@Arizona I have been busy with other things so not watched the video yet, although I have gone through the presentation.

I think Blair is a straight-shooter and comes across very much as a values-driven entrepreneur. So, I have no concerns there.

That said, it is one thing to successfully exploit a market niche in your home market (Australia), and another thing altogether to roll out a brand internationally in a highly competitive space. There are a lot of brands competing for pharmacy shelf space globally, and I remain skeptical/open-minded about the success of the international expansion.

I think ongoing success in Australia underpins a large fraction of the SP over the 2027 timeframe. That will provide enough time to see if the international expansion is successful. That's my basic investment strategy. If the international roll-out struggles, I think there will be opportunities over the next 2-3 years to exit with a reasonable return or at least with capital preserved because Australia will do the heavy-lifting for medium term revenue/margin growth.

Of course, in the success case where over 7-10 years $BIO creates the equivalent of 3 x Australia (2027) in ANZ, EU/UKI and North America - that's the outcome I hope will materialise. So far, so good, but its very, very early days for the international component, and the ASX is littered with brands that have not translated well overseas, and this is more like a consumer brand than true healthcare. Equally Blackmores and Lifespace provide a template for success, and Blair has clearly learned the lessons of Blackmores in ensuring he keeps control of the brand.

That's the game in my view. Looking forward to the ride!

@mikebrisy You have put it well.

Australia seems to be ticking over nicely, while having a large percentage of the TAM untapped and plans in motion to tap this market.

A good base from which to have a shot at the international markets.

So far so good.

I agree with you @Arizona that Blair's communication and style provides comfort that they the company is in good hands.

I do have a bit more optimism about the overseas expansion, as the goal of the company is to increase the health and wellbeing for the end user whilst providing a great financial incentive for the pharmacist to stock/prescribe it (40% margin for the chemist for selling the product).

I really like the opportunity that the Cholesterol probiotic offers both independently and when used in conjunction with the other statin medications, and could potentially be considered as an early intervention rather than a post diagnosis solution. The price point however is likely to be out of reach for pensioners or retirees on a budget, as they can easily obtain alternative medications already available on the PBS at a fraction of the price. (I can guarantee I wouldn't be able to convince my parents to try this product given the price point)

@mikebrisy, Arizona or others in the Strawman community - from your knowledge and experience in the pharmaceutical space, is there ever a chance that a pro-biotic that provides these sort of health benefits could ever make its way onto the PBS? Or is it unlikely that they will ever meet the definition of a 'medication' or are the hoops to be considered by the TGA too onerous?

I could only find one pro-biotic on the PBS to date from my review, but not sure if that could change in the future as better options are available.

@SudMav I'd say it is unlikely that existing products will achieve the same status as prescription medicines.

This is for several reasons. I'll focused my remarks on those (such as $BIO's products) that have been clinically tested against specific, measurable, clinical endpoints.

First, the trials tend to be quite small in the number of patients, and second, the therapeutic benefit is mild to moderate. I think there are fair questions about the rigour of the science as well as the level of control in the trials, which is difficult as an oursider to fully evaluate from the publications. For sure, I doubt the level of rigour would meet the requirements of the FDA NDA process, where the documentation and level of control is very high.

The clinical trials for probiotics generally only have modest budgets of maybe a few $000,000, whereas the 3-phases of the clinical process for pharmaceuticals typically costs tens of millions or even hundred of millions of dollars. For the most part, the research is often published in lower quality scientific journals, where it is easier to get the papers accepted. Whereas drug trials will be published in prestigous journals like the Lancet series, JAMA, etc.

I don't think about these products as medicines. Rather, as branded consumer products will specific health benefits, for which there is some scientific support.

That's not to say that perhaps a probiotic strain might be discovered one day that has such a definitive and positive effect that it goes through the entire medicines approval process, and achieves the status of a medicine. (In writing this, I'm not sure whether any actually have).

I don't see any of this as a problem. Probiotics is a huge and growing global industry. The global probiotics supplement industry looks to have a value of some US$10bn annual sales (excluding probiotic foods and animal health) growing at 7-11% depending on your source and timeframe. There are several companies that have been very successful over many years, and others that haven't - just like any industry.

While some consider probiotics a fad, then it is a fad that has been decades in the growing.

