I'm currently smarting at the £20m+ valuation attributed to SweetBiotix, pre commercial. Remember, Chr Hansen paid $83m for LGG strain in 2016. I actually thought the £20m+ was a tad high, given there appears to be no commercial agreement in place for SweetBiotix.....that we know of. Given this, I asked how this valuation had been arrived at.
SOH: "Thats the strong indications from industry which reflects the scale of the opportunity and industry need in a consumer environment where sugar and artificial sweeteners are under threat and impacting on companies sales. As outlined in our interims and RNSs we have extensive IP which limits others working in this field, human study data, and a number of development programs creating potential for healthy sweet fibres and a customised oligosaccharide derived from Stevia glycosidases which is 223X as sweet as sucrose without the aftertaste (as reported in Julys RNS). We of course still need to realise the undoubted potential, which if successful and given the scale of the opportunity, will reflect very nicely on OptiBiotixs valuation."
Another thought came to mind. Given the hurrar building around the human biome and the clamber for innovative ways to combine the human gut bacteria into everyday products, it surely follows that OPTI's IP will grow in value, more so as it becomes commercial. Perhaps we are entering a new world of IP valuations where they become real assets and become increasing valuable as they become commercial entities. I'm sure all of this is a given, but perhaps the added value is increasing ahead of commercial progress in anticipation. Of course the added bonus - All OPTI's IP is double locked, which is the point SOH is making when he says this limits 3rd party's working in the same field. This in turn must make OPTI more of a target with the M&A arena.
Big thanks to Primal sharing his exchange with SOH and a follow up from me, which is self explanatory.
I asked SOH about TWs comments, also asked him about other things and here is his detailed great response:
Tom has no other information other than that disclosed to all investors but has picked up the sentiments well and based on his experience has got a good sense of the opportunities. I thought he wrote a well balanced just before Christmas which showed good insight.
He is recognising that the market opportunity in the microbiome is very big, the application areas OptiBiotix has targeted (cholesterol reduction, weight reduction, sweet fiobres) are large markets with an unmet need, we are attracting interest from large global partners (Tata, DSM) and industry leaders (Sacco, Gallenicum), and are building up commercial traction with 8 deals in the last half of the year of increasing magnitude. On top of this we have multiple opportunities developing in microbiome modulators, natural high intensity sweeteners, and sweet fibres, and approaches from a number of corporates looking at potential M&A opportunities. Added to this the potential for a dividend/dividend in speci and the massive opportunities for SBTX (skincare) in which we own a 42% stake we can see why a number of commentators see OptiBiotix as a very cheap share at the moment.
We are looking forward to 2018 and the team remain excited by the high level of interest in our technology and products. As previously commented on I have built OptiBiotix around multiple opportunities to reduce investor risk and this has created a large amount of interest across numerous areas, some of which overlap. Typically some of these opportunities dont develop but we have been fortunate that in OptiBiotixs case all these opportunities have developed, and in some cases like the SweetBiotix, created more opportunities than originally anticipated. This creates complexity as we try to negotiate with large corporates who want global exclusivity but move slowly and balance that with regional partners who have national expertise and will adopt easy and grow sales quickly. Most investors will have heard me talk about our multi revenue model where we get revenues from manufacturers of LP-LDL and SlimBiome (e.g Sacco, Knighton), formulators (e.g Nutrilinea, Cereal Ingredients etc), and distributors (e.g HLH, PharmaBiotica, Gallenicum etc). If they view the RNSs over the last year they will see a clear progression down this route which substantiates the model. The next stage is to extend the width of the funnel, the scale of the partner, and increase our retail presence. These are all underway and we should see develop further in 2018.
In light of SOH's detailed response to Primal's chat - I was concerned SweetBiotix may be subject to M&A at the wrong stage for LTHs. I also wondered about core valuations OPTI BOD attributed to it, if such a scenario occurred.
Primals question related to the valuation and how traders only see the short term value. My response was trying to highlight my strategy which I have often talked about and is presented in all our annual and interim reports has always been to build a multi-layered opportunity which diversifies investor risk and creates multiple opportunities which creates high value and investor return. My comment on SweetBiotix repeats what we have reported earlier in that we have M&A interest in a number of areas of OptiBiotix. However, as I have often stated there is no intention to sell off parts of OptiBiotix as we are only part way along the process off building value as we develop the science, build a substantive IP portfolio (which protects our commercial interests), prove product safety and efficacy in humans studies, and then build the revenues (which we only started last May). My point was that whilst traders are not seeing the value this is not the case with the industry with interest suggesting
Did anyone see those two big trades sneek in at 08.08 today? - only registered after hours and look like sells of £800k & £200k.
SP still up nicely on the day and in the last session last Friday.
Immenent good news around the coener (again!!)?
