TIDMOPTI
RNS Number : 1826Z
OptiBiotix Health PLC
30 August 2018
OptiBiotix Health plc
("OptiBiotix" or the "Company")
Half-Year Report
OptiBiotix Health plc (AIM: OPTI), a life sciences business
developing compounds to tackle obesity, high cholesterol and
diabetes, announces its results for the six months ended 31 May
2018.
The Company has had a strong period of growth over the last six
months, announcing multiple agreements as they continue their
transition from a development company into a commercial
business.
Highlights
-- A US manufacturing, supply and profit sharing agreement with
Cereal Ingredients, Inc for SlimBiome(R)
-- Completion of five successful human taste studies on
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
International 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 drug products containing LP-LDL(R) in India
-- A non-exclusive agreement with Seed Health to produce,
promote, market, and commercialise products containing LP-LDL(R) in
the USA
-- A non-exclusive license with one of the world's largest
providers of dairy products to explore the potential for using
OptiBiotix's SweetBiotix(R) technology to reduce the sugar content
in a range of its dairy food products
-- 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) for Weight Management Ingredient of
the Year at Vitafoods 2018 and 'Best Functional Ingredient for
Health and Wellbeing' at Food Matters
-- The US launch of SlimBiome(R) in Cereal Ingredients
Nutri-Bites(R) product range in March 2018
-- Independent human studies by Oxford Brookes University have
demonstrated that volunteers who took SlimBiome(R) compared to a
placebo feel fuller and are less hungry, have less food cravings,
and eat less sweet and fatty foods
Post-period end highlights
-- Evaluation agreement with global dairy company for SweetBiotix(R)
-- US launch of LP(LDL) (R) with Seed Health
-- Manufacturing, supply and profit sharing agreement with Morley Foods
-- Exclusive license agreement for LP(LDL) (R) with ALFASIGMA S.p.A.
Stephen O'Hara, CEO of OptiBiotix, commented: "The last six
months has been an exciting period of growth and development for
us. We have seen a number of Board changes which reflect the
continuing transition of the Company into a commercial business and
have signed seven new agreements covering the USA, Asia, and
Europe. As these and the total of nineteen deals we have signed
since March 2017 translate into an increasing range of products and
territories across the world there is an opportunity to deliver
significant revenue growth. We have been particularly pleased with
the increased interest from pharmaceutical companies in developing
LP(LDL) (R) as a drug product called a biotherapeutic, which
creates the possibility of high, value deals in a number of
territories in the future. Our online store is now ready for launch
and we plan to go live with it in September 2018. This will create
another channel to market our products, with the potential to
become a division in its own right. On behalf of the Board I would
like to thank our shareholders for their continued support and we
look forward to an exciting future commercialising our technology
in a market forecast to become one of the world's fastest growth
areas."
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
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
Lianne Cawthorne Mob: 07584 391 303
Chairman's and Chief Executive Statement
We are pleased to present OptiBiotix Health plc's interim
results for the six month period ended 31 May 2018.
This period reflects the continued transition of OptiBiotix(R)
from a research and development company into a commercial business,
with seven commercial deals in six months covering the USA (two
deals), Asia (one each in India and Pakistan), Europe (two deals),
and a deal with a global brand who is one of the world's largest
providers of dairy products. OptiBiotix has now completed nineteen
deals since March 2017 reflecting international interest from
industry in microbiome products which have a strong scientific and
clinical evidence base. OptiBiotix's science is winning awards at
international conferences (ProBiota 2017 and 2018) and its two
products, LP-LDL and SlimBiome(R), have been nominated for awards,
with SlimBiome(R) winning the award for best weight management
ingredient at Food Matters in November 2017, and Vitafoods in May
2018. 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.
This focus on building the science has led to growing partner
interest in licensing LP(LDL) (R) to extend our products into drug
biotherapeutics. The deals announced with Trigen Pharma, and Akums
Drugs and Pharmaceuticals, are example of deals whereby the partner
provides all funding for drug registration, in return for
exclusivity and milestone and/or royalty payments based on future
product sales. As the promise of the microbiome materialises into
an increasing range of products and territories across OptiBiotix's
platforms, and these and other agreements start to translate into
growing revenue streams, 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:-
-- A US manufacturing, supply and profit sharing agreement with
Cereal Ingredients, Inc for SlimBiome(R)
-- Completion of five successful human taste studies on
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
International 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 drug products containing LP-LDL(R) in India
-- A non exclusive agreement with Seed Health to produce,
promote, market, and commercialise products containing LP-LDL(R) in
the USA
-- A non-exclusive license with one of the world's largest
providers of dairy products to explore the potential for using
OptiBiotix's SweetBiotix(R) technology to reduce the sugar content
in a range of its dairy food products.
