TIDMOPTI
RNS Number : 9190Z
OptiBiotix Health PLC
24 September 2020
24 September 2020
OptiBiotix Health plc
("OptiBiotix" or the "Company" or the "Group")
Half Year Report
OptiBiotix Health p lc (AI M: OPTI), a life sciences busi ness d
eveloping compou n ds to tackle obesity, cardiovascular disease and
diabetes, a nnounces its results for the six months ended 30 June
2020.
Highlights
-- First half revenue growth of GBP744,821, a five times
increase in revenues from H1 2019 (2019: GBP148,818)
-- A 15.5% reduction in other administration costs and a 50%
reduction in loss compared to the same period last year
-- A scalable business model delivering a growing number of
deals with larger partners, pharmaceutical specialists, and
established retailers building brand presence
-- Valuable global intellectual property portfolio of over 70
overlapping patents and 68 trademarks providing strong commercial
protection to the group's science and brands
-- Launch of a branded SlimBiome(R) product range with Holland
& Barrett, the first agreement with a major retailer to market
our proprietary weight management technology
-- Completion of a successful human study in partnership with
Nutrilinea Srl, demonstrating that a new food supplement
formulation containing LP(LDL) (R) can reduce high blood pressure
(hypertension)
-- The launch in Italy by ALFASIGMA S.p.A. of a food supplement
containing the cholesterol reducing LP(LDL) (R) probiotic strain
providing an entry into Italy, the largest and fastest growing
probiotic market in Europe
-- Extension of the existing terms and territories for our
partners CTC Group and Cambridge Commodities for the distribution
of SlimBiome(R), SlimBiome(R) Medical and GoFigure
-- The launch of SlimBiome(R) in the North American market by Agropur
-- An agreement with Optipharm, whose flagship brand Optislim is
Australia's leading weight management brand, for the exclusive use
of our OptiBiome(R) weight management ingredient in over 20
countries including Australia, parts of Asia, New Zealand, Middle
East, Gulf States and North America
-- The launch of SlimBiome(R) containing products in Walmart and Costco in the USA and Canada
-- Signing a three-year distribution agreement with a subsidiary
of Pierce Group Asia granting it exclusive rights to import and
commercialise OptiBiotix's SlimBiome(R) and LP(LDL) (R) to China
and Hong Kong
-- Granting MAXCARE Inc exclusive rights to commercialise
OptiBiotix's SlimBiome(R) proprietary weight management technology
in Taiwan
-- Granting Cambridge Commodities Ltd, one of the UK's leading
speciality ingredients suppliers, a non-exclusive licence to
distribute ProBiotix's specialty ingredient LP(LDL) (R) as well as
our finished dietary supplement CholBiome(R)(x3) for cholesterol
and blood pressure reduction in the UK
-- The launch of WellBiome(R), a patented supplement to improve
gut health, in response to partner interest arising from increased
consumer awareness of the human microbiome and the growing trend in
health and wellbeing
Post-period end highlights
-- Extension of our existing terms to include the new
WellBiome(R) product with Draco Ingredients GmbH in Germany;
Agropur MSI LLC in the USA Canada and Mexico; Maxum Foods in
Australia and New Zealand; and CTC Holdings BV in the Philippines,
Vietnam, Indonesia, Colombia, the Dominican Republic and
Guatemala
-- A non-exclusive distribution agreement with Actial
Farmaceutica Srl for the distribution of CholBiome(R) and
CholBiome(R)(X3) in Australia, New Zealand, Indonesia and Thailand
as a product line extension of its VSL(#) 3(R) brand
-- Extension of the terms, territories, and products covered by
our existing distribution with CTC Holding BV for the sale of
CholBiome(X3) to include LP(LDL) (R) as a bulk ingredient and three
additional products: CholBiome, CholBiome(BP) and CholBiome(VH,,)
and to extend coverage from the Philippines to include
non-exclusive distribution rights for Vietnam, Indonesia, Colombia,
the Dominican Republic and Guatemala
-- Extending the terms of our original exclusive licence
agreement for OptiBiome(R) with OptiPharm Pty Ltd. ("OptiPharm") to
include Europe in addition to Australia, parts of Asia, New
Zealand, Middle East, Gulf States and North America
-- An exclusive agreement with a US company for the large-scale
manufacture and commercialisation of a number of SweetBiotix(R)
products in return for upfront, milestone, launch, and royalty
payments
Stephen O'Hara, CEO of OptiBiotix, commented: "This has been
another period of exciting progress for OptiBiotix with a 400%
increase in sales and a large reduction in costs compared to the
same period last year. Our divisions are now making strong progress
towards profitability with more agreements generating revenues,
existing partners increasing sales, and more retail partners
launching successful new products. Our products are now being
commercialised with large retail and pharmaceutical partners
boosting consumer awareness and confidence in our brands with
OptiBiotix now being identified as a key player in the microbiome
space within industry.
