Investors

Chief Executive Officer’s report

We have made excellent commercial progress during 2025, with our investments in the key strategic markets of India, the USA and Asia delivering larger partners who are investing in marketing our products, leading to strong sales and early repeat orders. Our key first-generation products are well positioned to benefit from growing industry and consumer interest in the suppression of hunger and appetite as a route to managing weight with on-pack health claims that give us a key point of difference. The clearance of a substantial stock overhang during the year has eliminated a significant drag on our reported sales and we entered 2025 with a strong order pipeline. Our focus is now on improving margins and reducing costs to bring the business to profitability, while we continue to develop the huge potential of SlimBiome in managing hunger in a market with strong consumer interest, WellBiome in improving gut health, and our second-generation product portfolio.

Strategic overview

OptiBiotix Health (AIM: OPTI) is a life sciences business focused on the development of products which reduce hunger and food cravings, enhance the gut microbiome, and provide a healthy substitute for sugar.

Our strategic approach has been designed to reduce risk and maximise opportunities for investors by recognising the challenges inherent in bringing new technologies and products to a naturally conservative global food market, where consistency and risk avoidance are key and the acceptance of new products is notoriously slow.

Since our inception we have developed an extensive portfolio of microbiome assets including not just prebiotic products like SlimBiome^®, WellBiome^®, SweetBiotix^® and Microbiome modulators within our core OPTI business, but also skincare through SkinBioTherapeutics PLC (SBTX) and probiotics through ProBiotix Health plc (PBX). Together these create a diverse portfolio of tangible assets in an emerging area of healthcare that is of growing interest in consumer markets throughout the world. We are pleased to note strong commercial progress made by both SBTX and PBX during the year, and we see considerable potential for further growth in both these companies in the future.  As sales continue to grow and these companies reach profitability we expect their value to increase. This gives us the potential to realise value through the sale of shares, so as to reduce our need to fundraise in a volatile market, or to return cash to our shareholders through an ad hoc dividend.

Within OptiBiotix, our strategy is to focus on global markets with exceptional growth potential and to target these with a diverse portfolio of highly differentiated, clinically proven and patented products. These products have been developed to anticipate and align with global megatrends and growing market needs as illustrated by the following market reports:  

• Proven scientific and clinical efficacy is a key consumer requirement in purchasing health products: The top wellness trends in 2024 | McKinsey
• Natural weight management/appetite suppressants like SlimBiome®: https://www.verifiedmarketreports.com/product/appetite-suppressants-market/
• Digestive Health and the Microbiome (WellBiome®, Microbiome modulators): Ten Key Health and Nutrition Trends for 2024 - KHNI (kerry.com)
• Sugar reduction (SweetBiotix®): Ten Key Health and Nutrition Trends for 2024 - KHNI (kerry.com)

The years we have spent undertaking clinical studies to establish robust health claims for our first-generation products mean that SlimBiome® has now achieved scientific credibility and acceptance by major partners and consumers as a proven aid to weight management. This has allowed us to gain regulatory approval in multiple international territories across Europe, North America, Asia and Australasia for on-pack health claims which are key to differentiating our product from competitors in a large but crowded marketplace. We note that one of the USA’s biggest weight management brands has placed an order to include SlimBiome in their products with on pack reference to studies showing a 73% and 82% reduction in hunger.  This partner intends to launch products in Walmart stores.  We have also successfully extended our technology into new channels such as sports nutrition with LeanBiome^® already incorporated into two of the world’s leading sports nutrition brands, Myprotein and MuscleTech, and into new product areas such as gut and digestive health with WellBiome®.

The last year has seen a significant change in industry and consumer awareness of the impact of reducing hunger and cravings on weight management, something OptiBiotix first reported in consumer studies on its SlimBiome® product as long ago as 2016 (announced: 6 September 2016).  This interest in bringing functionality, like reducing hunger and cravings, into weight management has meant that traditional brands like Slimfast and Weightwatchers who have not focused on these areas have lost market share and opened up new opportunities for functional products.  Confirmation of the ability of SlimBiome® to reduce hunger and cravings through a series of independent human studies, published in peer reviewed journals, is enabling us to attract international partners, who are willing to invest significant amounts in advertising to quickly grow their market share and so increase the potential for strong sales growth.