-- 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) for Weight Management Ingredient of
the Year at Vitafoods 2018 and 'Best Functional Ingredient for
Health and Wellbeing' at Food Matters
-- The US launch of SlimBiome(R) in Cereal Ingredients
Nutri-Bites(R) product range in March 2018
-- Independent human studies from by Oxford Brookes University
have demonstrated that volunteers who took SlimBiome(R) compared to
a placebo feel fuller and are less hungry, have less food cravings,
and eat less sweet and fatty foods
RESULTS
OptiBiotix results for the 6 months ended 31 May 2018 are set
out below. Administrative expenses were GBP 1,020,446
(GBP1,021,081: 2017) including a number of non-recurrent costs
associated with patents entering the national phase of prosecution
(GBP58,056) and humans studies at Oxford Brookes on SlimBiome(R)
and Reading University for SweetBiotix(R) (GBP113,040). Non cash
items, amortisation of patents and share option expenses account
for GBP105,409.
The accounts show a loss after tax for the period of
GBP1,085,095 (GBP3,206,484 profit: 2017). The loss for the year of
GBP1,085,095 includes the Group's share of the SkinBioTherapeutics
PLC loss for the same period of GBP209,229 (GBP294,278:2017).
The 41.9% investment in SkinBioTherapeutics PLC is treated in
the accounts as an associate company. The value in the balance
sheet at 31 May 2018 of GBP3,979,793 represents the value of the
investment on 4 April 2017, the SkinBioTherapeutics PLC listing
date, less the OptiBiotix share of the losses since that date. As
of 21 August 2018, the value of the investment stood at
GBP9,460,089.
Cashflow remains tightly controlled with a focus on building
shareholder value through investment in R&D, IP and
in-licensing opportunities. The Group's cash position remains
strong at GBP1,797,121 which is sufficient to cover the delivery of
existing development and commercial plans.
BOARD AND MANAGEMENT
We continue to evolve the Board in line with the Company's
development. The last six months has seen a number of board changes
to reflect the transition of the company from a research and
development company into a commercial business.
We were pleased to announce the appointment of Neil Davidson as
Non-Executive Chairman commencing 1 January 2018. 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 thirty 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 believe with the addition of Neil we have a well-balanced
Board and management team for this stage of the company's growth.
This includes scientific and commercial expertise in the founder
and Chief Executive Stephen O'Hara, commercial expertise in Per
Rehne (Commercial Director) and Christina Wood (Sales and Marketing
Director), scientific expertise in Dr Sofia Kolida and market
expertise in Non-Executive Director Dr Gareth Barker and Peter
Wennström. They are complemented by our CFO Mark Collingbourne and
Neil Davidson our Chairman.
At the end of the accounting period we announced that Dr Sofia
Kolida would join the board as Director of Research &
Development rewarding her input and expertise in the development of
OptiBiotix's technology platforms. This appointment reflects the
growing partner interest in OptiBiotix's microbiome modulators and
SweetBiotix(R) technology with Dr Kolida taking on responsibility
for leading development programs with current and future corporate
partners. In August we announced Sean Christie will join the board
as a non executive director subject to regulatory approvals.
We anticipate further additions and changes to the both the
executive and non executive team as we extend the global reach of
our products and in-line with the continued growth and expansion of
the Company.
SCIENTIFIC AND COMMERCIAL OVERVIEW
With recent scientific advances in the understanding of the role
of the microbiome we are rapidly approaching a future where
microbiome products will make a significant contribution to the
prevention, management and treatment of a wide range of human
diseases. This potential was recognized at an early stage in the
development of OptiBiotix with the creation of a number of
technology platforms using different approaches to modulate the
microbiome. This strategy has provided multiple opportunities
within the microbiome space to develop food ingredients,
supplements, and pharmaceutical products with partners, and provide
a broad based investment portfolio across a number of application
areas in the microbiome space. Whilst this is costly and takes
longer, it diversifies risk by offering shareholders multiple
opportunities in evolving space.