"The Company is now in a pivotal position of having a scalable
business model growing sales from proven products with partners in
multiple international territories in the human microbiome market,
which is expected to grow at a CAGR of 22.60% between 2020 and
2025*. This presents us with a large and expanding market
opportunity on which we are well placed to capitalise by increasing
our range of applications, products and territories.
"Whilst uncertainty within the global economic environment will
create challenges, we believe that our proven strategy of working
with multiple partners, across different application areas and
geographies within the healthcare sector, will limit the risk
related to any individual deal, product, or geography, and we look
forward to continued further progress over the year as a
whole."
*Mordor Intelligence 2019
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 (NOMAD)
Liam Murray / Jo Turner / Ludovico Lazzaretti Tel: 020 7213 0880
finnCap (Broker)
Geoff Nash / Kate Bannatyne (Corporate Finance) Tel: 020 7220 0500
Walbrook PR Ltd
Anna Dunphy Mob: 07876 741 001
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "expect", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors.
Chairman's and Chief Executive's Statement
We are pleased to present OptiBiotix Health plc's interim
results for the six month period ended 30 June 2020.
The first six months of this year has seen strong revenue growth
with a 400% increase in group income and individual divisions
reporting a 1,309% (SlimBiome(R)) and 477% (LP(LDL) (R)) increase
in revenues. This was achieved against a 15.5% reduction in other
administration costs and a 50% reduction in the loss compared to
the same period last year. The strong sales growth is especially
pleasing given the uncertain global economic environment and impact
on potential sales as a result of COVID-19, particularly in
countries like India and the USA, in the first six months of the
year. Whilst these percentage increases are compared to a low base,
there is an acceleration in year - on - year revenue growth as more
agreements generate revenues, existing partners grow sales, and
more retail partners launch products. The Company is now at a
commercial turning point with a proven business model, growing
sales from proven products, partners in multiple international
territories, and reduced administration and R&D costs. This
places the Company in a strong position to exploit the opportunity
in the global human microbiome market expected to show a CAGR of
22.60% between 2020 and 2025 (Mordor Intelligence 2019).
Our first generation products, SlimBiome(R), and LP(LDL) (R),
are now established scientifically, clinically, and commercially
with products being sold in over 120 countries around the world and
a growing brand presence. These first generation of products were
designed with a low development risk with the aim of establishing
the Company and its product positions, and testing the innovative
business model in the market. This has now been achieved with the
conclusion of multiple deals with large retail and pharmaceutical
partners including Alfasigma, Agropur, Holland and Barret, and
Optipharm, and OptiBiotix increasingly being identified as a key
player in the microbiome space in industry reports (see
https://www.openpr.com/news/2004286/what-s-driving-the-human-microbiome-market-size-key-players
). Of note is the increasing number of pharmaceutical companies
such as Alphasigma and Actial Farmaceutica commercialising LP(LDL)
(R) products into the high value GP, hospital, and pharmacy
markets. The other significant change in this period was the number
of established retailers such as Holland & Barrett, Walmart,
and Costco taking product s containing SlimBiome(R), OptiBiome(R),
and subsequently WellBiome(R), into the mass consumer market.
Whilst retail agreements typically have lower margins, they enhance
the credibility and consumer awareness of the product, and with it,
confidence in the brand. Our products are now increasingly becoming
associated with internationally recognised retail and
pharmaceutical partners and established brands, which create
further interest, and demand in other markets.
The next stage in the Company's development involves: -
-- Achieving and then growing profitability in each division by
scaling sales, leveraging our purchasing power as volumes increase
to reduce the costs of goods, and focusing on higher margin
products and;
-- Commerciali s ing next generation products including
microbiome modulators, biotherapeutics, and our growing family of
SweetBiotix(R) products .
As we grow sales and profitability in our first generation
products, extend our reach into new application areas and
territories, and commercialise next generation products the scale
of our opportunity enlarges.
RESULTS
OptiBiotix results for six months ended June 2020 are set out
below. The results are compared with the six months ended 31 May
2019 following the change in our financial year-end from November
to December in 2019.
The results show revenue for the six months of GBP744,821 (2019:
GBP148,818). These figures represent a five times increase in
revenues from H1 2019. This increase was achieved despite difficult
trading conditions in a number of territories which may have
impacted on sales in retail outlets and reduced visits and sale
opportunities from partner representatives visiting hospitals,
GP's, and pharmacies due to COVID-19 restrictions.
