It's out!, page-223

Tread carefully.

I have been hearing about this accumalation is going on since the PG announcement. havent's they finished yet ? What they have a billion dollars to buy OBJ ?

Heard it all.One only needs to look at Tom Boorman's newsletter which reeks with information that a retail investor can dream to have on hand. Add to that the 3 orchestrated pumps and dumps and you are still back around the closing price of PG annoucement.

Its just a ploy to get you to buy higher.

Plus the information some posters show here is extensively detailed and even due diligence cannot bring out such information.

TREAD VERY VERY CAREFULLY.

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At the moment it is GSK who have the rights to oral healthcare, but P&G own Oral B so there is a good deal of pressure on GSK to now complete their trials (if successful) and sign off on a deal with OBJ, before P&G snap it up. It is my view that the terms would also improve as OBJ is in a much stronger negotiating position.

Of course it is early days and it is very difficult to put numbers around the P&G deal and the potential other deals with COTY, GSK oral and GSK Analgesics. But I'll try:

If you look at how P&G advertises, I have little doubt that they will give "Diamagnetic Repulsion" an impressive brand name and sell it as an innovative change and significant advancement for consumers. A recent announcement from P&G in regards to their new Gillette balled razor suggested they would spend up to $200 million on advertising.

The areas that OBJ’s technology will be entering are some of P&G's highest selling areas by revenue. Their beauty and grooming divisions generated $28 billion in sales last year. Olay generated approximately $3 billion in sales. A new product which will work to significantly reduce wrinkles and is better than the current product, should sell very well. Bear in mind that there will be no change to the chemistry of the cream, just an addition of a magnetic technology that will increase absorption.

My base case is that the 7 products will achieve sales of circa $150m per annum per product within three years of the products entering the market. This equates to at least USD$1 billion p.a. in worldwide sales. Commercial royalty rates are known to be between 1 and 5 percent. I have used a low case estimate of 2%, this equates to approximately $20 million p.a. in revenues to OBJ.

The agreement ensures that P&G will pay OBJ all developments costs so most of this number will fall straight to the bottom line. A profit of $20 million should easily achieve a market cap of $500 million assuming a PE ratio of 25 which I think will be low considering the growth that will be occurring. The value of the other programs in the area of oral healthcare and analgesics with GSK, beauty with COTY and joint pain through the Bodyguard patch could equally be worth $20 million a year in earnings or more. At this point I would say that all of these are just the cherry on top of a deal with the world’s biggest consumer goods company, P&G.

With the size of the potential deal to come all of which have global application, the blue sky case for OBJ is without doubt a market cap of well over billion dollars. I believe a 15 cent share price target is completely reasonable and undemanding for the current status of the company.

I maintain my strong speculative Buy on OBJ and disclose my personal interest in the stock.