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, to create award winning science and products. These
awards provide independent industry validation and raise
OptiBiotix's profile and reputation. This in turn attracts
commercial interest in our technology leading to a healthy deal
pipeline. The change in the type and size of commercial agreement
from development and manufacturing, to an increasing number of
distribution agreements for our products, reflects the transition
of OptiBiotix from a company development the science into a
business commercialising products. This changes the risk reward
ratio leading to OptiBiotix's 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.
We believe growing industry interest in microbiome products with
strong science, independent clinical studies, and key opinion
leader endorsement, will continue to help convert the high interest
in our products into growing revenue streams from license deals and
supply agreements in the months and years ahead.
OptiBiome(R) (SlimBiome(R), CardioBiome(R), ImmunoBiome(R),
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), is the first product in the
range, and has been developed to reduce hunger, leading to less
snacking and easier weight loss. This is a new scientific 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 with
further evidence for SlimBiome's(R) effectiveness demonstrated in
an independent study by Oxford Brookes University. The study showed
that if you compare control and test groups who take SlimBiome(R)
or a placebo the SlimBiome(R) group:-
-- Feel fuller and less hungry
-- Have less food cravings
-- Change their food choice so they eat less sweet and fatty foods
This is the first time to our knowledge this has been
demonstrated for any functional weight management ingredient.
Following on from winning the award for 'Best Functional Ingredient
for Health and Well Being' at Food Matters in November 2017,
SlimBiome(R) won the award for Weight Management Ingredient of the
Year at the Vitafoods European tradeshow in Geneva. The award is
given to the product identified by a panel of scientific,
regulatory and industry experts demonstrating leading edge research
and innovation in the weight management market.
Christina Wood is leading the commercialisation of SlimBiome(R)
and has made good progress since commencing her role as Sales and
Marketing Director in March 2017. Christina has been working with
manufacturers, application developers and retailers to extend the
application of SlimBiome(R) into a broader range of 'Health &
Wellbeing' food and beverage products. This has led to a profit
sharing agreement with Knighton Foods a wholly owned subsidiary of
Premier Foods plc (November 2017), and Cereal Ingredients (December
2017), a speciality ingredients manufacturer based in the USA. This
was followed by a non exclusive distribution agreement with
Cambridge Commodities (April 2018) to distribute SlimBiome(R) into
the sports, health & wellbeing and ingredients sectors of the
UK ingredients market, and Morleys (June 2018), to manufacture and
supply a range of muesli packs containing SlimBiome(R).
The overall aim is to have SlimBiome(R), and subsequently other
OptiBiome(R) products, in a wide range of everyday products. The US
launch of SlimBiome(R) in Cereal Ingredients Nutri-Bites(R) product
range which can be used with granola, snack mix inclusions, cereal
bars, coated snacks, or just used as a healthy crunch topping, is
an early example of how SlimBiome(R) can be used in multiple
applications. Recent studies with bread at Reading University have
shown SlimBiome(R) improved the physical properties of bread (crumb
structure, texture, colour), and shelf life of bread, with 60% of
consumer (n=102) who showed a preference preferring bread
containing SlimBiome(R), with 40% having no preference. This
extends SlimBiome(R) applications from snack bars and shakes to
breakfast cereals and bakery products (e.g. cookies, cakes and
tortillas).
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 developments with
international partners and large retailers which we hope will
develop into commercial agreements in the months and years ahead.
The overall approach is consistent 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(R) 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(R), CHOLESTEROL REDUCTION AND LP-LDL(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.
The science behind OptiBiotix's LP(LDL) (R) product won best
scientific publication at ProBiota 2017 and 2018. These awards
raise OptiBiotix's profile and reputation and attract commercial
interest.