In contrast to 2019 where the majority of this income was
generated from LP(LDL) (R), both the Functional Fibres
(SlimBiome(R), OptiBiome(R), and WellBiome(R)), and the Probiotics
division (LP(LDL) (R)) made roughly equal contributions of
GBP342,734 and GBP341,858 respectively, with the online store
contributing GBP60,229. As in previous years , there was no
substantive contribution from license or royalty payments which
tend to be received in the second half of the year, and can greatly
influence gross margin. The renegotiation of our contract with
Sacco S.r.l., should also help improve margins in H2 2020.
Administrative expenses were GBP896,268 (2019: GBP1,025,050)
with GBP162,840 non-cash expenses representing depreciation,
amortisation and share based payment charges (2019: GBP157,112).
With increasing revenues and decreasing costs, the loss for the
first six months of the year was GBP605,663, a significant decrease
(51%) for the same period last year (2019: GBP1,217,705).
As at 30 June 2020, the Company had GBP1.47m Group cash balance.
Once R&D tax credits are claimed and recoverable VAT repayments
are added, the balance would be GBP1.68m.
The Company received GBP746,751 of investment income in this
period from the disposal of shares in SkinBioTherapeutics plc.
COMMERCIAL UPDATE
We signed 15 new commercial agreements during the first half: 11
for SlimBiome(R), and four for LP(LDL) (R). Of particular note were
deals with Holland and Barrett, Optipharm, and US partners that
open up retail opportunities in the UK, Australia, parts of Asia,
the Middle East, and North America. Announcing deals with
international recognised partners increases industry awareness of
OptiBiotix's brands within the industry, and changes the nature of
partner discussions as the commercial benefits are established in
more territories. Growing brand awareness increases the value of a
product, and ultimately shareholder value, and is particularly
important and valued by large corporates. This is in line with our
strategic aim of growing the awareness of ingredient and finished
product brands around the world.
LP (LDL) (R)
Sales of LP(LDL) (R) as an ingredient or final product grew by
477% compared to the same period last year. Particularly noteworthy
developments in the first half were the successful launch of
AlfaSigma's Ezimega 3 product and the commercial growth of Seed
Health's Daily Synbiotic. Whilst we consider H2 2020 will be a
challenging global economic environment, we believe our strategy of
working with multiple partners, across different geographies will
help limit any commercial risk. Post period, the signing of an
agreement with Actial Farmaceutica Srl for the distribution of
CholBiome(R) products was a significant achievement and brings
further credibility to the LP(LDL) (R) brand. Actial is the
developer of one of the world's best-known probiotic brands -
VSL#3(R) - and their products have a reputation for their strong
science and clinical studies amongst hospital clinicians, GPs and
pharmacists.
We now have partners commercialising LP(LDL) (R) in over 60
countries including the world's largest probiotic market (USA: Seed
Health) and second largest (Italy: AlfaSigma). The next stage of
our strategy is to grow sales with existing partners, extend
territories and applications, and continue to sign up new partners.
In addition to growing sales, the Company is renegotiating
contracts as volumes increase to reduce the cost of goods. The
renegotiation of our contract with Sacco S.r.l., announced in March
2020, from a profit sharing to a manufacture supply agreement where
we buy from Sacco and then sell product to partners ourselves,
significantly improved margins. The results of this should be seen
in H2 2020.
The Company has now published six studies on LP(LDL) (R) in peer
reviewed journals or as abstracts at international scientific
conferences. These cover the safety and performance of LP(LDL) (R)
in human studies, the three mechanisms of action by which LP(LDL)
(R) reduces blood lipids, and LP(LDL) (R)'s antimicrobial activity
against a wide range of clinically important human and/or animal
pathogens including Campylobacter, Shigella, Salmonella, E.coli
O157, and Clostridium difficile. The results of two published
independent human studies in different countries show significant
reductions in both blood pressure and cholesterol and the product
to be safe and well tolerated.
Publications and presentations help to differentiate LP(LDL) (R)
from products which are sold solely on marketing and reduce the
risk of commoditisation and price erosion. The presence of a
scientific and clinical evidence base, GRAS, and pharmaceutical GMP
manufacture validation increase s the potential for LP(LDL) (R) to
be commercialised as a pharmaceutical drug product and are major
points of differentiation from other probiotics. Together these
designations increase the market attractiveness of LP(LDL) (R) to
pharmaceutical partners either used by itself, or as combination
treatment to help lower the dose and potential side effects of
statins. This extends the opportunity outside the traditional
supplement market into broader therapeutic opportunities which will
be explored more actively in H2 2020.
