Optibiotix Health (LSE:OPTI) — Strategic and commercial update

0:01 Good afternoon, ladies and gentlemen, and welcome to the OPTIBIOTIX HEALTH PLC Strategic and Commercial Update Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and will be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Simply type in your question and press send. The company may not be in a business position to answer every question received in the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. These will be available via your invest to meet company dashboard.

0:32 We'll notify you by email when these are ready for your review. I'd also like to remind you that today's presentation is being recorded. But before we begin, I'd like to make the following poll. And I'd now like to hand you over to Steven O'Hara, CEO and Rene Kuminga, Director. Good afternoon to you both. Hi. Good afternoon to all our investors, and thank you for attending. Just to let you know, we've had 27 questions submitted before this presentation. They've all been answered, and they'll be available immediately after the presentation. So I think most of you know me. I'm the Steve O'Hara. I'm the CEO and founder of of OPTIBIOTIX. And I'll just introduce you very briefly to Rene Caminger, who is the CEO of OPTIBIOTIX Limited. Rene, just wanna introduce yourself? Sure. Thank you, Steven.

1:21 Nice to meet you all. Sorry. This e channel.

1:25 I have added my short biography in the on the IMC website, and you'll find a link to my LinkedIn profile there. I hope to bring a bit of business development experience and also some business leadership to OPTIBIOTIX, And, hopefully, that will lead to some improved results in in the coming year years to come. And that might result in a higher share price, which is, of course, our ultimate goal. You'll hear later of me when I present a couple of the slides in this presentation. Thank you so much. Okay. Thanks, Rene. So I just wanna start the presentation slightly differently from from previous and look at, answer the question really, what makes a a good investment?

2:12 Many of you will know that I've been involved in investments for a number of years. I've been a a director of an investment company, a shareholder investment company called Diagnostic Capital. I've also been on the board of number of companies at the wish of various investment groups. I've also sat across many meetings and listened to investment presentations like this with various institutions. So I work with MVN and with calculus. So I've got quite a good experience of working with investment. I thought what I would do is introduce you to some of the things that investors look for, both institutional and retail investors, because I think you're also aware I'm a investor myself. Because that will give you a an idea of where I'm coming from in terms of how I built the company. K? And I'll link these to to OPTIBIOTIX.

3:06 So the first thing I look for in terms of a good investment is a new technology. And, ideally, in an immature and high growth market, that from has some risks, particularly in an immature market. But we think the human microbiome market is one of those markets. It's a a new technology market and it's high growth. You can see on the right hand side, the compound annual growth rate is run by twenty two point five seconds. So it's quite a a rapid growth rate, and it's seen as the future of health care by many groups. But people don't buy technology. People buy products, and those products have to address a market need. They have to bring new benefits. And so what I've done is create products that address large markets and create a new benefit. So for example, weight management, as you go on there, it's a big market.

3:56 But what we've done is introduced a new benefit in that our products introduce aspects that impact upon hunger and impact upon food cravings. In terms of cholesterol drug low end market, we've created a probiotic, and this has a real benefit in that. And you'll see some data later, but also when it's published formally in a peer reviewed journal that our probiotic can reduce cholesterol as good as most statins, but of course, it has no tolerance or safety issues. So again, a real benefit in a large market. And finally, in the sugar substitute market, what we've created is a product that is not a sugar. Okay? So it doesn't have the issues in terms of calorie calories and in terms of diabetes.

4:42 It's a sugar as a fiber. Okay? So it's really unique. Okay? And we've been around the world. We've spoken to the major sugar producers, and we know this is unique. And we had to spend some time in protecting that before we release the information to the to the market. So the this is a key aspect of what we're trying to achieve. The other thing is sometimes when you build a company, things go wrong. You have experienced team. So on our board, we have two ex CEOs. So we have Neil Davidson, we and have Chris Brinsmeath. They've been CEOs of Footy companies. We have one group FD, a Footy 100 company, and, of course, one ex health minister. So we got quite a hefty board, and they bring an awful lot of experience, probably more than we need at this stage to develop the company. What I'm trying to do is build a board that takes us to the next level.

5:33 The second thing you need that's what the fourth thing you need to have is differentiated products. And this is key in a marketplace like food and nutrition. It's dominated by market hype. Okay? So what we try to do is create products that have good science, that have clinical studies, and have IP, and also win a lot of awards. Now winning the awards is something you can't guarantee, but we've been very, very successful in in winning awards. And what this does, this brings us to the recognition of some major companies, and you'll see later our plans on that. Then you need to have a scalable business. By that, I mean, if you grow sales, you don't want to increase your cost proportionately. What we can see in the right hand side is that in 2020 and 2021, we've increased our sales, but at the same time, we've increased our gross profit and our gross margin. So we're growing the sales, increasing margins.

6:29 That's a good sign of a scalable business. And then you need to have a diversified risk portfolio. And by that by that, what I mean is that you don't want the company as a single technology or a single product. So we currently have six, what we call, technology platforms. SlimBio, WellBio, and now LeanBio. We have LPLDL as a nutraceutical but also as drug therapeutic. With sweetbiotics and microbiome modulators. And that gives you quite a broad, and diverse risk portfolio. The earlier products are out there currently and being sold. The later products, sweetbiotics and microbiome modulators are in the pipeline and come to market. K? And the other thing, you try to diversify your risk in terms of territories.

7:14 So we have lots of partners in many territories across the world. And not all of these are selling currently because in some territories, good example would be Brazil, it takes eighteen months to actually go through regulatory process. We started that process about twelve months or so ago. So it just takes time to build up that network. And finally, I think is important aspect is how did the management believe in the company such that they invest real money? And you've seen that across the board in terms of OPTIBIOTIX. We've got quite a large management management ownership. I myself have probably invested 350, maybe £500,000 in the company, and that's beyond my initial investment and and and involvement. We've had a lot of them as our board members when they've joined have invested. And as you're well aware, five buys from management or the board of since April this year.

