OptiBiotix Health PLC (LON:OPTI) Chief Executive Officer Stephen O’Hara caught up with DirectorsTalk for an exclusive interview to give an overview of the company’s progress and their plans for 2017
Q1: Stephen, there’s been a lot of activity and announcements with OptiBiotix Health since Christmas, can you give us an overview of the company’s progress and plans for 2017?
A1: Yes, certainly and you’re right, there is a lot going on and hopefully a lot more to come over the next few weeks and months.
Let me just start off with the new appointments, Per Rehné and Christina Wood. So, as a company, we’re moving from a research and development company very much a product company with early revenues, and those revenues are starting to grow quite nicely. So, this transition requires a different skill set so we brought in very high calibre recruits who have a track record of building sales and a network of contacts across different geographies which will open up international opportunities. We’re very much focussed, as a company, in initials stages, in your home territories and you do that because you want to make sure that if there’s any problems with the product you can deal with them in your home territory first. Now, OptiBiotix Health needs to start establishing growth across other territories internationally so the overall aim here, bringing both Per and Christina on board, is to build sales by establishing multiple sales channels across all of our product platforms.
So, let’s just give a quick review for each of the investors of where we are with each of the product and technical platforms and I’ll start off first with SlimBiome which is the first product to market in GoFigure products. So SlimBiome is a patented formulation and it’s being sold in the GoFigure product range, that’s been gaining great customer reviews and we’ve had some good sales growth, if you consider we started from 0 in August, in December we were round about 25,000 per month so that’s grown without any marketing. From Optibiotix’s point of view, it provides really good consumer validation of the efficacy of SlimBiome so customer’s feedback with some great reviews and we’ve got a lot of repeat sales. The focus is very much on trying to create a product that managed hunger and in doing so helped reduce calorie intake and to manage weight loss. So, we’ve viewed that success to leverage discussions with partners on the wider use of SlimBiome as food ingredient instead of products and we announced one of these deals, just before Christmas, for a large multi-national for the Asian market. I said at the time that we’d carry on discussions, see if we can release their name and I can confirm that after extensive discussions over the last month, the company has now agreed to allow us to use their name and I can confirm that the company is Tata Chemicals Limited (NSE:TATACHEM). So, Tata Chemicals is a global science company which has lots of expertise and revenue in food and nutrition and is listed on the Indian stock exchange. It’s part of the Tata Group which itself employs over 60,000 employees and has got annual revenues in 2015/2016 of over $100 billion so it’s a very large company with a great network. Now, Tata Chemicals’ food and nutrition business is a major supplier of food ingredients to the food, beverage and pharmaceutical industry within India and they’re trying to extend that into other markets and we’ve been really really impressed by the Tata team and we see many commonalities in the approach that they’ve taken and the approach that we’ve taken. We hope this will be the first of a number of agreements across all our platforms so good progress with SlimBiome. The aim of the agreement with Tata is to develop weight-management products containing SlimBiome technology in a range of food and over-the-counter products which can be launched into the Indian market in the second half of 2017 so we hope to get products in the market, on sale, in the second half of 2017 with Tata.
Going now onto GoFigure, we’ve got some good plans for GoFigure, we’ll looking to extend the marketing of GoFigure particularly in the UK and at seasonal periods, we want to make the most of the current interest in GoFigure. We want to increase the number of GoFigure retail listings particularly with the major retail outlets so those include people like Boots, Sainsbury’s, Waitrose etc. so they give you the volume so it’s important that we have discussions with those particular groups to allow us to build the business in this area. We also want to increase the number of countries that we’re selling GoFigure products into so companies for the UK and Iceland we want to extend that into other territories and the appointment of Per and Christina will help us in that.
So, moving now onto our cholesterol product, we’ve spent the last year or so building up the science, building up the IP and developing formulations and working with a wide range of partners you have the supported manufacturing, distribution and sales infrastructure support a launch of this product in Spring 2017. This has been a really interesting product, there’s a lot of interest in this product and has very good clinical data, it has strong continued support and uniquely reduces both cholesterol and blood pressure. This has an enhanced effect on reducing cardiovascular risk so provides a unique product differentiator in the marketplace. So, what we’re trying to achieve with this particular product is a multiple deal structure, we get revenues from the people who produce it, the manufacturers, and we get revenues from distributors who formulate and distribute the products so, we’re looking for multiple revenues across a range of points in the supply chain. The key point to bring out to investors is that we don’t see this as a single product opportunity, we see this as a multiple product opportunity with a range of partners. We’ve been working hard to ensure that we have multiple partners who have the right ability and the right incentive to take these products across a whole bunch of different territories. We see our strain, which we trademarked as LP-LDL, is very much the ‘intel’ inside a range of products for cardiovascular health across both consumer and pharma, this creates the opportunity for multiple revenue streams from the sale of the strain, the sale of white label products and the sale of branded products and that maximises shareholder return. So, whilst it’s been a time-consuming process trying to put together multiple deals, it does diversify investor risk and if successful, would give a great shareholder return.
Finally, looking at the sugar products, we’ve made some really good progress on the sugar products, and the sugar science, in the last 12 months. So, we’ve been developing compounds which modify the human microbiome, they cover 3 areas:
- Microbiome modulators where OptiBiotix has demonstrated its ability to manipulate both the microbiome’s composition and its function. This creates a potential for design ingredients or supplements which can modify an individual person’s current microbiome to improve health and it creates the potential for what we call precision microbiome medicine. So, I think there’s a big opportunity here in this particular area.
- When you look at combining those microbiome modulators with existing products such as probiotics, and this is what I presented at the conference in Berlin last week, we’ve been able to show that by combining a prebiotic and a probiotic, you can greatly enhance the product’s health benefits and this is a market that’s expected to be worth about $46 billion by 2020.
- The last aspect of this is our sweet natural healthy sugars which aren’t digested in the human gut, hence a calorie-free, and so work to date has demonstrated we can synthesise these sugars, we’ve tested them in human studies and we’ve been able to show they’re safe and they have a level of sweetness between 60-70 of sucrose. So, we hope to launch our first-generation sugar product, our SweetBiotix, later this year so the end of 2017 or the early part of 2018.
So, all of these developments, with the partnership with Tata, with the development and launch of our LP-LDL strain and our progress on our SweetBiotix have the potential to rapidly accelerate the OptiBiotix Health’s growth. So, if you believe, like many health commentators, that the microbiome has a major effect on the prevention management and treatment of human disease, we have the ability to alter particular components of a patient’s microbiome and by doing that we believe this is a large step forward in healthcare. So, if you look back to 2016, we had very few revenues, a small number of commercial deals, no products in the market, now we’ve built a strong IP portfolio and over 2016/early 2017 we committed to commercial deals with a number of large corporates including KSF, the brand owners of Slimfast, DSM, the world’s large ingredient supplier and now Tata Chemicals and we hope for future agreements with them. You can see there’s lots of optimism within OptiBiotix Health PLC and despite all of this progress we still have about £3.2 million in the bank.
So, in summary, we have a solid financial base, we have products on the market now, we’ve got new products primed for launch next Spring, we’ve got a pipeline of great science creating new product opportunities for the future and an increased interest from institutional investors who are recognising the opportunities presented by the human microbiome. So, we think we’ve had a good year in 2016 and we look forward to a great year in 2017.
