key points from recent road show meetings

I thought some of you may be interested in getting some feedback from the recent roadshow. My broker spent over 2 hours with Glynn and Jeff at a lunch presentation in Sydney earlier in the week and was hugely impressed with the guys and the story. The key message they wanted to convey was that OBJ was in a very strong state and had solid foundations from which to grow. Sure they had the P and G deal over the line but there was so much more to come. P and G was just the first one and the likes of GSK and Coty were very much as good potentially. My broker was very surprised at how highly they regarded the Bodyguard product and the guys made a point of focusing alot of the presentation on its potential, saying that it could dwarf the other deals so it was the elephant in the room!
My broker thought Glynn and Jeff presented really well and seemed to be a good team with different but important skills that complemented each other. The only real issue it was stated was that there was "only one Jeff". Jeff was very passionate and excited by the company's future. He knew the market very well and knew what each partner was trying to achieve and my broker said that he was hugely impressed by the commercial nature of the company. They spoke alot about their strategy of targeting consumer products rather than developing medical products so they could generate sales much sooner. They aimed to develop products such as Bodyguard by flying under the radar of agencies such as the FDA by not making medical statements that would slow the process to market down substantially.
In relation to P and G, OBJ said that the next 2 product deals should be finalised soon and Jeff was going o/s this week to try and get the next 5 products over the line too. He didn't see any problems getting those deals completed soon. This is where my broker sees the short term catalysts in the stock. One broker asked why P and G don't take over OBJ and Jeff said that at the moment the brand managers were driving the relationship with OBJ but he thought that when head office started writing lots of big cheques they may decide to buy the company. Jeff said that P and G counted their revenues in blocks of $100m and all 8 products were in the 10-20 block size (ie. $1-2 billion revenue range!)
Moving on.. Glynn was very optimistic about GSK in particular and gave a rundown of the huge growth in the toothbrush market as many Indians bought brushes for the first time. Apparently, GSK were selling 2 million brushes a day and the current toothbrush and toothpaste technology was about as good as it could get without radical change such as taking on the OBJ technology. GSK were still waiting on ethical approvals to commence a large study but OBJ said they expected the results to be available by year end and they were expecting a deal with GSK shortly afterwards. Apparently initial results were outstanding so there is no reason to think the larger scale testing will be any different. GSK were just 9 months behind P and G, according to OBJ. They said that for less than 1c cost using OBJ technology in each product consumers got hugely improved results so it was a no brainer for these companies to work with OBJ.
As I said, Bodyguard got a lot of attention. The next step is for AIS to conduct a large study for about 5000 people. This should be complete in a few months time and if results continue to be positive this could lead to a deal with a shoe maker and another partner/distributor which could be a "game changer" according to Jeff, by the end of this year. OBJ has had huge interest from various parties and discussions with Brooks and Deep Heat owners were mentioned but all majors like Reckitt, Pfizer and GSK were mentioned too . This product filled a void in the market and could retail for $1.20 each in a packet of 10-20 and would cost 22c each to make. The big upside here was that the knee is only the first area to be trialled but there was no reason for the all natural product not to be able to be used on other parts of the body!! The beauty is as well that there was not competitor in the space so OBJ fills a void in the market.
Another huge area of interest where OBJ has been fielding inquiries is many drug companies are looking to get more products into the over the counter category to increase sales. As OBJ can increase absorption into the system it can have the same effect or better efficacy than more powerful drugs which cant be sold over the counter and take alot more time to gain approvals..
The directors told my broker they would make more of an effort to promote the company and there was likely to be at least 2 research notes that would be released soon..
There is a lot more I could mention but it is getting late and I need to get some sleep..
The key take away was that the expected OBJ to be a vastly different company in 12 months time than it is now, rather than being an RandD company it should have sizeable sales.