Last trading day before Xmas! Whats the chance of sp being "well over £1" by end of day?
Bloody annoying really, but still confident of a decent return.
Its been all about the numbers - or lack of them which has held the price back - and I do blame the tipsters because people expect the sp to reach certain targets at certain times and when they dont - they panic and sell, this has been the case for a while now - endless small sell trades and the Market Makers have dropped the sp to try to avert this.
This time last year HSR said " We thought 2016 was the year but we are sure 2017 will be!" - I wonder what they will say this year end??
We have had brilliant newsflow this year - regular contract wins with 30 more in the pipeline. Once the numbers start to come through for them then the punters will return, but when will it be? Didn't Opti announce the Tata deal this time last year?? Does it take a year to receive revenues from this? the same with the early deals this year - how long before they actually write a cheque to Opti?
In an interview with SOH early this year he did mention 18-24 months to become a £200m company - I guess he has worked out the income more acurately than TW - Lets not forget HSR is a tipping site for 25% gains in a short timescale - They got the company fundamentals right - just the timescale wrong.
I can't see the share price trend changing until some hard cash is put on the table from these deals. I bought years ago on the advice of TW who said we could expect over 100p within months. But the shares are way down. And heading lower?
I would not take for gospel anything Whinnyfroth said. Why would the BOD divulge to him, who has a dubious reputation at best, information not given to the shareholders?
I hold no shares and have no view on the merits or otherwise of the company but just council holders not to be too influenced by his ramping comments.
High blood pressure, or hypertension, hardens the arteries and increases the risk of heart disease
LPldl was selected after 4,000 microbial strains were screened
A reduction in levels of blood pressure required for a diagnosis of hypertension will highlight the advantages of non-prescription alternatives, believes Stephen OHara at Optibiotix Health PLC.
Last month the American Heart Association changed its classification of high blood pressure to a reading of 130/80 from 140/90, a move that instantly put half of the US population in the unhealthy category.
Reports in the UK have suggested that health watchdog NICE (National Institute for Health and Care Excellence) is also considering lower guidance, action that would classify millions more Britons as medically unfit.
There is no natural cut-off point above which hypertension definitively exists and below which it does not NICE said.
High blood pressure, or hypertension, hardens the arteries and increases the risk of heart disease, diabetes and strokes
Heart problems account for a quarter of all deaths in the UK.
OHara, Optiobiotixs chief executive, believes a new class of probiotics that modulate the human microbiome can help people with high blood pressure to manage the condition.
Statins are the standard treatment to lower cholesterol but O'Hara says LPldl is a viable non-prescription alternative.
We believe that our microbiome modulating probiotic, LPLDL, is not only a cutting-edge scientific development, but a safe and natural way for people to reduce their blood pressure, and to effectively manage their long-term cardiovascular risk, he said in an article in Nutraceutical Review.
A study at Reading University showed it was a safe and reduced LDL cholesterol by up to 13.9%, and blood pressure by 5.1%.
LPldl works by affecting the metabolism of bile acids in the intestine and was chosen after 4,000 microbial candidates were assessed using Optibiotixs Optiscreen platform.
During 2016 when OPTI was developing its science, it had no real revenues. Its share price "soared" however based on the anticipation of its tremendous potential. In those early days it was no doubt over valued in economic terms. During 2017 with the"risk off" attitude of most investors, its share price has been range bound, despite the growing number of significant deals struck with large "players". One might now consider the company is undervalued against its revenue potential from those deals currently in the public domain.
Its with that background I've attempted to make a crude target price calculation as a sort of "reality check" and to validate my own LTH in the company. I use the term "crude" calculations as a number of inputs are down to my own assumptions, and not all of those will be correct!
However the following information is in the public domain (not my assumptions) and understood to be from reputable third parties and authoritative;
* Each of the major contracts currently being announced will net OPTI between £250k and £500k per year.
* OPTI's operating costs are virtually fixed and change little with the number of deals struck. They currently stand at £1m per year.
* There are six LPLDL deals of substance already agreed, including the Galenicum LPLDL on 27th October. Apparently SOH had said publicly he expects another four to be agreed in the near future. This week's Supply and profit sharing agreement with Knighton Foods is for Slim Biome. So there are still a further 4 LPLDL deals expected to be announced in the short term. That will make ten LPLDL deals in place.
* OPTI are paid their royalty revenues either 3 months or 6 months in arrears.
* Some clients like Galenicum are fast off the mark and launch immediately a deal is struck. Other partners are slower. So it's possible that a deal signed today with a partner who has a "slow launch", will not generate any revenues for a year. But equally a deal could see revenues generated within three months.
