Optibiotix Health (LSE:OPTI) — Commercial update

0:00 Good afternoon, and welcome to the OPTIBIOTIX HEALTH PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply tap in your questions and present. The company may not be in a position to answer every question or receives during the meeting itself. However, company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I would like to submit the following poll, and I would now

0:31 like to hand you over to CEO, Steven O'Hara. Good afternoon to you. Hi. Good afternoon, Alex, and thanks very much for the introduction. So my name is Steven Juara, as Alex said. I'm the founder and CEO of OPTIBIOTIX HEALTH PLC. And today, I'm just gonna give you a commercial update. I'm really looking forward to 2024 and trying to set the scene. We had a difficult 2022. We can recover very much in 2023. We got a lot of good stories to tell for 2024, a change in environment in terms of the changes in terms of the anti obesity drugs, the strategy we set out to expand into into Asia and into The USA, bringing on some really big big partners, and also our strategy to go more down the ecommerce route, and I'll try to explain the reasons why.

1:33 And then finally, I'll talk about the second generation products. That'll be fairly brief. So I wanna do a separate presentation on that. At this moment in time, we've got a lot of really good commercial discussions taking place. You know, we have some big partners with The US company and also DSM, and I have to be very careful in terms of the sensitivities because I don't wanna get to situations sometime we did with Tata a number of years or so ago where people, after a presentation similar to this, guessed it could be Tata. I had people phone up Tata both in UK and India pretending to be OPTIBIOTIX and trying to find out inside information. So I'm always cautious since since then. So I hope you find it useful and, you know, a bit like today actually, it's been a a bright day to day and I think we've got a bright future ahead of us in OPTIBIOTIX.

2:23 But I'll let you cite that after the presentation. So I just want to start off with the story so far. So this is very much for those new investors or people might be interested in joining OPTIBIOTIX. And just a refresher for those who sort of drop in and drop out. So we listed in 2014 at 8p per share, market cap just over 5,000,000, and since then, currently, the the SP is around about 18%, so sorry, 18 p. So up around about 125% and had a market cap around 18,000,000, so up around 240%. But lots of peaks and troughs along the way, which 2022 was the trough and some of the earlier years were the were the peaks. But I think now we're in a very good position going forward. And if look at 2023 last year on the right hand side of the slide, you can see that OPTIBIOTIX has won the best performing shares on AIM 2023.

3:23 But just also consider 2023 is a pretty poor market for small caps. I just sense now we're coming out to that, and I hope that 2024 in particular, the latter half half a bit, particularly if you can show strong growth and some interesting partners both in terms of the first generation, second generation, really get SP moving. I think most people know we have three subsidiaries. One is what we're talking about today, which is the prebiotic subsidiary, where prebiotic uses those materials to actually change the growth rate of organisms, not to change the microbiome. Skin Biotherapeutics, which I also founded and put on the stock market back in 2019, We as a company invest 700 k, and so far we've taken out £5,500,000 worth of SKIN shares. So that means we haven't had to dilute OPTIBIOTIX shareholders in OPTIBIOTIX by selling shares in skin. And we have a current value of about £3,000,000 in skin biotherapeutics.

4:26 Probiotics, again, founded probiotics, I'll put that on the stock market, the ATVIS market in 2022. We give up a dividend of the specie, about 50% of the shares, so we own 44%. OPTIBIOTIX, I own about 5%. So total around about 49%, and we have a current value now of 2,200,000. But that to me is one of the most undervalued shares on any stock market, and there's a range of reasons for that, which I'll maybe come to later on when I pick up on some of the questions. So moving on, this is just a graphical representation of what I've just described in terms of three parts of the company and some of the end products that we have. I just wanna just set the scene in terms of the the strategy but also focus more really on the commercials.

5:19 So in terms of this strategy, just to remind people that we were creating a company that had different aspects to it which gave us multiple shots on goal at the inter microbiome space which was a new space. Okay? So multiple opportunities. That's why we've got probiotics health PLC, skin biotherapeutics and antibiotics health PLC. But I really wanna focus more on the on the commercials and what the commercial strategy has been and how it's evolving. So if you put a product on the market, particularly globally, technically, and market it would typically cost effective 30,000,000. We haven't raised that type of money. So what we've done, we've used a b to b strategy.

6:06 So this means you work with distributors, and the distributors take the products to you for for you onto their marketplace and there's some value in that. In the early stages, you can't really attract the larger companies because you need the IP in place and you can't have the IP in place until you have the studies in place and you can't have the studies in place until the science is there. So we're now in a good position in terms of having the science in place, the studies in place, the IP in place. We've seen over the last year or so we've attracted some really big partners in the IABH of world, the Doctor. Mohr Pens of this world, the Hack Groups of this world. And we started, and we'll see as we go further forward, more of these large partners who who have quite large and detailed requirement before they take on product, not at least being a regulatory approvals for multiple countries.

7:02 And so what we try to do is build the first generation products in terms of sales and in parallel de risk the second generation products. So the first generation are there to get us into a position where if all else fails, we'll be a profitable company and be worth a high degree of value, We get the second generation products in the marketplace which we will this year, then we will have a very high value because they're they're the added expert if we want. And what I also want to bring out is that we're moving more and more towards a final product provider. We're focusing more on ecommerce and also on those very large growth markets in Asia and the world's biggest market, The USA. And I'll go through the reasons why from that in the next few few slides.

