Opti sbtx tipped26 Jan 2019 16:44
May have been posted before.
https://www.ii.co.uk/analysis-commentary/four-aim-shares-cusp-something-big-ii507543
OptiBiotix (OPTI)
90p
OptiBiotix (LSE:OPTI) does not fit exactly with the other examples. Unlike them, the share price has risen sharply and progress has been relatively rapid. OptiBiotix reversed into an AIM shell in August 2014 at 8p a share.
Despite the share price rising by more than 10 times, there is enormous additional potential. The microbiome-focused company has reached a point where revenues are accelerating and there is the potential to unlock value in some of the offshoots of the business.
The business has been run in a very lean way with trials undertaken by contract specialists and manufacturing outsourced. This means that the overhead base is relatively low so when revenues do ramp up and breakeven is passed profit should grow significantly.
Revenues are growing for the SlimBiome weight management ingredient and additional deals are being signed and this is reducing the cash outflow.
The focus is on obesity reduction, natural sweeteners, cholesterol reduction and medical products. It is not just a question of OptiBiotix building up its own revenues. Once subsidiaries have developed microbiome-based products focused on a specific market they can be spun out and quoted separately.
Source: TradingView (*) Past performance is not a guide to future performance
SkinBioTherapeutics (LSE:SBTX) was the first spin-off from OptiBiotix. A placing at 9p a share raised £4.1 million net for the skin health company in April 2017 and, although, diluted, OptiBiotix retains a 41.9% stake. SkinBioTherapeutics is talking to potential partners and the final phase of human studies for a cosmetic skin cream formulation should end in the first quarter of 2019.
On 24 September, subsidiary ProBiotix Health was formed and in December it raised £1.025 million via a convertible loan note issue. The plan is to float the business later this year. Admittedly, the uncertainty in the markets could hamper that plan, but it will eventually be spun-off even if it takes longer than expected.
OptiBiotix may decide to raise cash by reducing its stake in SkinBioTherapeutics – depending on market conditions. The stake is currently valued at £7.4 million. Some of the cash raised would be paid as a dividend.
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