It seems almost certain there will be more than the ten deals mentioned above and each worth between £250k and £500k to OPTI. And that's only from the LPLDL Stream. SlimBiome is gaining traction now and a further large deal with Tata is expected to be announced "soon". Given the size and scope of the Indian market, revenue of £1.0 million is suggested from that particular deal (if and when it happens). Then there is the Sugars Stream which SOH has in the past suggested will have the greatest potential!
Those are the inputs I've gathered in the public domain.
The following inputs are my own assumptions;
* Due to the "slow start" effect and quarterly or half yearly royalty payments, I've assumed no revenue is generated in the current year. i.e. The initial year a deal is struck. This is clearly incorrect. But I don't want to over state revenues and/or guess at partner start-up timings.
* The average net revenue from each deal will be £375k in year one of revenue, increasing 10% compound for subsequent years.
* The number of deals and revenues;
10 deals by end 2017. Due to "slow start" and royalty payments, assume no revenue in current year i.e. the year the deal is struck. So revenue in 2018 is £3.75 million.
7 additional deals during 2018. So revenue in 2019 is £6.750 million.
5 additional deals during 2019. So revenue in 2020 is £9.300 million.
Whilst there are a couple of Slimbiome deals in 2017, assume effectively they are in 2018. So
Assume 10 deals during 2018. But one is expected to be with Tata where the revenue is thought more likely to be £1.0 million. So due to "slow start" etc no revenues are assumed in 2018. But revenue in 2019 is £4.375 million
5 additional deals during 2019. But I assume one deal is in the USA where I assume revenue is likely to be £1.0 million. So revenue in 2020 is £7.312 million.
Mol - as I said, I did say I may not be correct. I had a couple of emails asking me about the possibility and tried to explain how in practise it may work. Just from a SB situation, I believe it is almost impossible to get borrow and most providers I am aware from contact and experience of ETX and Core from y perspective, are close only, thus won't open a long position either. Is that across the platform for all clients or just me? No idea.
IMHO day traders are swinging us about as well as MM games for accumulating clients. I have proven this in the past on ADV.
In any event, exciting times ahead, before and after Christmas. Would you want to chance it?
Dont really consider charts when investing but..... isn't this whats called a sideways triangle? coming to a fine point now where it is said there will be a significcant breakout up or down.
And as I type the price has ticked up 2p ......Heres hoping..
A brief exchange with SOH this morning on the subject of Galenicum.
Seemingly another potentially exciting commercial agreement with Galenicum. In the RNS its states Galenicum " has market presence across the world including the Unites States, Peru, Chile, India, and China, the company has a global reach in pharmaceutical and nutritional markets." then later states "this agreement expands OptiBiotix's sales into the Middle East and Latin America."
I assume this is a limited license and other partners are in the pipeline for USA, and Chinese markets, or some of these territories?
There are something like 30 latin American countries - Is Galenicum limited here? It also seems you are being quite deliberately cautious with your expectations in terms of revenues by bracketing Galenicum with HLH and PharmaBiota, (REVENUE RANGE) whom have a much smaller commercial footprint. This appears to have dampened the positive effect I hope for.
Per's linkedin comment is encouraging. One down on to the next. Positive chap.
SOH :- We have multiple discussions and our stated strategy is to create multiple opportunities across multiple territories and channels with different formulations and presentations. We are negotiating hard to make sure we restrict agreements to specific formulations and dont give up territory exclusivity or access to large markets like the US and China until these partners PROVED their worth, or pay a PREMIUM. The deal with Sacco is an example where we limited their reach initially to Italy, then Europe, and then extended it once they proved themselves. This limits the companies risk and allows us to have multiple deals within a country for different formulations or presentations, creating multiple revenues.
You are correct that Gallencium has a much larger commercial footprint and has a leading position in Spain. As stated in the RNS, and outlined in our interims, our strategy is to target the leading pharma groups in their country with established brands which we can leverage to gain market access. This is quicker than having to build a new brand. You will also note that many of the companies we are working with - Sacco, Nutrilinea etc, and now Gallenicum, have a track record of doubt digit growth and are rapidly building their businesses, and hopefully will continue to do so on the back of LP-LDL sales.
I am sure that investors have also recognised that that this now the sixth deal since June (not all LP-LDL) which even with conservative figures will start to add build into a large revenue stream, with little increase in operating costs. This is consistent with our stated strategy. As Per indicates, one down, onto the next one. I am sure investors will also note that this is just one product amongst our portfolio.
The cautionary statements are provided by the regulator as a requirement of release in the absence of sales figure which partners are reluctant to release. To be fair this is consistent with the approach we have always taken of building long term sustainable value rather than hyping the market.
Cholesterol drug failures spark big pharma interest in Optibiotix's microbiome-based alternative
11:00 18 Oct 2017
The failures of these drugs has sparked interest in a possible combination with LP-LDL said Stephen O'Hara, Optibiotix's chief executive
Optibiotix's LP-LDL is being looked at as a combination possibiity
Microbiome specialist Optibiotix PLC (LON:OPTI) has seen a marked increase in cholesterol lowering product LP-LDL from big pharma after another high profile development failure.