SlimBiome(R)
Sales of SlimBiome(R) as an ingredient or final product grew by
1,309% compared to the same period last year. This was largely
driven by partners in the UK, Australia and the USA either
launching retail products or building stock levels for the launch
of products. Of particular note is the extension of SlimBiome(R)
into everyday foods like muesli and porridge and the development of
healthy snacks like fruit and fibre gummies under the SnackSmart(R)
brand. The launch of WellBiome(R) at the end of the period reflects
the growing interest from partners in a science backed Health and
Wellbeing microbiome product which taps into a global trend for
Health & Wellness, a market estimated to be worth US$4.2
trillion in 2019 with the digestive health segment accounting for
US$60 billion.
SweetBiotix(R)
SweetBiotix(R) is a family of products based on the concept of
creating a sweet fibre that has a low glycaemic index, which
enhances the microbiome. The concept uses new science, new
manufacturing processes, and is a step change from existing
products on the market or known to be under development. There are
currently around half a dozen types of SweetBiotix(R) and a couple
under development. The aim is to have a broad range of products
suitable for a wide range of application areas which meet the needs
of multiple partners on applications as diverse as dairy, cereals
and hot & cold beverages. The agreement signed post period with
a US partner is a significant milestone in the commercialisation of
SweetBiotix(R) products. The agreement, for one part of the
SweetBiotix(R) portfolio, provides an exclusive license in return
for the partner bearing all the manufacturing, marketing and
commercialisation costs. This is a significant investment for our
partner. In return , OptiBiotix will receive upfront, annual and
product launch payments from the US partner plus royalties on all
future product sales. We have also negotiated
enhanced royalty payments on sales of SweetBiotix(R) products by
our partner to 11 application/ innovation partners.
INTELLECTUAL PROPERTY
There has been a rapid increase in the number of patents filed
in the microbiome space in the last 10 years, and OptiBiotix and
Probiotix Health have together filed over 100 patents to protect
their commercial interests and create first mover advantage in this
evolving field. This is being supported by a large investment -
typically of over GBP250,000 year - in patents and trademarks to
broaden protection in international markets
Our Intellectual Property ('IP') strategy has been based on
building a portfolio of overlapping patents to protect our
commercial interests and reduce the risk of any particular patents
failing to grant or being opposed by a competitor. This means that
we have multiple composition, application, and process patents to
protect each area of our business. Whilst this approach is more
costly, it reduces our future commercial risk. As patents are
granted in key territories (typically the US, Europe, Canada,
Japan, Australia, India) the Group is able to reduce its patent
portfolio (from 100 to 70 patents) in some territories to lower IP
costs whilst continuing to protect its commercial interests.
Our strategy and investment have enabled the Group to build an
extensive and valuable intellectual property portfolio of some 70
patents worldwide. In addition to these patents, we have registered
over 68 trademarks to provide what is called 'double IP' - a
combination of patents and supporting trademarks which allows
OptiBiotix to build its trademarked brands supported by its
patents. This approach further reduces risk and in combination
creates a valuable IP portfolio in the microbiome field.
KEY ACHIEVEMENTS
During the period to date we have signed new agreements, had
product launches, extended our product range or territories with
existing partners, and completed a human study. These achievements
continue to build shareholder value, example of which are set out
below:-
New agreements
-- Concluding an agreement with Optipharm for the exclusive use
of our OptiBiome(R) weight management ingredient in over 20
countries in its flagship Optislim brand, Australia's leading
weight management brand
-- Signing a three-year distribution agreement with a subsidiary
of Pierce Group Asia to import and commercialise OptiBiotix's
SlimBiome(R) and LP(LDL) (R) in China and Hong Kong
-- Granting MAXCARE Inc exclusive rights to commercialise
OptiBiotix's SlimBiome(R) proprietary weight management technology
in Taiwan
-- The signature of a licensing agreement with Granja Pocha S.A.
