Galenicum - SOH comment25 Oct 2017 12:43
While we eagerly await for Korgi to impart his wisdom by answering the questions I posed to him yesterday...
A brief exchange with SOH this morning on the subject of Galenicum.
Seemingly another potentially exciting commercial agreement with Galenicum. In the RNS its states Galenicum " has market presence across the world including the Unites States, Peru, Chile, India, and China, the company has a global reach in pharmaceutical and nutritional markets." then later states "this agreement expands OptiBiotix's sales into the Middle East and Latin America."
I assume this is a limited license and other partners are in the pipeline for USA, and Chinese markets, or some of these territories?
There are something like 30 latin American countries - Is Galenicum limited here? It also seems you are being quite deliberately cautious with your expectations in terms of revenues by bracketing Galenicum with HLH and PharmaBiota, (REVENUE RANGE) whom have a much smaller commercial footprint. This appears to have dampened the positive effect I hope for.
Per's linkedin comment is encouraging. One down on to the next. Positive chap.
SOH :- We have multiple discussions and our stated strategy is to create multiple opportunities across multiple territories and channels with different formulations and presentations. We are negotiating hard to make sure we restrict agreements to specific formulations and don�t give up territory exclusivity or access to large markets like the US and China until these partners PROVED their worth, or pay a PREMIUM. The deal with Sacco is an example where we limited their reach initially to Italy, then Europe, and then extended it once they proved themselves. This limits the companies risk and allows us to have multiple deals within a country for different formulations or presentations, creating multiple revenues.
You are correct that Gallencium has a much larger commercial footprint and has a leading position in Spain. As stated in the RNS, and outlined in our interims, our strategy is to target the leading pharma groups in their country with established brands which we can leverage to gain market access. This is quicker than having to build a new brand. You will also note that many of the companies we are working with - Sacco, Nutrilinea etc, and now Gallenicum, have a track record of doubt digit growth and are rapidly building their businesses, and hopefully will continue to do so on the back of LP-LDL sales.
I am sure that investors have also recognised that that this now the sixth deal since June (not all LP-LDL) which even with conservative figures will start to add build into a large revenue stream, with little increase in operating costs. This is consistent with our stated strategy. As Per indicates, one down, onto the next one. I am sure investors will also note that this is just one product amongst our portfolio. The cautionary statements are provided by the regulator as a requi
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