8:06 And that's important because what it means, if you're part of the board or you're part of the management team and you invest your own money, you keep your way of dilution. And what you can see at the very bottom of the right of the slide on the right hand side is that we've got a very little dilution compared to other companies in the marketplace. That sets a scene in terms of good investment, and why I've gone down a particular path. What I just want to do now is very briefly just lay out the structure of the company. Now you've seen this a number of times about a year or so ago, but we've added to it since. The key point to bring out is that we have the two main parts of the company of the probiotic side. So this is where we develop technology platforms that are based on probiotics. That's all kept under Probiotic Health Limited.

8:53 The prebiotic side, I'll come to in a second and let, Renny talk through. But we've also recently formed a subsidiary in India, and that's the active trading company within within India that allows us to trade without all the tax disbenefits you get in India and, of course, all the import taxes. And you're also well aware that I found founded Skin Biotherapeutics, and this is on the a market in 2017. So we're also substantive shareholder in Skin Biotherapeutics. This is of quite a good example of PLC. Having a diverse portfolio. So what I'll do now, I'll pass over to Rene to talk you through OPTIBIOTIX Thank you, Steven. So the Prebiotics business consists of three parts. On the left hand side, you see the first generation products, which I call integrated solutions, which are based on existing ingredients with health claims and which are supported by our own human studies.

9:52 Then on the right hand side, middle in the right hand side, you see the second generation products, which are the prebiotic sweeteners and the bacterial what I call a bacterial superfood. And I'm gonna cover more in more in detail later on this presentation. Just to say that 2021 has been a very successful year and will be a very successful year for us. Probably the sales of the first generation products will more or less double, and we'll have we'll see significantly improved margins. And it looks like that will continue in 2022. Okay. Thanks, Rene. So I just want to go to this slide very briefly. I've shared this slide with you before, but I think it's quite useful just to recap on it so you're clear on what we're trying to achieve strategically.

10:41 And the main points really are in the line. Okay? Just wanna reemphasize those particular points.

10:46 You're well aware we have a b to b strategy, and the idea of b to b model, certainly, initially, it allows you to access many, many markets around the world. Remember I told in the previous slide that we've got access to a 160 countries and allows to do that very cheaply. We use local market knowledge, so partners that have local market knowledge. But the the the the partners, they invest in regulatory registration. They invest in understanding and moving through the products into through customs. And more importantly, they invest a ton of amounts of money in marketing and PR. So that gets us to scale fairly quickly. That gets us to a a point where we're selling products around the world.

11:33 The downside of working with a, a b to b model is that the partner priorities can change. Sometimes their time scales are changed due to practice beyond our control. You may have a change of personnel within the the team. You may have as we had recently, for example, one of the partners on the Sweetbartic side was going through an acquisition of the company that senior management taken out for a period of about three months. And it also means we have less visibility of who our partners are selling to. What we're trying to do going forward is change that. Okay? We're trying to move to a different model. It will still include b to b part of the business, but trying to move to position. Now we've established our LPLDL and our SlimBiome as global brands across many, many markets. We're now trying to get more the value chain by selling finished products either to partners who then sell or direct to consumer. Okay? So keep that in mind as you go through the presentation.

12:35 This is strategic shift that we started at the beginning of twenty twenty one and was part of the reason that we appointed Rene to use experience in this particular area.

12:45 So I'll just move on to the next slide now, and Rene will expand upon what I just described in a bit more detail. The business models that we operate, really on the left hand side, you see our original business model where we sell ingredients through distributors and contract manufacturers to brands and retailers. Obviously, gives us fast market reach, but less control and also lower prices and lower margins. So increasingly, we're moving to the middle route, which gives us direct access to the customer where we contract contract manufacturers to produce ingredients and finished products, which we sell to the final brand owner or retailer.

13:32 So it gives us an opportunity to sell both ingredients as well as finished products. Gives direct contact, gives us more control, and ultimately gives us better prices and better margins, which we've seen in our most recent deals. And the most recent deal was recently communicated with a sports and nutrition company, and that has come through this route. And then on the right hand side, you see a direct to consumer model and we have plans to increase that presence. We have currently some sales in The UK through our own shop and we're trying to improve and increase that to promote our own go figure range, call by own, slim by own, etcetera, but direct to consumer and in doing so to generate profitable sales.

14:24 What that will do is it will also create pool from brands and retailers in the middle section of this chart. Thanks, Steven. Okay. Thanks, Len. And moving to next slide. The other point, important point to bring out is that if we sell final product, we get a double benefit because that final product contains ingredient that we've also sold to include in that final product. We get a double benefit and enhanced margin. So what I just wanna do with this slide is just to set out what we've achieved. Okay? And the reasons we've gone to this particular approach. Remember, only got a team of eight people, and we've if you look at our investment compared to others, we've raised quite a small amount of money to have such a broad portfolio.

15:13 I just wanna go through what our current position is, not in too much detail, but just to set the scene out, okay, in terms of where we are. That's important in terms of where we want to go in the future. So the first position, okay, I need to bring out is that we've got a lot of science. Now you might think, oh, science. Now you're a scientist. So it's quite but it's what you have to realize, and I touched on it earlier, that when you enter a marketplace that's dominated by false claims and and over marketing, particularly, for example, in weight management, you have to differentiate yourself in terms of the science. So we have over 25 publications of which eight are peer reviewed, and the others are poster and conference abstracts. So we present at conferences. We often present both a poster and an abstract. Okay? And that really gives us recognition.