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 twelve
manufacturing, application and distribution agreements. Per has
been working with manufacturers, formulation and distribution
partners to develop around 30 formulations of LP(LDL) (R) which
have the science, cost structure, and synergistic mode of action to
create a wide product range. This approach allows OptiBiotix to
present product solutions to consumer health, pharmaceutical and
retail companies that provide multiple revenue streams from
ingredient sales, white label and own branded products. Investors
will have noted the deal evolution from small privately owned
pharma companies, who are quicker to execute agreements, to larger
deals with GBP100m plus revenue companies like Fine Foods,
Gallenicum, Trigen Pharma, Akums, and Seed Health in the USA.
This division has a broad deal pipeline and is rapidly being
developed into a self-sustaining business unit with the IP
portfolio and leadership to fully exploit the revenue potential of
its products. If this division continues its current development it
has the potential to become a separate legal entity creating the
possibility for an independent exit by a trade sale or listing in
the UK or the US, depending on market conditions.
OPTIBIOTICS(R), MICROBIOME MODULATION, AND SWEETBIOTICS(R)
OptiBiotix has made significant progress in its scientific
programmes to develop compounds which modify the human microbiome
to prevent, manage and treat disease. These now cover three areas,
each representing 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) .
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 $64bn by 2022 (Markets and Markets,
2017).
SweetBiotix(R) : SweetBiotix(R) is 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
have undergone 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.
These studies have created interest from a number of corporates
with expertise in the manufacture and commercialisation of
speciality ingredients and/or consumer products. In February and
March 2018 the Company met up with teams of scientists and senior
executives from a number of major corporates in Europe and the USA.
It was clear from our meetings that OptiBiotix are global leaders
in targeted microbiome modulation and sweet prebiotics/fibres. In
May 2018 we announced a deal with a global brand which is one of
the world's largest providers of dairy products. This was followed
by term sheet with a global supplier of nutritional and
agricultural products with an annual turnover exceeding $100bn for
the scale up, manufacture and distribution of its SweetBiotix(R).
These agreements are part of a strategy of identifying partners who
can manufacture and sell the ingredient as a stand-alone product
and major consumer good companies in cereals, confectionary,
beverages etc. who want to use SweetBiotix(R) as an ingredient in
their products. This is consistent with our approach of mitigating
risk by building a multiple deal structure which we hope will lead
to a deal with a global manufacturer who has rights to produce and
distribute the our product as a standalone sweeter, and deals with
beverage producers, dairy producers, cereal producers,
confectionary groups etc., who have the rights to use our product
as a sweetener/functional food ingredient in their products.
SKINBIOTHERAPUETICS PLC
OptiBiotix owns 41.9% SkinBioTherapeutics plc (SBTX), which is
at an early stage in its development, similar to the beginnings of
OptiBiotix in August 2014. SBTX continues to make solid progress
scientifically and commercially as it progresses towards human
studies later this year. If successful, these studies should
demonstrate safety, tolerance, and efficacy and create strong
interest from commercial partners with the potential for a
substantive uplift in valuation. The Board remain optimistic on the
future of SkinBioTherapeutics as it has good technology and is
targeting multi-billion dollar global markets, where there is a
real need for new science.
OPTIBIOTIX.Online
The online store is now ready for launch and we plan to go live
at the start of September 2018. This creates another channel to
market our products, with the potential to become a division in its
own right. The online store creates a shop window for our
technologies and products and will sell our own brand GoFigure
products, the wider range of SlimBiome(R) products, and LP(LDL) (R)
formulations, creating an additional revenue stream and the
opportunity for direct market feedback from its customers. We
expect products to be added to the store throughout the year
according to seasonality and further partnership deals.
OUTLOOK
OptiBiotix is continuing its strategy of developing microbiome
modulators with a scientific and clinical evidence base for large
markets (>GBP100m) where there are high growth opportunities
(CAGR >10%), and a large unmet need.
The last six months has seen the continued transition of
OptiBiotix(R) from a research and development Company to a
commercial business, with seven agreements covering the USA, Asia,
and Europe, and a deal with a global dairy brand. OptiBiotix's
science has won awards at international conferences and its
products have been nominated and have won awards at international
exhibitions. This has created a significant industry interest and
generated a substantial deal pipeline across all platforms. The
focus now is on translating interest into deal flow and working
with our partners to ensure we maximise the commercial opportunity
to generate revenue growth against a continued lean cost base.