7:49 So this is our strategy, okay, in terms of the rationale behind being a finished product provider. So if you take Slimbio and Welbio, okay, we have a number of manufacturing partners in UK, Europe, India, America, and Asia. So we get those manufacturing partners to produce a product and we sell those that raw ingredient to distributors or we sell it to people like the head group or to Hong Barrett. Okay? So we sell the ingredient. Okay? And that gives us revenue. We also have a number of partners around the the world who actually make final product, again in UK, Europe, India, The US, and and Asia.

8:36 And and so they turn our ingredient into the gummies, into the bars, into the shakes, etcetera. And if we can sell those directly ourselves, we get the sale of the raw ingredient in those products and the sale of that final product. We get a double sale. Okay? And I'll show you some examples of those if you go forward in the future. Maybe the best one being doctor doctor Morepine. We sell those via distribution partners. For example, we will sell pharma product to Nardi in in The Gulf, and we also occasionally sell pharma product to retailers. K? But ideally, we won't be selling those into ecommerce channels. And why is that? The reason we want to sell via ecommerce, it's all about margins. Okay? And through different sales channels.

9:26 And so this is a slide. It's not using any particular product that we we have, but it's using any typical margins for each of these these channels for similar type of products. And so if you look through the columns, you've got cost, that's the cost producing the product, the sale price, and the margin in pounds and the percentage margin. So if we produce the ingredient, okay, and we sell that to a distributor, okay, and then typically we'll make it about £8 and sell it for £30, okay? That's selling the ingredient, a good margin at 22. If we sell the final product, if we sell the final product to a distributor, such as Nargie, we then sell it on, but make it the three pounds, sell it to 10, and the margin is about seven pounds.

10:12 Again, quite a high percentage margin. If we sell it to a retailer by a retailer, I mean, these large retailers like your Holland Barracks, like you say, your Tesco's, etcetera, like your Boots, even some of the European retailers, we'll make it for £3 and we'll set it for £6. Okay? So our margin is much much reduced. But if we sell it via ecommerce channel, we make it to £3. Okay? And we sell it to £30, so much higher margin. So you might ask, well, why would you sell ingredient? Why would you sell via by retailers? So a couple of problems to bring out here. If we sell the final product, okay, we have two sales that I mentioned earlier, the ingredient that goes in the final product and the product sale.

11:00 And also, as I touched on earlier, if you sell via distributors, they bring and understand the marketplace, and each marketplace is unique where they go to and will come to the Asian ones, but USA is unique and they have different concentrations of the various ingredients within Slimbron. They have their own customer network, but we tend to lose visibility of what's going on. So there's a plus side but also a downside. We haven't got a clue what's going on on many of these these occasions. On occasions, they will say things about our product which will be frankly untrue. K? There'll be misrepresentations. We've got to be very careful of that. And particularly if there's if they're in places where they speak in a different language, then who's to know what they're saying? And I'll give you an example of that shortly.

11:46 Why go buy retailers? So retailers give you in essence, so their strategy is they sell new chat space, but they bring volume usually, and they bring a large customer base, and they probably most importantly of all, they bring brand credibility. The challenge for them, they are very, very demanding and have very, very poor payment terms. Okay? So what we're trying to do is move away from selling ingredient to manufacturers or distributors sorry, ingredient distributors and selling more pharma products and move more and more to a pharma product solution particularly via the ecommerce sales channels. But we'll still have a mix. Okay? We'll still have that mix according to where the opportunities lie and the markets we're going to because some market, particularly in The The US, is very, very difficult to sell pharma product because each of the large companies, the large companies want to have their own manufacturers and they buy new ingredients and use their farm product.

12:49 So this is some examples of what you get in terms of distributors. K? If you get ten minutes over the the read ahead, just click on this YouTube video and you'll have quite a decent laugh. Around about six minutes fifty five seconds, you'll hear what they say about Slimbile. You get a sense of what they've said cause you've got a picture with me and princess Eugenie, which is totally made up and all about using SlimBiome to help princess Eugenie lose 40 kilograms prior to a wedding. All this is totally fabricated as is all the pictures. Okay? And this is sort of typical payment terms that we get with retailer. Okay? So a couple of things. So in terms of invoicing, it's typically within ninety days on the end of the month in which the customer receive the invoice.

13:37 So if they received the invoice on May 1, it'll be ninety days from the end of May. Okay? So a hundred and twenty days. Even then, they tend not to pay then another sixty days on on from that. But the interesting thing here is this part of it. The supplier is not entitled to to spend deliveries of the goods as a result of any sums being outstanding. So they haven't paid us. We've still got a supplier. So these are these are actual payment terms that we've seen in from a retailer. The other interesting thing, okay, is this part here though. Okay? Is that the customer can terminate the contract in a whole or in part by giving notice to the supplier anytime prior to delivery. K? So they can order a product, we can produce it, we can go to deliver it, they say we don't want anymore, and I've seen that happen a few times, thankfully not to to OPTIBIOTIX.

14:32 So these are risks that you face when you go by a distributor, particularly in some countries, Asia being a prime example, unless you get the right distributor, at least some of the risk that you face when you go by by retailers. After saying all of that, there are some retailers and some terms and some markets where it is worth it to give you that brand recognition, to give you that credibility. That's all about making judgments in each areas. Well, this is another one. This is quite interesting because they changed their priorities. So we spoke to Boots last year, very, keen to get our product on on their store, on their marketplace, and then into their into their stores. And some months later then, they decided that for the time being, they're not gonna launch their online marketplace.

