TIDMOPTI
RNS Number : 4909P
OptiBiotix Health PLC
18 February 2021
OptiBiotix Health plc
("OptiBiotix" or the "Company" or "the Group")
Strategic and commercial update
OptiBiotix Health plc (OptiBiotix), a life sciences busi ness d
eveloping compou n ds to tackle obesity, cardiovascular disease and
diabetes, provides the following strategic and financial update
ahead of the Group's final results for the year ended 31 December
2020.
Strategic Update
OptiBiotix's commercial strategy of securing deals with multiple
partners who make up the value chain (manufacturers, formulators
and distributors) across multiple territories is producing results
with rapid revenue growth against a low and decreasing cost base,
demonstrating the scalability of the commercial model. The Company
is now at a commercial tipping point with its probiotic and
functional fibre divisions achieving profitability, increasing
margins, an appreciating asset in its investment in
SkinBioTherapeutics plc, and an established network of partners
growing sales and expanding both the product range and territories
in which they sell products.
Having established the scientific, clinical and commercial
viability of its first generation products (LP(LDL) (R),
SlimBiome(R)/WellBiome(R)) with award winning science and products,
the Company has industry credibity and is identified by industry
reports as a key player in the microbiome space
https://ksusentinel.com/2021/02/08/human-microbiome-market-study-report-and-in-deep-analysis-2021-optibiotix-health-plc-metabiomics-osel-inc-puretech-health-4d-pharma-synlogic-inc/.
OptiBiotix products are now increasingly becoming associated with
internationally recognised retail, pharmaceutical partners, and
established brands, which creates further interest, and demand in
other markets. With proven science, human studies and reputable
partners for its award-winning products, it is the Directors'
belief that it has a reduced investor risk profile and can turn its
focus to growing profitability in each of its divisions and
commercialising its next generation products. These include its
microbiome modulators, drug biotherapeutics, and a growing range of
SweetBiotix(R) products.
The strategy has been designed with the divisions acting as the
trading arms of the Company focused on commercialising products and
achieving divisional profitability whilst the Company acquires and
develops its own technologies to build the product pipeline by
providing the scientific and clinical studies, publications and
regulatory approvals (GRAS, GMP pharma) for commercialising its
next generation products. Having two separate product platforms
(Functional Fibres and Probiotics) and an investment in a third
(SkinBioTherapeutics plc), whose value has appreciated during the
year, gives OptiBiotix shareholders a position in multiple
opportunities within the fast emerging microbiome space. Whilst
this takes longer than a single technology solution, the strategy
is designed to reduce investment risk and create the potential for
multiple returns.
Financial update
This update reports on the 12 months of the financial year
ending 31 December 2020. These are preliminary and unaudited
figures and do not include a small number of royalty payments which
will be included in the final audited figures. The figures are
provided to give investors an insight into the progress of the
Company and may differ from reported full year audited results.
2020 has been a pivotal year for OptiBiotix as its probiotic and
functional fibre trading divisions have transitioned from
demonstrating the commercial viability of their technologies and
products to delivering profitability. This has been achieved by
growing sales, renegotiating contracts as volumes increase to
reduce the cost of goods, improving margins, and where appropriate,
modifying partner terms and conditions so they deliver on sales
performance and commit to growth plans to retain exclusivity.
OptiBiotix's Functional Fibres division delivered an EBITDA of
GBP66,271, up from an EBITDA loss of GBP433,249 in 2019, with total
sales of GBP557,539, (2019: GBP222,235), an increase in sales of
151% over 2019, despite a challenging global trading environment
with COVID-19 limiting our partners' ability to innovate, formulate
and launch new products. The division signed a total of 18
commercial agreements in the year to 31 December 2020.
