OptiBiotix Health PLC (LON:OPTI) has reached a significant milestone following the first sales in Germany of a new range of cholesterol-lowering capsules containing its breakthrough LP-LDL technology.
It follows the successful registration by partner HLH Biopharma (HLH) of the product, known as Lactobact, which uses naturally occurring strains of bacteria.
“We hope this will be the first of many product launches of multiple formulations and presentations of LP-LDL as the active component in a wide range of pharmaceutical and consumer products around the world,” said chief executive Stephen O’Hara.
“HLH have an international reputation for providing high quality and scientifically validated products and are one of Europe's leading suppliers of probiotics to the pharmacy market.
“Establishing early sales of LP-LDL to pharmacies with HLH helps substantiate the credibility in the science behind LP-LDL to build the brand and acceptance in the larger consumer healthcare markets."
OptiBiotix is a pioneer in the human microbiome, which is essentially the bacteria that inhabits the gut and skin.
It has found, for instance, small changes to the gut flora can affect the way the human body processes food.
With this in mind, it is developing compounds to tackle obesity, high cholesterol and diabetes, as well as potential products for skin care.
Its LP-LDL formulation comes from the bacterial species Lactobacillus plantarum.
Lactobacilli are common components of the human intestine and used by the food industry as probiotics.
Unique line selected
LP-LDL is unique in that it was selected using OptiBiotix's Optiscreen platform from a collection of over 4,000 candidates for its “outstanding capacity” to hydrolyse bile salts.
This activity is crucial for both bacterial survival in the gut and its use to prevent and manage a number of health conditions such as high cholesterol, high blood pressure, glucose and energy regulation, vitamin metabolism, and liver function.
This creates the potential to use LP-LDL as the technology core of multiple products using the model pioneered by chipmaker Intel.
Broker expects more deals
The broker finnCap said revenues from Germany will be in the “low to mid six figures”.
Analyst Alex Pye expects further deals. “Management continues to deliver on key commercial milestones laid out at the time of our initiation,” he said.
“We expect OptiBiotix to continue to announce further supply agreements in the coming months with national pharmacies and large global consumer health partners.”
After spinning off its SkinBio business as a separately listed entity earlier this year, the group is now focused on three development areas.
They are OptiScreen, which is developing gut bacteria to help in lowering cholesterol; OptiBiotics which is developing SweetBiotix, its natural sweet fibre to help with diabetes control; and Slimbiome, its weight management product.
The firm already has commercial partners in place for all its platforms with global brands.
At the end of 2016, Opti partnered with Indian giant Tata to develop various weight management foods and products that contain its SlimBiome technology.
In March 2016, OptioBiotix also signed a deal with Sacco, one of Europe’s leading probiotic manufacturers and raw ingredients suppliers to manufacture and supply OptiBiotix's cholesterol reducing strain, LP-LDL, in Europe.
To give an idea of the size of the markets Opti is working in, finnCap estimates the functional (diet) foods market is worth £154bn annually.
Having created value from the SkinBio spin-off, O’Hara recently told Proactive Investors that his target is to build each of the three divisions into separate legal entities and possibly list each separately on London’s AIM market.
O’Hara said he hoped any listing would be planned sometime by the end of this year and the beginning of next, once each division has built up its IP, development programmes, and commercial partnerships.
The firm’s boss also said he plans to give some more of the value from the SkinBio float back to Opti shareholders in the future as well, in a way that is best for both firms.
Overall, O’Hara’s aim is to further the commercialisation phase of the business, increasing revenues organically, but is also exploring the opportunity to make a strategic acquisition as well, which may be the only reason for the firm to raise any further cash, given its healthy balance sheet.
Certainly, Opti has provided shareholders with value thus far with the stock changing hands for 66p, compared with a flotation price in August 2014 of 8p a share.
If O’Hara and his team can deliver on his plans, that value could be very much enhanced.