for the inclusion of ProBiotix's patented probiotic strain LP(LDL)
(R) into a functional yogurt product in Uruguay, South America
-- Conclusion of a new licensing agreement with Velinoff Pharma
Ltd for the distribution of ProBiotix's products CholBiome(R) and
CholBiome(R)X3, which contain OptiBiotix's patented LP(LDL) (R)
probiotic strain in Bulgaria
-- Reaching a one-year exclusive distribution agreement with
Prosperous Pharma, based in Lebanon, to distribute and
commercialise OptiBiotix's SlimBiome(R) Medical to the Gulf
Cooperation Council States and the Levant region
Product Launches
-- The launch of a branded SlimBiome(R) product range with
Holland & Barrett, the first agreement with a major retailer to
market our proprietary weight management technology
-- The launch in Italy by ALFASIGMA S.p.A. of a food supplement
containing our proprietary cholesterol reducing LP(LDL) (R)
probiotic strain providing an entry into the largest and fastest
growing probiotic market in Europe
-- The launch of SlimBiome(R) in the North American market by Agropur
-- The introduction of SlimBiome(R) containing products in
Walmart and Costco in the USA and Canada through USA partners Smart
For Life and Evolution 18
-- The launch of WellBiome(R), a patented supplement to improve
gut health; this is a proprietary blend of prebiotic functional
fibres, functional dietary fibres and minerals optimised to promote
the diversity of the gut microbiome
Extensions of product range or territories with existing
partners
-- Signing a new global manufacturing and supply agreement for
LP(LDL) (R) with Sacco S.r.l. that changes our original
profit-sharing agreement to a manufacture and supply agreement
-- Extension of the existing terms and territories for both CTC
Group and Cambridge Commodities for the distribution of
SlimBiome(R), SlimBiome(R) Medical and GoFigure
-- Extension of territories with Extensor to distribute
GoFigure(R) consumer weight management products in Ukraine,
Estonia, Lithuania, Latvia, Kazakhstan, Kyrgyzstan, Tajikistan,
Uzbekistan, Turkmenistan, Armenia, Azerbaijan, Georgia, Belarus,
Moldova and Russia
New Human Studies
-- Completion of a successful human study by ProBiotix Health,
in partnership with Nutrilinea Srl, demonstrating that a new food
supplement formulation containing LP(LDL) (R) can reduce high blood
pressure (hypertension)
BOARD AND MANAGEMENT
There has been no change to the OptiBiotix Board during the
period. As noted in the annual report, Steve Prescott left his
position as CEO of our wholly owned subsidiary ProBiotix Health Ltd
by mutual agreement at the end of May 2020. Stephen O'Hara is
acting as CEO of ProBiotix Health with the support of Mikkel
Hvid-Hansen in the expanded role of Commercial Director.
We anticipate that there will be further additions and changes
to the B oard and management teams as we continue to grow sales and
transition to a profitable and sustainable business. Specifically,
we expect to enhance our operational and quality control
capabilities to meet the needs of our growing list of larger
corporate partners and retail customers and add international
expertise to support our intention to seek a listing in an
international market.
OUTLOOK
The first six months of this year has seen a large increase in
sales (400%) as more agreements generate revenues, existing
partners grow sales, and more retail partners launch products. This
has been achieved with a 15.5% reduction in other administration
costs in a difficult global economic environment. The Company now
has proven its business model with established products being sold
through an international network of pharmaceutical, ingredient,
formulation, and retail partners in over 120 countries around the
world, and is identified as a key player in the microbiome space by
industry reports.
The Company remains focused on the next phase of its strategy
with each of its divisions currently on course to reach
profitability in the current financial year. We anticipate
continued revenue growth in 2020 as existing deals contribute to
full year revenues, we extend the application of our products into
new areas, retail partners launch more products and extend their
territories, and we continue to execute deals with new partners. We
also anticipate a further reduction in administration costs in the
second half of 2020 as management costs are removed from the
business and improved gross margins from royalty and license
agreements.
To support sales growth , we anticipate adding new products
across our portfolio. For LP(LDL) (R) these include more dairy
products, and expanding development of our cardiovascular health
portfolio with a blood pressure (CholBiomeBP), and vascular health
product (CholBiomeVH). This will complete a suite of cardiovascular
applications of different formulations which should meet the
regulatory and market needs of most countries around the world. We
are also exploring further the potential of LP(LDL) (R) for its
immune health properties after a number of customers have reported
reduction in allergies, particularly hay fever, and its use in
combination with existing treatments, such as statins, to help
lower dose and reduce side effects, whilst maintaining efficacy. We
have sequenced LP(LDL) (R)'s genome and are exploring the genetic
predisposition of the strain to impact on a range of health areas
outside of cardiovascular health. In addition, we have also been
awarded (subject to contract) a grant to explore the effect of
LP(LDL) (R) on stress, anxiety, and sleep disorders with
universities in the UK and Europe.
