Optibiotix Health PLC (LON:OPTI) Chief Executive Officer Stephen O’Hara caught up with DirectorsTalk to discuss the new appointment of Martin Hunt as Chairman at SkinBiotics, how this fits into their strategy and what it means for shareholders
Q1: Now Stephen, can you tell me more about the appointment of your new Chairman at the SkinBiotix division of Optibiotix Health?
A1: Yes, sure. In July of this year Optibiotix announced a strategy to demerge and list as separate divisions and the appointment of the Chairman that we announced in the RNS is the start of this process. It’s the process of demerging SkinBiotix and we think this is an important step in the development of SkinBiotics as we build a dedicated team, with dedicated leadership who have the expertise in the biotherapeutic space. I think investors have to realise that it’s a very different space to the other Optibiotix divisions and requires specialised industry knowledge in cosmetics, medical devices and in pharmaceuticals and Martin’s appointment is to start a process of building a dedicated team and a dedicated leadership with the industry knowledge and expertise to fully exploit the opportunities that we see in the microbiome space particularly in the skin microbiome space.
Q2: So what could this mean for Optibiotix’s investor and how will it fit into your overall strategy?
A2: Well our strategy is to build value for shareholders as part of that process, we’re looking to build each division to a point where we can demerge then list it separately, if you look at SkinBiotix and look at the area that it works in, we don’t believe that the market really recognises the value within SkinBiotix, let me give you a couple of examples. The first example is the size of the market opportunity in skin so these market opportunities include cosmetic skin care, a market of $121 billion, healthcare-acquired infections, a market of $82 billion, dermatology, and $10 billion on wound care. I guess the other aspect is that if you look at the other ways in terms of value in a company over the market opportunities that it’s targeting is the value of comparison so SkinBiotix is in the biotherapeutic space and if you could comparate a company such a 4D Pharma their valuations tend to be in the hundreds of millions rather than the tens of millions and we think that with SkinBiotix the true value of the division within Optibiotix is not being fully realised. By taking it out of Optibiotix and putting it into a separate company, which is demerge Optibiotix and then list it separately will best realise value for shareholders and there’s other examples of this that have set a precedent for this type of approach and they include Racal who spun off Vodafone and Chubb and more recently Paypal from Ebay. What it means in terms of shareholders is typically they retain their position in Optibiotix but they also gain a proportional position in the new listed company so from a shareholder point of view it’s a way of greatly increasing the value of their shareholding.
Q3: With that in mind then, when do you think we can expect any listing to happen?
A3: We can’t give the exact details of when the listing will happen but this is part of the process of looking to list SkinBiotix separately, timing will be market sensitive and we will announce an RNS on that nearer the time. We look at market conditions over the forthcoming months, we look at putting the team in place and getting the right people who we feel can lead a team and who have the expertise to fully exploit the opportunity, once we have those in place we will produce an RNS, we will signal our intent then in terms of a listing. We see this as not a longer term opportunity, we see this, dependant on market conditions, as a short to medium term opportunity and we’re pressing ahead on that as I indicated in the earlier question and the first part of that process was appointing a Chairman. So we’re really excited by the opportunity and we think it’s a great way to build shareholder value, we think if we get it right and we take it to the market then very much like as we did with OptiBiotix we were able to get a great increase in share price and value over a short period of time. We think that SkinBiotix opportunity is very similar; big markets, big opportunities and as I said earlier comparator companies with high market valuations, I think it’s a great opportunity here for investors in Optibiotix Health.