16:01 And just as an example, just a couple of months or so ago, I was working with a a global partner. This is a a a nutrition company that you'd recognize globally. And they contacted us. And they contacted us because strategically, they're starting to move to microbiome space. And they were set a task to look out for companies that had science, clinical studies, okay, IP. K? And these studies were were were reported in peer reviewed journals. And as he said, you won the very few companies in the industry that ticked all those boxes. And, hopefully, you'll see more of that that in terms of companies, and, hopefully, that company will turn into a partner in the months ahead. So that's why it's so important that without this science, okay, without the clinical studies, you will not attract a a global player. Okay? And as you're well aware, I used to be a director of three m health care, and I used to look at this quite a lot. One study is interesting.

17:02 Two study starts to be really quite interesting. Three or four studies, particularly if they're peer reviewed, starts to be quite excited and really attracts interest. Okay? And that's why we become recognized as a key player the global microbiome space. That's amongst other players like DuPont, Nestle, etcetera. So we get a lot of kudos and credibility for our science and our publications and our presence. But that doesn't that's not that important unless you can turn that into a commercial advantage. What we try to do is is create commercial products, okay, which win awards. We try to create a a network of partners that give us some presence around the world. But as we set out at the start of this year in our annual report, our target for this year was to rather than have lots of little companies, okay, that will work with across many little to medium sized companies that will work in in in many areas to to try to attract those larger national companies. So these are companies that have a presence within their own country. Okay? And we're particularly interested in those countries like India and parts of Asia and America, those international partners that have reached.

18:16 Now we've got Agrippa here in The US. We've got Alpha Sigma, which here in Italy, Hornbrough in The UK. We've got the ecommerce partner that we announced recently, and we've got ACTIOTIO Pharma. So we've got five partners already. What we want to do is increase that to approximately 10 partners. What we're striving to do is turn that into one or two additional partner this year or the start of next year. So we're changing that mix so we have larger partners. They are more demanding, so we have to add to our regulatory structure and our scientific team. But on the upside, we should get larger sales and we should get should get volume sales. Okay? What's interesting with these partners is that that's an important point really. When you look to our partners like Holland and Barrett, when you look to Seed, when look to, OPTIX HEALTH PARTNERS that, make a large part of our current revenue, and they are recurring revenues, which will go into next year and the year on, etcetera, etcetera. So we build upon that by adding more territories to those particular partners. So for example, you're aware just a month or two ago, Seed, who had the rights for America, wanted global rights for the d s zero one product.

19:32 You're aware that Hongbat increased their number of products from three to eight, and you're also aware, I hope, that OPTIX HEALTH have extended their product range in July of last year, and we'll hopefully see more of that when we come to 2022. That should give you some confidence that as we build the business, that one, we've got existing partners that add into their territories and product range, and secondarily, we're adding more partners. And these are more selective partners

19:58 who are larger. I sometimes, over the years, use an example of the fishing analogy where you you, first of all, track the smaller fish and the smaller fish attract the create the interest and activity from larger fish. Now we're attracting larger fish, and you'll see that come through this year and and next year. A little point to bring out. Just on on what we achieved so far, the trading companies are profitable. So OPTIBIOTIX HEALTH and and Probiotic Health PLC Limited Limited are profitable. And as we touched on earlier and point to all this scalable model, we're trying to make sure that we don't just grow sales and in doing so lose margin. We're trying to grow sales, increase our gross profit, increase our gross margin, which we achieved both in h one this year, and we should achieve for h for the full year, but we certainly achieved in the full year for 2020.

20:53 And as we've indicated earlier, and in our interims, we're on track to meet our, or exceed our current forecast. Okay? And we'll update the market, make you more clear on that. Then the other part for you to bring out is that as well as having our first generation products, we're now really starting to gain benefits from our second generation products. You're well aware that we get a milestone payments from LPLDLTH to biotherapeutic, and we also get milestone payments from our SweetBartics partner who's who's who's, upscale the manufacturer. And that's quite unusual in this industry, and that should give investors a high level of reassurance that these partners see our products as quite exciting and innovative and groundbreaking in the areas that we're working in.

21:42 I'll just move on to the next I'll pass it to Rene now to talk about the premarket area. Yeah. These are our, what we call our first generation products. I just wanted to go through that, give you a little bit more background. SlimBio is so far our most successful ingredient. We sell it as ingredient as well as finished products in the go figure range, but also SlimBio medical. Large customers you're well aware of are Holt and Barrett and OPTIX HEALTH You see some product examples on the on the right. And it's a multi award winning ingredient. And most recently, we won the nutritional industry executive award in The United States, which is probably the large market which we're trying to address in in the next six to twelve months.

22:32 We're next to Holland and Barrett and OPTIX HEALTH finalizing a number of deals with with large finished product customers, and I hope to be able to to come back to that in the next months. The last bit of good news on SlimBio is that we won a Health Canada approval, which also gave us very specific health claims, which we can now associate with SlimBiome in that market. So it really gives a lot of credibility to further credibility to SlimBiome as an ingredient. The middle product LeanBiome is is really the new kid on the block. It's aimed at gut health of athletes, and it's it it seeks to maintain or improve their gut health when on a high protein diet.

23:24 So it's really been developed with supporters in mind and incorporation with nutrition companies. You've seen that we've closed a recent deal, which has been announced a couple of weeks ago with the first order of 200,000 pounds, which we meanwhile supplied and with the product which will be launched in quarter one in Europe and Asia. And we'll get on pack recognition with the trademark that you see there on the right bottom of the slide. And the idea is to expand this range further and create a suite of products that are suitable for athletes. As you might know, quite a large percentage of athletes suffer from microbiome issues.