This is all part of a commercial strategy of closing out deals
across multiple levels of the value chain, starting with
manufacturing agreements such as the profit sharing agreement
signed with Knighton Foods for the production of SlimBiome(R). This
is complemented by royalty bearing license deals with formulation
and distribution partners such as Cereal ingredients, Fine Foods,
Trigen Pharma, Cambridge Commodities, Akums, and Seed Health for
the supply of white label and branded products.
Whilst this strategy takes longer to develop than single license
deals and requires close collaboration with partners, this
multi-channel approach enables OptiBiotix to maximize the income
potential of each product, whilst limiting the risk related to any
individual deal. This allows OptiBiotix to operate on a very
asset-light infrastructure with manufacturing, regulatory
approvals, and sales and marketing infrastructure funded by
OptiBiotix's partners such 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 working with the right
commercial partners and ensuring their sales and marketing teams
are provided with the supporting science and training to highlight
the benefits of our technology to maximise sales growth. We
recognise, from past experience, that all partners may not meet our
expectations so have mitigated commercial risk where possible by
agreeing non exclusivity or offering exclusivity for a specific
formulation and limited time period. This allows us to continue
discussions and agree deals with multiple partners in the same
territory to create a competitive position where partners have to
perform to ensure they retain commercial rights.
As we extend our reach into new application areas and new
territories, the scale of the opportunity enlarges. We were pleased
to announce a non exclusive deal with Seed Health in May 2018 for
the US launch of a product containing OptiBiotix's cholesterol and
blood pressure reducing strain (LP(LDL) (R) ). Seeds Daily
Synbiotic(TM), is targeted at the US probiotic market, one of the
largest and fastest growing probiotic markets in the world, with
supplements alone accounting for $2.06 billion sales, and a
projected 55% growth per annum to $3.3 billion by 2021. Our deals
with Galenicum LP(LDL) (R) (Spain, Chile, Peru and the Middle
East), Trigen (Pakistan), Akums (India) reflects our continued
expansion into new territories where we see high growth
opportunities. We would hope to see continued expansion into new
territories and application areas with national and international
partners in the forthcoming months and years.
Of particular note in the last six months is the increased
interest from pharmaceutical companies in developing LP(LDL) (R) as
a drug product called a biotherapeutic. The deals announced with
Trigen in April 2018 and Akums in May 2018 are examples of such
drug deals where the partner provides the funding for drug
registration and clinical studies in return for exclusivity
milestone and/or royalty payments on future product sales. As the
gap between neutraceuticals and pharmaceutical narrows we
anticipate this will be a developing trend. This creates the
potential for high value deals for use of LP(LDL) (R) as a
biotherapeutic in a number of territories in the months and years
ahead. 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 company continues to evolve its board and structure to fully
exploit the expanding range of opportunities and maximise revenue.
As part of this process the company has developed an online store
to create a shop window for its technologies and products
OptiBiotix.online. This creates another channel to market our
products with the potential to become a division in its own right.
The online store will sell our own brand GoFigure products, the
wider range of SlimBiome(R) products, and LP(LDL) (R) formulations,
creating an additional revenue stream and the opportunity for
direct market feedback from its customers. We expect a continual
range of products to be added to the store throughout the year
according to seasonality and further partnerships. To support this
development we appointed Steve Riley as Head of online sales and
marketing in April 2018. In addition to the appointment of Steve
Riley we extended the role and responsibilities of Dr Sophia Kolida
to a board position. This reflects growing partner interest and
engagement in OptiBiotix's microbiome modulators and SweetBiotix(R)
technology with Dr Kolida taking on responsibility for leading
development programs with current and future corporate
partners.
As OptiBiotix's technology platforms become self-sustaining
business units, where appropriate, 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. 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 a market
capitalisation of GBP20-GBP25m in August 2018. The strategic intent
is for OptiBiotix shareholders to benefit from the appreciation of
this asset plus, subject to market conditions, any dividends that
may be returned in recognition of this value uplift. The company
believe if the probiotic division continues its current development
to reaching commercial sustainability it has the potential to
become a separate legal entity creating the possibility for an
independent exit.
The Board believes OptiBiotix(R) is at the leading edge of an
emerging market, forecast to become one of the world's fastest
growth areas. Over the last six months the company has continued
its progress in building a broad based microbiome business by
closing out a number of agreements with commercial partners from
around the world.