15:20 So what you're finding with a lot of these stores, whether it's Walmart, whether it's Costco, whether it's Superdrug, is that they're building their own online marketplace and boots a little bit behind many others and have experienced some difficulties. We will be on boots at some point in the future. I suspect we're also beyond Superdrug as we are in Walmart. But these are the online online marketplaces, which are starting to gain some traction above and beyond the the Amazons of this world. But I use it to give an example of no matter what we're told or what I tell investors, things can change in a matter of days, hours, and you don't often get updates in terms of those changes. Those are the risks. I think most of you are familiar with our products. SlimBiome, OPTIBIOME, that's the same product. OPTIBIOME we have to use in some of the South Pacific market because you can't use the word slim in some of your products.

16:21 LeanBiome, SportsBiome, this is all about building the same product, okay, it's still Lean Bio into the sports nutrition market. World Bio is starting to build it quite nicely now. So we had the best sales over the weekend of the World Bio online. And then the second generation products, and these are looking really, really quite exciting elements of the second generation products. I'd love to be able to tell you exactly what's going on, but I have to have to be cautious on on that. I don't want to damage opportunities with some really good partners. You know some more like DSM, but there are some nice partners in the in the industry that I'm working with. So just wanna go through the science a bit here, and I don't normally do this because I I understand that, you know, what you're interested in revenues, but we'll come to revenues and partners shortly.

17:13 But I'm going to go gonna go to the science for Slimbarn because what we're seeing now is that there's lots of interest in products that reduce hunger and manage appetite. Okay? And this has largely been created from the anti obesity drugs. And we see a number of opportunities being presented to us by a number of new partners who say that given the answer to obesity process quite expensive, given they have a number of side effects, that there's an alternative option for them when we think slimline may be an alternative option. And the beauty is I spent years talking about reducing hunger, reducing appetite, managing cravings, and the anti obesity drugs come along, all of sudden, it's all in the market news.

17:58 So the point I'm making here, the time is right to really make the most of the opportunity. I just wanna show you what we've got in terms of the science. I'm gonna go through this fairly quickly, and I'll bring out a number of key points. So these are published. Okay? We have four studies. Two are published. One's in an endo go in preparation, and the board just finished a week or so ago, and that was commissioned by a large US corporate. One of the biggest weight management companies in the whole of The US commissioned this study for the study, the full study. One to two studies, and comparable studies to actually launch in the marketplace later this year starting next year. So just go into the study in order. So this was used in Slimbine Medical or Slimbine X3 as we now call it, double blind, shape controlled four week human study. Okay? This is on people who were given nutrition advice. They weren't told to diet, okay, just said eat healthy.

18:55 What we found, again, quite interesting here, is after four weeks, so green insulin biome, and this is consistently gray is placebo. You got reduction in hunger by 10%, a reduction in desire to eat. And look at this, a massive reduction in the amount of food that they took in. So we seem to have a product that reduces hunger, reduces desire to eat, makes you feel fuller, okay, but most importantly reduces the amount of food that you eat. Okay? That's the first study. The second part of the first study, we had volunteers came in. They came in, and we said to them, we're gonna give you breakfast. Okay, so he told not to eat, and we said we'd give him breakfast. We sent him into a room, and before he sent him into a room, we gave him one dose of Slimbium, so a drink of Slimbium or a dose of placebo, and we said to him, go into a room, and in the room was a table, they had cooked breakfast, you had pastries, you had pizzas, you had sorts of fruit, all sorts of products. We filmed what they took, they went once they took it, they went across, they put their food on the scales, we measured that, and then count how many times they went back, etcetera.

20:07 And what we found, and probably the best way of showing this is week four, we did week two and week four, is that what you found was that the type of food they ate changed. So they tend to take less fatty food and less calorie intense food. So what this first study seems to show is that SlimBiome doesn't just change how much food you eat, remember previously we had a big reduction in the amount of food you ate, but also changed the type of food you eat. So people are changing their diets towards a more healthier diet, just what you want in a weight management product. Okay? Second study. Okay? This was similar, four big study. Okay? And these are studies because they're focused not not so much on weight. They're focused on on cravings and hunger. They're linking that to to weight because if you can reduce your hunger, reduce your cravings, taking less food, you'll naturally lose lose weight.

21:01 K? And these were asked to take a calorie control program. What we found in here was that people did lose weight and they lost a lot of fat. Okay? So 5.4% fat mass after four weeks. And most of this fat was around their hip and their waist. So not just losing water as you get with many weight management products, you're losing fat and losing fat around the waist and the hips. So again, quite an interesting outcome of the study. But probably more significant, again here after four weeks, we saw reduction in cravings for food, okay, sweet and savory food, a bit bigger than the other study, but you get that variability in any study with humans. But this is the interesting thing. We've got a big improvement in mood after four weeks, and we think this is because people are losing weight, they haven't got these cravings for food, they're not hungry, so they're looking better, feeling better, and not hungry. So that's quite a big indication really in terms of a a very interesting product. So that was the second study. K?