For SlimBiome(R), given increased consumer awareness of the
human microbiome, and the growing trend in health and wellbeing, we
have launched WellBiome(R). This uses existing human study data
which showed positive effects on the microbiome, mood, and blood
pressure. This has allowed us to extend the opportunity outside
weight management without adding any development costs by utilising
existing studies and changing the dosage in the final product. We
have been pleased with the high level of partner interest in
WellBiome(R) as witnessed by the number of agreements signed post
period. Investors should also note the number of partners who have
gained early success with our products and who are now extending
their territories or product range. This has led to the Company
continuing to sign new deals and extend existing partner deals as
shown by a number of agreements signed post period including:-
-- Extension of our existing terms to include WellBiome(R) with
Draco Ingredients GmbH in Germany; Agropur MSI LLC in the USA
Canada and Mexico; Maxum Foods in Australia and New Zealand; and
CTC Holdings BV in the Philippines, Vietnam, Indonesia, Colombia,
the Dominican Republic and Guatemala
-- A non-exclusive distribution agreement with Actial
Farmaceutica Srl for the distribution of CholBiome(R) and
CholBiome(R)X3 in Australia, New Zealand, Indonesia and Thailand,
under the VSL#3(R) range
-- Extension of the terms, territories, and products with CTC
Holding BV for the sale of CholBiomeX3 to include LP(LDL) (R) as a
bulk ingredient and three additional products: CholBiome,
CholBiomeBP and CholBiomeVH,, from the Philippines to include
non-exclusive distribution rights for Vietnam, Indonesia, Colombia,
the Dominican Republic and Guatemala
-- Extending the terms of our original exclusive licence
agreement for OptiBiome(R) with OptiPharm Pty Ltd. ("OptiPharm") to
include Europe in addition to Australia, parts of Asia, New
Zealand, Middle East, Gulf States and North America
-- An exclusive agreement with a US company for the large -
scale manufacture and commercialisation of a number of
SweetBiotix(R) products in return for upfront, milestone, launch,
and royalty payments
Having established a range of first generation products (LP(LDL)
(R), SlimBiome(R)), and a large international network of partners
our focus is now turning to commercialising our next generation
products with partners. These include our microbiome modulators,
biotherapeutics, and the growing family of SweetBiotix(R) products.
The agreement announced post period with a US partner for one part
of the SweetBiotix(R) portfolio is an early example. It provides a
'no cost' route to commercialisation with the partner bearing all
the manufacturing, marketing, and commercialisation costs in return
for an exclusive worldwide license and milestone and royalty
payments.
We believe our strategy of securing deals with partners who make
up the value chain (manufacturers, formulators and distributors)
across multiple territories is now bearing fruit with rapid revenue
growth against a low and decreasing cost base. The Company is now
at a commercial tipping point as its divisions move towards
profitability and our global network of partners start to deliver
on early forecasts, grow sales, and look to introduce more products
into more and more territories.
We continue to explore the potential for a dual international
listing in the USA or other international markets. Preparatory work
carried out to date includes aligning our financial end of year
with similar companies on other international exchanges, reducing
our holding in SkinBiotherapeutics plc to reduce the risk of having
to include segmental reporting and enhancing our quality and
reporting systems. We anticipate further change to the management
team and B oard and more commercial agreements in the US as we to
continue to evolve the Company and build market presence to
increase the success of any potential dual listing.
Investor and consumer interest in the human microbiome is
growing , presenting us with a market opportunity that 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, biotherapeutics, and
Medical Devices. We look forward to growing sales 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.
We look forward to the future with a stronger team, more deals,
more products, and, most importantly, greater revenues and
profitability.
On behalf of everyone at OptiBiotix Health we would like to
thank our investors for their continued support and look forward to
an exciting future.