Throughout the world, increasing governmental, medical, scientific, media and consumer interest in the growing challenge of obesity has helped OptiBiotix in raising awareness of the potential for our clinically proven product, SlimBiome^®, which works in a similar way to injectable weight loss GLP-1 agonists like Semaglutide, marketed as Ozempic and Wegovy, in reducing hunger and cravings to support weight loss in overweight individuals by reducing hunger and cravings – but in a totally natural, non-invasive way, and without any adverse side effects.  

News releases from Universities highlighting the potential for SlimBiome® as a natural alternative to Ozempic and Wegovy helped us to secure a number of interviews with specialist journalists and a notable article appeared in the August 2024 issue of Nutrition Industry Executive (NIE), a publication widely read by industry decision-makers in the USA. 

While OptiBiotix’s commercial focus has been on overweight individuals, recent work with dieticians at a speciality London obesity clinic has indicated that SlimBiome® may have potential as an adjunct to treatment with Ozempic/Wegovy.

Reports suggest that patients taking anti-obesity drugs often experience a decreasing effect over time, despite increasing their dose. To counter this, a small number of patients were given SlimBiome® with patients reporting an enhanced appetite suppressant effect. Work is ongoing to explore whether SlimBiome® combined with Ozempic may help to reduce drug dosage (and cost) and enhance or prolong the appetite suppressant effect of these anti-obesity drugs.

The high market valuations attached to potentially effective weight management products was underlined in March 2025 by the collaboration agreement signed between the Swiss drug manufacturer Roche and Zealand Pharma of Denmark for the development of Zealand’s drug Petrelintide, worth up to US$5.3 billion: https://www.reuters.com/business/healthcare-pharmaceuticals/roche-develop-commercialize-obesity-drug-with-zealand-pharma-2025-03-12/ .

The Group now has approved health claims, a broad IP portfolio, a network of manufacturing and distribution partners, and is growing its brands in multiple markets around the world.  Whilst building sales in diverse international markets takes longer than just building sales in home markets, it reduces the risk of our products being copied in other territories and builds multiple revenue streams.  This creates the foundations for a substantial global business in the years ahead.

The Group is at a significant point with its second-generation products, with discussions ongoing with a number of major partners, including two well-known brands of popular beverages, which we hope will lead to material news flow in the near future. These brands are interested in a range of our products which cross over different parts of their businesses.  We are pleased to report that our SweetBiotix^® products have now been tested by an independent expert tasting panel and in a range of branded drinks, dairy products and as a bulk product and have shown significant taste advantages over sugar.  Partner testing has shown similar results.

We are continuing to work with DSM-Firmenich and a manufacturer who supplies products to major corporates like Unilever which uses 10,000 metric tonnes of sugar per annum in addition to a number of other companies looking to incorporate SweetBiotix^® into their products. 

The substitution of sugar with SweetBiotix^® in partner products is a complex process requiring input from multiple teams within large companies (R&D, regulatory, product innovation/ development, IP/legal, manufacturing, commercial etc) often with conflicting priorities.  Whilst frustrated by the length of time this process is taking, we are pleased at the level of engagement and the steady progress being made, and we are confident of a successful outcome. A number of these partners are global brands and have strict confidentiality conditions in place and regularly screen for use of their names in chat rooms and other media forums. We ask investors to understand our need to respect our commitment to our confidentiality agreements to protect their interests and avoid damaging our commercial relationships. 

We also continue to see very significant further potential for revenue growth and value creation through the development of microbiome modulators, which apply our unique patented technologies to precision engineer the human microbiome to enhance those microbes that deliver health benefits. This is an emerging field of research and development for both the food and pharmaceutical industries, which we believe offers the opportunity to transform healthcare.