24:12 The bottom product there is WellBio and some of you might recognize this product. It's been around for a while. Originally, that was a copy of of SlimBiome, but presented differently. We have actually redesigned it and created a completely new prebuilder core, which is aimed at restoring age related microbiome deterioration. And then with added ingredients to address specific age related health issues. So our plan is in quarter one to parallel track the launch of that that product range and to do own studies, own human studies on them to support it. Thanks, Stephen. Okay. Thank you. So what you can see in that slide is very quickly, we've extended our range from Slim Biome to a more advanced well biome and, of course, a new brand in terms of lean biome. So we we see this as quite quite exciting time, actually, in terms of this brand extension, and it will also extend into other areas.

25:16 I just wanna go through the LPLDL because this is really quite an amazing product, quite frankly, and we haven't really given it enough market airing. So and the more we look at it, the more excited we get quite quite frankly. So, yeah, you know this story. We've screened 4,000 Australians. We've got Australian now. We understand the mechanism of action, and we carried out a number of studies. And I'll you've seen a couple of them. I'll come to our most recent study in a in a moment. I mean, protected it with quite a quite a large pattern family. And then we've extended we created a range of products, final products. So this is so these are final product solutions that we are to sell in The UK, but we're increasingly selling around the world. Okay? So this is final product sales. So going back to what we said earlier in terms of that that mix, we've moved on a little bit in terms of of LPLDL on the probiotic side that we sell a lot more probiotic final solutions because then we get the sale of the final product, we get the sale of the ingredient, and you'll see more and more of that as we as we go on. We've got a number of quite interesting deals, Alpha Sigma being one of those deals, and they sell Sigma three.

26:34 So they had a a tough year previous. They're about $11,500,000 in terms of sales this particular year, and they're hoping to grow it next year depending what happens with the Omicron variant. And Seed have been remarkable in terms of the marketing of their product, which contains LPLDL. And VSLTH PLC cardio, we signed a a good deal with OPTIL about midyear, and they're going to the process again regularly approvals in a range of markets. We'll come back to that, as soon as we have news to go to the market. That's looking quite exciting because we've built now VSLTH PLC is one world's best known probiotic brands, and they've taken our probiotic and included it into their particular brand. A bit like Coca Cola or Pepsi taking and putting something putting something new into their brand.

27:24 They'd only do that if they are confident of it. And those discussions, just you know where with the ACTIL, they started in 2015. Okay? So that shows you how long it takes in terms of some of these discussions with some of these larger partners, particularly where they have an established brand. But just I wanna bring out a couple other things. I won't go through future plans in too much detail because we'll pick it up later. But where we see some really good exciting opportunities in 2022 and beyond. Now Seed Health are making remarkable progress in terms of the investigational new drug application and we see that coming through. We've also got quite a lot of interest in terms of our drug bio therapeutic development. And we have one company paying us for that, okay, milestones, and there's substantive milestones.

28:11 They're they're 6 figure milestones, and that was due you know, we had a lot of milestones last year, and we'll have those going going forward. And we see that as a big opportunity. But I think what we have to do now and we'll do this off the back of the publication of our new study where you'll see data comparable or better than statins is really put some time and effort into this and investigate time and effort into this to move that forward. In the shorter term, we're really pushing on the dairy side. As you're probably aware, SACCO have got a deal with DOLA. DOLA is a really large company, a 2,000,000,000 turnover company. They've struck a deal. So Saco struck a deal with DOLA. That's why we haven't announced it, that add LPLDL, so our probiotic, to a plant based protein mix in functional foods.

29:03 We've also got five dairy partners. Okay? So these are new partners we've we've picked up over the last, five to six months. These are partners that are taking LPLDL and putting it into dairy. So these are your yogurts, etc. And once they're launched, we'll introduce you to those partners and make you aware at this moment in time they're going to the process of testing and pre market assessment. And of course, we've got Grand Chipotcher. That should be launching shortly. And just on the development side, I mentioned previously we've got a lot of work taking place in stress and anxiety. That's because we looked at the genome. So this is the whole genome of the strain. We can see within that strain that there's certain aspects of it that link to antihistamine, so there's antihistamine effect, but there's also a number of of of gene sequences that suggest this particular probiotic could have an impact on stress and anxiety.

30:01 We've got a clinical study on that last

30:04 year. It's quite speculative, so it may not work out, but it's another opportunity. And finally, we're looking at developing LPLDL as a postbiotic. So what a postbiotic is, is a kill bacteria. Okay? It's something that's not live. And that's important if you want to access some of the very high temperature and humid what we call zone b, zone four b market, or if you want to put a probiotic into food. If you put a probiotic into food, probiotic being a live organism, then what happens is that if you have a high water content, then the stability of that food, the shelf of that food is significantly decreased. If want to put it into a food product which is not refrigerated, because of course you can't refrigerate to extend the shelf life, then you need to be looking at postbiotic.

30:53 So we'll have more on that in the the next six months or so. I just wanna share this with you. Okay? What I've done here is I've compared so this is the recent study that we've we've carried out. This is going through a a peer review process, and quite frankly, it's been a nightmare in terms of how long it's taken. But the reason it's taken so long, you put it to a a journal. Those journals have a limited number of people. I used to be on those peer review panels a number of years or so ago. These are people, typically academics or scientist specialists in the field who don't work full time for these journals. They do it as part of a favor, as part of their academic kudos, if you like. And they may only look at review articles once a week, sometimes once a fortnight or once a month. What we've seen this year was normally expected to take three, four, five months to get a an article published.

31:50 It's taken a lot, lot longer, and that's partly because of COVID. So they've given priority to COVID publications. It's a real frustration. What I want to do is share what we've got with you without disclosing the actual data. I disclose the actual data impact upon our ability to publish in a peer review review journal.

