Optibiotix Health (LSE:OPTI) — Investor Update

0:01 Good afternoon, ladies and gentlemen, and welcome to the OPTIBIOTIX HEALTH PLC Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just please simply type in your question and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and we'll email you when they're ready for your review. I'd also like to

0:32 remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. And if you'd be so kind and give that to your attention, we'd be most grateful. And I'd now like to hand over to Stephen O'Hara, CEO from OPTIBIOTIX. Good afternoon. Good afternoon, Mark, and good afternoon to everyone attending the presentation. There's been over two sixty people that have accepted the invitation to the presentation. So hopefully, either listening now or listening at some point in the in the future. And they are a mixture really of new potential investors and some old friends that have been investing with us for quite a a period of time. So what I've tried to do is balance the presentation. So there's some slides here that investors will be familiar with, which are important for new investors. There'll be some slides that I've updated and there'll be some new slides at the end in particular that sets out how far you've come and particularly looks towards the future, where we'll be going in the next couple of months and years and where we think this will take us, which I think will be of particular interest to existing investors.

1:44 And I hope at the end of it, people will think, well, this is an interesting company. It's an interesting space, the microbiome. It's got some interesting products which are science based and won lots of awards and are accessing those global markets like cardiovascular health and obesity that are big markets. And as well as its first generation products, it's got some really exciting second generation products that if there's a number of these, and if either of those get to a point where they reach full market potential, this will be a very large company. So we hope it's of interest to investors and we welcome their feedback. I'm going turn my screen off now so you get a bigger picture of the slide and then we'll pick up the questions later on. But thank you very much for those people who've added some questions initially and they've all been responded to and you can pick those up later.

2:40 Just moving on to the first slide. This is just very much an introduction for those new investors. And OPTIBIOTIX in the microbiome space, as I touched on, this is a really exciting space and it's seen by many as the future of healthcare. And just very briefly with the microbiome space, the microbiome is simply the microbes in their genes the enzymes and proteins they produce in the gut and on the skin. And this schematic shows that. So on the left hand side you can see a tower block and that shows the number of cells in the human body. The black top of it shows the number of human cells and the bottom bit in grey shows the number of microbial cells. This sort of represents the large number of microbial cells to human cells.

3:27 And the sphere just to the right hand side of that, the dot in the centre represents the number of microbial

3:35 genes in the sphere and the central dot the number of human genes. So I'm just adjusting my microphone. So the whole idea behind this is that if you can change, there's the key message to go away with, if you can change the microbes, you can change their genes, and in doing so, changes the proteins and enzymes and impact on the proteins and enzymes and start to impact upon human physiology and human metabolism. And lot of the early work took place in animals and this is always quite an interesting story. This is back in 2007 when I first came across the microbiome. An early work was carried out of what I call this Gordon twin. So one fat twin and one thin twin, which had identically genetically.

4:25 So what then happens is that you've taken the faeces from your obese twin, they put that they gave that to a mouse and that mouse then was a lean mouse and that state that went fat. So you and then if you take a lean twin and take the faeces from a lean twin, give it to a lean mouse, that mouse stayed lean. Or if you give it to a fat mouse, that mouse went lean. So what you've got is an example in animals of what's seen as a transfer of phenotype. So you transfer the characteristic, what BC or leanness, by transferring the microbes and the faeces to the animals. So that's quite an interesting concept and of course many people will be familiar with that's now moved into humans and there's many hospitals around the world that are using what's called FMTs, which is Fecal Microbial Transplant. So they're using faeces to treat people to particularly reduce the incidence of Clotium difficile infection, which has a high mortality.

5:25 Now, you can't really sell faeces in my view, so what we've done, we've looked at different ways to modify the microbiome. In essence, there's two ways: you can add organisms, and if you add good organisms, so these are organs for the health benefit, they're called probiotics. Or the other possibility is you add ingredients that can change the microorganisms in the gut or on the skin and in doing so you can change the ratio of those microbes, genes and proteins and enzymes etc. To improve health, okay? And they're called prebiotics. And the company is structured around those two parts of the business, probiotics and prebiotics. And that's just an important point to get across. If you then move on, I just want to take you through the way I've structured the company in terms of its

6:20 strategy, okay, its vision and strategy. So what we try to do is develop compounds that are science backed and clinically proven. We're taking those into the food supplement and pharma market, but in essence the process we've taken is very much a pharma process. So many of these foods and supplements are very much sold on the basis of marketing. They don't have that science backing it, don't have the clinical studies that support them. And what we find when we speak to a lot of the larger companies and we have lots of discussions with a number of larger corporates is that they find this of great interest to them. It creates real differentiation in the marketplace to have a science backed product with clinical studies. And we have a number of clinical studies, for example in our probiotics, three clinical studies, two published, one coming out, about five scientific studies and similar across the other products. And as I say, gives us real differentiation in the marketplace.

7:20 What we've also done is build a strong portfolio of IP as patents and, and trademarks. And that's quite unusual. So in the food and and supplement industry and industry, you don't get many companies build an IP portfolio, but there's a real there's a there's a good reason for that because it creates a a real value in terms of the assets of the company. And what we've done quite early on, particularly for a quite young company, we've had a land grab of critical elements to microbiome space. So you get in early and you land grab a lot of the IP, it actually creates a lot of value because it's bent to other companies mentioned in our space unless they license or buy your IP. And that's why we've got a lot of large companies who've licensed our technology quite earlier on.

8:05 And what we've also done, which I think is critically important in a space which is so volatile because the science of the microbiome is evolving is more not known than known about the microbiome. We created multiple technology platforms. So we have one probiotic platform, that can go via the pharma or go via the supplement route. We have three prebiotic platforms, one is SlimBiome, one is Sweetbiotics, one is our microbiome modulators. And of course, we also have Skin. So investors are not invested in a single technology, single or small range of products. We've got four bets here if you like. When I formed the company, that was always the plan. I felt one or two of those would fall to the side, but fortunately, it's, all those technologies have have grown to maturity.