Merck pulled the plug on its cholesterol lowering drug Anacetrapib last week after disappointing trial results.
Pfizer had already scrapped a similar protein inhibiting product, bococizumab in December, while Roche, Bristol-Myers Squibb and Eli Lilly have all suffered disappointments in this area.
Stephen OHara, Optibiotixs chief executive, said the failures of these drugs had sparked interest in a possible combination with LP-LDL its own natural cholesterol reducing product.
The problems with these failings in high cost drug development is that it limits the therapeutic options, he told Proactive.
This is increasing pharmas interest in safe proven natural alternatives like LP-LDL to supplement and extent the patent life of existing drugs with combination therapies.
Optibiotix had seen big pharma interest build over the past 3-4 months following Pfizers move and he expects this to grow as The interface between food and pharmaceuticals narrows.
A food additive, LP-LDLs efficacy is at a similar level to pharmaceutical products but with fewer side effects.
Any collaboration would likely take the form of a licensing/joint venture deal.
Anecdotally, LP-LDL is also showing good efficacy in reducing blood pressure as well as lowering cholesterol, said OHara.
One example, on the Optibiotix website, cites a person in their fifties who saw their blood pressure reduce more by using LP-LDL than through the ACE Inhibitor they had been prescribed. ACE Inhibitors are drugs designed to lower blood pressure by reducing angiotensin II in the body.
While this was only one person, OHara added that its own research had indicated a similar group effect on blood pressure and cholesterol across a much wider population (young, old, men and women,) and in much higher population numbers.
It also shows the higher the blood pressure or cholesterol the greater the effect so the benefits are greatest in those most in need.
A noticeable beneficial effect on hypertension (high blood pressure) would be a significant differentiator for LP-LDL, OHara said, and if possible it will try to find a partner to carry out further clinical studies.
OptiBiotix has been a pioneer of products based around the human microbiome, which is essentially the bacteria that inhabits the gut and skin.
Small changes to the gut flora can affect the way the human body processes food and that had led to a range of products being developed by the company that are now approaching the commercial stage.
The strategy so far has been to find commercial rather than research partners.
A memorandum of understanding has already been signed with Bened to explore opportunities to combine LP-LDL with the Taiwanese firms PS128, a psycho-biotic that has shown encouraging results in reducing anxiety and depression in animal studies.
Industry leaders Tata Chemical and pro-biotics specialist Sacco have also all recently agreed deals for a variety of Optibiotixs products.
Tatas deal was for appetite suppressant Slimbiome. A new version of the flour-like weight loss additive was launched in the US at Las Vegas last month.
We announced at the AGM in May 2016 were were tidying up the share register before we announced our strategy on building the division into legal entities in June 2016 and listing SBTX. Simplifying the share register has a number of advantages including simplifying and reducing the cost of any dividend distribution.
In the High Court of Justice (Chancery Division) Manchester.
In the matter of Optibiotix Health Plc (company number 05880755) with its registered office at Innovation Centre Innovation Way, Heslington, York, England, YO10 5DG (the Company).
Notice is hereby given that, on 27 July 2017, an application was presented to the High Court of Justice for an order to approve the cancellation and resulting reduction of:
the entire 26,001,739 issued A deferred shares of £0.19 each in the capital of the Company;
the entire 63,373,961 issued B deferred shares of £0.009 each in the capital of the Company; and
the entire 135,587,295 issued C deferred shares of £0.0009 each in the capital of the Company,
which was approved by a special resolution passed at an Annual General Meeting held on 10 May 2016.
An order was pronounced by the High Court of Justice that the hearing be advertised in the London Gazette and that any person or body wishing to object to the order shall file and serve evidence in support of such objection by 4pm on 29 September 2017. In accordance with its practice, the Court is also likely to consider any other objections which are made to it, in writing or in person, at the hearing of the order to confirm the reduction of capital. That hearing is expected to take place at the Court on 23 October 2017 at 10:30am. Should that date change, the new date will be advertised on the website of the Company.
A copy of the Claim Form may be obtained from the Companys Solicitors, Turner Parkinson LLP, Hollins Chambers, 64a Bridge Street, Manchester, M3 3BA, telephone number 0161 957 8888 (Ref: RPT/LC/8954-06).
well that took time to file!
Deferred shares of 19p each 26,001,739 £4,940,330
Deferred shares of .90p each 63,373,961 £570,366
Deferred shares of 0.09p each 135,587,293 £122,028
the total value of which (unless court orders otherwise) will reduce the accumulated deficit at May 2017 of 7.139m as far as i know
jees just need to reduce /cancel share premium account and we will have distributable reserves
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