OptiBiotix's wholly owned subsidiary, ProBiotix Health Ltd
("ProBiotix"), delivered an EBITDA of GBP75,768, up from an EBITDA
loss of GBP474,205 in 2019, with total sales of GBP818,481 (2019:
GBP397,831), an increase of 106% over 2019, despite a challenging
global pandemic with a number of ProBiotix customers' postponing
launches or implementing a short-term focus on sales of immune
health products. The division signed a total of seven commercial
agreements in the year 2020.
The consumer health division contributed GBP137,024 of sales
(2019: GBP122,220), an increase of 12% on the previous period, but
showed a loss of GBP25,230. This division acts as the shop window
for partners to test new products which has led to successful
product launches with Holland and Barrett, Alfa Sigma, and other
partners.
Total invoiced sales for the Group were GBP1,513,089 (2019:
GBP744,833), an increase of 103% on the previous year.
Administrative expenses (excluding non-cash items such as share
based payments and amortisation) were GBP1,592,320 (2019:
GBP2,204,216), a reduction of GBP530,350 (27.8%) on the previous
year. As the Company scales its sales, it is starting to see an
improvement in margins, increasing from 53% in 2019 to 58% in 2020.
The Company is now in a strong position with increasing sales and
improving margins complemented by a large reduction in costs,
demonstrating the scalability of the business model.
As at 31 December 2020, the Company held GBP865,585 cash in the
bank (2019: GBP455,608). Once R&D tax credits (GBP195,000) and
recoverable VAT (GBP67,000) repayments are received the balance is
GBP1.13m (2019: GBP705,388).
The Company received an additional GBP747,500 during the year
from partial disposal of its holding in SkinBioTherapeutics plc
("Skin") which are not included in the revenue figures.
The Company currently has an interest over 24.5% in Skin. The
Company's accountants have advised that as a result of the change
in the Company's holding in Skin during the financial year that
Skin will now be treated as an "investment", and any change in
value as at the 31 December each year would be reflected in
OptiBiotix's audited accounts.
Subject to the auditors confirmation of this accounting
treatment in the financial year to 31 December 2020 OptiBiotix
would report an increase in value of its holding in Skin of
approximately GBP7.0 million and a group net profit for the year to
the year ended 31 December 2020 of approximately GBP5.8
million.
Outlook
2020 has been a pivotal year for the Company with both its
probiotic and functional fibres trading divisions doubling sales,
reducing costs, and reporting profitability. This is a substantive
change from divisional losses of GBP474,205 for ProBiotix and
GBP433,249 for the functional fibre division reported in 2019. The
Company has also benefited from an increase in the value of
OptiBiotix's holding in Skin which is making strong progress on its
path to commercialising products. The Directors believe the
Company's holding in Skin will continue to grow in value, whereupon
OptiBiotix shareholders will benefit from the appreciation of this
asset. The Company is exploring other opportunities in the
microbiome space with a view to replicating its successful
investment in Skin, where for an investment of circa GBP700,000 in
2016 it has built an investment asset worth GBP15 million.
The Company is now focused on the next stage of its development:
growing sales and profitability in its divisions, and
commercialising its next generation products (e.g. microbiome
modulators, SweetBiotix, and drug biotherapeutics). The Group
strategy of investing in scientific and human studies are major
points of differentiation from other products and important for
attracting partners who sell products into the high value hospital
and pharmacy markets and corporate partners.
With the two recent publications on SweetBiotix(R), and further
publications underway demonstrating prebiotic activity and superior
taste profile, the Company is well positioned to convert corporate
interest in this suite of products into commercial reality. The
Company has published six studies on LP(LDL) (R) in peer reviewed
journals or as abstracts at international scientific conferences. A
further study (awaiting peer review and publication), in volunteers
taking LP(LDL) (R) in a high cholesterol patient group, showed
substantive reductions in total cholesterol, LDL cholesterol, and
Apolipoprotein B (ApoB), a biomarker increasingly linked to
atherogenic risk, when compared to a placebo control.