22:08 Interesting. When we looked at the microbiome, and Bryce said, you're trying to create a product which creates a healthier diet. What we found was that if you check that the microbiome was zero in four weeks, look at this area here, bacteroides increases, this area here, So they are bacteria that are associated with lean body type. So if you measure discordant twins, one fat and one thin, you'll find that thin twin will have a higher proportion of bacteriologies and the highest proportion of Bristol AC. So that's linked in to lean body states. So it seems to be creating a lean body state as well as improving the diversity of the microbiome, which is beneficial to overall health. Oops, sorry, I've gone the wrong way.

22:57 So this is the third study. This is an an ongoing publication that will present at conferences, and this is a study that we repeated for a large US partner. The partner is sounds like they're the biggest branded weight management product in The US. They wanted to have two studies rather than one from different universities. But this is a particularly interesting study because what we're trying to show here is how if you take just one dose of sugar, so what we did with 18 healthy adults, so this is measuring the glycemic response. Okay? And so there's an international protocol for this which involves 10 people. We used 18 people, so roughly twice the amount that's actually needed just in case people dropped out. And so they invested they ingested fifty grams of dexto, which is sugar, and fifty grams of dextrose plus three grams of slimbione. So three gram of slimbione is the dose that we use in one of those slimbione sachets.

23:55 So what we and what you can see, you get an impact on the glycine response, so you don't get these peaks and troughs that you do typically when you're taking in sugar, you get the insulin response. But interestingly again, if you compare the dextrose to dextrose per slimviolent, what you find in terms of slim bile, this is after taking fifty grams of sugar, it's about twelve teaspoonfuls with or without slim bile. You get lower fields of hunger, that's also to be significant. You get higher fields of fullness, and get a low desire to eat. So these are all really important trends. What you're seeing across all our our our studies is that you'll see that slim buying reduces hunger, reduces food cravings, starts to control appetite.

24:45 As a consequence, you eat less and you change the amount of food you eat and you lose weight. K? That's the story consistently across three of those those studies. And this is an interesting one. So what we thought we'd do, if we take some products that are on the market, so we take a range of products, see just one of them. Okay? And we measured the viscosity and the changes in the gut. Okay? So so if you take SlimBio and SlimBast and make viscosity over a period of seconds, okay, you can see the viscosity does go up, both the SlimBio and the SlimBast. If you add the two together, you get much higher viscosity and you get a lower passage through the gut. That means you will feel fuller for longer. So this would be and so the reason we're doing this is to create evidence to share with partners and say, well, look, guys, if you're selling SlimFast, if you incorporate SlimVironment in the SlimFast, you've got people will take it and they will will feel hungry and they'll actually not trade food for a long period of time, so they'll feel full up longer. And so we got a whole range of these that we're working with partners on. So another good example of where the science starts to really impact upon commercials.

26:00 I'll let you have a look at that while I have a drink, but this is just a quick comparison that we've done of Slimbion, and GLP agonists are the the anti obesity drugs. And I'll just pick up the the main ones really. No side effects, but there's quite a lot of side effects with the anti obesity drugs. We actually seem to be able to reduce weight loss by reducing fat. There's a number of and certainly the sentinel study that was produced showed that people who took the anti obesity drugs didn't just lose fat, they lost muscle. Okay? That's seen as quite a concern because these people are quite rightly because the way the drug works, they're reducing their food intake, but if they've got poor diet, then they're eating less as a poor diet and they're reducing their fat but also their muscle.

26:53 And we seem to be actually having a positive impact in terms of the gut microbiome and a positive impact in terms of changing the amount of type of food people eat. There's obviously a big cost comparison, so typically these drugs cost £75. So the idea I'm showing you this is not to say we wanna compete in the same marketplace as those drugs, but we think we've got something that can be used as an alternative for those people who can't afford the drugs, can't take the drugs for those particular because they have side effects or a whole range of other reasons, maybe they don't wanna take them, don't wanna take drugs. So we think we've got a lot of interest, well we have a lot of interest in these products as a consequence of the interest in the anti obesity drugs. What I wanna do now is just talk about the progress we're making internationally, okay, and how we're building a global brand.

27:44 And I'll give you some indication of the revenues that we're starting to get through in some of these areas with some of our partners. Okay? I'll start off with Asia Pacific, and then we'll then go into India, and we'll go into America, and then we'll go into the ecommerce. I hope you find this interesting too how the our strategy from a year and a half or so ago, we said we want to go into these areas and build the ecommerce, build up sales in these areas, and how we're starting to deliver results. Okay? So first of all, OPTIFARM, a well known partner of ours, well known in Australia, it is a big brand, honestly. It has a brand called Optislim, which is the category leader, and this is some examples of the of the products that OPTIX HEALTH has and I think that's some accounts warehouse.

28:34 But they're involved in over 24 pharmacy chains, they're also involved in Costco, both in Australia, New Zealand and increasingly in Thailand, and looking to take their products, including our ingredients, into America as well. This is their premium product. Okay? OPTIMAN. They have an OPTIWOMAN and OPTIVEAGAN. I show this because I mentioned earlier about the science and where the science is important and allows us get regulatory approvals to make health claims, and these make a big difference. So these are the health claims they have on their pack, okay, here, here, here. Okay? OPTIBIOME. So OPTIBIOME is the as slim biome, but we can't use the word slim in some of these products. Okay? It reduces hunger, reduces cravings, can improve the gut microbiome.

