Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. 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.
Shares in Optibiotix (OPTI) are now trading at 22p -22.5p – it was only a few months ago that we tipped them at a 9p offer. There is news today but the fun is only just beginning. The announcement today is not exactly concrete but shows momentum. It reads:
OptiBiotix Health the Life Sciences business developing compounds to tackle obesity, high cholesterol and diabetes, announces that its weight management yoghurt will be showcased at the Health Ingredients Europe conference in Amsterdam from December 2nd - 4th2014. The product will be available on the Nizo Food Research stand and will be supported by product samples. The stand number is J2.
Health Ingredients Europe (HiE) is the largest European exhibition for health ingredients, with more than 500 global suppliers registered to attend. HiE promotes itself as the leading European venue to engage with business partners and solution providers in the $1 trillion health, natural and nutritional food and beverage industry.
The weight management yoghurt brings together the joint expertise of OptiBiotix Health and Nizo Food Research. OptiBiotix is responsible for the weight management formulation, created by world experts in satiation (the feeling of fullness), metabolism and how microbes harvest energy in the gut whilst Nizo's specialist expertise lies in the manufacture of dairy products and using taste and texture to improve satiation.
This is a good showcase for the product in yoghurts and shows the closeness of the relationship with Nizo. Even today the company is only valued at c£16 million – and it still has £3 million net cash. What will really kick start the shares is the announcement of commercial deals and our sources suggest that this is really not going to take long. We remind you of how big such deals could be from an update a few weeks ago:
To illustrate that point of what recent licensing deals for cholesterol reducing products – a similar market – are worth. Consider BioGaia licensing its Lactobacillus reuteri strain to Nestle for €50.8 million (Feb 2012) and Schiff Nutritions $40 million (2011) deal for Ganeden’s Bacillus coagulans BC30 strain.
For Optibiotix, we are aware that preliminary discussions with AB Bio, Du Pont, and Probiotics International suggest early commercial interest.
Other deals in the area of weight management if Optibiotix wants to go down the co-development route are Plandai’s £2 million upfront plus 5% of future revenues deal with Phyto Nutricare (April, 2013), and Trovita Healthcares product formulation licensing deal with Galen (Aug, 2013). Again we are told that preliminary discussions with ingredient manufacturers suggest early commercial interest.
Our target price to sell remains 30p and we expect that to be met very soon. For now hang on in there.
The HotStockRockets SHARE TIP OF THE MONTH is out at 2.45 PM today. It costs as little as £5 to join the site and you can do so HERE
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