well now that jace has posted his tome, there is little need for mine.. but its done, so you will get it anyway...
This covers only the presentation part and not the Q&A or the discussions afterwards. I have reported only what was said and have kept my opinions out of it. I have not cross-checked this with anyone elses posts :
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Opening by Dirk Vandissel (B&Y)
- this is a non deal presentation
- nearly all B&Y staff and clients with a speculative appetite hold OBJ
- the relationship OBJ has developed with P&G is a first for any Australian company
- Bodyguard and Surface hygiene could well be the jewels in the crown
Glyn Denison
- largest groups of OBJ shareholder are in Adelaide (thanks to B&Y)
- 12 years of development; started with P&G 8 year ago
- entering the "third horizon" revenue production (McKinsey model)
- "we have a lot more shares than we would like"
- well capitalised and on cusp of significant revenues from licenses
- P&G deal is heart & soul / cornerstone
- SK-II 2014 consumer trials in South Korea, China, Hong Kong Taiwan, Japan
- Now two product licenses with SK-II plus another many times larger brand (Olay).
- Shaving brand (Gillette) trial results show over 3 times penetration of particular skin care molecule. 3 to 4 million shavers produced per day.
- Early stages of developing wave 3 and 4.
- Coty near end of consumer trials
- Bodyguard first tested in 2010. Spent well over 1 mil on development. Now negotiating with a number of distributors.
- A real benefit of the P&G deal is the credibility that it gives to OBJ and its technologies which is very apparent to other large intl. corps. Were in San Francisco last week meeting with Steve Meller. Meller stated credibility of P&G in talking to Pfizer, RB, etc was of enormous benefit. P&G "put us through the wringer" with formula/tech/safety testing that went on for years. Other companies will know this and will be much quicker to accept OBJ. This short-circuiting of the normal process we think will be particularly true for Bodyguard.
Jeff Edwards
Waves : Eye wand enormously successful. In the first week generated US$7.5 million in additional profit for P&G. Now going into global sales. Much larger Olay eye wand going into China next year. Wave II whole face applicator for anti-aging and tone, going to market, we believe, later next year. Engineering is complete. Middle of developing wave III and wave IV. A commitment for two new products based on advanced packaging.
Gillette : goal was to drive skin care products from shaving cream into the skin, thus driving sales for both blades and creams. (Women buy most shavers for men and are interested in improving their partner's skin). Target was to improve key ingredient penetration by a factor of 2 after 3 stroke blade pass at the price limit of 1/10th of one cent. Result of testing program was a 3-fold improvement. So far, all of P&Gs blade innovations have been matched by competitors. OBJ offers a huge differentiating factor for P&G against competitors because the tech is ours. Can be used for male and female targeted blades.
Coty : Some of the work we are doing with P&G is going to be moving across to Coty (due to the sale).
Coty was looking for a device to handle 3 or 4 different products. Claims support was completed this week. We are waiting to hear on those results and if successful would expect launch before end of this year. Glyn emphasized that this was dependent on those results. [Showed dermaportation prototype].
Because of our success, we are doing development programs for L'Oreal, Galderma, Beiersdorf, Johnson & Johnson.
Bodyguard: Problem with age related joint pain is not so much about pain prevention as it is preservation of quality of life. Best current treatment is NSAIDS for pain. Can only be used for 14 days, but people are likely to have knee conditions for 20 years or so. Bodyguard has now proven to deliver a 32% reduction in worst pain using a drug-free all natural product that is perfectly safe to take for the next 20 years. A substantial accomplishment not missed by our partners. P&G asked for more time after the 60 days expired. OBJ said fine but it's now open for all to review equally. Trial participant feedback was favourable by all measures compared to NSAID. There are other joints of course; years of platform expansions possibilities. All partners with VMS divisions showing great interest in disposable patches (showing small circular patches assumed to be hot dots) and looking at the entire BG platform. Pfizer, P&G (Swisse), RB. "I'd be amazed if this thing stays still for very long".
Personalised Skin Care: people of different racial backgrounds and living around the world in different climates cannot possibly get the same level of success from the same off-the shelf skin care products. With Personalised Skin Care, we can tailor the delivery to provide everyone with the best outcome for the products they buy. Along with this is the online sales component. The high street model is failing. 73% of young Chinese women buy their non food items online. Shown to P&G, L'Oreal, Galderma, and others. P&G are keen to trial this. Considering it as a cornerstone to their online business. Fully covered by patents.
Advanced Packaging: rather than producing just the micro-arrays, we can also be producing the packaging incorporating the micro-array. SK-II has 2 products on the dev pipeline using our advanced packaging and using our DCE technology. Also RB were looking to improve their product for acute muscular pain but had no budget for changing the chemistry. OBJ offered a new low cost cap design (shown attached to RB's Nurofen Gel) with built in magnetic micro-array. Resulted in 4X greater (faster) penetration of pain fighting ingredient. Cap also addresses FDA concerns with these drugs which was dose control (squeeze until beads appear in holes in cap). Also consumers prefer it as it avoids them getting the greasy product on their hands.
Surface hygiene: bugs exist in microscopic cracks in surfaces. Previous Uni study found OBJ's micro-array based cloth doubled the kill rate for golden staph. Latest results show near 4X kill rate. Cost of getting a new antiseptic approved is huge. Much better to improve the ones that exist with OBJ tech. Hospitals, homes, industrial. This is moving very fast. Somebody is going to grab this and own this, and we are hopeful.
Pre-surgical patches: bugs exist deep within cracks and follicles of the skin. When the surgeon makes an incision, infection can get in even though the surface of the skin has been sterilised. Put an OBJ patch on the operations site half hour before surgery and it will kill the bugs throughout the depth of the skin in that area. $90 billion hospital acquired infection industry.
Summary by Glyn Denison
Revenue: we are very aware that we need to get some revenue in the door. We are asked that regularly and rightly so. It's been a long long road; however we now have 2 product licenses: wave 1 eye wand and wave II which is for putting on tone and moisturisers, etc. 200,000 wave I devices manufactured. Revenue will be a percentage of the wholesale price of the combined unit, not just the wand. Can't give forecast as are not certain of exact rollout. P&G has committed the tooling of SK-II wave II which is not insignificant. Been told that later part of this year and 2017 this will get going. We are not talking a few hundred thousand, rather millions. We also have a start for the other P&G brand, again a % of the wholesale price of the combined unit. Getting very close to getting some sizable licensing coming in the door. BodyGuard, surface hygiene, and personalised care could all happen at any time. For these, we own the end products, so there will be a whole different and more significant regime of payments for those. 11 work plans underway or completed. More on the way. Surface Hygiene could happen any day. Low risk, no biological testing, very constructive meetings with major distributors and we have high hopes for that.
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(20min delay)