Optibiotix Health PLC (LON:OPTI) Chief Executive Officer Stephen O’Hara caught up with DirectorsTalk to discuss their joint product agreement with a multinational and other potential commercial progress.
Q1: Now Stephen, you’ve announced today a pretty exciting RNS, can you tell me a bit more about the agreement with this multinational?
A1: Yes, sure, it is pretty exciting. So if we go back to the end of November, Optibiotix announced a scientific commercial update which discussed a number of commercial partners across all its technology platforms and this announcement is as a result of ongoing discussions with one of those partners and it creates an opportunity to take Optibiotix’s SlimBiome technology into the Asian market with a major corporate whose name will be well-known to investors. The agreement allows the development of food and over the counter products containing the SlimBiome technology for the Asian market which I’m sure everyone would appreciate is a very large market with both India and China ranked second and third in having the highest number of overweight people in the world. So this agreement is a very exciting agreement and is a great opportunity to take our technology to a major market with a well-known international brand and is really good news for shareholders.
Q2: Why can’t you tell investors the name of the multinational?
A2: This is always very difficult, I’d love to be able to tell the investors the name of the corporate because they’d be excited by it but there’s a number of reasons why this tends to happen, it’s not that uncommon with large corporates for a number of reasons.
he first point is that this is a product development agreement, we’re creating new products for the Asian market and, as you might expect, any company who’s launching new products into a market they’ll want to maintain commercial advantage informing competitors of the launch plans for new products reduces that advantage.
Secondarily, corporates spend many years and millions of dollars building up their brand name and creating brand recognition and when the name eventually comes out people will certainly recognise the name. They don’t really want to see other companies like Optibiotix leveraging their brand name for their commercial gain. Just to put this in context, we have an agreement, it’s covered by confidentiality clauses and if we did break those clauses for whatever reason and that could lead to termination of the agreement. Commercially we’re in discussions with the same company for other products so we’re also discussing our cholesterol supplement and our sugars so it’s our commercial interest to respect confidentiality with this agreement.
In addition, as a company Optibiotix has built up a very good reputation with our partners and the industry in general and we wouldn’t want to risk reputational damage by releasing confidential information so whilst it would be great to tell shareholders I’m afraid in this case, certainly for the time being, we can’t release the name of the corporate.
Q3: Can you give us an update on other potential commercial progress for OptiBiotix Health PLC?
A3: Yes, there’s a lot going on and as we announced previously we’re in late-stage discussions with quite a number of partners across all our platforms and there continues to be a lot of interest in our technology across all our platforms. I created deals for companies over many many years and this is a really exciting area, we‘ve got lots of companies interested across all our technology platforms, that’s fairly unusual and a number of these discussions have been going on for many months.
Typically they go through a process where there’s interest then they extend it to due diligence of our science which goes to the technical stage, you then have a due diligence on the technical property and often the partners, particularly if they’re global partners and they have opportunity across a number of different continents and countries, the partners want to assess the opportunity in each of those countries. So that can take often 6-7 months to actually go through this particular process so we’ve lots of discussions taking place and we’d hope that a number of these agreements would conclude in the new year.
For now we’ve got a great agreement with a great company and it’s a good end to 2016 and we hope to have a very successful 2017.