Scientific overview

Our recent R&D activities have focused on the following areas:

SlimBiome^®

Double blind, controlled human intervention studies on the impact of a single dose of SlimBiome^® intake on glycaemic and insulin response, and measures of fullness and hunger over a 2.5 hour period have been completed in:

• 16 healthy weight adults (University of Roehampton): showing a significant impact on insulin response, a significant reduction in hunger and an increase in fulness. This has been accepted for publication in the European Journal of Clinical Nutrition, one of the leading journals in its field.
• 20 overweight adults (Brunel University of London): showing a significant reduction in hunger. We are submitting this study for publication in the Journal of Functional Foods.

The first study has been accepted for a presentation by Prof. Adle Constabile at the International Prebiotic Association conference in June 2025.  We are awaiting the outcome of the second study which was submitted for a presentation at the Nutrition Society summer meeting in 2025.  These studies, presentations, and publications are important in marketing and to substantiate health claims by regulatory bodies.

WellBiome®

We have undertaken a study on the impact of WellBiome^® in a novel in vitro model of the human gut. The main aims of the study focus on:

• The impact of WellBiome^® on microbiome composition and short chain fatty acid production in conditions simulating the three parts of the human large intestine.
• The impact of WellBiome® fibres (XOS, inulin) individually on the above-mentioned parameters to demonstrate the superior performance of WellBiome^®.

Result analysis is ongoing. Data shared to date show a superior impact of WellBiome^® compared to Inulin and XOS:

• It supports gut microbiome stability in all gut areas.
• It supports beneficial bacteria (bifidobacteria) in all gut areas.
• It reduces potentially pathogenic bacteria.
• It increases short chain fatty acid synthesis in all gut areas.

This study has been accepted for poster presentation at the International Prebiotic Association conference in June 2025.

On the basis of the above preliminary outcomes, we have been approached by the MiGut research group in the University of Leeds to support a grant application looking into the impact of WellBiome^® in promoting gut microbiome resilience and stability during antibiotic intake. We will be investigating both a prophylactic and a treatment effect in gut models.  The global antibiotic-associated diarrhoea (AAD) treatment market is projected to grow from $1.43 billion in 2024 to $4.62 billion by 2034, with a compound annual growth rate (CAGR) of 12.4% (FactMR, 2025).

Additionally, we are submitting a further BBSRC/MRC grant application for a clinical study looking at the impact of WellBiome^® intake eight weeks prior to open heart surgery in patients. This study has NHS ethics approval and was delayed due to change in universities from the principal investigator. It would be a double-blind placebo control and primary outcomes will be relevant to time in ICU, post operative recovery, and complication occurrence among others. Data will additionally be correlated to a very large NHS database of past operations whereby we can patient match for outcomes. If positive, this could be a very high impact study for WellBiome^®.

Consumer Health and Ecommerce

We made significant investments in our Ecommerce business during 2024 to drive direct-to- consumer sales as a strategic move to reduce reliance on retail partners and increase profit margins. The Consumer Health division has the advantage of receiving online sales income immediately and allows more control over the Company’s brands, IP and messaging whilst reducing reliance on distributors to grow our brands.

This investment drove a 108% increase in total Ecommerce sales during the year to £387k (2023: £186k). The largest single area of growth was Amazon, where our sales increased by 156%. Sales in China grew by 28% and direct sales through our own website by 5%. In terms of profitability, our own website was profitable every month and overall in 2024 due to its low marketing spend; China was profitable for seven out of the twelve months and recorded a small overall loss for the year; while Amazon was loss-making every month due to the significant investment in marketing needed to grow the customer base.

As we grow our subscriber base and increase sales from repeat purchases, marketing costs should reduce as a percentage of sales which should lead us to profitability on Amazon. The Company has successfully moved to the Fulfilment By Amazon model (‘FBA’) which allows customers to receive faster delivery through Prime accounts. This has helped Amazon subscriptions increase from 82 to 320 (a 290% increase) with subscriptions now making up just under 30% of our overall Amazon sales and SlimBiome® consistently ranked among Amazon’s top best sellers for anti-appetite-suppressants.

North America

We have made good progress towards our strategic goals of increasing our number of partners and growing our sales within the USA, the world's largest economy.

