It is an expansion of a deal the two inked last December and gives Tata, part of the Tata Group, the exclusive rights to produce a sugar from OptiBiotix’s LP-LDL probiotic strain.
The sugar – galacto-oligosaccharide – will be used in various food and over-the-counter products, subject to its successful development at pilot development.
When digested they stimulate the growth of ‘good’ gut bacteria, which Opti has showed can lead to improved health and help to tackle ‘chronic lifestyle diseases’ such as diabetes and obesity.
This agreement with Tata focuses on the Asian markets, particularly India, but Opti is in talks with other companies about manufacturing the cholesterol and blood pressure-lowering strain in other markets such as the US.
“We believe the combination of OptiBiotix's ability to develop ingredients which can modify an individual's microbiome, and Tata's research and manufacturing expertise, international reputation, and global reach, places both companies at the forefront of global microbiome research and product development,” said OptiBiotix chief executive Stephen O’Hara.
“This agreement takes both companies further down the path of translating the science of the microbiome field into products which will improve the health and wellbeing of people around the world.”
City broker praises 'interesting' deal
"The announcement is interesting in that TATA recently launched its own GOS related first general health product and is a major supplier of pharmaceutical industries both within India and globally," said finnCap analyst Lorne Daniel.
"Whilst only in the earliest stages of development, we are encouraged by this announcement and continue to recognise the commercial milestones that OPTI's management are steadily and reliably delivering upon."
Shares rose 5.35%, or 3.8p, to 74.8p.
--Updates for broker comment, video link and share price--