32:10 What this slide shows is that I've taken LPLDL, okay? I've taken it at the in use concentration and I've compared it to bempedoic acid. So this is a product that's marketed by a group called Experion Therapeutics. Last year, they sold about $270,000,000 worth of product in The The US and a typical, statin called Lipidol, which is marketed by Pfizer. And what I've done on the, the column which is LPLDL, in blue I've compared to the statin and in red I've compared it to bempedoic acid because there's no statin data. Just to go through what we've got, okay, and this is why we're so excited. So in terms of total cholesterol compared to statins, the two arrows indicate we've roughly got double the amount of effect of a statin.

33:04 So double 17, so about 34%, 35% reduction in terms of, in total cholesterol compared to a typical statin, a massive difference. But the key area here is LDL C. So LDL C is a part of cholesterol which is associated quite closely with cardiovascular risk, a risk of heart disease, of heart attacks and strokes. What you can see on the slide there with the one arrow is we get comparable data to Lipidore. We're around about the 25%, 26%, 27% mark in terms of our reduction in LDL C. Now, there's not much data on non HDLC, which is another marker of cardiovascular risk, less commonly used for statins, that is on bempedoic acid. Again here, you can see typically would double the impact of bempedoic acid.

34:03 But the interesting one to point out is APO B, where we've got real differentiation. So when you sell a product into hospitals or onto GPs, the two areas to look at is LDL C because that indicates cardiovascular risk and APO B which indicates the likelihood of plaque building up in your arteries. So the risk of atherosclerosis. Okay? And what we've got in terms of APO B, we've got an effect which is roughly double the effect of statins. So what we have here is a product that is equal to at least or better than in some areas than statins, certainly better than bempedoic acid, but has no tolerance or safety issues. So we think this data is a game changer for us as we go forward in terms of LPLDL and the opportunity in pharmaceuticals as either as a drug or with a pharmaceutical company who sells into the consumer health market. So we're really, really excited over this, and I'm just so frustrated that we haven't been able to get this public out in the marketplace. But once we do, we can bet you bought there will be a lot of press around this. K?

35:17 So just moving on. I won't go through this in any great detail. You're aware of this slide, but just want to bring out the fact that this this is these are difficult awards to gain. Okay? These are are not, you know, easy awards. We're competing with the DuPont, the Nestle's, the Coca Cola's, all the big companies. And many of these big companies have their own people on the panels. So to gain these awards, particularly in terms of SlimBiome, is exceptional. So I just really wanna make that point. What I'll do now is I'll just pass over to Rene to talk through the last couple of slides in terms of Sweetbiotics microbiome modulators, then I'll start to look for the future. Rene, I'll pass over to you. Thank you, Steven. Yeah. Sweetbiotics is a very exciting range of sweeteners that have periodic functionality.

36:07 And as you might know, traditional sweeteners like Stevia or Morgicides have bitter off notes. So food and beverage companies are looking for improvement on that. They're also looking to add gut health claims to their products, like high fiber or a prebiotic fiber claims. Sweetbiotics addresses both at the same time. Now our commercial projects are steadily moving forward. We have a use US company that is upscaling the production of our first generation product, and we're generating licensing income from that. We're also advancing through milestones with a leading beverage company who's trying out our product in fizzy drinks.

36:56 So this has has very large potential if that's successful. And then we're in advanced discussions with a leading stevia company, obviously interested in working away the bitter off notes of their product and working on a joint development and commercialization agreement. At the same time, this is technology under development, so there's still a lot of work to do. And as you will see in Steven's final slides, we're planning to invest a lot more in our in our r and d efforts in this area. Steven? Next slide. K. Microbial modulators is a new approach to create prebiotic food that is appreciated by specific bacterial strains.

37:46 And the trick is to get it produced by their own enzymes to create a prebiotic. And we have achieved that now with bacterial cultures, but it's very difficult to scale up. So we've proven the prebiotic food can increase growth rates in mixed cultures and can improve on cholesterol reduction. The next step is to create an approach which can produce this to scale. Once we've done that, we feed these prebiotics to the strains, the original strains to prove that we get superior bacterial growth. Once that is proven, we then have a technology suite that is of great interest to produce and boost probiotics or to even create our own therapeutics.

38:38 Again, an area that is under under development. There's a lot of stuff going on. A lot of r and d work that's still is still required, and it this will have will be an emphasis in our investment planning going forward. Okay. So what I was gonna talk through now the last few slides is we've set out that we've got a business that's growing rapidly, double digit sales, more than double sales last year, growing very quickly this year. At the same time, we're increasing our gross profit and our our margin. So we've got to a good position now. Okay? And that's based around largely our first generation products.

39:24 Now we we have to really start to look to grow sales in those products and to really expand the market in those particular products and really accelerate the the the commercialization of our second generation products. So I've got this side label future plans investment in growth. I could equally have labeled it using the £2,000,000 we raised from Skin Biotherapeutics share sale. Okay? So this is what we're using the money from. Okay? We won't use all the money from Skin Biotherapeutics in this area because this will probably last two to three years with the income that we got coming in. Our focus is very much on growing the the the revenues and growing our margins so we're profitable. But this is what we want to use the money to invest in. So when investing in growth, okay, and actually maximizing the the existing opportunity and accelerating the growth of our second second generation products. Okay? So I just wanna break it down into two areas really and then cover those the those investments in in both. Okay? So just on the the prebiotic side, we're gonna do a lot more marketing and invest a lot more marketing in supporting the sales growth of SlimBiome, OPTIBIOME, WellBiome and LeanBiome.