At the beginning of the year we were pleased to announce the launch of LeanBiome® in MuscleTech’s Nitro Tech Ripped range, a premium protein powder designed to support athletes who want to lose fat and build lean muscle. MuscleTech defines itself as the No.1 selling Bodybuilding Supplement Brand in America - https://www.muscletech.ca/research/ - and the inclusion of LeanBiome® in this leading global sports brand is a significant endorsement of our product.

This means that LeanBiome® is now included in two leading sports nutrition brands, Myprotein and MuscleTech, a global market worth $45.2bn in 2023 and expected to grow at a CAGR of 7.5% per annum to 2030 (Grand View Research, 2023).

In Q4 we received our first order of just under one metric tonne of SlimBiome® from Daily Nouri, a well-regarded US brand known for its science-backed, clinically supported probiotic and prebiotic solutions impacting on gut health. These are sold through its own online store, Amazon and major retailers including Walmart and Albertsons. This order was in preparation for the launch in February 2025 of a new FeelFull prebiotic lemonade drink containing SlimBiome®, with on-pack health claims which state daily use supports ‘reduced appetite and cravings’ and a ‘feeling of fulness’ supported by our own multiple clinical studies.

We are also working with two additional partners in the USA who expect to launch in 2025.  One is a NASDAQ listed USA e-commerce and direct selling company to which we supply a tomato soup final product containing SlimBiome®, and the other is one of the largest players in the US weight management market.  The launch of products with either partner will increase brand awareness of SlimBiome® in the USA and drive further partner interest.

Discussions are also ongoing with a number of large US partners to commercialise our second-generation SweetBiotix® sugar substitute and microbiome modulators.

As we grow our sales in the USA, particularly in the light of constantly changing tariffs, we will need to warehouse stock and set up a USA subsidiary to support the short lead times required by retailers and ecommerce partners. We believe our North America business has taken a significant step forward in 2024 and we expect it to be profitable in 2025 and making a material contribution to overall profitability going forward in subsequent years.

OptiBiotix Health India

India is already the most populous nation on Earth, with 1.4bn consumers, a growing middle class population and an obesity prevalence of more than 40%, presenting a huge area of opportunity for weight management products.

Our business took a material step forward with the announcement in March 2024 of a major new partnership with Morepen to sell products containing SlimBiome® under the Dr Morepen brand, which is an established, well-known and trusted brand in the Indian market. In December we were pleased to announce the launch of Dr Morepen’s newly developed LightLife brand, initially comprising six products containing SlimBiome®, supported by a comprehensive marketing plan with a shared budget of over £1.5m with OptiBiotix’s contribution linked to receipt of orders. LightLife is being positioned as India’s first 360° weight management plan and is being sold through Morepen’s own website, all major ecommerce platforms in India, and will be available in more than 5,000 pharmacies across all the key cities in the country by late 2025.

We believe that our agreement with Morepen and the upcoming launch of more products under the Dr Morepen brand, plus other partner launches and the reorder of products by Apollo Pharmacies, could generate significant revenues.

During the year we have enjoyed continued steady growth in revenues with our partners in Vietnam, Thailand, Indonesia, Malaysia and Singapore, engaging customers who are launching new products in the region.

Australia

We have cleared the substantial stock overhang held in Australia by our former distribution partner Maxum and secured a new partnership agreement with a larger company, Brenntag, a €9.2bn specialist ingredient and pharmaceutical supplier. We have continued to grow sales of our OptiBiome® prebiotic fibre (an alternative trademark to SlimBiome®) to our partner Optipharm in their Optislim and Optiman ranges, and are actively seeking additional partners in Australia to reduce the risk always associated with reliance on a single major partner in any market.

Results

Our order book and delivered sales grew strongly throughout the year, with total revenues increasing by 35% to £870k (2023: £644k). Orders increased at an even faster rate, growing by 56% to £1,004k with £134k of orders carried forward for delivery in 2025.

Just under half our total revenues during the year were generated by Ecommerce, with India and business-to-business ingredient sales in Europe and Asia making up just under 40%. Licence fees received accounted for over 10% of revenues, with only a small sales contribution from the USA.