29:23 So the science and the clinical studies are there not just for the sake of doing science and clinical studies. They allow us to get the regulatory approvals that allow us to make the health claim. Without this, we've got to compete on marketing. That became very, costly. If we can actually compete in terms of our science and show real differentiation, then we want to win it, but it takes time. This is also an interesting development by OPTIBIOTIBIOTIX. They've got a healthy meal option. So these are ready meal. Okay? And I hope to take some of these into The UK and some are online on particular stores. What they are finding that people this is quite common. People who buy the ready meals, they take in the healthy options. So they're quite low in calories, 90 calories.

30:08 They're taking the meals, but they still feel hungry afterwards. What they've done quite cleverly is added a sachet of OPTIBIOME, the slim BIOME, to each of these packs. Okay? So people take the healthy meal, they open it up, they pour the OPTIBIOME onto it. As a consequence, it reduces their hunger and cravings. And again, you can see here that the claim for health claim we can make on these packs. So they're in across Australia and New Zealand. They're looking to extend them again into into America. We'll be looking to take those into The UK and online store. And we like this idea in terms of a slim biome or OPTIBIO and sprinkle that you can use, which has no frames in it on a whole range of products.

30:56 So this is probably worth about 250,000 plus at this moment in time and this this year, Maybe slightly more depending on so you're you're probably talking about $17.05 to $1.10 per month in terms of use of Symbaron. And it varies depending on when Costco places an order because these things come intermittently. So but that's all taken from stock. Apart from finding that, we supply these direct as a final product direct to them with these sachets. So this doesn't include these yeast and biome sprinkled. Okay? It includes the ingredient in the replacement shakes. So that's starting to build quite nicely just in that one company. But again, just to mention, we had a big stock builder and we're just taking that down now bit by bit. So once we clear that stock, you'll start to see these sales coming through into the acupuncture sales.

31:57 And so this is Asia now. So we've only went to Asia the last six months or so properly, and we've been doing that by our agent called Nutri Connect who are really making a a really good job of this. You properly recognize that. I've been out to Vietnam, Malaysia, Thailand, etcetera, over the last couple of months and also to Indonesia. And the reason we we find these markets quite exciting is that they are high growth markets. We often have got very high populations. So Vietnam population of a 100,000,000, Indonesia, two seventy five million. So really big population. So what you want your folks in your products on are those markets where you have high growth and you have big population. So that's where you will get the return. You can start to see the products. Many of these have just been launched. CDC had been around for a while. They've only really the spot did connect really started to move. Most of these, with the exception of the Vietnamese one, are large drinks. So they develop in a range of drinks where there's orange or chocolate drinks or berry drinks. We're starting to see this come through. So again, for year one potential, you're probably looking at a 125, a 150 k just in year one. We'd see that built in to about 500 k per per year, and if we're really lucky, particularly in Indonesia, we could get to the million mark. So you can see why you were moving into these particular markets. And you've got considering, you you have to go to these markets, get regulatory approvals, which takes six, maybe sometimes nine months, we're

33:27 making a lot of progress in quite a short period of time. India, I just want to go through. People are largely familiar with that with Apollo, but also with a number of other companies in India, so that's starting to go quite nicely. Apollo's an interesting one, so they have our shakes and they have our we have these made for us in India, okay, and they have these shots. It was interesting when we launched with Apollo last year or so ago. When people went into Apollo, they bought the the products, they had a big increase in number of

34:01 customers go into Apollo as part of the Go Figure launch. They brought in new customers. But most interestingly of all, they had 87% of customers made a repeat purchase. So they have a bit like we have in Tesco's or Sainsbury's or on your card so you can tell who's buying a game. So 87% of the people purchase, that tells you've got a good product coming back and buying it. They've also created a new marketing idea. So rather than a bit like MuscleTech and Myprotein, they're putting LeanBiome into their whey protein products. They're actually selling whey protein products themselves, this is Apollo, but actually selling the shots that go with them and say a shot plus a whey protein product is better than a whey protein product by itself.

34:47 So again, as you go to these countries where you've got OPTIBIOTIBARM with the little sachets the veggie meals or whether you've got an Apollo linking the shots to the the weight coating. It looks quite it's a really good idea if we can go and take ourselves into other markets. So the the key one here now in terms of the new product launch. So this is some examples of what Moor Pen have put together, a simple, well, weight magic made simple product. These aren't finalized yet. These are some ideas, and these are the five products that have five different flavors that they're launching with in h two. Looks like July, but knowing the way things work, it might be a month or so later. And these are the numbers. Okay? So this is based on Morpent sales forecast, but I haven't given you their numbers. I've given you our numbers based isn't it? I'll go through this, and then I'll have a note of caution. Okay? Let me get forecast from a partner.

35:47 Generally speaking, if you're sensible, you'll half it. Okay? Just keep that in mind. Then we can say, well, we half. I mean, it could be less. It could be a lot more, and we have a lot of confidence and more pain. But just a touch of caution when investors may be taken on board in in in a year's time, where is this? Just keep that in in mind. So this is the revenue potential based on Morpen's sales forecast, okay, for us, okay, for OPTIBIOTIX. So this is selling the pharma product, okay, at 1,200,000, 2.7, etcetera, plus the five years. So we don't really know, as I said earlier, whether it'd be launching in July, which is the plan, or it'd be delayed a couple of weeks or or or so, but that will determine what we get in in terms of the first in in 2024.

