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The reason they use terms like 'modest' is because the partner requires them not to disclose precise terms. Nevertheless they do give an indication and are intended not to overstate and therefore mislead investors. For example the use of 'modest' for the Sweetbiotix payments rather than 'low'. IMO they would have used 'low' for £100k-200ks. I think 'modest' would therefore indicate £300k-400ks; and significant/substantial would have been used for the £500k and above range. Given the relatively 'modest' overheads for the company even that first payment is useful even though we are projecting to hit breakeven, small profit shortly anyway.
As for the Sweetbiotix deal generally. Remember that the first batch of recurring revenues is about to cover costs. The next batch of recurring revenues will thus be recurring profits and so on. And Opti have now announced that they have set in train a deal that will deliver a further sequence of profit revenues to add very substantially to all the others. And some people were disappointed. As for exclusivity SOH has made it clear that there are performance clauses as always, that they have other strains of fibres to deal with others, and also I think that exclusivity here indicates that the company has confidence that the partner has the resources and the clout to deliver scale.
The reason they shouldn't use "modest" is purely because it is relative and open to individual interpretation.
I welcome the conservative approach to the rns rather some of the hype you get elsewhere on AIM. In this case it does appear to be a deal which is relatively immaterial in the short term, the good news is that the volume of these individual deals is adding up - a proportion of which will not perform but some that will transform revenue
Appears lse has one of it's gremlins again.
jascott
Couldn't agree more, maybe he' hoping to keep the SP steady and not raise hopes too much. Otherwise there's no reason for it to be included.
jascott
Couldn't agree more, maybe he' hoping to keep the SP steady and not raise hopes too much. Otherwise there's no reason for it to be included.
Sounds better then yesterdays rns, where something stinks. Too many holes to be picked in it. Needs to stop doing exclusivity deals, certainly global ones.
I really wish they would stop using the word ‘modest’ in RNS deal announcements. It’s likely to lead to a less than modest share price performance.
OptiBiotix Health plc (AIM: OPTI), a life sciences business developing compounds to tackle obesity, high cholesterol, diabetes and skin care, announces that its wholly-owned subsidiary, ProBiotix Health Ltd ("ProBiotix"), has entered into an exclusive distribution agreement with Ayalla Marketing ("Ayalla") for the distribution of its cholesterol reducing probiotic, LPLDL®, as an ingredient and as four finished products (CholBiome, CholBiomeX3, CholBiomeBP and CholBiomeVH) within the CholBiome® portfolio for Brazil.
The new agreement:
· Includes distribution of LPLDL® as bulk ingredient; as well as four additional products: CholBiome, CholBiomeX3, CholBiomeBP and CholBiomeVH
· Offers an agreed and expected first order within 30 days from approval of the authorities of both the ingredient LPLDL®, as well as one of the CholBiome products
The agreement is for an initial period of 12 months and has modest minimum order quantities for each product providing the Company security of income and revenue growth.
Ayalla was founded in 1973 with the purpose of providing APIs (Active Pharmaceutical Ingredients) for the pharmaceutical industry. The company has a diverse product portfolio developed to meet the need of veterinary, food, cosmetics and fragrance industries. It has three business units: Pharmaceuticals, Nutraceuticals, and Technologies which includes bringing new drug molecules to market. LPLDL® will be distributed by its Nutraceutical business unit. Ayalla has developed a network of suppliers in Europe, the U.S. and Asia, which enables the company to offer high quality products and services and is a well-known and established distributor of pharmaceutical and nutraceutical products in Brazil.
Cardiovascular diseases (CVD), are estimated to account for 28% of all deaths in Brazil in the last five years and for 38% of deaths in the productive age range (18 to 65 years). The estimated costs of CVD were $6.9billion USD in 2015, a 17% increase in the period from 2010 to 20151. Whilst statins remain the first choice of drug treatment, non-drug treatment including exercise and the use of nutritional supplements are increasingly being seen by clinicians and health care professionals as a naturally safe and effective approach to reducing cardiovascular risk.
1. Analysis of the Economic Impact of Cardiovascular Diseases in the Last Five Years in Brazil Arq. Bras. Cardiol. vol.109 no.1 São Paulo July 2017 Epub June 01, 2017
Mikkel Hvid-Hansen, Commercial Director of ProBiotix Health commented: "We are pleased to announce the signing of this distribution agreement with Ayalla. Ayalla is an established distributor with a national reputation and wide network of contacts. We chose Ayalla because of its reputation and expertise in commercialising pharmaceutical and non-drug products with strong science and clinical studies in the Brazilian market."