These studies consistently show comparable efficacy to statins,
but with no tolerance or safety issues. Whilst one study attracts
interest, multiple studies are often required to convert interest
into action with corporate partners who tend to be more risk
adverse. The Company's investment in multiple studies, FDA GRAS and
pharmaceutical GMP manufacture is now starting to come to fruition
with increased interest in LP(LDL) (R) from pharmaceutical partners
looking to use LP(LDL) (R) by itself, or as combination treatment
to help lower the dose and potential side effects of statins, in
markets outside the USA. This extends the opportunity outside the
traditional supplement market into broader therapeutic areas and
creates the potential, if the interest develops, to create a
biotherapeutic drug division or separate Limited company.
The focus on next generation products is being supported by the
continued evolution of the Board and management teams to meet
changing needs. This is shown by the Board appointment of Chris
Brinsmead and the non-Board appointments of Chris Nother and Dr
Taru Jain who bring expertise in territories (e.g. India) and areas
(e.g. pharmaceuticals) of strategic interest. The Company now has
more opportunities, with an increasing number of larger partners,
than it is able to meet within its existing capacity and will
continue to evolve the team to fully exploit the opportunity within
the window of opportunity. The appointment of Aneta Zlotkowska as
Head of Quality & Operations, who joined in January 2021, is
part of this process to ensure the Company meets the quality and
regulatory requirements of current and future corporate and retail
partners both in the UK and internationally.
Whilst COVID-19 has brought many challenges, the rapid
development of vaccines and new therapies has increased awareness
of the value of science-based healthcare solutions. Consumers have
become increasingly educated as to the relationship between health
and wellbeing and the risk of serious illness and mortality from
infectious diseases in individuals with an unhealthy lifestyle and
underlying conditions like obesity, diabetes, and high cholesterol
and blood pressure.
Investor and consumer interest in health and wellbeing and the
microbiome is a growing trend and, as a result, the Company's
market opportunity is large and expanding. OptiBiotix is ideally
positioned to exploit this opportunity with first generation
products which impact on major chronic lifestyle diseases, industry
recognition as key industry player in the microbiome space, and
next generation products of SweetBiotix(R) and microbiome
modulators, and drug biotherapeutics to follow. We look forward to
growing sales and profitability as we scale our busines model and
strengthen our position in this new and exciting area of science
which has the potential to revolutionise the future of
healthcare.
Stephen O'Hara, CEO of OptiBiotix, commented: "This has been
another year of progress for OptiBiotix with its probiotic and
functional fibre divisions achieving profitability by doubling
sales, improving margins, and reducing costs, in a very challenging
and uncertain global economic environment. The Company is also
pleased to report a significant appreciation in the value of its
investment in SkinBioTherapeutics plc which, if confirmed in the
final audited accounts, would mean OptiBiotix reporting a group net
profit for the year to the end 31 December 2020 of approximately
GBP5.8 million.
OptiBiotix's strategy of building multiple product platforms
(functional fibres, Probiotics, SkinBiotherapeutics), whilst taking
longer than a single technology solution, gives OptiBiotix
shareholders multiple shots at a goal, reducing investor risk with
the potential of significant upside. The Company continues to
explore other opportunities in the microbiome space with a view to
replicating its successful investment in SkinBioTherapeutics plc
and extending the role of LP(LDL) (R) into the drug biotherapeutic
market.
The Company is now in a pivotal position in having a scalable
business model with first generation products achieving
profitability and second generation products having a solid
scientific, clinical, and commercial base with early deals and open
innovation projects with major corporates. With interest in the
microbiome increasing, the Company is in a strong position for
future growth in this exciting area of healthcare."
This announcement contains inside information for the purposes
of UK Market Abuse Regulation and the Directors of the Company are
responsible for the release of this announcement.
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
Neil Davidson, Chairman Contact via Walbrook
below
Stephen O'Hara, Chief Executive
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
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 programme 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.
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