As the scientific and consumer understanding of the role of the
microbiome in the prevention of disease and the maintenance of
health grows we see substantial opportunities for products that can
modify the microbiome and show a measurable health benefit. We are
pleased that our strategy of developing microbiome products with a
strong scientific and clinical evidence base has provided clear
product differentiation within the market and stimulated high
commercial interest. We look forward to converting this interest
into further deals in the months ahead and building revenues from
existing and new deals.
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.
N Davidson and S O'Hara
30 August 2018
Consolidated Statement of Comprehensive Income
For the six months to 31 May 2018
6 months to 6 months to Year to
31 May 31 May 30 November
2018 2017 2017
Unaudited Unaudited Audited
Continuing operations GBP GBP GBP
Revenue 80,560 74,868 191,073
Cost of sales (37,624) (34,631) (73,706)
-------------- -------------- --------------
Gross Profit 42,936 40,237 117,367
Administrative expenses (1,020,446) (1,021,081) (2,244,169)
-------------- -------------- --------------
Operating loss (977,510) (980,844) (2,126,802)
Finance income / (costs) 63 95 (6,012)
Profit on disposal of subsidiary - 4,103,986 4,116,286
Share of loss from associate (209,229) - (294,278)
-------------- -------------- --------------
Profit/(Loss) before Income
tax (1,186,676) 3,123,237 1,689,194
Income tax 101,581 83,247 228,447
-------------- -------------- --------------
Profit/(Loss) for the period (1,085,095) 3,206,484 1,917,641
Other Comprehensive Income - - -
-------------- -------------- --------------
Total comprehensive income
for the period (1,085,095) 3,206,484 1,917,641
Total comprehensive income
attributable to the owners
of the company (1,081,953) 3,206,484 1,907,441
Non-controlling interest (3,142) (86,783) 10,200
(1,085,095) 3,119,701 1,917,641
Profit/(Loss) per share
Basic & Diluted - pence 4 (1.36)p 4.08p 2.43
Basic & Diluted before (1.36)p 3.54p 2.13
Profit on investment revaluation
- pence
Consolidated Statement of Financial Position
As at 31 May 2018
Notes As at As at As at
31 May 2018 31 May 30 November
unaudited 2017 2017
Unaudited Audited
ASSETS GBP GBP GBP
Non-current assets
Intangibles 1,868,388 1,976,949 1,927,226
Property, plant & equipment 6,062 9,411 6,561
Investments 3,979,793 4,398,539 4,189,022
-------------- -------------- --------------
5,854,243 6,384,899 6,122,809
-------------- -------------- --------------
CURRENT ASSETS
Inventories 30,151 25,503 8,890
Trade and other receivables 104,085 76,528 106,122
Current tax asset 274,236 191,950 183,951
Cash and cash equivalents 1,797,121 1,923,018 1,247,431
-------------- -------------- --------------
2,205,593 2,216,999 1,546,394
-------------- -------------- --------------
TOTAL ASSETS 8,059,836 8,601,898 7,669,203
EQUITY
Shareholders' Equity
Called up share capital 6 1,658,100 7,203,590 1,586,628
Share premium 1,451,613 6,232,427 6,279,718
Share based payment reserve 523,443 430,346 474,517
Non Controlling Interest (3,142) (84,683) -
Merger relief reserve 1,500,000 1,500,000 1,500,000
Accumulated profit/(deficit) 2,468,731 (7,139,029) (2,795,147)
-------------- -------------- --------------
Total Equity 7,598,745 8,142,651 7,045,716
-------------- -------------- --------------
LIABILITIES
Current liabilities
Trade and other payables 88,296 63,858 239,395
-------------- -------------- --------------
88,296 63,858 239,395
-------------- -------------- --------------
Non - current liabilities
Deferred tax liability 372,795 395,389 384,092
-------------- -------------- --------------
372,795 395,389 384,092
-------------- -------------- --------------
TOTAL LIABILITITES 461,091 459,247 623,487
-------------- -------------- --------------
TOTAL EQUITY AND LIABILITIES 8,059,836 8,601,898 7,669,203
Consolidated Statement of Changes in Equity
For six month to 31 May 2018
