherapeutic in other territories in
the month and years ahead.
As the Company enters the next stage of its development, we will
need to evolve the structure to fully exploit the expanding range
of opportunities and maximise revenue. Currently the Company is
structured around technology platforms, such as Optiscreen(R) and
OptiBiotics(R) , which creates a scientific focus. The transition
from a technology to product company requires a different focus and
skill set and restructuring of our website. The appointment of Per
Rehne (Commercial Director), and Christina Wood (Sales Director),
who were appointed in January 2017 and joined us in March 2017, was
the start of this process and has delivered an increase number of
quality in deal flow. OptiBiotix's technology platforms are being
developed into self-sustaining business units with a commercial
focus lead by directors who have the business development, sales
skills and experience to fully exploit the revenue potential of the
products. As these develop, we will separate them into wholly owned
separate legal entities with the potential for an independent exit
by a trade sale or listing separately or collectively in UK or the
US, depending on market conditions. The benchmark for this is seen
with the transition of SkinBiotix Limited as a technology platform
within OptiBiotix to a high value public company with GBP4.1m cash
allowing it to fully exploit the potential of this exciting
technology. This allows OptiBiotix shareholders to benefit from the
appreciation of this asset plus any dividends which may be returned
in recognition of this value uplift. This is consistent with our
strategy of providing investors a broad based investment portfolio
across a number of areas in the microbiome space which diversifies
risk, whilst offering shareholders multiple opportunities in this
exciting space.
The Board believes OptiBiotix is at the leading edge of one of
the hottest areas of healthcare innovation which is forecast to
become one of the world's fastest growth areas. Over the last 12
months, we have continued our progress of building a broad based
microbiome business with a strategy which best maximizes the value
in each division and a diversity of IP and commercial relationships
which provides shareholders with multiple opportunities. The next
stage of the process involves the continued development of new
application areas and extending our products into new territories
and application areas, such a biotherapeutics, with suitable
partners. We believe the Company has now significantly de-risked
scientific, clinical and manufacturing risk across its platforms.
This changes the risk reward ratio leading to an increase in value
and the Company and its assets becoming an attractive proposition
for corporate partners. This has led to a number of approaches from
potential acquirers interested in assets in specific divisions.
The Board anticipates further scientific and commercial interest
in the Company's technology and products and a future where
microbiome products will make a significant contribution to the
prevention, management and treatment of disease. We are pleased
that our strategy of developing microbiome products with a strong
scientific and clinical evidence base with key opinion leader
support has provided clear product differentiation and stimulated
high commercial interest. We look forward to converting this
interest into a growing number of revenue generating deals, of
increasing value and in a wider range of territories.
The last twelve months have seen a growing number of awards for
our science, industry awards for our products, and increased deal
flow. We anticipate both the rate and value of deal flow increasing
as we develop new applications, take existing products into new
territories, and leverage our technology platforms to develop new
product opportunities.
OptiBiotix has made strong progress in the last twelve months
and now looks to build on its scientific innovation, product
success, and commercial interest to build a diverse microbiome
business with significant value for shareholders.
On behalf of everyone at OptiBiotix Health plc, we would like to
thank our investors for their continued support and look forward to
an exciting future in this exciting area of science which has the
potential to revolutionise the future of health care.
N Davidson and S OHara
22 May 2018
Consolidated Statement of Comprehensive Income
Year ended Year ended
30 November 30 November
2017 2016
GBP GBP
Revenue 191,073 288,119
Cost of sales (73,706) (38,214)
-------------- --------------
Gross Profit 117,367 249,905
Administrative expenses (2,244,169) (1,765,736)
-------------- --------------
Operating loss (2,126,802) (1,515,831)
Finance cost (6,154) -
Finance income 142 165
-------------- --------------
(6,012) 165
Share of loss from associate (294,278) -
Profit on disposal of subsidiary 4,116,286
-------------- --------------
Profit/(loss) before Income
tax 1,689,194 (1,515,666)
Income tax 228,447 174,544
-------------- --------------
Profit/(loss) for the period 1,917,641 (1,341,122)
Other comprehensive income - -
-------------- --------------
Total comprehensive income
for the period 1,917,641 (1,341,122)
Total comprehensive income
attributable to:
Owners of the company 1,907,441 (1,297,871)
Non-controlling interests 10,200 (43,251)
-------------- --------------
1,917,641 (1,341,122)
Profit/(loss) per share
Basic profit/(loss) per share
- pence 2.43p (1.67)p