40:46 Okay? And this will be working with our partners because often we find some of our partners so are very, good. So OPTIX HEALTH a very good example of a very good partner. Others aren't great at marketing, so we have to provide them with lots more supporting material and do constant training. So we need to invest more in that. Okay? We want to expand our categories and many touched on this earlier, we created a new well biome. So this new well biome really is quite exciting. It's a product, so the original idea was to say extension of SlimBiome. This is a totally new formulation using a new combination of some quite exciting prebiotics that actually come out of the gut with some minerals that when added together create some really good health benefits. We think it's a great opportunity in terms of our well-being.

41:41 And we also see sports nutrition as a big opportunity And we you we announced made an announcement a week or two ago about launch with a sports nutrition brand. We see that being as a global brand in terms of sports nutrition, but we see big opportunities in this area. Okay? So that's on the prebiotic side in terms of first generation. We also recognize so because the good thing about raising small amounts of money is that you don't dilute shareholders. The bad thing about it is you possibly don't invest enough in marketing your first generation products and and accelerate the the investment in your second generation products. And that's what this 2,000,000 allows us to do. Okay? Now we're in a stable position. We're confident going forward that we're a company now that is a a solid company on sustainable which is sustainable in terms of revenues going forward. As I mentioned earlier, a lot of those revenues are recurring. Probably 8085% of those revenues are recurring. So now we can really take some risk and invest in in in these new opportunities and reinvest marketing the products. So what we want to invest in, as Randy indicated, we got one partner who's paying for the manufacturing and scaler of one version of SweetBartix, and that is a low cost to us, but but we then get a royalty stream

43:11 from that. What we've done, we've introduced those, so these are the manufacturing partner, to our partners that have been working on the application development, so they're developing applications in dairy, in beverages, or fitted drinks, etc. So they can work together, so as the manufacturer produces these products, we can then share those with our distribution partners who can put those into finished products like yogurts and dairy, and and and fizzy drinks. So it brings both those together. What that does, that doubles our royalty stream. Okay? Because because we've created this relationship with the application developers and we've got our manufacturer. By bringing those both together, we get a double benefit. Okay? That's the first point to bring out. But we don't want to stop there. Okay? That's one part, not one group on SweetBartix products. What you want to do, and we've been up having we've had discussions all in all for the last three years with this particular partner, is the and it's a partner that is well known on the world leaders in in sweeteners.

44:16 When we first spoke to them, their focus was very much on sweeteners. Now their focus is on creating products not as sweet but have a health benefit. So you can see how the evolution of the thought process of these companies has changed over the last one to two years. So what we're doing, we're investing in jointly scaling up and commercializing our own brands we bought in products with that particular partner. And we we may get something before Christmas, may get something just afterwards. There's no guarantees until the deal is across the line. But as I indicated, we've been working with this group for the the last three years, and it's become really intense over the last three to six months. And I know the vice president of innovation very, very well. He assures me that they may commit to this particular product.

45:05 Again, no guarantees, but we think we're nearly there with that. Let's see what we can do this year or the start of next year. Then I just want to move on to probiotics. I'll lead you to some of these already. We've got a fantastic product in coal bio. Look around the market, are comparable to statins and I want to build out of that data that we've created in terms of the publication to really leverage that with national newspapers, with TV doctors to really and with radio programs to really accelerate our investment. But not just UK, it has to be international. We're not if you're gonna build a business, has to be international. So that's what we're looking to to do, particularly in terms of our core buying brands.

45:51 Remember, we have three of those. One reduces cholesterol, called by Meg three. One that reduces blood pressure, called by BP. One that reduces and impacts upon vascular health, removes cardiovascular, removes the buildup of plaques called called by MEG-three. So we're really pushing out this in 2022. And as I touched on earlier, want to really spend some time leveraging the results we've got on our probiotic in terms of clinical studies to really engage with consumer health pharma groups who and want to either take our product and set up by pharmacies who want to develop a Synthroid Biotherapeutic. That's actually we have one of those deals already for The US. We will look at other deals for Asia and for Europe. And I think that's a massive opportunity.

46:39 Then if we then look to to both, okay, it's all very well saying this, but then you have to enable it. So how do you enable it? Okay? We've touched on earlier, we want to focus more on d two c, so going direct to consumer. That's part of what we want to to do to invest in marketing and building our sales channel as the Amazon, as Tmall, as Ali Health. And that requires an awful lot of money to get present. You don't get a return immediately. It takes time to get a return that may come through in six, nine months, but it's worth the the investment because the margins are are great and you've got more control of your product. We also need to invest in those key markets. You know, where we invested in India this year with a business development director of the Taro Jam, and hopefully, you see the benefits of your appointment in the next few weeks or months or certainly start of next year. But we need to invest in The US sales director. You need to have people on the ground. You're gonna have partners over there, but they need a lot more support than we've given them in the past. Okay?

47:44 We also if we're serious over direct to consumer, we need to invest in a d to c direct to consumer business manager. And finally, because we've got these larger partners, we've got a number currently, and we believe we'll have a number two or three in the next couple of weeks or months or so as you go into into next year. We need to support those partners because they are very demanding in terms of their requirements. As I touched on earlier, when we went into Brazil with a partner, the documentation was extensive and it takes up all our time. So we need to appoint a scientific medical support specialist in that area. And finally we need to really reach out to those people who use our products. If you go to a GP or clinician, a cardiologist and you say this carbine looks really good they'll say don't believe in probiotics.