36:35 K? But we already placed a substantive and probably our biggest order ever for in in May. Okay? So we're really well underway. But as well as selling the final product, we also sell the ingredient. This is back the point I made earlier. If you sell final product, you have a double sale. You can sell a final product and you also the ingredient, in the case of the manufacturer, keg, which goes into that pharma product, you get a double benefit. Okay? And so these are the numbers and these are the profit we'll make from those. Okay? So again, that looks like an interesting customer. And these sorts of customers, if they materialize these sort of numbers, they'll be transformational for the business. What you need is not just one of them, you need two, three, or four of them to make sure you mitigate the risk. And I'll show you what we'll do next. K?

37:26 So The US, very typical to The US market. It takes time. We've got a a large pipeline there. Iovate, the MuscleTech product, has come before very, very quickly. And what they're doing very, very nicely is they're using science, our science, to differentiate their products in a crowded marketplace where, you know, whey protein in essence is, you know, fairly commoditized. So people selling whey protein products have some difficulties. You have to build on the branding and also sell it in terms of the science. Similar, but not in The US, so my approach in Europe and then moving into The US, I wanted to show you this link back into sports nutrition.

38:11 They haven't really

38:14 differentiated our product, okay, other than the brand. They haven't really brought up the science on the MyProtein impact diet lean and breakfast smoothie. But we're getting some great reviews, okay, on the the website, and we also found that they had a big uptake in new customers. A lot of younger customers were going in buying this product. The biggest challenge you have is that without that differentiation, how do they know the benefits of LeanBiome? So what my protein are doing, they're undergoing a marketing and rebranding of our products. And what you'll find as a consequence when you go to the website, some of these products won't be available because they've got new branding and they use an existing product before they rebrand and relaunch.

39:03 And this is The US corporate. I mentioned earlier that we've got Morpen. I'm gonna need more than just one particular company, those sort of numbers. So this is a a really big US corporate. Okay? And I went out there a month or so ago and we agreed a global launch. Okay? Verbally. K? We haven't agreed it in terms of signing a an agreement. But that's the way many of these US corporates work. But global launch is very, very complex. So you greet and talk with a vice president, then passes it to his team, they go to the regulatory environment in each of these areas, they go through the requirements in terms of the financials, they go through a whole range of of areas. And that we all use their own contract manufacturers, and the problem with that is that you're working with a contract manufacturer and the and and the global corporate.

39:58 So you've got a a three way conversation going. But as I mentioned earlier, you know, with with American tender selling ingredient, and these are sort of revenues that we would get in terms of selling these ingredients between new and new filings. So the idea is that will be launched at the end of this year, beginning of next so beginning of next year. I suspect it'd be beginning of next year rather than the end of this year. This is a different global corporate where I mentioned earlier in terms of weight management and brand, but this is looking quite quite interesting. So all agreed in principle, going through the process, but again, as I highlighted here, there's no guarantee into the product on the shelves. And I think the key point here, I guess, is this is the big global brand and it's going global with our products. Okay?

40:44 So that would be an interesting opportunity for us. Just to finish off a couple more slides then, and we're getting near the end of the presentation, I just wanna show you what we're doing in terms of ecommerce. Doing really well in terms of Amazon UK. It's been led by by Shiraz. And so we've got our own website. We've gone to Amazon, expanded into other areas in terms of Amazon Germany, UAE, etcetera, Amazon India. But what you're finding is, again, the same story we said previous, is that we've got a big increase in the number of Prime subscriptions. Okay? So we're getting a lot of loyalty attached to this brand. That's what you want when you advertise online. Typically, and when you go online, it costs about a £100 to bring in one new customer. So of course, if you bring in one new customer and the customer buys £40 worth of products, it doesn't come back. It's a loss. If you've got these customers come back time and time again, that was seen with them and with our products, you know, it's worth the investment. Okay? And that's what we had to work out initially.

41:44 And so you got a 179% increase in the number of Amazon Prime subscriptions over the last well, this is from May 8, the month before. Okay? And as you can see here, we've got Amazon Choice for our Gummies, which are which are going extremely well. China, again, going going well. We're averaging out. We had a couple of months in October, November sort of thirty, forty k. Now we're averaging 20 to 30 k. We're moving more from TikTok to Tmall, which is Alibaba, because the cost of bringing in new customers in TikTok was just too high. Okay? And what we're we're focused on famous profitability. What we find with Tmall would get more customer returns. K? We're adding Slimbium X3 to our Chinese market and introducing the indulgent bar. And the plan is to sell Slimbium X3 to our partners in Meddy, our agents, at £60 per box. So you can see a decent margin there.

42:46 Live in Amazon UAE on the May 13, we're all set up for Amazon India, which is waiting for the products to be coming to store and then picture them and then get them onto Amazon Prime and also for the The US, but rarely on warm item US. So lots of things underway in terms of not just for slim buying but also for well buying. As I said earlier, well buying is starting to take off now as well. This is just some of the potential for e commerce. Okay? So this just gives you an example of where we could be in terms of The UK, 200 k. Asia, we started it October November last year, 300 k, UAE, US coming through. Okay? We haven't mentioned India sorry, Asia was in the India was in Asia. So that's looking quite quite nice. So a big increase in 2023 in this area.

43:39 You can see in terms of ecommerce, it increased 2021, 2022 more or the same. Then you have the sheer as effect, as I call it, a big increase, and that will keep on keep on going, long term, quite nicely. So you're starting to see an effect. And I'll let you look at that for a second while I have a drink of water as I'm pouring out. And what I'm just trying to show here is a strategy we set out a year and a half or so ago was investing in ecommerce, investing in Asia, investing in in America. And you can see in 2022, okay, with b to b, k, going to migrate to 2023, we had an increase and stabilizing.