Diluted profit/(loss) per 2.17p -
share - pence
Consolidated Statement of Financial Position
As at As at
30 November 30 November
2017 2016
ASSETS GBP GBP
Non-current assets
Intangibles 1,927,226 2,195,646
Property, plant & equipment 6,561 11,755
Investments 4,189,022 -
-------------- --------------
6,122,809 2,207,401
-------------- --------------
CURRENT ASSETS
Inventories 8,890 26,625
Trade and other receivables 106,122 194,230
Current tax asset 183,951 120,000
Cash and cash equivalents 1,247,431 3,115,366
-------------- --------------
1,546,394 3,456,221
-------------- --------------
TOTAL ASSETS 7,669,203 5,663,622
EQUITY
Shareholders' Equity
Called up share capital 1,586,628 7,196,010
Share premium 6,279,718 6,144,357
Share based payment reserve 474,517 417,585
Merger relief reserve 1,500,000 1,500,000
Accumulated deficit (2,795,147) (10,345,513)
Non-controlling interest - 90,692
-------------- --------------
Total Equity 7,045,716 5,003,131
-------------- --------------
LIABILITIES
Current liabilities
Trade and other payables 239,395 253,805
-------------- --------------
239,395 253,805
-------------- --------------
Non - current liabilities
Deferred tax liability 384,092 406,686
-------------- --------------
384,092 406,686
-------------- --------------
TOTAL LIABILITIES 623,487 660,491
-------------- --------------
TOTAL EQUITY AND LIABILITIES 7,669,203 5,663,622
Consolidated Statement of Changes in Equity
Share-based
Called Merger Payment
up Retained Share Non Relief reserve Total
Share Earnings Premium Controlling Reserve equity
capital interest
GBP GBP GBP GBP GBP GBP GBP
Balance at 30
November
2015 7,117,315 (9,047,642) 3,863,687 - 1,500,000 383,435 3,816,795
Loss for the
year - (1,297,871) - - - - (1,297,871)
Issues of
shares
during the
year 78,695 - 2,280,670 - - - 2,359,365
Share options
and warrants - - - - - 34,150 34,150
Non
controlling
Interest - - - 90,692 - - 90,692
------------ -------------- -------------- -------------- ------------ ------------ --------------
Balance at 30
November
2016 7,196,010 (10,345,513) 6,144,357 90,692 1,500,000 417,585 5,003,131
Profit for
the
year - 1,917,641 - - - - 1,917,641
Issues of
shares
during the
year 23,343 - 135,361 - - - 158,704
Share options
and warrants - - - - - 56,932 56,932
Non
controlling
Interest - - - (90,692) - - (90,692)
Cancellation
of shares
during
the year (5,632,725) 5,632,725 - - - - -
------------ -------------- -------------- -------------- ------------ ------------ --------------
Balance at 30
November
2017 1,586,628 (2,795,147) 6,279,718 - 1,500,000 474,517 7,045,716
Share capital is the amount subscribed for shares at nominal
value. Share premium represents amounts subscribed for share
capital in excess of nominal value, net of expenses.
Merger relief reserve arises from the 100% acquisition of
OptiBiotix Limited on 5 August 2014 whereby the excess of the fair
value of the issued ordinary share capital issued over the nominal
value of these shares is transferred to this reserve in accordance
with section 612 of the Companies Act 2006.
Retained earnings represents the cumulative profits and losses
of the group attributable to the owners of the company.
Share based payment reserve represents the cumulative amounts
charged in respect of unsettled warrants and options issued.
Consolidated Statement of Cash Flows
Year ended Year ended
30 November 30 November
2017 2016
GBP GBP
Cash flows from operating activities
Cash utilised by operations (1,895,285) (1,398,181)
Interest received 142 165
Taxation 141,902 151,950
------------ ------------
Net cash outflow from operating
activities (1,753,241) (1,246,066)
Cash flows from investing activities
Purchases of property, plant
and equipment (1,804) (10,551)
Purchase of intangible assets (43,381) (162,213)
Investment in subsidiaries - 133,943
Disposal of subsidiary net of (228,212) -
cash balances
------------ ------------
Net cash inflow from investing
activities (273,397) (38,821)
------------ ------------
Cash flows from financing activities
Share issues 158,703 2,359,365
------------ ------------
Net cash outflow from financing
activities 158,703 2,359,365
------------ ------------
Increase/(decrease) in cash
and equivalents (1,867,935) 1,074,478
Cash and cash equivalents at
beginning of year 3,115,366 2,040,888
------------ ------------
Cash and cash equivalents at
end of year 1,247,431 3,115,366
Earnings per Share
Basic earnings per share is calculated by dividing the earnings
attributable shareholders by
the weighted average number of ordinary shares outstanding
during the period.
Reconciliations are set out below:
2017
Weighted average
Basic and diluted EPS Earnings Number of shares Profit per-share
GBP No. Pence
Basic EPS 1,907,641 78,586,791 2.43
Diluted EPS 1,907,641 87,831,953 2.17
2016
Weighted average
Earnings Number of shares Loss per-share
GBP GBP Pence
Basic and diluted EPS
Earnings attributable
to ordinary shareholders (1,297,871) 77,683,891 1.67
As at 30 November 2017 there were 7,845,237 (2016: 10,345,237)
outstanding share options and 1,399,925 (2016: 1,983,709)
outstanding share warrants, both are potentially dilutive.
The Company's Report and Accounts for the year ended 30 November
2017 will be posted to shareholders shortly and may be downloaded
from the Company's website at www.optibiotix.com
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
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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