OptiBiotix Health Plc
Bolsters its Indian footprint with a distribution of SlimBiome products in India under the Dr Morepen brand.
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By Alex Langton | 14 February 2024
Mike Caine and I have a financial interest in OptiBiotix Health.
OptiBiotix Health, a life sciences company engaged in developing solutions for obesity, high cholesterol, diabetes, and skincare, has recently announced a noteworthy partnership with Dr Morepen Ltd to distribute SlimBiome®-infused products in India. This collaboration is set to leverage Dr Morepen's robust presence in the Indian market, a subsidiary of Morepen Laboratories Ltd, a firm listed on the Indian Stock Exchange with a substantial workforce and a diverse product portfolio spanning 82 countries.
Dr Morepen, established in 2001, has built a reputable brand in India, advocating for proactive health and well-being management. The company boasts an impressive reach, having direct access to over 200,000 pharmacies and further indirect access to 300,000 nationwide. The distribution strategy encompasses online sales, in-store placements, and direct marketing to healthcare professionals.
Considering Morepen's extensive network and reputation, this partnership is significant, as it could enhance market penetration and consumer adoption of SlimBiome® products in India. Based on Morepens sales forecasts, the directors of OptiBiotix anticipate this agreement might contribute approximately £6-7 million in annual revenue over the next four to five years, highlighting the potential financial impact of this collaboration. I note Mr Winnifrith has indicated a summer launch. However, when we spoke to O’Hara, he was less committed than Winnifrith, which is a concern because he has a habit of hyping expectations, putting unnecessary pressure on the company. Ironically, Winnifrith warns about acting on second-hand information-pure class, given he has hyped expectations regarding the launch.
However, OptiBiotix already has established partnerships in India for SlimBiome®, including manufacturing and distribution agreements. (Import taxes play an important role in making it economically non-viable to sell into the Indian market, so we had to establish manufacturers who could produce SlimBiome® consistently and to the right quality and cost, and then manufacturers who could produce the final product. We anticipate more following O'Hara's talks with ministers today in London, who are eager to establish trade agreements with India.
This invites curiosity regarding their performance and how they might influence or synergise with the new collaboration with Morepen. Notably, prior initiatives have seen the launch of innovative health products in the Indian market, such as Metalite, a weight management supplement, and Metalite Pro, a high-protein meal replacement incorporating SlimBiome®.
Mr O’Hara, OptiBiotix CEO, explained: “If you remember my fishing analogy and what we have done elsewhere, you need to attract smaller companies (fish) who can then show traction and customer acceptance in a new market before the larger partners join in – this is Anthem, who are a regional player in India who sell into speciality markets (obesity clinics) Furthermore, a recent licensing agreement with Tata Chemicals to integrate Fossence into SlimBiome and LeanBiome products for the Indian market underscores OptiBiotix's strategic focus on this region. (Fossence gives us credibility in the Indian market and was a factor in the Morepen agreement). All these links together in a structured way.”
For prospective investors and stakeholders, several questions merit consideration to further elucidate the forecast and strategic alignment:
How will the new partnership with Dr Morepen complement and integrate with OptiBiotix's existing agreements and market strategies in India?
Given the crowded marketplace and existing partnerships, what measures are in place to ensure the differentiated positioning and competitive advantage of SlimBiome® products?
Are there projections on how Tata Chemicals's inclusion of Fossence might impact the consumer appeal and efficacy of SlimBiome® products in the Indian market?
What are the anticipated challenges in scaling up production and distribution to meet the potential demand surge resulting from this partnership? “This has already been worked through with partners investing in new equipment and new lines to meet the scale-up).”
This partnership represents OptiBiotix's strategic move to capitalise on India's burgeoning health and wellness sector. Yet, the interplay between existing agreements and executing a coherent market strategy will be pivotal in realising the projected financial outcomes and strengthening OptiBiotix's foothold in the region.
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With such positivity with the projected Revenues then I look forward to seeing a Broker note and forecasts out in the market in the next few days.