8:57 And that diversifies risk but also maximizes the scale of the opportunity. And and later, we'll come to the scale of the opportunity. And then tactically, we decided that we would look to get some products out there early. These are our first generation products. And so we'll start to build early sales, and we'll start to build a network of partners whilst derisking our second generation products, which are more innovative, where we have to create new science to create those products. Those are our sweetbiotics, our microbiome modulators. And some of those now are getting to a point where they're really quite exciting. And so at a point of scale and then commercialization. And then finally, what we've done is looked at our our team and said, look, you need different people at different stages to develop in your organization.

9:43 So we changed our our our team as the company has grown. So we're not a static company. And where we've needed to, add expertise, we've added expertise, and that will continue. And so we brought in commercial, leaders who are well known within the industry with track records of building sales to to take forward each of those divisions. So the PLC, if you like, the group PLC, is the company that take hold of the technology, proves the technology, so proves the science behind the technology, proves the clinical studies, builds the IP portfolio. And each of the divisions, when they come to a point where they're they're ready to trade, both of them have been trading and now are profitable. And they're they're led then by commercial, leads. And that creates the potential then for each of those divisions, as we've done with Skin Biotherapeutics, to list those companies separately on the stock market or get a trade sale. So, again, it gives the shareholders multiple opportunities for exit.

10:42 I just want to use this slide, which I think you haven't seen before, and it's quite an interesting slide. And the idea behind it, it sort of looks at where we are compared to our peers and it also gives us an idea of some of the risks and returns in the microbiome space. So the top five companies on this list on the left hand side starting from Finch and going down to Experian, they're all pharma companies. Okay, so they've gone down the pharma route. Proby is a probiotic company and we sort of span a mixture of all these. If you look at our patterns, can see we've got quite a lot of patterns compared to many. The only 40 pharma, a pharma company has more patents than us, so quite a lot of patterns compared to the pharma company.

11:28 The pharma companies have raised quite a lot of funds and even Probio raised quite a lot of funds. And you can see the market cap is high. So we've got lots of patents, we've raised a small amount of money and we've got a relatively low market cap compared to others. What's also interesting, many of these companies, particularly pharma companies, the first four have got no products. I'd also ask a number of shareholders to look at Experian. That's quite an interesting company. They've got something very similar to our LPLDL. They've got a non statin cholesterol product and they've got revenues of over $200,000,000 and they've got their pharma product, which is bemboleic acid, can reduce LPLDR by around 16%.

12:16 You'll see when we publish our study we'll get reductions of LDL by around about 26%. So really substantial reduction. So we're getting statin levels of reduction but we're a natural product. So we see a big opportunity here in the non statin cholesterol market. And just finally, what I've done here, I just looked at the percentage change in the SP and this is all relative to when OPTIBIOTIX went on the market, which was August 2014, where those companies were on the market at the same time or where the those companies entered the market by by listing. And and what you'll see, we've got quite a variation in terms of the x p the SP. Now this will vary depending on the the time point when you took the the share price at the start and and end point, but they all rate the share point in to the to to the share price in September. And you'll see that we've got some reductions compared to when these companies were listed. We got some big increases like Proby, and we had a 612% increase since we listed.

13:29 So we're not doing too badly. Probably more importantly, if you look at some of these numbers here, we raised GBP 8,300,000 and we've got market cap of GBP 50,000,000. We can see some companies like 45,000,000 have raised GBP $250,000,000 and got market cap of 150,000,000. So we're trying to create some value here. And we think there's quite a lot of opportunities going forward in this space. Now this is always difficult when you make comparisons because these comparisons are the pharma companies that are already in the marketplace. And so this is not pure, but it gives you an indication as to the scale of the opportunity if we get things right. And just moving on further, I just want to talk you through in terms of our commercial strategy. Where we are in terms of our commercial strategy is that we've got give me a second. Just open the screen.

14:20 We've got so we've got a b to b strategy. So what b to b means is b to business. So our partners, we sell to businesses and they sell on to other businesses. Okay? And the idea behind that is our partners, our business partners help build the brand recognition. So they build the brand LPLDLTH and Slimber Arts. It's particularly important with our first generation products and allows us to build a global network. But more importantly, it allows us to develop a a low cost, low risk route to multiple markets. And those partners then, they prove the the the concept, and they build the confidence in the the brand. And that then allows us at the same time to build finished product solutions.

15:08 And you'll see if we go through the next few slides that we're moving from ingredient business to finished product solution, and that allows to rapidly scale growth. So it's different stages of the company. So the first stage of company is obviously building the science and building the clinical studies and building the IP around that and then manufacturing. Then we're at the stage of selling ingredients and building our brand and now we're going to the next phase of the company of selling more and more finished products. And the reason behind that, you get a higher value and a higher margin for those finished products that allow you to grow sales. Okay? And then the other point to bring out commercially is that we've got a portfolio of small and large companies. And the reason behind that is that when you create innovation in the industry, many smaller companies are quicker to adopt innovative products. Some larger companies who tend to wait, a lot longer until the the product is established before they enter the market. And so we try to create a a portfolio of of small and large companies. And the small companies start to build the volumes and the larger companies, we try to make sure we kept those key markets of India, Asia, and America open for those larger companies. Because what they bring, the larger companies, they bring sales, they bring international presence, they bring brand credibility.

16:25 And with that stage now, we're we're in discussions with a good half a dozen of large partners. And hopefully, you'll see the fruits of that, those those discussions over the next couple of weeks, months, etcetera. But now just in the discussion yesterday, a very large international partner said that we're entering the space, we see a big opportunity, and we see you as our priority partner because you have all the things I discussed earlier. You have IP, so you have protection, you have science, you have clinical studies. All those things are really important for for your large corporate partners. Yep? Because they are very demanding, and they do take a long time to to negotiate. So the bottom part of the slide just goes through those aspects of the pros and cons of going by this particular b to b approach to commercialization.

17:19 First thing is that allows us to use their local partner network and their local market knowledge. The partner pays for all the regulatory registrations. And in places like Japan and Brazil, that can be very, very expensive and very, very long. Allows them to deal with import and customs, which it can become increasingly complex over the last two years or so. They deal with all the marketing, the PR, distribution costs, they they bear all those costs. And this allows us to have an international reach. And and don't forget, you know, we're we're the 160 countries at various stages of commercialization, but we only have six eight people in the team. So a small team, but big reach. Okay? But here's the downside, here's the flip side. You've got less control. So we're dependent upon the partner and their priorities and those can change.

