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OptiBiotix Health expands its supply agreement with Italian food company

03:26 EDT 22 Aug 2017 | Proactive Investors

OptiBiotix Health plc (LON:OPTI) has announced an expansion of a key manufacturing and supply agreement. It is broadening its European tie-up with Italian food company Sacco, signed in March, to cover the US and rest of the world. The deal gives Sacco the exclusive right to manufacture and supply OptiBiotix's cholesterol and blood pressure reducing LPLDL bacterial strains in the new territories. Sacco will receive 50% of all profits and the two have agreed a guaranteed cost of manufacture and minimum sales price per kilogramme to secure against discounting. Big market The food additive can now be sold in America, the world’s largest probiotic market with annual sales of US$7.1bn.The new supply agreement will also see an extension of the LPLDL technology into dairy applications, which is a US$35.5bn market. As important are the synergies from transaction with the economies of greater scale kicking in. It will also ensure long-term security of supply with Sacco's ability to produce at different locations from multiple facilities. "This new agreement significantly extends the scale of the commercial opportunity open to LPLDL to new application areas and territories, and reflects growing confidence from both companies in LPLDL's market potential,” said chief executive Stephen O’Hara. “We chose Sacco as we have been impressed by their ability to introduce LPLDL to a global network of distributors and believe extending our partnership with them provides the best opportunity of quickly building revenues and developing LPLDL into a global brand. “In addition, the ability to supply competitively priced ingredients from a single manufacturer across world markets simplifies the supply chain and contract negotiations with corporate partners."

Original Article: OptiBiotix Health expands its supply agreement with Italian food company

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