Called Share Share-based Non Merger Retained Total
up premium Payment controlling Relief Earnings Equity
Share reserve Interest Reserve
Capital
GBP GBP GBP GBP GBP GBP GBP
------------ -------------- -------------- ------------ ------------ ------------ --------------
Balance at
30 November
2016 7,196,010 6,144,357 417,585 90,692 1,500,000 (10,345,513) 5,003,131
Profit for
the period - - - - - 3,206,484 3,206,484
Issued share
during the
period 7,580 88,070 - - - - 95,650
Share based
payment - - 12,761 - - - 12,761
Non Controlling
interest - - - (175,375) - - (175,375)
------------ -------------- -------------- ------------ ------------ ------------ --------------
Balance at
31 May 2017 7,203,590 6,232,427 430,346 (84,683) 1,500,000 (7,139,029) 8,142,651
------------ -------------- -------------- ------------ ------------ ------------ --------------
Loss for the
period - - - - - (1,288,843) (1,288,843)
Issue shares
during the
period 15,763 47,291 - - - - 63,054
Non-Controlling
Interest - - - 84,683 - - 84,683
share based
payment - - 44,171 - - - 44,171
Cancellation
of shares
during the
year (5,632,725) - - - - 5,632,725 -
------------ ------------ ------------ ------------ ------------ ------------ ------------
Balance at
30 November
2017 1,586,628 6,279,718 474,517 - 1,500,000 (2,795,147) 7,045,716
------------ ------------ ------------ ------------ ------------ ------------ ------------
Loss for the
period - - - - - (1,085,095) (1,085,095)
Issue of shares
during the
period 71,472 1,520,868 - - - - 1,592,340
share based
payment - - 48,926 - - - 48,926
Cancellation
of share
premium
account - (6,348,973) - - - 6,348,973 -
Non Controlling
interest - - - (3,142) - - (3,142)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Balance at
31 May 2017 1,658,100 1,451,613 523,443 (3,142) 1,500,000 2,468,731 7,598,745
------------ ------------ ------------ ------------ ------------ ------------ ------------
Consolidated Statement of Cash Flows
For the six months to 31 May 2018
Notes 6 months 6 months Year to
to to 30 November
31 May 31 May 2017
2018 2017 Audited
Unaudited Unaudited
GBP GBP GBP
Reconciliation of loss before
income tax to cash outflow
from operations
Operating loss (977,510) (980,844) (2,126,802)
Decrease/ (Increase) in
inventories (21,261) 1,122 17,735
(Increase)/decrease in trade
and other
receivables 2,035 (111,753) (172,336)
(Decrease)/increase in trade
and other
payables (151,099) (3,374) 209,220
Share Option expense 48,926 12,761 56,932
Depreciation 2,507 3,692 6,998
Amortisation of patents 56,149 56,484 112,968
------------ ------------ ------------
Net cash outflow from operations (1,040,253) (1,021,912) (1,895,285)
Interest received 63 95 142
------------ ------------ ------------
Net cash outflow from operating
activities (1,040,190) (1,021,817) (1,895,143)
Cash flows from investing
activities
Purchases of property, plant
and equipment (2,459) (1,348) (1,804)
Purchase of intangible assets - (36,621) (43,381)
Disposal of subsidiary net
of cash - (228,212) (228,212)
------------ ------------ ------------
Net cash (outflow)/inflow
from investing activities (2,459) (266,181) (273,397)
------------ ------------ ------------
Cash flows from financing
activities
Share issues 1,592,339 95,650 158,703
------------ ------------ ------------
Net cash inflow from financing
activities 1,592,339 95,650 158,703
------------ ------------ ------------
Taxation - - 141,902
Increase/(decrease) in cash
and equivalents 549,690 (1,192,348) (1,867,935)
Cash and cash equivalents
at beginning of year 1,247,431 3,115,366 3,115,366
------------ ------------ ------------
Cash and cash equivalents
at end of year 1,797,121 1,923,018 1,247,431
Notes to the Half Yearly Report
For the six months to 31 May 2018
1. General Information
Optibiotix Health Plc is a company incorporated and domiciled in
England and Wales. The company's offices are in York. The company
is listed on the AIM market of the London Stock Exchange (ticker:
OPTI).