18:07 Tell us they're going to launch in August or November and they say I'm sorry because of various things, know, someone's off sick, somebody got married, we're going to launch in February. It doesn't mean anything to them. That acts in a different financial year as far as we're concerned. So it becomes very difficult to control a partner. Bigger the partner the less control you have over them. And we have less visibility of the partners that our partners work with. So occasionally we come across products in the marketplace and say oh we weren't aware of that. We've had a a partner do a deal that they've not informed us of. So there is certain challenges to us. And probably the biggest challenge is we have less financial visibility. So they will give us a forecast, but that can be unreliable. We have to be cautious in terms of what we tell to the market. That's why we're very cautious in terms of giving a forecast until we had a number of partners and we had recurring sales. So most of our sales, about 85% of our of our sales are are recurring, and we start to build up a a a reliable revenue stream that will be ongoing, and we'll be adding to that as we as as we go forward. And the point I made earlier, the large partners tend to be a lot more cautious. They they they tend to launch a couple of products initially in the marketplace, see how they go and maybe link them to one or two territories. And you've seen this, for example, with Hall and Barrett where they launched three products initially, they extended to eight and then extended further.

19:31 We've also seen it with OPTIX HEALTH who launched a couple of products initially and then more recently in July of this year, extended the range into OPTIMAN and into OPTIX HEALTH. So it does take longer with larger partners, but now is the time where we've got that interest, we've proven the science, we've proven the commercial reality of our products, and now is the time to really focus on getting a lot more of those larger partners across the line. As I say, we're very confident in doing so. So this is just a slide that has two aspects to it. One, just to show you that we've been very well recognised within the industry. These awards that you don't pay for, they are open awards that many people submit to. They're quite well recognised international awards and you're in direct competition with others. And those include some of the larger companies. So we've been finalists or winner of a number of these awards.

20:34 The other reason I showed this slide is that you can see, and it's quite a good example in terms of SlimBiome, that we started off very much focused on ingredient, with an ingredient awards, and then started to focus very much on putting forward our products, Limbion Medical, our go figure range of products. And similar down with LPLDL, initially we start to focus very much on our ingredients, then more recently we're moving more and more towards submitting our products for rewards. So that's part of the transition from selling ingredients to selling final product. Again, as I mentioned earlier, selling final product means you've got a higher sales point, you've got greater margins and of course you've got a double effect because selling product means you're also driving ingredient sales.

21:23 So if I then move on to this slide, this is a company snapshot. I'll go through it fairly quickly because it's a slide that I've used in the past. And just at the high level, it's about company's based around science and building the patent portfolio. We have first generation, second generation products and I'll go through each of those in more detail later. But I guess the bottom of the slide some of the key points I want to bring out that people may not have seen before is that we've been generating revenues the last few years. In 2020, over half of our sales were ingredient sales. A small percentage were foreign product sales and just in reserve were royalties. So going back to what I said earlier, we're trying to move now to change that ratio. So we have same, we increase our volume sales of ingredients, but percentage wise, because we can increase our final product sales more, you will see that percentage change, okay? And that's a focus for this year. And then the other point to bring out is that we've got quite a lot of investment from the board and from management.

22:32 I'm a substantial investor in OPTIBIOTIX. And what's really interesting, I think we each of the directors are either investors directors have been with us for a while or new directors have joined us, recognize the opportunity. And when you see directors, with five buyers from directors since April this year buying into a company, you start to realize that they recognize the opportunity here. So we really do see a big opportunity here, and it gives an indication as to the level of confidence the Board has going forward. And as we get to the end of the presentation, I'll talk to you more about where we see the opportunity going forward and why we've got such a high level of confidence. And then these points on the side, we've got this technology, the technology doesn't bring you revenues. What brings you revenues if you turn into products that go into large and rapidly growing markets and that's what we've aimed at, weight management, cholesterol reduction, sugar substitutes.

23:31 Again, it's the real differentiation in terms of our products. We've got science, we've got studies, clinical studies, we've got awards. That really starts to attract the interest of the larger companies. And we've got presence. What the presence shows in terms of 160 countries, it shows that the products aren't limited to to borders. In other words, you can get the same effect whether you're in The UK, whether you're in Europe, whether in The US, whether in Asia, etcetera. So they work across all continents. And that allows you to build a an international business. And, again, having been a a director of health care for three m, that ability to scale up a technology and create multiple products and take them international is key if you can invest in an opportunity.

24:27 And as we go just gonna go through now some of the product slides. So some of these, all you'd be familiar with, but I've updated them, and we've got some new information on the bottom. But again, what we try to focus on is, and it breaks down to a couple of areas, we've built up the science and the understanding behind the ingredient. We have sales of ingredient and we've got some good sales of those and building quickly. We then focus very much on building our own brand and we've seen lots of awards, as you saw earlier, both on ingredient and the own brands. We've got something fairly unique here in terms of a C Mark medical device for weight management. There's very few of those around. The only one that we're familiar with is Excess Medical and that's grown to around about $250,000,300 million pounds per year in terms of revenue.

25:23 And if you look at Excess Medical, I advise you to do so and look at some of the side effects and look at the results that it gets and compare it to Sublagstrom Biomedical, you will see that it's quite a good comparator. We think we're a superior product. So we think those sorts of sales are potentially achievable over time with the right investment. So just focusing very much on the future plans on this slide is we're looking to expand the product range and territory of the existing partners. That's key. So as I touched on earlier, we've got a number of large partners that have bought into the SlimBiome and the product range and they're extending their product range and they're also extending their territories and you'll see more and more of that going forward.

26:12 We're extending the line extensions to SlimBiome to create more and more products. We're investing more and more in our finished product portfolio as we shift from ingredient to finished product. And we're also expanding the categories, okay? So we're going from weight management into health and well-being of WellBiome, which we launched last year. There's lots of interest in WellBiome, but we haven't seen that materialise yet into active sales. We've got a new sport nutrition brand with a partner and we hope you launch that sometime this year. That's quite exciting because it's quite a big partner if all that materialises. So that's some new information in terms of the opportunity going forward.