48:38 You need to reach out to them and be presenting to clinical pharmacists, the clinical nutritionists, to clinicians and GPs who will be to increase awareness of SlimBiome, of lean biome and of LPLDL and colbiome to those professional groups. And we have engaged in the past, know there's a different strategy for skin biotherapeutics, We haven't engaged with the Diabetic and Obesity Society and cardiovascular health like the BNF, but it is quite difficult to engage with those partners, particularly when you have products that are on sale via other partners, like, for example, HEALTH PLC and Barrett. So you can see, now we've we've raised money, and now what we have to do is really invest that money wisely to increase sales of our first generation products, shift to a more d to c, so direct to consumer sales channel, and invest in commercializing our second generation products more actively and really pushing forward those with partners and getting our LPLDL as a drug out in the marketplace as soon as possible. So we think if we get these things right, it will really have an impact upon 2022 going forward in terms of sales and profitability.

50:00 So just very quickly now, just want to touch on the financials. I've shown this slide before, so I'm not going to go through it in any great detail. I'm acutely aware that we have about ten minutes left. But just want to pick up a couple of key points. First of all, this is what we've we've indicated previously. Our revenues has been doubling year on year. Okay? But as well as the increase in our revenues, our cost base haven't been increasing proportionally. In fact, last year, it went down by 27%. But, of course, 2019 was an unusual year because it was thirteen months because we changed our end of year. We had some additional costs. But it's been fairly stable over the over the years despite our revenue increase, and that shows you it's a it's a scalable model. Okay? It's a scalable model because as you grow in the sales, you're not increasing your costs, at the same level. K? So we're increasing our sales, but we're also increasing our gross profit and we're increasing our margins, which is a good sign for the future.

50:59 I just want to touch at these last couple of points down the very bottom here in terms of H1 twenty twenty one. So we've indicated that we've we're doing well in the first half of the year. I'm sure all the signs out we're doing equally well in the second part of the the year. We've increased our gross profit and we've increased our gross margins. We're in a very, very strong position in terms of the balance sheet, We were before the 2,000,000 sale of Skin shares, but that then, as I touched on it, allows us to reinvest and grow the the opportunity within OPTIBIOTIX. When target to meet or surpass our 2021 forecast, that was presented by our our broker, about 2,200,000. That's looking very, very good.

51:45 We are in the process. So in November, we went out to our partners and we asked them for their forecast. A number have come back, a couple of as you often get are a little bit late. A number have come back and said, hey. Now we've given you our forecast, but let's see what happens in next couple of weeks in terms of Omicron. Because if we're going to sell into hospitals and we're going to sell onto GP surgeries to pharmacies, if we get another outbreak of COVID from the Omicron variant, we may not be able to access those markets. So let's review that at the end of this year. So but we'll certainly have a a forecast out at the at the start of 2022. That will be linked in not just with a a forecast, but a lot more investment activity.

52:32 What I just wanna do now just to finish off is say, well, what does all this mean? Now we talked a lot and what did it all mean for for us? I just wanna capture all that in this final slide. Okay? And it's sort of a a a takeaway message. So look. We've we've done well. We've created a a good position for us. We're recognized across the across the world in terms of a global leader in this particular space. And that stands us in very, very good stead. Okay? That's with our science and our awards. We've got a really good trading position. Now we established that with eight people over the last couple of years. Remember, we only launched many of these products in 2018 and 2019, 2020, a COVID years, if we can call them that. So it has been quite challenging. But despite that, we've had some really good double digit growth.

53:19 As I indicated earlier, we're on track to meet or surpass our broker forecast for 2021. But now the situation's changed. Okay? Now we're in a position where we have these solid products out there. We've got international recognition. We've got all the awards. We've got the science in place. We can really start to focus on generating more sales and bringing in these these these big global partners that will really accelerate sales. We've got one across the line this year. We hope to get a couple more across the line this year at the start of next year and a few more after that. What we hope to get is eight to 10 of these big partners. You need eight to 10 because they will change as time goes on, but you need those to really drive growth, to get to high levels of revenues that we hope to to to to achieve. And each of these individually could, in their own right, over time, get to 5,000,000 sales each. Now that's not saying that they all will or any will, but has the potential for some of these partners if you get it right with these particular partners.

54:21 So we're growing sales. We're moving to direct to get more we're moving our mix from selling ingredient to direct to consumer, our via a partner to sell to the the the consumers to sell a more final product. We're adding to our our team. We're investing in in in Sweetbiotics and microbiome modulators, and we've got this focus on large partners, new product lines, new territories, and a greater investment in in sales and marketing 2022. If we achieve all of that, right, we will be in a very, very strong position. The other thing I want to address is the share price. Okay? So all this looks really, really good, and I think we're a very strong position. And anybody who looks at a company will say we're in a very much stronger position than we were when the share price was a pound. Okay? But we have to address the share price. Now this year, we have done a fair bit of marketing, which people have been been aware of maybe in terms of the institutional investors and a number of retail investor presentations, but we have to do more. We have to start that share price. We have to get the messaging right, and we have to get that message out to more people.

55:33 On the challenges, we're part of the market that's highly regulated and the bulletin boards are totally unregulated. So we have to find a route to go direct to our to our investors because the majority of our investors, about 10 institutions, but we have about we have a large number of retail investors. And retail investors typically make up 95% of your your, liquidity on a day to day basis across the the market. Okay? So what we'll be doing in 2022, the start of twenty twenty two, we'll be creating a regular podcast to investors, direct to investors. So this will be probably fortnightly. What we'll do, we invite investors to send in questions based on what they've done for this particular presentation, and I'll answer those then in a podcast.

56:20 Okay? Roughly every two weeks. If there's not enough questions, it won't be every, every two weeks. It might be every three weeks or or four weeks. Of course, on top of that, whenever we get an announcement, we'll do a podcast so we can add some color to that announcement, which you can't redo through an RNS. Allow us to be doing what's called a capital markets day with fund managers. That's working with Warbrook and our broker to go out and meet ten, twenty institutions and fund managers over a period of a week or ten days. Okay? To increase their their their awareness. Now we're quite well known across the the industry. We haven't gone out and raised funds in the last, was it eighteen months or so? There is interest. And in the first part of the year, I did a fair bit of a promotion and it was quite a lot of interest.