During the year we finally cleared a large overhang which at one stage reached 64 metric tonnes of SlimBiome® stock purchased during the Covid years of 2020/2021 by our partners Maxum in Australia and Cambridge Commodities in the UK. This overhang meant that sales from these partners to their customers were not fully recognised in our 2024 accounts, while our gross margins were impacted by our repurchase of some of this stock at its original sale price for supply to other customers in Asia, Europe and the USA at a slightly higher price. We anticipate margin to recover in H2 2025 now that this stock overhang has been cleared,

Selling costs increased as planned due to investments in sales and marketing in India with Morepen, setting up cost for Amazon India, and online sales in China and Europe. As a result of these investments, we are seeing revenue growth accelerate into 2025 across all parts of the business. 

Other operating costs remain flat for the year at £1,605k (2023: £1,661k) despite now carrying full cost for employees previously shared with ProBiotix Health plc. We anticipate fixed costs to reduce in 2025 through actions initiated earlier in the year to lower PR, Broker and staff costs.  The Company has a small team considering we have products in numerous geographies.  Currently it stands at two non executive directors, eight full time employees, and a part time Finance director, who all work from home, significantly reducing infrastructure costs. Staff costs will reduce further in July 2025 as we remove the need for an inhouse regulatory employee.

As we continue to grow sales and improve margins whilst reducing fixed costs (PR, Broker, R&D, staff), and investment in marketing all parts of the business and the Group should become profitable.

The Company remains in robust financial health with the balance sheet showing gross assets of £9m (2023: £9.4m), no debt and net cash at the year-end of £739k (2023: £635k). Since the year-end the Company has sold 2,248,389 SBTX shares at an average price of 22p, generating gross proceeds of just over £500k and raised a further £750k in May 2025 via a placing.

Outlook

The current financial year has started strongly, fuelled by continued consumer demand in our ecommerce channels, and new orders and reorders from India, the USA and Asia. 

Last year’s strong sales growth in Ecommerce has continued to date and is expected to accelerate with the recent launch of products on Amazon India, where we are focusing on building awareness to generate sales, gain reviews and ultimately win subscriptions.  We are also broadening our offer to consumers with the launch of a new raspberry SnackSmart SlimBiome® Indulgence bar, which tasting suggest will be our most popular product yet. Such product launches maintain consumer interest through the normal, seasonal dips and troughs in the weight management market, and help to drive an increase in average order value. We believe that further investment in Ecommerce will accelerate revenue growth through this channel.

In North America, the initial launch through Daily Nouri’s own online store and Amazon USA of FeelFull prebiotic lemonade drink has generated excellent consumer reviews and further orders for SlimBiome®. 

We were pleased to announce on 15 April 2025 that we had received our first order for SlimBiome® from a leading US weight management brand, following more than 18 months of work with the brand on human studies that allow it to make scientifically substantiated health claims of hunger control on its products in the USA. These provide it with a key point of difference from other products on the market.  The company intends to launch in Walmart in H2, which if successful they claim is likely to require the delivery of 4 metric tonnes of SlimBiome per month.  If successful, this is another agreement which has the potential to make a material change to OptiBiotix’s revenues in years ahead. 

Post period we have progressed the establishment of a new subsidiary in the USA and warehousing allowing us to meet the forecast volumes and short lead times required by retailers and ecommerce partners.  We expect to launch products containing SlimBiome® with other US partners and continue discussions with a number of partners on the commercialisation of SweetBiotix® and microbiome modulators.

We continue to make good progress in the key strategic market of India, following a multichannel approach that embraces both business-to-business sales and direct sales to consumers through multiple channels and partners. Our partnership with Morepen continues to grow with the launch of their LightLife product range containing SlimBiome® proving successful and leading to reorders in Q1 2025. Since the beginning of the year our wholly owned subsidiary OptiBiotix India has announced the launch on Amazon India of a range of meal replacement and flavoured shot products containing SlimBiome® under the GoFigure® brand. We believe that with the right investment Amazon India offers huge potential and this launch is an important step forward in building a presence for the Company's products in this key market.  At the same time, we have repackaged and relaunched the GoFigure® range sold through Apollo Pharmacies across India to give added prominence to Tata Chemicals’ proprietary Fossence® ingredient, which is well known and respected by Indian consumers, under the partnership agreement we signed with Tata in 2023.