26:57 So lots of interest in this area. Then looking at LPLDR and again I'm not going go into much detail of this slide which is there for new investors and up to date some existing investors. Same principle, lots of science behind it studies and all the studies are publicly available. You can see some of those studies on our website. We have the ingredient that we sell but we also this is further ahead than maybe SlimBiome in terms of building a portfolio of final products. You've got a portfolio of final products that reduce cholesterol, reduce blood pressure and also improve vascular health. We had a big increase in sales in this area last year and we've got a lot of interest. And linked into that, we've got a number of partners who've taken what we've got, called Biomex three as an example, then put it into their own product.

27:55 So Zigma three is essentially called Biomex three and that's taken by Alpisigma into the Italian market, which is the world's second largest market for probiotics. Seed is a really interesting company in terms of their multistrain DS01 product and they're really starting to grow. They had big sales last year that I think sometimes they struggle in terms of meeting the demands for their product, but they've just received a big investment to expand their capacity, but they're also expanding the areas that they're moving into. And as you saw a couple of weeks or so ago, we signed a deal with them to extend the DS zero one beyond The US into other markets. And we'd hope that based on what they've said, we'd hope to get GBP 3,000,000 to 5,000,000 alone from that particular company from Seed from the sales of LPLDL into DSO one in the years ahead. So you can see how we build this business going forward.

28:59 And of course, we've got BSLTH PLC, hopefully launching very, very soon. And then just to take you through the future plans, I think everyone's familiar that we've gone through a process whereby we've got GMP and FDA pharma manufacturers that allow us to go into pharma. We've got FDA grants and I just want to show you now what FDA grants means to us part of tactically why we moved into this area, because it allows us to take our products into food, particularly into dairy. Part of the reason behind that is the bottom bullet point on this slide, is that we're starting to expand sales into dairy. And the reason for that is if you look at the market, the probiotic market, it's roundabout GBP 60,000,000,000 and of that GBP 54,000,000,000 is in dairy and nearly 7,000,000,000 is in supplements. So we want to take our products into dairy and we've been working with a number of partners over the last couple of years to take our dairy our LPLDL, put it into a number of dairy products, work on the health claim and we've also got a clinical study that's underway that we'll report in 2022.

30:12 So that's looking quite exciting. We've got some work taking place in South America in terms of products being launched. But an awful lot of interest in that area, very large and daily companies. As we said previously, we've got an IND investigation new drug application with them with SEED which will take us down the Oculus supporting data for a biotherapeutic. The other area people may not be familiar with is that we're trying to expand the LPLDL applications. So we've had the genome sequence, we've had this in a couple of times now. So we know the whole genomic sequence and we know what genes within that sequence can impact upon either histamine response, stress and anxiety.

31:01 It looks quite interesting. So we got a consumer survey out to people who use LPLDL and colBiome currently to get their feedback to see if they're experiencing any changes in terms of stress, anxiety, allergy from using our products. But we've also got a study set up in Italy and in Southampton, looking at it in a bit more detail and we hope to have a clinical study at the latter end of twenty twenty two in this area. So what we're trying to do is take LPLDL down the cardiovascular route but also look at other opportunities and particularly the day route looks quite exciting. This is just a map I want to share with you again, this is a new slide for the first time. And these are companies that have expressed an interest in LPLLDL or working with LPLLDL and mixing it with a range of ingredients to get a health claim and to launch a number of products. So these are in America, Canada, South America, Australia and parts of Europe.

32:07 So as those develop we'll give you more news on those. But I just want to make you aware, there's been an awful lot of work in the background for the last two years, really trying to leverage our FDA grass to take LPLD out of food to extend the range of the opportunity and we think this will be a great opportunity going forward. I just want to go through those are the first generation products. I'm pretty comfortable where we are with those. I've done this a number of times and I have to say, of all the companies I've built up, I haven't come across a company that at this stage of development have got so many things going on. Particularly contributing another eight people.

32:53 So we've got the first generation that are growing in Dublin sales. We've got all those awards, etcetera, and publications. And even more exciting, we've got these second generation products. I talk about SweetBartics and we're now at the stage where it's really starting to become real. It's really starting to create an awful lot of interest because you can talk to partners about the the science, But if you can't scale it up and be able to deliver, you know, tonnages to these partners on a monthly basis, then it doesn't become a commercial reality. So the background behind this is totally new concept, okay? Which takes a little bit of time for people to get their heads around and that's why we've had to publish and go through a whole series of studies to prove that this is a fibre which is sweetness and it's got a prebiotic potential, so it's a healthy sweet fibre.

33:55 And there's nothing else out there, believe me, we've been through this process both in terms of meeting lots of partners but we've been through this process also because when you file a patent you get it reviewed compared to other products in the area. So we're comfortable this is novel. So a patent has to be novel, invented when applicable. So this is quite an exciting area. So we've got our publications in place, we've got a range of different products, we've got our patents in place. And as I touched on earlier, we've now got two approaches to manufacturing. We've got a partner in The US who's who's scaling up. And it's really interesting that they're scaling up. And because they see the opportunity here, they're scaling up and paying for that scale up, but they're also paying us annual payments of 6 figure. And they also paid us an upfront 6 figure payment. So they're recognizing quite early on the potential of this this technology.

34:55 That's a really exciting opportunity. But we're also scaling up ourselves working with another partner to scale up and we'll report more on that in the weeks and months ahead as we as that translates from an open innovation project, sorry, with material transfer agreements to a firm commercial agreement. But we have lots of these transfer agreements in place with a number of global partners. What they tend to do, so just to explain, material transfer agreement is where we give people our product. You just got to be very careful when you give some of these larger companies your product because they have the ability to reverse engineer. You can have a non disclosure in place, but that protects you to an extent in terms of disclosing information, but not for reverse engineering.

35:46 The material transfer agreement says, we'll give you this product and you won't play with it or reverse engineer it. And we have to back that up then with the with the the patents, make sure our patents are in place. So we had quite a number of discussions quite early on. It was clear from those discussions, a number of partners were trying to find out more I was comfortable with and our patterns weren't in place. So there was a risk that they would take our science and work on it and potentially file their own patents and take over the opportunity. So it's all about trying to get those structures in place to make sure that when you work with a bit of bigger partners who have this ability to put twenty, thirty, 40 scientists on this to really investigate the science behind it and accelerate the development and overtake your development effectively that you have these patents in place, the publications follow the patents because you can't disclose anything in publications before the patents are in place and of course you have these MTAs in place. But there's quite a few discussions taking place in partners on that and we'd hope to close a number of those out in H2.