44:24 Look at the rate of increase in US between nothing in 2022, k, but in USA and India, a little bit in 2022. 2023, increased b two b. Well, first signs of of action in The USA in 2023. Then in India, a little bit of interest and also in in terms of local and e commerce. And as you go to 2024, we've got a big increase in India. Okay? A big increase in e commerce. So you're starting to see the plan coming into action. Okay? That shift from selling ingredients to selling in these different markets and growing the business. This will include the license fees that we get and a few other bits of revenues as well. Okay? And that's the first generation. Of course, we've got second generation to come.

45:13 Just in terms of the second generation, KSI Sweetbiotics, just to remind people, we're having a phase introduction of Sweetbiotics initially as a bulk sugar replacement substitute and then were followed by partner consumer products. We've got some really high forecasts from DSM and Burnneck in terms of the launch. We're talking 100,000 metric tons per launch, and you're probably looking at 20 to 30 pounds per kilogram per product. Initially, it'll start off around about, I guess, 25 to 30 and then come down, might even go beneath them 20 as it gains volume. We're also working on a finished product with a large global partner that can be launched, and we're also working more recently with a manufacturing supplier who surprised caramel was who surprised, you know, the the sort of products that we might get in the caramel bar or in your your rollers.

46:10 So a confectioner, if you like, a spicy factory market, and they're talking about 10,000 metric tonnes per gram. So quite a lot of things going on, but I don't wanna give you too much detail. I don't have what I call a TARFA effect where people go out and try to track down in front of these companies, pretend they're OPTIBIOTIX, pretend they're me, and create so many problems for us it becomes very damaging. And then microbiome modulators, look, this really a time for the Euclidra products. That's going very, very well. Publications, JGSM for publication, looking quite interesting, and we're looking to build a and we've got a number of marketing materials we'll be releasing shortly, which I think will be quite interest to to investors. And I did write an RNS a month and a half or so ago, but I held it back because things were changing almost week by week. And so when I was producing something, it was almost out of date. And so I held it back, but I'll do something over the summer as these things start to settle down and materialize into things that are unsubstantive.

47:14 And so in summary, why have things changed? Well, first of all, markets have changed. Okay? They've got this interest that I alluded to earlier in hunger and and appetite. Okay? And so the swim bio now has become a lot more interesting to people. Right? Because people are aware that by reducing hunger, reducing appetite, it could impact on weight loss. K? The second thing, the microbiome and gut health was on the the margins have now become mainstream. The third thing, obviously, is lots of interest in the high protein, low sugar snacks, particularly our calories in our bar. So we end up in quite interesting as well. And we've got a number of bars coming up which you'll find tasty as well as functional.

48:02 But of course, we've also got the sugar replacement interest and from the issues with sucralose, etcetera. But also we've changed our approach. We've focused more on ecommerce. Okay? We focus more on the Asian markets and we focus more on final product. Okay? We've been able to we're at the stage where OPTIX HEALTH PLAYING on PACS which is really attractive for larger partners. We've already picked up a number of international partners who are quite big, now these are billion dollar turnover companies, but we want more. Okay? And when we got two, three, four more, I think then I'll be in a really strong position. We've got a couple of those at a late stage, okay, some of these agreements, and we've got lots of growth in the Asian markets. And as you saw earlier, lots of growth on ecommerce.

48:55 On top of that, we've got second generation products, which I know I'm tempting you, and I know it's it's frustrating, but believe me, I don't want to damage the opportunity by creating a problem with our partners because of all the enthusiastic investors. And believe me, they form up partners, pretend they're OPTIBIOTIX, try to gain insight information, and I just can't have that happen ever again. It's happened twice now to to us. Once with OPTIVIOTIX, once with TARTA. We've got multiple plays in the emerging microbiome space.

49:45 I've just got one final slide I just want to show you. So I mentioned earlier the interest in the high protein, high fiber, low sugar bars. We're launching these. They'll be on our online store this week and Amazon in a couple of weeks. So this is an indulging bar. So it looks pretty good. It tastes really good. I'm trying to get one here that can first be used by about six months or so ago for us without cinnamon bar inside them. Really, really good. You So they've got they've got peanut and and they've got chocolate, thin layer of chocolate, and they've got caramel. Really, really good product. What I'd ask you to do is when they're on Amazon, okay, buy some product and write a review on the product if you like them. Okay? That helps us grow interest in Amazon, in our products, gets us an Amazon choice, and really starts to improve the sales in that market and consumers by products. So that's my final slide. Hope you found it interesting.

50:48 I've sort of given you a fair bit, but not everything, because I can't disclose inside information. I'm cautious as I said, there's too much on the secondary mission. But I'll pass back now to IMC. Perfect, Steven. Thank you very much indeed for your presentation. 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. While the company take a few moments to review those questions submitted today, I would 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. Steven, as you can see, we have received a number of presubmitted and live questions for today's meeting. And if I may now hand back to you and kindly ask you to read out the questions, give responses where appropriate to do so, and I'll pick up from you at the end.