Clearance of the substantial SlimBiome® stock overhang during 2024 should see an increase in sales revenues and gross margins from sale of this product to our partners during the current year. We are also pleased that Brenntag, a €9.2bn specialist ingredient and pharmaceutical supplier, has now replaced our former partner Maxum as our SlimBiome® distributor in Australia, and is actively looking for new partners in this region.

Our new partnerships in the USA and with Morepen in India both have the potential to generate multimillion pound revenues. With the launch of sales through Amazon India, and more launches with other partners anticipated in the USA, we expect our businesses in both the USA and India to grow rapidly in 2025 and beyond. The removal of the substantial SlimBiome® stock overhang, which has impacted our reported sales from 2021/2022 has already led to a 6 metric ton order from Brenntag in 2025.  We are seeing good early sales growth in Asia, albeit from a low base, and we hope the launch of our raspberry Indulgence bar and other products throughout our ecommerce sites should contribute to further growth in 2025 and beyond. 

The global weight management market is undergoing radical change due to the huge rise in popularity of weight loss drugs: a shift underlined by WeightWatchers preparing to file for bankruptcy and Glanbia looking to offload its SlimFast brand. Whilst UK sales through retailers are a relatively small part of our business, and are expected to reduce further as a proportion going forward, investors should expect to see our UK retail customers rebranding and relaunching their white label products containing our ingredients in response to these market trends. Given the strong and differentiated health claims we can make, we regard this as a growth opportunity for OptiBiotix.

We also expect to benefit from the global shift in the weight management market away from meal replacement products and towards appetite-suppressing drinks, where we have a unique proposition in SlimBiome® and can earn significantly higher margins. We are seeing strong interest in both our first- and second-generation products from major beverage companies which are looking to enter and gain positions through the acquisition of new ingredients and/or companies in the fast-growing prebiotic soda market – see:   The Rise of Prebiotic Sodas | Insights from FedUp Foods.  This has seen companies like Pepsico acquire Poppi https://www.benzinga.com/news/large-cap/25/03/44358047/pepsico-bets-big-on-prebiotic-sodas-with-1-95-billion-poppi-acquisition-details#  and Coca-Cola respond with its own brand, called Simply Pop: see Coca-Cola launches Simply Pop prebiotic soda to rival Olipop, Poppi and Coca-Cola Enters the Prebiotic Soda Market with Simply Pop, Challenging Olipop and Poppi. 

The addition of functional ingredients to traditional foods and beverages is a growing trend and one in which OptiBiotix, with its strong history of science and clinical studies supporting its products, is well placed.

We are pleased by the high level of corporate interest in our second-generation products but frustrated by the time it is taking to progress to the launch of an application containing these products.  However, we recognise the more innovative the product the more cautious large brands can be in being first mover in a very conservative food industry, but are confident of success.

Given the high customer ratings our products enjoy, and our unique position in being able to make evidence-based health claims for reducing hunger and food cravings, we have the potential to build a very successful and profitable business with our first-generation products, with our potentially even more exciting second-generation products still to come.

Growing volatility in the world with regional disputes and tariffs means shipping companies are taking longer to fill cargoes and there are long customs delays at USA ports which have the potential to impact on lead times and delay some orders, particularly to the USA.  This is compounded in the USA as we have a growing number of ecommerce (e.g Nouri) and major brands who supply retail partners (e.g Walmart) who require a 2-3 lead time for orders.  To mitigate this risk we are leasing a US warehousing and logistics facility who can warehouse 5-10 metric tonnes of SlimBiome in the USA and support the lead-times required. The Company also believes having sales and manufacturing in multiple territories helps mitigate risk from country specific tariffs or regional disputes which have become more common in recent times. 

With our sales growing strongly, and significant further product opportunities still before us, we are confident that OptiBiotix has the potential to deliver substantial growth in shareholder value in the years ahead.

Stephen O’Hara
Chief Executive
27 June 2025