36:56 And I haven't done this a number of times, I can't guarantee timings, but we're pretty confident in this that we'll get a number of large part deals in H2. Our microbiome modulators have been particularly interesting and we did some quite early work. We've working this for about five years and I've laid off recently in terms of the last couple of years because we really were struggling And going back to what I said earlier, were able to show the science, so we'd be able to show that we we developed the technology and this technology used the reverse enzyme process to create prebiotics. It's quite unique, okay? There's nothing else out there, okay? We patent that quite heavily. So it stops others from going to this area which is critical. So you can already see in terms of sweetbiotics and microbiome modulators, you've got a large slice of potential microbiome market, particularly if you think the microbiome is going to be important in terms of health and disease.

38:00 So we've got this ability. We've also got the ability to take a probiotic, the probiotic market is £60,000,000,000 and create a prebiotic for a particular probiotic. And the biggest selling probiotic is Lapacida species. We focus very much on that. And what we've got, so the science now, we're comfortable with, we've proven it in laboratory. Where we were struggling with was can we scale her up? And we spent the last two and a half years trying to scale this up, going through all sorts of approaches. It's only been the last four or five months where we've achieved that understanding of how to scale a rep and that's in place. As I said earlier, late to sweep BATICS, you can't really commercialize if you can't move from a laboratory scale to pilot scale to industrial scale. Now we're confident that we can move to industrial scale.

38:54 And I'll come to this a little bit later in terms of what that means. But what it means commercially is that we can create a number of products and you can break them down into three areas really. We can create microbiome modulators for commercial probiotics. We call that an OPTIBIOTIX, that was the original concept, the number I formed the company to create a prebiotic and probiotic which together is better than each individually. So you have this synergistic effect. And that's on Wikipedia. So that's the idea behind it. So you could call it a probiotic boost if you like, to simplify it. We've got a number of works and publications in place on that, particularly with DSM. And we focus very much, as I said earlier, on lactobacillus because they're part of that market, that's the biggest part of the market. But we've also created the potential to what we call microbiome therapeutics.

39:50 So we can create, remember we're at a stage now, as you're building an understanding of the microbiome, you're starting to gain an association between particular microbial species and their microbial products are short in fatty acids and diseases, whether that's cancer, autism, Parkinson's etc. We can actually create and we prove this concept, we can create particular prebiotics for any particular microbe in the gut. So we can start to change the relative ratio of microbes in the gut or on the skin and in doing so really start to create a means, a therapeutic to treat disease and we think this is quite exciting. Now again we've proven that in terms of laboratory and we've got to scale it up and we're comfortable in terms of where we are in scale up, which I wasn't comfortable six months or so ago. And I don't like you you step back and say look, read about the microbiome and see how important it is. And if you think it's important, then the ability to change the microbiome in a very targeted way is key. Okay? So that's the future of the microbiome. Unless you can do what we can do and no one else can do, you haven't really got a market that can develop. So we think this is a massive opportunity. We think this is equally, if not bigger than the Sweetbiotics opportunity if this all works out.

41:19 I just want to go through some financials, which I think you'll find interesting. So this is all published data, so nothing new here. But what you can see hopefully is that if I focus very much on 2020, because we reported those results, and I'll touch on 2021 shortly. So what we've been able to do is increase our sales last year by 104. So we doubled sales last year. And remember, last year was a pretty crappy year for many companies. Weight management market dropped down between 1216% last year, but we doubled our sales last year. And many people focused on immune health products rather than cardiovascular health products. But we did that whilst reducing our costs, Okay? So we had a big increase in sales and reduction in costs.

42:07 A part of that is because 2019 was a thirteen month year because we changed our end of year, but that makes that figure even better, okay, because that's thirteen months and this is twelve months. But what it shows is you've got a mod class scaleable. This could be very careful of businesses that as they grow their sales, they really increase their costs. So we've got a situation where as we're growing our sales, our costs are they stay the same, on this particular case, reduce it. So that shows you've got a scalable model. And as I sort of started off the presentation, I said that we're at a tipping point, we've got lots of things going on And we really are. So we've gone through that research phase, we've proven our products and we're really starting to grow the business now.

42:53 Again, thwarted somewhat by COVID in 2020, but still doubling sales. But it did have an impact upon us, particularly in the second half of the year. But you can see both of our trading divisions, remember our prebiotic and our probiotic divisions, moved from a position where they were losing just under GBP $05,000,000 per year in 2019 to just profitable. That's quite a big change in a year, let alone being in a COVID year. We've got a good cash position. Our cap position is similar now, around about GBP 1,000,000 market and half year to what it was at the end of last year. And our sales continue to grow and up, as you saw on the trading update, by 44% in the first six months. That doesn't include some of royalties that come in the second part of the year. So we're confident going forward in terms of the growth of our first generation products.

43:49 Now we're confident of growth. We think we'll reach our target. We're wary of some of the actions in both Australia, New Zealand and Asia in terms of COVID. But to date, we don't think it's had a major effect. So we're looking good in terms of our sales for last year and also for this year. I just want to look forward now. This is something very much for existing investors and just say, well, where are we now in terms of the opportunity? Where can this take us? I just want to go through process going forward for each part of the business and where we think it will take us and to the scale of the opportunity.

44:36 So LPLDL and CoreBiome we'll publish a clinical study, this is a clinical study on high cholesterol patients and that will show efficacy comparable to statins if not better but with no side effects. Submitted that to the journal, it's the high impact journal back in March. That came back to us about two, three weeks or so ago with very minor comments to review. They've been reviewed and resubmitted this week. So we'd hope to get that published in the next four to six weeks, okay, typically. It's difficult to predict these days because what happens in many journals are prioritising Covid publications. That depends on the number of Covid publications. I think that will really start to show the potential of LPLDR.

