The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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I should partly retract my previous comment today, as I've just seen this partersnhip was referenced in their 27 Feb commercial update with "forecast sales for OptiBiotix in Y1 of £1.2m and Y5 of £6.7m".
So it looks like it's forecast to build gradually, but with some sales from Y1. How these sales (if achieved) will translate into profit is yet to be seen.
Obesity is a huge problem, and it is becoming a bigger problem in more rural communities and in lower socioeconomic groups.
https://www.thelancet.com/journals/lansea/article/PIIS2772-3682(23)00068-9/fulltext#:~:text=As%20per%20the%20NFHS%2D5,abdominally%20obese%20in%20the%20country.
Plus in 4-5yrs there could be more such large agreements not to mention many smaller ones.
Martinu - the wording in SOH’s forecast is weaselly IMHO.
I take it to mean he estimates £6-7m revenue p.a. after 4-5 years.
That could be via gradual year-on-year increases. But it could equally mean very low sales in the early set up stages, followed by a large lump of cash once set up is complete. Any figures are a welcome development, as they’ve been sadly lacking with past partnership announcements. But more transparency is still needed.
Yes, pleased this has been done. I do notice RNS gives figure of £6-7m in the next 4-5 years. Previously SOH was saying £1m in 1st year, And £6m by year 5?
OptiBiotix Health plc (AIM: OPTI), a life sciences business developing compounds to tackle obesity, high cholesterol, diabetes and skincare, announces it has signed a partnership agreement with Dr Morepen Ltd ("Morepen") for the sale of SlimBiome® containing products in India under the Dr Morepen brand. Morepen is a 100% owned subsidiary of Morepen Laboratories Ltd ("Morepen Laboratories"), an Indian pharmaceutical company listed on the Indian Stock Exchange.
Morepen Laboratories has more than 2,300 employees and sells over 800 products to over 82 countries. Morepen is a well-known and trusted brand in India, launched in 2001 to encourage customers to be in charge of their own health and wellbeing. Morepen has direct access to over 200,000 pharmacies across India and indirect access to another 300,000 pharmacies. Products will be sold online, in store, and direct to physicians across India.
Stephen O'Hara, CEO of OptiBiotix, commented: "We are pleased to announce this agreement with Morepen, a well-known and trusted supplier to pharmacies, physicians, and retail customers across India. Morepen brings an extensive sales team with experience of highly differentiated scientific products and countrywide access to a network of around 500,000 pharmacies across India. Based on current forecasts, the Directors anticipate this agreement could contribute in the region of £6-7 million revenue per annum in the next four to five years."
Https://www.gloucestershirelive.co.uk/news/health/20p-day-supplement-boosts-brain-9135552
Could Opti cash in on these benefits?
https://www.futuremarketinsights.com/reports/galacto-oligosaccharide-gos-market
cost of gos seems to be around 6k per tonne add on manufacturing maybe 7k -8k ???
5% royalties ?£40 mill on 100k tonnes ?????
back of *** packet strictly
but cost of gos seems right ??
Regarding the nuances, I think there was two significant nuggets.
(1) One the resale or retention rates are excellent albeit from a low base.
(2) Finally SOH appears to have woken up to the power of marketing/ social media.
The jam tomorrow narrative is still there but I think the evidence is building that the foundation is very sound, certainly compared to 12-18 months ago
(2)
Ok, just listened. From 4.40 to 5.30 SOH talks about distributors destocking. But that revenue was booked in earlier year(s). So not in 2023,as I understand it. Then he says, we will see a leap in revenues. From 2024 ? So not sure what this means for upcoming 2023 results.
Some interesting chat about getting into Sports nutrition with high protein, high fibre snacks.
And then, signposting some updating in near future on Micro Mods.
Good of him to take the trouble to do the podcast. But not sure I was particularly excited by it. Hope others can find the nuances I missed.
Thanks for that, mol.
Https://soundcloud.com/optibiotix-investor/february-29th-2024
Something to listen to over the weekend
mol
We know the standard royalty % with the US partner is 5% plus another 5% for the MTA partners. I think it's safe to assume that OptiBiotix royalty with DSM Firmenich is 5%.
I don't think it'll be too far off that figure
Just a thought on price per ton. I think I remember an RNS in the past year that has spoken about trying to compete with sugar on price.
Given that sugar is circa $400 per metric ton, and in addition brings extra tax burdens at the point of sale to the consumer, perhaps that gives us some idea of the price of Sweet.
Of course whatever the price is, we are seeing a % of that and not the whole thing.
The above is complete speculation brought about by my excitement at the disclosure of the news that Sweet is goog into production. It could definitely be wrong
Nice week on OPTI, wish a few of my other AIM stocks would do the same.
Held on through the s*** days on the hope that the portfolio of different deals would start to motor -an with a royalty model the scaling of revenue to the bottom line is incredible past breakeven on fixed costs.
