LONDON (ShareCast) - (Sharecast News) - Life sciences company OptiBiotix Health said in a trading update on Wednesday that, based on initial figures, it expected first-half sales in its new structure to be "materially lower than expected" at around £0.12m.
The AIM-traded firm said it anticipated sales to "normalise" in the second half, but insufficient to make up the first half deficit, before returning to "healthy growth" in 2023.

It explained that the listing of ProBiotix Health on the AQSE market meant that it was now considered an "associate" for accounting purposes, with its revenues and costs removed and only OptiBiotix's proportion of its profit and loss included in the company's accounts, making year-on-year comparisons "challenging".

"We believe the difference in sales is partly a timing issue with a couple of larger partners delaying restocking due to uncertainty in the economic environment, and Apollo Hospitals and Nahdi Medical postponing launches until the second half as a result of regulatory approvals taking longer than expected," the OptiBiotix board said of the decrease in sales.

"These regulatory approvals have now been received and we expect launches to take place in the next couple of months.

"Larger partners offer scale and place fewer but much larger orders throughout the year and consequently any delays in orders can have a material impact on revenue in the early stages of a company."

OptiBiotix said it was progressing discussions to increase the number of larger partners to mitigate that risk in future years.

The listing of ProBiotix on AQSE, meanwhile, materialised a previously-unrecognised asset, allowing the company to report a £13.8m profit before dividends largely from the gain on the investment, offset by a loss on revaluation of the SkinBioTherapeutics shares.

OptiBiotix said it had a "healthy" balance sheet, with gross assets of £22m, down from £28m year-on-year, and £1.5m cash at the end of June, compared to £0.99m a year earlier.

"The company has invested in expanding its commercial and business development team in key strategic markets like the United States and Asia, and as part of its drive to build its direct-to-consumer sales," said chief executive officer Stephen O'Hara.

"We hope to see the return on this investment later this year and more significantly in the 2023 financial year.

"The aim for the second half of the year is to focus on growing sales with existing partners, building the online direct to consumer business, and launch GoFigure products in India with Apollo Hospitals and in Saudi Arabia with Nahdi Medical."

O'Hara said the firm would also look to attract more larger partners, particularly from the US, and to in-licence or acquire additional technologies to ensure a continuous pipeline of solutions to strengthen its position as "one of the leading companies" in the growing microbiome space.

"We are fortunate in having a healthy balance sheet and £1.5m cash in the bank to continue to invest in building the business.

"We also retain exposure to the growth potential in probiotics and skincare through the Group's shareholdings in ProBiotix Health and SkinBioTherapeutics."

At 1514 BST, shares in OptiBiotix Health were down 25.36% at 20.34p.

Reporting by Josh White at Sharecast.com.

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