45:27 Then we'll look into closeout agreements with a number of large partners, particularly in places like India, U. S. And China. That goes for LPLDR, COLBIOTIM and SCRIMBIOM. And we're pretty confident of that. There's a whole range of partners that we're working with. As I said, I spoke to one yesterday, they saw us as a priority and partner. And the reason for that is all the things I said earlier. I know I'm repeating it, but it's key to get across to you that we are very different in the marketplace. Having that science, having those clinical studies, having that patent changes from a company that's just selling ingredients and products that are same as the very innovative protected products. So we're pretty comfortable that we will work with these partners, we'll get some of those deals across the line. And some of those partners, they're talking and we've seen their forecast are sort of 10,000,000 to £20,000,000 sales in a year. Okay? That's not immediate, that will take time. But we see the opportunity with some of these larger partners, LPLT and CoreBio and, as I say, Slimbio and GoFigure.

46:36 And then we've got the LPLDL as drug biotherapeutic. We think that's a big opportunity, all being well. We, as I touched on earlier, will expand the sales of LPLDL into dairy. We think that's a nice opportunity and we'll expand the application. We think that probably, if things work out reasonably well, somewhere between 25,000,000 and £50,000,000 per year potential revenues. I'm not saying we get that now or tomorrow or a year's time but that's the potential of this. As I said earlier, take me back to one of earlier slides, look up Experian, okay, therapeutics and they have a product which has less activity than LPLDL, and they're over $200,000,000 per per year. So if you'd be a little bit conservative and say, okay, we're not gonna get to 200,000,000 per year, we'll get to say 20,000,000, you can see the scale of the opportunity.

47:31 And typically, if you've got the IP, you've got studies, etcetera, you're looking at 10 times multiple. So that alone, that particular area of the business could be worth somewhere between 200 and maybe $304,100,000,000 pounds as a market cap in its own right. I'm not saying it will be, but as I say, the scale of the opportunity. Similar for Symbiome, Wellbiome and Symbiome Medical. So we're expanding territories with existing partners, expanding the portfolio, we've got these large partners that we're in deep discussions with in these areas and again similar to CoreBiome, these can quite easily have sales of 10 this is sales to us okay between 10,000,000 to £20,000,000 per year and we're looking for our cat expansion. So again similar to our first generation products, you're looking at maybe £30,000,000 to 50,000,000 And again, just as an exemplar, look at XLS, you're looking at GBP 200 to GBP 300,000,000 per year.

48:31 Look at how we compare in terms of Slimbio Medical to XLS and compare as a like to like product You'll see we've got many benefits over it. There's lots of things we have to do to get to that particular level but that's the potential of it. And then you've got sweetbiotics. So we've got a publication that is going through review which will show the prebiotic activity and superior taste compared to other products in the market. We're trying to time that with a scale up and commercialization of our industrial partner, who would hope to be commercializing either later this year or next year, depending on the outputs of the sweet bars. Because once you commercialize it to a higher scale, you'd have to tester again to make sure it's the same product.

49:18 We've got the open innovation partners working on sweetbiotics, which we think are a big opportunity. And some of these are really quite large. So again, we see some big opportunities here. And the potential could be GBP 70 to GBP 100,000,000 in terms of revenue per year. And again, look at supplant as an example. They've got no revenues. Earlier science knows they raised GBP 24,000,000 recently at a valuation of GBP 100,000,000 plus. So you can see the potential value of that area. And then finally to the microbiome modulators. So we know how to scale up now. We've got everything in place. We're going through the scale up process. At the end of that we have to look at what we've scaled up in terms of then we have to compare it both structurally and compare it functionally to make sure we get the same results with the scaled up product as we had with the lab scale product.

50:15 Then we have to prove that it works in the clinical study and we've got some really interesting data that shows this prebiotic alone if we take it from LPLDR, which we call LLPGOS, that can reduce cholesterol by about 20%. So you can see and if you add it to LPLDL, you accentuate that benefit so you can see how the technology develops. We also think that as you get into proving these technologies and scaling these up, there will opportunity in the microbiome therapies area and if all doesn't work out in that area, we're confident that we've got a Lapus in the Superfield which I think is a a reasonable size opportunity. Now if you sit back and say, look, these are all ifs and buts, and I'd fully appreciate that, and this may or may not happen. What I would say to you, if you just say, well, okay. Out of all of these, just one could could turn out. Then one turned out and it was, you know, creating revenues of 25,000,000 to £30,000,000 per year, you're gonna have a company worth £230,000,000 and a company valued at at was at £50,000,000 And I haven't even touched on Skin Biotherapeutics, which is GBP 25,000,000 roughly today in terms of the contribution to that GBP 50,000,000.

51:30 So you can look at it and say, yes, we've got a lot of opportunities here. There's no guarantees we'll succeed. But now we've got going back to the initial point in terms of the strategy. We've got multiple shots at goals, and we've got look at it in terms of risk. There's first generation products. They've got no development risk, no manufacturing risk. They've got commercial risk and that's largely reduced because we've got commercialisation of those products both LPLDL and SlimBiome across a number of markets and major partners. About scaling that up, okay? Then if you look at Sweetbartics and microbiome modulators, we've got the IP risk, we've got that covered. We've got the science and the clinical studies risk covered, maybe not so much on the microbiome modulator side. And now we've the manufacturing risk covered.

52:17 And that's all about commercial risk. And having a number of early deals in those areas as we have with SweetBartix reduces that risk, and you see potential in that market. So we think we've got a lot opportunities going forward, and we think we've got a lot of potential for the business as we develop it. And just finally, I just want to put it all together. Look, I invest in a lot of companies, it's about trying to understand, are you entering a market that's large? Is it a market that's mature or is it an evolving market and has it got a good rate of growth? And we think we're in the right market in terms of microbiome. It's really a market that's grown quite quickly, 22.5% per year.

53:05 That's a science market if you like. But then if you look at the market in terms of pre and probiotics and cholesterol reduction and weight management, that's also grown and again they're big markets. We've got our first generation products as we started the particular presentation. They're proven, they're proven clinically, they're proven scientifically, they're proven in industry and they're proven commercially in terms of winning awards and being sold around the world. On top of that, we've got our sweet particles and microbiome modulators which if one or either of these succeeds and we're confident that both should succeed, then we've got a big uplift here. So lots of things going on within the company and as I sort of started, I said we think this is an interesting space. We think we're doing a lot of the right things.