51:36 Sure. I'll just pick and choose a couple of these questions. A number of them are repetitive. So one question is what has happened to CTC? Are they still a partner changing revenue? I think you saw it in the presentation that CTC were a partner. They had one customer initially. We got Nutri Connect involved, and we've been able to increase the number of partners that CTC was selling the product to as a consequence of an increase in the number of launches of products in The Philippines. So that will build quite nicely, but it built a very low base if you like. We've very little activity on CTC and that part of the challenge you have with multiple partners, multiple distributors, you really have got to sit in them, you know, and update on a regular basis and really manage them very, very aggressively to get them to.

52:38 Second question, there's a share overhang caused by financial to seek on funds and down their position. Why is OPTIBIOTIX broker not prime to take this stock and move the overhang and increase the share price? Honestly, I find these things a bit of a nonsense. We have a very, very good investor in terms of finance Yorker. They're very supportive of OPTIBIOTIX. They don't sell down on a regular basis. They're not constantly feeding into marketplace. They've been with us now for, it must be about eight years. And like any investor, they need to take the take the most of the opportunity. They sold recently, and I was called beforehand to be told they'd be selling because they at the end of last year, they had a a period where they were looking to they had a number of their funds had lost money and looking to draw down a number of sales of stock in funds that had made the money to rebalance their funds, took the entitled, like, any investor to sell stock.

53:43 Worthier of the company to help investors make money, whether that be a large institution at least half the stock rate years or retail investors have no problem whatsoever. We do sometimes work with these institutions if they come to us. Often, they'll be very, very sensible and sell into marketplace, and I have every confidence in finance Yorkshire. And I've known them personally under the finance manager and finance director for years and years, and he's a friend as well as an investor, so they're very, very, very good to us. Let's try, I think. Okay. A good one, actually. OPTIX HEALTH has written mails for the sachet of OPTIBIOME. Is this sachet strategy successful, or can it be rolled out at other partners' locations?

54:31 Good question. I partly answered it in the presentation. The answer is yes as part of our move forward. In fact, we've looked at different sachets, so you can either have the small sachet like they're using and a sprinkle to add into a range of products. That sometimes doesn't work if you want to add it to a drink, you might want to add it to a drink. So for example, if you've taken a protein drink or you've taken a drink into the gym, or you take a drink into work and you add to it, so we're looking at maybe more narrower sachets so you can pour it directly without losing a lot of powder. But it's something that we will take forward ourselves and it's something that OPTIBIOTIBIOTIX also be taking forward across different markets, particularly to The US. But it looks like a a really good product.

55:29 A question here about lean buying products in stock with THG as the head group, and I think I alluded to earlier. So what you've got, and I'll go through this with the head group, but it also applies to the whole and Barrett, is that in the past, you had a market in terms of weight management, which was very much a separate part of the retailer, okay, a separate part of the shop. Now what you're finding is that people are moving away from just weight management products, their health and well-being products become part of that. So as a consequence, what many companies are starting to do now is rationalize their offerings, but more importantly, they're starting to rebrand their products to bring out those products that are healthier in terms of helping you lose weight. That's why I purposely tried to show you that our products tick all those boxes in terms of helping reduce helps to manage a person to reduce the amount of food they eat, but also importantly change the type of food they eat so they eat healthier food, and the consequence that improves their microbiome.

56:42 So what you've got is that they're rebranding, they're bringing out a different range of a wider range of products. The consequence, they are sometimes not restocking with the original original product. So that looks quite we speak to the HEALTH group on a regular basis and the whole and about, we think that will be a really good opportunity for us going forward. So we seem to be in the right space at the right time. Quite a few things on sweet Bartik, which I've covered off. A couple of questions here on probartik asking one quite aggressively in terms of the lack of information on probiotics.

57:27 Look, I need to be open with you. I'm not the CEO of probiotics. It's a separate company. If you have any questions in terms of Probiotics, you need to submit those directly to either Warbrook who's their investigations company or to Probiotics themselves. But probiotics is a it's gone extremely well. As I touched on earlier, it's probably one of most undervalued stocks in the whole stock market. But I I take the point that the best position needs to be updated and and made aware of of how well it's doing and then how undervalued it is. I think that's it for me in terms of questions. I try to pick as many questions as I as I can, which reflects a balance. There's lots of duplication.

58:15 But I hope you found that an interesting presentation, and the response to questions was helpful. That's great, Steven. Thank you for addressing those questions for investors today. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Me company platform. But before we direct investors to provide you with their feedback, which I know is particularly important to yourself and the company, Steven, could I please ask you for a few closing comments? Yeah. I think I like many of best. Remember, I'm the biggest individual shareholder. We've been through these peaks and troughs in terms of the share price. We've been through peaks and troughs in terms of sales. It's been quite a difficult market, particularly with Brexit, COVID, Ukraine, etcetera. It's a very volatile world.

59:03 But I just when I look at it now, I think we really are at a inflection point in terms of any evidence I've just presented to you in terms of the products we've got, particularly in terms of the first generation products, got the human studies, they've got the IP, they've got the regulatory approvals, and now we're increasingly attracting the bigger partners. And on top of that, we've got the second generation products to come and just seeing just a couple examples of the potential revenues from some of these bigger partners. If we can get them to deliver to their forecast, which will be our focus going forward. So a big opportunity for us and a, you know, a big thank you to investors who stepped with us through thick and thin. But now I think we're on a good path, and, 2024 in particular will show a couple of really interesting opportunities coming to to the fore, which is looking good.

1:00:04 Fantastic, Steven. Thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be 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, and good afternoon to you all.