Objective, systematic reviews of all the published science concludes that the effectiveness of the products is variable (according to strain and condition), and the evidence is low to moderate in terms of quality and support of claims. The overall conclusion is that more, high quality research is required and the science needs to be better understood.

And that's the rub, High quality research costs big money - tens or hundreds of millions of dollars for one chemical entity for one condition. Few if any individual probiotics have an indicated efficacy and market potential to justify that investment. And this is in part because the science linking the action of the probiotic bacterium in the microbiome to the therapeutic action is often indirect, poorly characterised, and difficult to prove. Conventional pharmaceuticals usually have a more explicit action related to the targeted condition, e.g., blocking or promoting a specific chemical receptor or reaction pathway related to a disease. Conventional drugs are more invasive, with the active chemical entity going directly to the site of the intended target. Probiotics are ultimately digested in the gut - which of course gives them advantages with respect to side effects and lack of toxicity.

I rate $BIO's chances for succeeding in this industry quite highly, based on their early progress. Rather than a generic "me too" approach, $BIO is following a selective and targeted product selection strategy, which involves a modest investment to support the clinical research. From what I am reading, amidst the ocean of products out there, they are focusing their efforts on the higher quality end. This is not a unique strategy, but it places them in a small peer group.

Some jurisdictions, like Australia, will register them as therapeutic products with a carefully regulated label claim. But I don't think it is right to think of them as medicines. For that, you need to consult your GP! (Edited remark: in signing off in a light-hearted way, I unintentionally overlooked that pharmacists can also prescribe certain pharmacy-only medicines, and the list is growing. Equally, some GPs are recommending alternative treatment modalities in addition to prescription drugs. So the field is evolving continually, and probiotics is a part of that evolution.)

@SudMav Re the PBS: Its a great question. Unfortunately I can't answer it with any authority.

I do think attitudes and understanding in this space are shifting, though it may not be fast enough for investors.

I believe there is a demographic that want to take a more proactive role their health where possible and a growing number of health professionals open to/believing in these sort of products, be they used in a complimentary fashion or not.

For someone with cholesterol issues, for example, it would seem to me that trying Biomes product before getting on to more "conventional" medicines, would be a no brainer. No side effects. Maybe that's just me.

Your post really reminds me just how many products BIO has. And there are more on the way! I suppose that a good thing especially once the pharmacists are on side.

Thanks @mikebrisy - your insight into this was very valuable and I now have a better picture about the barriers to entry to get onto the PBS and what qualifies as a medicine. I agree that a small cap could never justify the rigor and expenditure required to become part of the PBS. Better to leave the PBS testing to big pharma, which now makes a lot more sense about why the price of these medications are so high.

It does seem like probiotics are their own unique niche product and the market for these alternatives has been increasing over time and its great to be uniquely positioned in the higher end of the market. I don't think that probiotics are a fad, but my main concern from a risk perspective is whether probiotics are considered a 'luxury item' which might be one of those things to drop off if people's budgets start getting tight. Time will tell but I'm still going to keep buying for now as its helping me to sleep better now.

I also agree with you @Arizona and was thinking this product would be one of those things that could be a low risk trial opportunity to see if you can fix before having to become reliant on the messaging. From what Mike said though, it might be hard to break through the messaging from GP/Health practitioners to get to the front of the queue, and hoping the pharmacist provides you with the alternative/bolt on option when you put in your medication at the dispensary.

The variety in the product range is really fascinating and as a shareholder I'm looking forward to hearing about their new Activated X brand after listening to the Presentation this morning, and the type of health issue they will be looking to solve.

@SudMav, PBS listing requires demonstrated evidence of efficacy, acceptable harm/side effect profile, sufficient cost benefit, and a favourable number needed to treat.

Given existing lipid lowering agents are so cheap as they have been off patent now for decades, unless any new intervention offers a substantially favourable cost-benefit profile, there is no chance of a public subsidy. One example where there may be an improved cost benefit ratio would be say a long acting injectable agent to improve adherence to intervention. These are on the horizon and likely to come to market in the next few years.

If a new probiotic agent to lower lipids is going to make money, it won't be because there is a government subsidy tailwind. I wouldn't bet on it, because any market advantage is going to be tied to what is fashionable, and as we all know fashions can change quite quickly.

Thanks @nerdag I appreciate your knowledge and perspective.

Sounds like I need to temper my excitement about the product. It does seem like its always going to be a pre-emptive option or complimentary product to prescribed medication.