N Davidson and S O'Hara
23 September 2020
Consolidated Statement of Comprehensive Income
For the six months to 30 June 2020
6 months to 6 months to Period to
30 June 31 May 31 December
2020 2019 2019
Unaudited Unaudited Audited
Continuing operations GBP GBP GBP
Revenue 744,821 148,818 744,883
Cost of sales (447,747) (86,755) (352,080)
-------------- -------------- --------------
Gross Profit 297,074 62,063 392,803
Share based payments 42,762 73,771 137,320
Depreciation and amortisation 120,078 83,341 217,904
Other administrative costs 733,428 867,938 2,204,216
Administrative expenses (896,268) (1,025,050) (2,559,440)
-------------- -------------- --------------
Operating loss (599,194) (962,987) (2,166,637)
Finance income / (costs) (64,682) (49,907) (44,356)
Profit on disposal of investments 48,967 - 123,468
Share of loss from associate - (248,117) (296,344)
-------------- -------------- --------------
Profit/(Loss) before Income
tax (614,909) (1,261,011) (2,241,856)
Income tax 9,246 43,306 123,468
-------------- -------------- --------------
Profit/(Loss) for the period (605,663) (1,217,705) (2,118,388)
Other Comprehensive Income - - -
-------------- -------------- --------------
Total comprehensive income
for the period (605,663) (1,217,705) (2,118,388)
Total comprehensive income
attributable to the owners
of the company (605,456) (1,216,894) (2,117,273)
Non-controlling interest (207) (811) (1,115)
(605,663) (1,217,705) (2,118,388)
Profit/(Loss) per share
Basic & Diluted - pence 4 (0.70)p (1.43)p (2.49)p
Basic & Diluted before (0.70)p (1.43)p (2.49)p
Profit on investment revaluation
- pence
Consolidated Statement of Financial Position
As at 30 June 2020
Notes As at As at As at
30 June 2020 31 May 31 December
Unaudited 2019 2019
Unaudited Audited
ASSETS GBP GBP GBP
Non-current assets
Intangibles 2,728,393 2,526,369 2,632,778
Property, plant & equipment 393 3,143 393
Investments 5 2,395,022 3,492,682 3,092,807
-------------- -------------- --------------
5,123,808 6,022,194 5,725,978
-------------- -------------- --------------
CURRENT ASSETS
Inventories 112,726 109,241 62,761
Trade and other receivables 394,857 77,196 607,308
Current tax asset 226,194 265,079 190,435
Cash and cash equivalents 1,469,147 984,170 455,608
-------------- -------------- --------------
2,202,924 1,435,686 1,316,112
-------------- -------------- --------------
TOTAL ASSETS 7,326,732 7,457,880 7,042,090
EQUITY
Shareholders' Equity
Called up share capital 6 1,758,812 1,708,811 1,708,811
Share premium 2,537,501 1,646,873 1,646,873
Share based payment reserve 782,821 676,510 740,059
Merger relief reserve 1,500,000 1,500,000 1,500,000
Convertible Debt Reserve 92,712 92,712 92,712
Accumulated profit/(loss) (1,098,381) 407,454 (492,925)
-------------- -------------- --------------
5,573,465 6,032,360 5,195,530
Non Controlling Interest 35,576 36,086 35,782
-------------- -------------- --------------
Total Equity 5,609,041 6,068,446 5,231,312
-------------- -------------- --------------
LIABILITIES
Current liabilities
Trade and other payables 419,916 188,608 561,623
-------------- -------------- --------------
419,916 188,608 561,623
-------------- -------------- --------------
Non - current liabilities
Deferred tax liability 548,863 518,488 522,350
Borrowings 748,912 682,338 726,805
-------------- -------------- --------------
1,297,775 1,200,826 1,249,155
-------------- -------------- --------------
TOTAL LIABILITIES 1,717,691 1,389,434 1,810,778
-------------- -------------- --------------
TOTAL EQUITY AND LIABILITIES 7,326,732 7,457,880 7,042,090
Consolidated Statement of Changes in Equity
For six months to 30 June 2020
Called Share Share-based Non Merger Retained Convertible Total
up premium Payment controlling Relief Earnings Loan note Equity
Share reserve Interest Reserve
Capital
GBP GBP GBP GBP GBP GBP GBP GBP
------------ -------------- -------------- ------------ ------------ ------------ -------- --------------
Balance at 30
November 2018 1,694,488 1,603,904 602,739 36,897 1,500,000 1,624,348 - 7,062,376
Loss for the
period - - - - - (1,216,894) - (1,216,894)
Issued share
during the
period 14,323 42,969 - - - - - 57,292
Share based
payment - - 73,771 - - - - 73,771
Conversion
rights of
convertible
loans - - - - - - 92,712 92,712
Non Controlling
interest - - - (811) - - (811)
------------ -------------- -------------- ------------ ------------ ------------ ------------ --------------
Balance at 31
May 2019 1,708,811 1,646,873 676,510 36,086 1,500,000 407,454 92,712 6,068,446
------------ -------------- -------------- ------------ ------------ ------------ ------------ --------------
Loss for the
period - - - - - (900,379) (900,379)
Non-Controlling
Interest - - - (304) - - - (304)
share based
payment - - 63,549 - - - - 63,549
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Balance at 31
December 2019 1,708,811 1,646,873 740,059 35,782 1,500,000 (492,925) 92,712 5,231,312
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Loss for the
