By James Parter | Sunday 2 November 2014
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Today I start a collection of three biotech companies that I think have brilliant upside potential. Biotech firms can fly on bullish news on their products and these are three firms that I am banking on to do that. These could be genuine multibaggers if they meet expectations or grind lower if they do not.
Number one company that I will look at is Optibiotix Health (OPTI), a microbiome company that the Sheriff of AIM looked at when it reversed into total flop shell Ducat Ventures. Ducat was a tin shop company but shareholders have been given life after death and this £7 million pound company could be worth double that I think.
That would put the shares (now 10.125p) at 20p and the market capitalisation would only be about £15 million and Optibiotix already has a wad of cash. CEO Stephen O'Hara is an astute fellow and the company has already screened bacteria that can reduce cholesterol by up to 82%! I could do with that
It's a ginormous market it is tapping with the human microbiome and 4D Pharma is in the same area. 4D is worth £172 million and does not have an awful lot more than Optibiotix. OK it’s a bit further down the proverbial path but Stephen O'Hara has already laid the foundations with the big pharma companies as he talked about at the recent Shareprophets seminar – the video of which is HERE. The price gap is astounding.
Optibiotix only listed in August. It is under the radar and set to fly. The science behind the human microbiome, particularly how changes to the way microbes work in our bodies can impact our health, presents a huge opportunity for us to address many widely experienced diseases and a chance to significantly improve lives worldwide. We are at the frontline of research into using microbiome science to tackle weight related health problems and this move to AIM provides us with the support we need to advance our pipeline of products that support and sustain weight loss and reduce lipid and cholesterol levels.
O'Hara has not hung around, starting studies to get products into foods with Nizo Food Research, getting together a top quality scientific advisory group and telling investors that the product worked in yoghurts without negative effects.
Optibiotix is set for a barnstorming few months and it is my first of three biotech picks to fly. Look for 20p or nearly 100% upside over six months. Do not be disappointed if it does not move immediately but wait for O'Hara to deliver the real news that will create value. A tie up with a big firm would do wonders for the share price.
p.s. Next time I will look at biotech firm dealing with urological disorders. Keep your eyes on this one. The third one is magical...
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