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OptiBiotix planning spin-out of cholesterol and blood pressure technology as it appoints City veteran Reynolds to chair new business

Last updated: 18:33 24 Sep 2018 AEST, First published: 16:23 24 Sep 2018 AEST

cholesterol on a dial
The company's technology offers a potential breakthrough in cholesterol control

OptiBiotix Health plc (LON:OPTI) has appointed City veteran Adam Reynolds to chair its spin-out business, ProBiotix Health, ahead of a separate stock market listing.

The new company will be home to cholesterol and blood pressure reducing bacteria strain, LPLDL.

In a statement, investors were told the division has now reached a stage of “scientific and commercial maturity” to make the separation a practical next move.

Reynolds, OptiBiotix chief executive Stephen O’Hara and the team will be hoping to emulate the success of the Skinbiotherapeutics demerger.

An initial £250,000 investment in the business is now worth just shy of £12mln, while the former subsidiary is currently carrying out first in human trials of its potentially breakthrough skin cream.

Successful strategy 

"The formation of ProBiotix Health and appointment of Adam Reynolds as chairman continues a successful strategy of building value in each division which is materialised by forming separate legal entities and taking them to a public listing,” said boss O’Hara.

“As the listed company grows in value using its own funds, OptiBiotix shareholders benefit from the appreciation of the asset as exemplified by SkinBiotherapeutics.”

OptiBiotix is a pioneer of the human microbiome, which is essentially the bacteria that inhabit the gut and skin.

It has found, for instance, small changes in the gut flora can affect the way the human body processes food.

After spinning off its SkinBio business as a separately-listed entity last year, the group is focused on three development areas – cholesterol, diabetes and weight loss.

finnCap hails change of focus

finnCap, OptiBiotix’s corporate broker, has been impressed with the progress made by CEO O’Hara and his expanded commercial team.

Analyst Mark Brewer in a recent note pointed out the group has transitioned from being technology group to a commercial-focused operation that has negotiated 16 commercial agreements.

These include deals with an offshoot of Premier Foods that makes Birds Custard, Indian giant Tata and Seed Health in the US.

“This significantly de-risks the business,” he added Brewer.

“The focus for the current year will be to begin to convert these agreements into revenues; the timing and quantum of which remain difficult to forecast.” 

The shares were up 4p at 99p, valuing OptiBiotix at £90mln.

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