53:59 We've got some really good products, first generation, which are doing well. We need to really invest now in moving the sales from ingredient into product, expanding the opportunity. And we really need to see our second generation products being commercialized as we go forward. If we achieve that, this really will be a big opportunity. And again, as I said earlier, that's notwithstanding the growth of our Acetin and Skin Biotherapeutics. So I hope you found this interesting. I've tried to meet the needs of many and maybe not achieve that, but trying to keep that balance between new investors who are interested in what we're doing and investors that have been following this path for a period of time and showing you the opportunity going forward, which we think is great and increasing.

54:56 So thank you very much. Stephen, thank you very much indeed for your presentation and updating investors. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while Steven takes a few moments before entering into the Q and A, I'd like to remind investors that a recording of this presentation along with a copy of the slides and the published Q and A will be made available via your Investor Meet company dashboard, and we will send you an email to notify you when it's ready for your review. I'd also like to remind you that your feedback is important to the company. And immediately after this presentation is ended, we'll redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations. Stephen, obviously, you know investors submitted a number of questions pre today's presentation.

55:42 And of course, you've been very diligent and provided written responses. So firstly, thank you to those investors, and we will publish all the responses to those questions in a written form shortly after today's meeting. In addition, Stephen, obviously, have submitted a number of questions during the meeting itself. And I thought if I could just hand back to you. I'm mindful of time, but please feel free to take as long as is necessary. If you could read out the question, perhaps who it's from and where appropriate to give a response and I'll pick up from you at the end. Sure. Thanks very much and thanks for those investors that submitted questions beforehand and also during the presentation. Some really good questions here. So Simon W, what have you learned about what makes a good partner? That's a great question.

56:29 It's very difficult because when you work with partners they are quite a broader bunch. What we try to look for are those partners that don't have competing products, so they're not looking to replace an existing product and compete with ours. Partners that have got an understanding of the local market, have got a network of distributors they can access, have got regulatory experience that can take us into that market and have got the ability to understand and to sell what is a very different product to what's in the market.

57:16 Of the products out there are sold on marketing and ours is really sold on the science and the clinical studies which gives the differentiation. And we found for example, and this is not to discredit them, but we initially had an agreement with Knighton. They're a manufacturing group and based on that actually to Xeon, their manufacturing group, they believe they can actually sell a find a product, but in essence they are partners who are better focused on manufacturing. So we've had to migrate some of those agreements from partners who really are experts in manufacturing, who want to have more value chain but don't have that expertise and have invested in the expertise to different agreements, to agreements whereby they are contract manufacturers and we take on that role of marketing selling the product. So if I then take the other side of it in terms of the bigger partners, the bigger partners are far more difficult to deal with.

58:20 Just some examples. So we come across a lot of partners who say that we really are interested in this microbiome space. You've got no expertise internally. We want to get into it but we're not sure strategically how to do it. We see you as a priority partner and find your products exciting but don't know how to access the market. And then really it's about building up a relationship over time, education, and they go through a process and I've experienced it a number of times with three ms. They go out, they establish what the market opportunity is, they establish the best channel to market. Is it via bricks and mortar, is it via online etc. And it takes them twelve to eighteen months to actually go through that process and they come back and then we go through the process of finding the agreement.

59:06 It is very different for small and large partners and you do have to evolve your partner relationships as you build the business and we've done that over the last few years but a really good question. Then moving on to Richard A. Core buying would seem to be an important product and has a very wide application in The UK, yet the product is virtually unknown with minimal sales in this country. Why is there no targeted advertising for the finished Core Biomeg three? So there a couple of things there. The first thing is when you build a business, you focus your energy and time on those markets that are big markets and growth markets. That's why we've got a deal in Italy because Italy is the second biggest probiotic market in the world and the biggest by far in Europe.

59:57 Second to that is Germany and beyond that is France, somewhere down the line. The UK is nowhere in there. And so The UK is quite a small market. And I think as a business, and I've seen invested many, many businesses, and I've been a director of many small businesses, that they become too too local. You have to look international and focus on those markets that are bigger. That's where we focus around, use in time, on those big markets like The Italy and increasingly in terms of coal buying, The U. S. And Asia. And I guess the other thing to mention is that we are starting now, we've got National Cholesterol Month in October. We will be doing a number of radio interviews across National Cholesterol Month to promote the product in The UK, but we see The UK very much as a shop window for the rest of world as opposed to be a major market.

1:00:52 It's such a small market and it's so competitive that it's not really worth spending much time on. So that's the reason that we don't really focus on The UK market. A couple of other questions. I'll pick these up which relate to a couple of questions that have been asked but I've answered those already in terms of prepared questions. I've got Simon W, SBS assumes value returned to shareholders. Could you please expand on that? That refers to one of my earlier slides where I discounted the value of skin biotherapeutics. And this relates to what we've said many, many times. So our strategy is to build a number of technology platforms, create those into divisions, list those separately on the market on the stock market or look for a separate exit for those.

1:01:46 We've taken Skin Biotherapeutics and put it on the market, that's grown and it just shows the value of that particular strategy And again, the strategy is that when we get to a point where we're comfortable in terms of the value, we will return that value to shareholders. Remember, I'm a big shareholder in OPTIBIOTIX and there's such a big shareholder in skin biotherapeutics. What that means is we return the value by either a dividend or dividend specie. And that's always been our strategy, but they are out quite early on. But that's not something we're going to do today or tomorrow or in the next six months or so. That's something when we're happy with the value that we're happy that SCIM has achieved this maximum value.

1:02:32 And that will go for other divisions as we list those separately. I've got another question here from Tim M. You compared OPTI with XLS, saying the OPTI product is better, but XLS had sales of GBP 200,000,000. So if any product are probably down to investment in marketing, I suggest excess invest heavily in marketing, hence the high sales of the OPTIX HEALTH PLC in marketing so we never choose the level of sales. Correct. So again, Tim is writing what he's saying, but just go back to what I've said strategically. So strategically, we try to achieve is we've created a b to b approach. That's our commercial strategy. Our commercial strategy then builds the brand.