period - - - - - (605,456) - (605,456)
Non-Controlling
Interest (206) - - - (206)
Issue of shares
during the
period 50,001 890,628 - - - - - 940,629
share based
payment - - 42,762 - - - 42,762
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Balance at 30
June 2020 1,758,812 2,537,501 782,821 35,576 1,500,000 (1,098,381) 92,712 5,609,041
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Consolidated Statement of Cash Flows
For the six months to 30 June 2020
Notes 6 months 6 months Period to
to to 31 December
30 June 31 May 2019
2020 2019 Audited
Unaudited Unaudited
GBP GBP GBP
Reconciliation of loss before
income tax to cash outflow
from operations
Operating loss (599,194) (962,987) (2,166,637)
Decrease/ (Increase) in
inventories (49,965) (78,808) (32,328)
(Increase)/decrease in trade
and other
receivables 212,451 296,607 (233,505)
(Decrease)/increase in trade
and other
payables (141,707) (332,380) 40,634
Share Option expense 42,762 73,771 137,320
Depreciation - - 2,750
Amortisation of patents 120,078 83,341 215,234
------------ ------------ ------------
Net cash outflow from operations (415,575) (920,456) (2,036,532)
Interest received 52 - 168
Interest paid - (49,907) (57)
Tax received - 154,505 313,173
------------ ------------ ------------
Net cash outflow from operating
activities (415,523) (815,858) (1,723,248)
Cash flows from investing
activities
Purchase of intangible assets (215,693) (356,621) (594,923)
------------ ------------ ------------
Net cash (outflow)/inflow
from investing activities (215,693) (356,621) (594,923)
------------ ------------ ------------
Cash flows from financing
activities
Share issues 898,004 57,292 157,292
Proceeds from borrowings - 775,050 775,050
Disposal of Investments 746,751 - 617,130
------------ ------------ ------------
Net cash inflow from financing
activities 1,644,755 832,342 1,449,472
------------ ------------ ------------
Increase/(decrease) in cash
and equivalents 1,013,539 (340,137) (868,699)
Cash and cash equivalents
at beginning of year 455,608 1,324,307 1,324,307
------------ ------------ ------------
Cash and cash equivalents
at end of year 1,469,147 984,170 455,608
Notes to the Half Yearly Report
1. General Information
Optibiotix Health Plc is a com pany incorp orated and d omiciled
in England and Wales. The com pan y 's offices are in York. The com
pany is listed on the AIM market of the Lo nd on 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 period ended 31 December 2019, 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.
The interim financial statements have been prepared in
accordance with the accounting policies set out in the Annual
Report and Accounts for the period ended 31 December 2019.
3. Segmental Reporting
In the opinion of the directors, the Group has one class of
business, being that of identifying and developing microbial
strains, compounds and formulations for use in the nutraceutical
industry. 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. The Directors believe that income, costs,
assets and liabilities are interconnected and as there is only one
location all income and costs are derived from the single segment.
The directors will assess the need for segmental reporting for the
year ended 31 December 2020.
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
to Period to
30 June 6 Months to 31 December
2020 31 May 2019 2019
Unaudited Unaudited Audited
Basic
Earnings attributable
to ordinary shareholders (605,663) (1,216,894) (2,118,388)
Weighted average number
of shares 86,379,784 85,178,415 85,262,488
Earnings (Loss) per-share
- pence (0.70)p (1.43)p (2.49)p
Diluted
Earnings attributable
to ordinary shareholders (605,663) (1,216,894) (2,118,388)
Weighted average number
of shares 86,379,784 85,178,415 85,262,488
Earnings (Loss) per-share
- pence (0.70)p (1.43)p (2.49)p
Basic and diluted earnings per share are the same for the 6
months to 30 June 2020, 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 30 June 2020 there were 7,765,907 outstanding
share options and 329,336 outstanding share warrants.
5. Investments
Cost GBP
At 30 November 2018 3,740,799
Share of associate loss for the
year (296,344)
Disposal of shares during the period (351,648)
------------
Carrying amount
At 31 December 2019 3,092,807
Disposal of shares during the period (697,785)
------------
Carrying amount
At 30 June 2020 2,395,022
6. Share Capital
Issued share capital comprises:
6 months 6 months Period to
to 30 June to 31 May 31
2020 2018 December
Unaudited Unaudited 2019
Audited
GBP GBP GBP
Ordinary shares of 2p
each
87,940,601 1,758,812 1,708,811 1,708,811
-------------- -------------- --------------
1,758,812 1,708,811 1,708,811
During the six months to 30 June 2020 the company issued
ordinary shares of GBP0.02 each listed, as follows:
Date issued Price Type Number
23/04/2020 GBP0.40 Placing 2,500,000
08/06/2020 GBP0.08 Warrant exercise 50
--------------
2.500,050
7. Post balance sheet events
No post balance sheet events.
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