Biome Australia Ltd Signs Landmark Agreement

Biome Australia Limited (ASX:BIO) announced this morning that they have signed a landmark agreement with one of its key probiotic research and development partners to develop multiple new novel probiotic strains which will be 100% owned by the company. This is a significant step for the company because in the longer-term Biome plans to use the strains in its own products. These products will deliver even higher margins than the 59% average currently being achieved. The new strains will be used to develop new products for mainstream gut and immune health as well as other condition-specific targets.

Probiotic strains owned by Biome have the potential become highly valuable IP for the company. In the announcement the company quoted an example where Lactobacillus RhamnosusGG was sold to Chr. Hansen in 2016 for €73m (A$120m). Biome’s Market Capitalisation at the current price of $0.17 per share is approximately $35m fully diluted.

Paul Hart

Canary Capital