SweetBiotix Update

OptiBiotix Health plc (AIM: OPTI), a life sciences business developing compounds to tackle obesity, high cholesterol, diabetes and skincare, provides an update to its SweetBiotix® product range following its overview in 2023 (RNS Reach: 19 July 2023).

Market update

The Company reported in 2023 that the sugar substitutes market is projected to grow from USD18.8 billion in 2023 to USD24.3 billion by 2028 and of the health concerns associated with a number of sugar substitutes. These health concerns included increased blood sugar levels and the risk of diabetes with sucralose and saccharin https://www.diabetes.co.uk/news/2022/aug/popular-artificial-sweeteners-found-to-raise-blood-sugar.html), cellular DNA damage with sucralose Common artificial sweetener may cause DNA damage, cancer (medicalnewstoday.com), and aspartame as a possible carcinogen https://www.bbc.co.uk/news/health-66057216. More recent studies have shown a link between artificial sweeteners and a 9% increased risk of cardiovascular disease (including heart attacks) and 18% greater risk of stroke Sugar substitutes: New cardiovascular concerns? - Harvard Health.

In the last six months, there have been consumer concerns over sugar substitutes which has translated into existing and potentially new industry partners (including PepsiCo) discussing the use of natural, safe sugar substitutes like SweetBiotix® for both new and existing products. In anticipation of this need, OptiBiotix initiated development of its own finished product brands containing natural sugar substitutes and flavourings in mid-2023. The Company believe that natural products will be an increasingly common requirement throughout 2024 both in existing and new products. In recent months, products have been developed and successfully taste-tested with natural sweeteners for a large US company and a large Indian pharmaceutical company.

This has heightened commercial interest in the SweetBiotix® product range as a safe, low calorie, healthy alternative to sugar and sugar substitutes.

Current position

The Company has developed SweetBiotix® products to meet the needs of a number of industry partners and well-known global consumer brands. These products have been tested by academic groups who have published their findings in peer reviewed journals providing an authoritative and independent assessment of SweetBiotix's® taste and prebiotic functionality (see Prebiotic Potential of a New Sweetener Based on Galactooligosaccharides and Modified Mogrosides - PubMed (nih.gov)). The remaining challenge was developing approaches to scale up laboratory methods to an industrial scale without impacting on function, taste, and texture. This was actioned for two different types of SweetBiotix® with a US partner in September 2020 and Firmenich in July 2022. The agreement with Firmenich, one of the world leaders in taste and the world's largest stevia supplier, was particularly encouraging as it followed extensive due diligence of the Company's IP, science, the products taste and texture and commercial potential by a partner who specialises and leads in this field. Industry validation by a partner specialist in this field and product verification by scientific experts in peer reviewed journals should give investors confidence in the commercial potential of these products.

The Company can report significant progress by both partners in the commercial scale production of SweetBiotix®, in line with the Company's hopes and expectations, with final product taste tested and accepted by our US partner. Expert panel testing of the scale manufactured product has shown comparable taste and texture when compared to the laboratory product. Manufacturing scale up with Firmenich slowed during and after their merger with DSM, as anticipated, but resumed in late autumn 2023 as Firmenich moved manufacturing scale up from its contract manufacturer to DSM's in-house manufacturing facilities. Ongoing discussions indicate strong partner support on increasing the anticipated scale of production and supply given the enlarged group, DSM-Firmenich, now have access to global manufacturing and distribution capability.

Given recent progress, the Company's focus has moved on from manufacturing scale up to engaging with commercial partners to launch products. Discussions are ongoing but are likely to involve a phased introduction of SweetBiotix® products as a direct bulk sugar substitute and then introduced into OptiBiotix's and partners consumer products across an increasing range of applications. With growing consumer and industry concerns over traditional sugars and sweeteners, the Company is in a strong position to exploit its low calorie, high fibre SweetBiotix® products as a safe, natural and healthy alternative to sugar and sugar substitutes.

Stephen O'Hara, CEO of OptiBiotix, commented: "Consumer concerns over sugar and the safety of several sugar substitutes have materialised into companies reformulating existing and/or launching new products containing natural, safe, and healthy alternatives. The Company believes its sweet, high fibre, low calorie, prebiotic fibre SweetBiotix® products are ideally positioned to launch at a time when many companies are actively looking for a natural alternative to meet this need. SweetBiotix® are unique in being classified as dietary fibres creating the opportunity to replace unhealthy calorific and cariogenic sugars, or sugar substitutes with healthy fibres in a wide range of food and beverage products or as a sugar replacement in its own right.

"The Company has developed novel science, protected its commercial interests with a broad IP portfolio, has SweetBiotix®'s taste and texture and/or health potential confirmed independently by industry partners and in academic publications, and formed partnerships with a number of industry partners. These include DSM-Firmenich who have specialist expertise in taste and texture, manufacturing capability, and a global distribution network. Our US partner has shown SweetBiotix® can be manufactured to scale. Given the size of the challenge and considering the food industry is dominated by large global players with significant R&D capabilities this is a significant achievement for OptiBiotix. The focus now is on leveraging this position to fully exploit the market opportunity open to us and bring products containing SweetBiotix® to market. This is the focus of 2024."