57:06 But of course, the challenge is, I've mentioned a number of times, because our balance sheet is so strong, because the share price of Sweetbartix oh, sorry, of Skinbartix went up so great, we can't gain EIS and VCT. That means in The UK market, many of many institutions require EIS or VCT and would only join a a fundraise or only enter a company at a a fundraise or if there's a large block of shares to to sell. So we'll be focusing very much on the Capital Markets Day and trying to convince those fund managers, particularly private fund managers, who have a bit more flexibility and can buy $102,100 grand, 300,400, $500 worth of shares to invest in OPTIBIOTIX.

57:52 I'll also be supporting that with some journalist interviews. And on the back of that, as I touched on earlier, some product interviews in terms of radio with people who are known to as radio or TV presenters but also working with some of the major newspapers who are particularly interested in what we're doing in terms of an alternative to statins. So we get that right, then we should have a company that's got growing sales, increasing margins and a rising share price. If we get that, it'll be a happy Christmas to to all, and it'll be a a very happy and very profitable 2022. So so rest assured, we're trying our best to build this business in the right way, and we're acutely aware of the share price. And I'm sure you're well aware I am the biggest holder individual holder of shares. So if it affects you a little bit or at all, affects me an awful lot. So that's our focus for next year, building the business, growing sales and dealing with the share price.

59:01 So thank you very much for listening. Steven, Rene, thank you very much for your presentation. I'm just going to bring your cameras up for the q and a session. And ladies and gentlemen, please do continue to submit your questions using the q and a tab situated in the top right hand corner of your screen. But just while the company take a few minutes to review those investor questions submitted already today, I'd like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via investor dashboard. I'd also like to remind you that your feedback is important to the company. And immediately after this presentation has ended, you'll be redirected for the opportunity to provide your feedback in order the company can better understand your views and expectations. Thank you to those investors who submitted questions ahead of today's event. The company have kindly written responses to these, and these will be published after, the session.

59:46 Investors have also submitted a number of questions during the presentation, and I want to hand back to you, Steven, to respond to those where it's appropriate to do so. Could I ask you to read out the question and who it's from? Thank you. Yeah. I'm just going through a number of questions. To be honest, many of the questions that have been raised are being covered in the 27 questions that I responded to. I'm just trying to find all in the presentation. So for example, what was a successful 2022 look like? I've touched that in terms of the the last slide. When we announced a dividend policy, it's a good question actually. So in terms of a dividend policy, our strategy has been very much to create a company that has a couple of options in terms of dividends.

1:00:38 We have a we announced this in 2017 that would invest in skin biotherapeutics, support its growth, use some of the the money to reinvest in growing OPTIBIOTIX for a point in time, give out a dividend in skin. We sell the skin shares or give out a dividend in SPC. So clearly, can't announce when that will happen. So if I announce when that will happen, that will impact upon the Skin Biotherapeutics share price and would also be inside information. But we'll announce that to market when we're in a position to to do so. There was a question about Skin Biotherapeutics disposing of shares. I've covered that in the in the presentation. There's a question about Slimbion products and the whole in the barrack website being sold out.

1:01:25 So I can I've answered that already in the in the q and a, but I can assure you there's no issues in terms of the supply of SlimBiome to hold them bare it. But I know internationally, there's supply issues in certain ingredients. There's a a question which is always the question that people ask is about what actions you take in improve share price performance. I touched on that in the last slide. And and the the the question to me, you've added questions that, know, we're building a company and why hasn't the share price improved in line with the value creation that we we we've that that that we we that we we created as a company. And I I've answered this in the q and a, which he has a more detailed answer, but you'll also see in the final slide that we're looking to address this as we go forward to increase the messaging, to improve the messaging.

1:02:20 I think that was very there's no other questions that I can see that really I haven't answered either in the Q and A or in presentation. Yes, Steven. Thank you. I think you've actually addressed pretty much all the questions that you can or that you or that you compared to the pre submitted questions. And, of course, the company will review any further questions submitted and published responses as appropriate to do so. Just before redirecting investors to give you feedback, I was just wondering if I could ask you for a few closing comments to you. I think the main point I'd bring out is what I best I educate the investment summary. I think we've created a a good business here. It's on a a very sound footing.

1:03:07 We've got our first generation products that are generating very decent revenues at very good margins. We've got our second generation products that are generating milestone payments. What we have to do now is use the funds that we've raised from Skin Biotherapeutics to invest wisely to accelerate the growth in those first generation products, extend their use into other areas as we touched on in terms of sports nutrition and health and wellness in terms of lean biome and well biome. We need to accelerate the commercialization with partners of sweet Bartics. We need to really focus on LPLDL as a biotherapeutic and in response to many of the questions in the Q and A, I'm with you on this, we really need to focus on getting our messaging better to retail investors.

1:04:04 And as we indicated, we'll be doing that by podcast to to investors and also more and more presentations like this. I think our last presentation on this was September of this year. I did another retail investor presentation in November. You got this one. So we roughly do one every month or two. We'll increase that, as I touched on earlier, to one every two weeks via podcast, our own podcast, to help support the growth in the share price and to increase the interest in retail investors. And finally, I just want to say thank you very much for listening, and I wish all our investors a safe and happy Christmas and very, very prosperous 2022.

1:04:50 Thank you very much. Steve and Rene, thanks again for updating investors' stake. Could I please ask investors not to close the session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete. However, it's greatly valued by the company. On behalf of the management team of OPTIBIOTIX HEALTH PLC, we'd like to thank you for attending today's presentation. That now concludes today's session, and good afternoon to you all.