OptiBiotix Health PLC (AIM:OPTI) has continued to demonstrate the effectiveness of its strategy despite challenging global trading conditions, Cenkos Securities maintains.
The broker issued a note in the wake of the life sciences firm’s full-year results that saw the group post a 45% increase in annual revenues after it ramped up investment in the business.
The future growth of the company is supported by commercial agreements with large partners and a substantial pipeline of opportunities through its second-generation development programmes, the broker said as it reiterated its ‘buy’ recommendation.
Based on the market value of OptiBiotix’s shareholdings in SkinBioTherapeutics (20.7%) and ProBiotix Health (44%) and the current market capitalisation of £18.1m, the underlying PreBiotic business is currently applied nil value, the broker argued.
The broker left its forecasts for the current fiscal year but suggested the forecasts are conservative. It is going for an increase in revenues to £3.0mln from £2.2mln in 2021 and a narrowing of the underlying loss to £0.7mln from £1.0mln.
“We believe that OptiBiotix is well-positioned to outperform these forecasts, having signed several contracts with large commercial partners during 2021 and post-period end, including the launch of a new product with The Hut Group’s Myprotein brand,” the broker said.
The group has strong underlying science and ongoing commercial traction.
“OptiBiotix’s second-generation products are targeting potentially larger market opportunities and we expect further progress in the short term as COVID-19 disruption subsides,” the broker concluded.
Shares in OptiBiotix were unchanged at 20.5p at midday.