The financial information set out in this Half Yearly report
does not constitute statutory accounts as defined in Section 434 of
the Companies Act 2006. The group's statutory financial statements
for the year ended 30 November 2017, prepared under International
Financial Reporting Standards ("IFRS"), have been filed with the
Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain statements under
Sections 498(2) and 498 (3) of the Companies Act 2006.
Copies of the annual statutory accounts and the Half Yearly
report can be found on the Company's website at
http://www.optibiotix.com/.
2. Basis of preparation and significant accounting policies
This Half Yearly report has been prepared using the historical
cost convention, on a going concern basis and in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union, using accounting policies which are consistent
with those set out in the financial statements for the year ended
30 November 2017.
New and amended standards adopted by the group
There are no IFRSs or IFRIC interpretations that are effective
for the first time in this financial period that would be expected
to have a material impact on the group.
3. Segmental Reporting
In the opinion of the directors, the group has one class of
business, being that of research and development. The group's
primary reporting format is determined by the geographical segment
according to the location of its establishments. There is currently
only one geographic reporting segment, which is the UK. All costs
are derived from the single segment.
4. 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:
6 Months Year to
to 6 Months to 30 November
31 May 2018 31 May 2017 2017
Unaudited Unaudited Audited
Basic
Earnings attributable
to ordinary shareholders (1,081,953) 3,206,484 1,907,441
Weighted average number
of shares 79,270,322 78,517,954 78,586,791
Earnings (Loss) per-share
- pence (1.36)p 4.08p 2.43p
Diluted
Earnings attributable
to ordinary shareholders (1,081,953) 3,206,484 1,907,441
Weighted average number
of shares 79,270,322 90,481,227 89,710,518
Earnings (Loss) per-share
- pence (1.36)p 3.54p 2.13p
Basic and diluted earnings per share are the same for the 6
months to 31 May 2018, since where a loss is incurred the effect of
outstanding share options and warrants is considered anti-dilutive
and is ignored for the purpose of the loss per share calculation.
As at 31 May 2018 there were 9,278,037 outstanding share options
and 1,045,690 outstanding share warrants.
5. Investments in associate undertakings
On 4 April 2017 the group reduced its shareholding in its
subsidiary, SkinBiotix Limited, from 52% to 41.9% as a result of
their listing on the AIM stock exchange and is now accounted for as
an associate under the equity accounting method.
Company
GBP
Cost
At 30 November 2016 -
Additions 4,483,300
Share of associate loss (294,278)
------------
Carrying amount
At 30 November 2017 4,189,022
Share of associate loss (209,229)
------------
Carrying amount
At 31 May 2018 3,979,793
6. Share Capital
Issued share capital comprises:
6 months 6 months Year to
to 31 May to 31 May 30 November
2018 2017 2017
Unaudited Unaudited Audited
GBP GBP GBP
Ordinary shares of 2p
each
78,543,318 1,658,101 1,570,866 1,586,628
Deferred shares of 19p - 4,940,330 -
each
26,001,739
Deferred shares of .90p - 570,366 -
each
63,373,961
Deferred shares of 0.09p - 122,028 -
each
135,587,293
-------------- -------------- --------------
1,658,101 7,203,590 1,586,628
On 27 February 2018 the High Court of Justice confirmed the
Capital Reduction of the share premium account.
During the six months to 31 May 2018 the company issued ordinary
shares of GBP0.02 each listed, exercised at a price of GBP0.08 per
share in the capital of the company following the exercise of
options and warrants and a placing:
Date issued Number
14/12/2017 73
30/01/2018 354,162
06/02/2018 800,000
30/05/2018 2,419,355
--------------
3,573,590
7. Post balance sheet events
On 14 June 2018 the company issued and allotted 1,461,408
ordinary shares of 2 pence each exercised at a price of 8 pence per
share following the exercise of options.
On 17 July 2018 Neil Davidson and Sofia Kolyda, Directors of the
company, were granted 385,000 and 165,000 options respectively. The
options have an exercise price of 73p per share and an expiration
date of 13 July 2028. The options have performance criteria
attached to them which includes a doubling of the share price and
significant revenue targets.
On 17 July 2018 165,000 options were issued to other senior
members of staff. These options have similar vesting conditions to
those mentioned above.
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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