1:03:17 That allows you to get recognition for LPL, ODL and for for SlimBiome without having to invest in in marketing and salespeople yourself. There's no point marketing unless you have salespeople. So typically, if we take The UK, we probably need three salespeople for The UK, each on 120,000. So that would be three sixty. We probably need 10 for for Europe. So again, you got over over 1,000,000. That's per year by the by the way. Marketing, you is substantial. So rather than do that, we've gone via the b two b route. We've established our brand, and now once the brand is established, now we can start investing in our final product because people are aware of Slimbarm. They're aware of OPTIX HEALTH and we can start building a product portfolio around that. So we will be investing in in in marketing.

1:04:10 We will be investing in growing our product sales via various channels internationally. And that and again, when I use this as an example, XLS, I use the example of 200,000,000. I said, if we get a tenth of that, 20,000,000, the company itself in terms of market capital, 10 times multiple worth 200,000,000. So I'm not saying we get 200,000,000, but I can quite easily see us getting 20,000,000 to 30,000,000 for core biomedical products in the years ahead with, as Tim quite rightly says, a bit more effort and a bit more directed investment in marketing. But it's all about timing. And again, what you don't want to do is invest in a technology and a product and then have a problem. When you start to get large sales, these partners can be very demanding. You need to have the infrastructure and support and science and technology in place to try to do that.

1:05:10 Okay. Charlie a. Why haven't CentOS incorporated such positive figures in a recent broker note? They are forecasting a 225% upside currently, but my view of the financials you just presented in opportunities, significant in excess of this. Your thoughts? So Cenkus are our brokers. They're independent of us. They have their own view. Their view takes into account the wider market. They have no inside information. And what they're doing, which I think is right, they say well look, I forget whether it's two twenty five or 100 or 300. What they're saying is that if you look at OPTIBIOTIX account, you look at its existing products and its sales and potential sales growth, if you look at its shares in skin biotherapeutics, then that in itself is worth more than 50,000,000.

1:06:10 And if you add on to that, the second generation product, it's it's worth much, much more. So as they sum the past valuation, it's, you know, it's worth more than the actual market is getting it can be credit for. So I I think they were consistent in terms of our theme. We as as as directors and managements within the company believe that the company is currently undervalued and that's why a lot of directors have invested in the company. And let's just go back to three, four years or so ago when the company was valued at £100,000,000 okay, the share price was a pound. At that stage we didn't have the extent of the IP that we've got currently, we didn't have the IP granted, our patent granted, so there's some risk there. We didn't have the clinical studies we have now.

1:07:01 We didn't have the sales we have now. So all those things were in place. We didn't have the science behind the second generation products. So we think at this moment in time that the company is undervalued. I think that some of the parts valuations looking at in a different way and saying the same thing. That's an opportunity here for shareholders. And in essence, and I took this view when I invested, it's quite low risk because the first generation products are proven. So forget the second generation, if they never work, you've still got big upside from the first generation and particularly with our skin biotherapeutics. So you know in many respects the risk is quite low and the potential upside is potentially quite high.

1:07:52 I'll just finish off one other, I'm reading these just as they come through so I've got no prior knowledge of these. Richard C. Hi, Steven. Due to the wide variety of positive health benefits your product provides, is the potential there for OPTIX to create a similar product to seed, a multivitamin like product to assist with cholesterol, blood pressure, weight management, sleep anxiety, skin health and overall microbiome, good bacteria balance. Yeah, answer is true. But you have to be careful. We're building our product around science and clinical studies. So we're trying to differentiate an IP, to differentiate ourselves from the marketplace. Now we've proven LPLDL, now we've proven SlimBiome.

1:08:38 You can then start, if you rightly say, adding other ingredients to it. So let's take an example, you could say well what are the big markets out there? Let's just take one healthy aging. So what are the key issues with healthy aging? Well one of the issues with healthy aging is cardiovascular health. So people consider cardiovascular health is one of the biggest issues you have as you get older. The second issue is about cognitive health. What keeps you bright and alert? The third issue is diabetes and sugar control. And the fourth is mobility linked into managing maybe your calcium levels. So could you create a product which could for example contain LPLDL2 to manage cholesterol, vitamin K2 to manage calcium or maybe some of them vitamin D to add to that.

1:09:33 And also a little bit more in terms of sleep and anxiety and maybe something along the lines of chromium to control blood glucose. All of sudden got quite an interesting science backed health product for healthy ageing, which is a big market, which has health claims. So it's a very good question and it's not something that we've missed out on. We've got a number of ideas that we're working with in the marketplace with partners on healthy ageing and on other areas. And the other areas I've touched on already are dairy in terms of LPLT, market is so big and of course with SlimBiome, just that spot efficient market. Stephen, it might be an opportunity time for me to come in because for every question you seem to answer there is another one or two that come to you.

1:10:22 So thank you firstly I guess to all the investors that submitted questions and obviously we'll make these available to Steven and the team to review. And as I say, we will publish responses to all these questions, of course, where it's appropriate to do so. I'm mindful of time. I'm also mindful that I didn't remind you to to to put on your camera that I promised you I would. Forgive me. But perhaps before I redirect investors to give you feedback, Stephen, because I know it's important to you, I could perhaps ask you just for a few closing comments. And as I say, I'll then redirect investors. Well, I've known I've kept investors for her long time and have answered a number of questions. But I guess to me, I would just try to emphasize to investors that I've done this a number of times and this is a really exciting company.

1:11:07 And as I touched on during the presentation, it's at a critical point in its development and we can see the opportunities open up in front of us and we've got more opportunities than capacity and our focus now is delivering on those opportunities, particularly with those larger partners that we've been focused on this particular year. You can never guarantee anything, but we're confident that we'll get a number of partners across the line in the near future. And if that's the case, then you change the nature of the business from one which has got sales of a couple of million to a company that has got potential sales of GBP 20,000,000, 30,000,000 as I've touched on my presentation. So thank you to all our investors who showed interest company and thank you for investors who have been with us for this journey from the beginning.

1:12:01 I really appreciate all your support. Stephen, thank you once again for the presentation and for updating investors today. This will take only a few moments to complete, but I'm sure we'll be greatly valued by the company. On behalf of the management team of OPTIBIOTIX HEALTH, we'd like to thank you very much for attending today's presentation. That now concludes today's session, and good afternoon to you all.