Will be watching the Strade Bianche at the weekend, the most beautiful cycle race partly on the compacted chalk "white roads" in tuscany finishing in the sqaure in Sienna - the DSM Firmenich team will be riding !
The actual text was > 100k tonnes and this is for only DSM Firmenich.
The US partner will most likely have similar forecast with any few of the big 11 global MTA partners signing up for sweetbiotix. I think this is in the early stages of a major re-rate of the sp.
I think if it was a typo we would have had an amendment by now? I think we have been, through not actually knowing, guessing on the most skeptical percentages, but this rns from last year did state actual percentage royalties. It's hard to comprehend these figures and what it would mean for the company.
From last July's RNS;
A manufacturing agreement signed with a US partner in September 2020. They are paying OptiBiotix a six figure annual milestone in H2 every year during scale up plus a six figure launch milestone payment with royalties of 5% on all sales and a further 5% on sales to 11 named companies (Kelloggs, Nestle, Coca Cola , Firmenich, Tereos, Cargill, Arla ,Tate and Lyle, Agropur, Givaudan, Tata) reflecting the development work ongoing with these partners before we signed the agreement.
@AustinTexas, I had a quick look at some sugar suppliers, you may have heard of Kent Foods, they had this on their website:
"Kent Foods is Europe’s largest independent supplier of sugars, selling 350,000 tonnes of sugar every year. Here at Kent Foods, we are completely independent. This means that we can advise you on the best wholesale sugar for your requirements from our own Sucranna Sugar range to the ranges of the World's major refiners."
As this is just 1 independent supplier, and there are many others, I think 100K per annum for us is very good for a starter and as Sweetbiotix get's more established, I can see that increasing rapidly in a 2-3 years times. We also have the supplier across the pond also, and if they were to do a similar preliminary forecast of 100k tonne per annum as well, that'll be 200k tonne.
I still can’t get over the 100,000 tonnes per year. My instinct tells me the number is wrong and should be 1000 tonnes. Just for a moment visualise a single ton of product in a cube container maybe 1 .5 meter in size - put a thousand of those together- now do that 100 more times, I bet you couldn’t fit it in an oil tanker. And that’s just a years product?
Even if Opti receive £1000 per ton (£30k for Slimbiome!?) that’s £100m per year. This would blow every one of those “70+” previous agreements out of the water - combined! That amount of product would surely equate to complete worldwide domination of sugar products.
Someone please convince me the numbers and revenue are correct!
I think it's a very good update. It would have been nice to know if they had hit profitability in all the divisions as was the aim on a month-by-month basis by Dec 23. Good to see us concentrating on the bigger markets now.
As regards to Sweetbiotix, that was one of the main things that attracted me to Optibiotix many years ago (too bad I got in when share price was a lot higher compared to now), it definitely has been slow going, but 2024 is the year for us. I think someone was trying to compare the 100K tonne to what Stevia produce, but I don't think we can make a comparison to that as ours is a bulk sugar replacement (so if product has 100g of sugar, I assume they would use roughly around 100g of sweetbiotix, we need a lot more info around this though ), whereas Stevia is just a sweetener so only need a tiny bit to sweeten stuff.
Awesome to hear it's already been added to a finished product already and that we should expect to see many more throughout 2024. I'm finally really excited for this year after waiting patiently for several years.
Not to forget we still have "MicroBiome Modulators" in the pipeline, which could be massive. Does anyone know if any timelines have been mentioned around that?
The climate could not be better for a sweetbiotix launch although the wait has frustrated us all.It is becoming clear that sugar and sweeteners in ultra processed food has caused nearly the same morbidity and mortality as smoking.Many countries have legislated against this food type and surely the UK will belatedly follow.Gut health is now known to be an essential for our general health.We have products that will fit perfectly with the move away from ultra processed ,high sugar/artificial sweetener full foodstuffs.Several global companies have expressed their wish to embrace healthier food so if we are good enough we should get into the team.
I wonder whether some big holder may have been determined to sell into the mid 20s to account for the volume that has been shifted without a massive swing I'm share price. Hopefully that seller is now done and the handbrake can come off.
Yes very muted response given the potential health benefits from this product
Abstract
The gut microbiota and their metabolites could play an important role in health and diseases of human beings. Short-chain fatty acids (SCFAs) are mainly produced by gut microbiome fermentation of dietary fiber and could also be produced by bacteria of the skin and vagina. Acetate, propionate, and butyrate are three major SCFAs, and their bioactivities have been widely studied. The SCFAs have many health benefits, such as anti-inflammatory, immunoregulatory, anti-obesity, anti-diabetes, anticancer, cardiovascular protective, hepatoprotective, and neuroprotective activities. This paper summarizes health benefits and side effects of SCFAs with a special attention paid to the mechanisms of action. This paper provides better support for people eating dietary fiber as well as ways for dietary fiber to be