joining the dots of recent obj announcements

One of the reasons I am in OBJ is I believe it has great UPSIDE, and regarding the DOWNSIDE - it as DERISKED as you can get for a ‘specie” bio stock.


The OBJ UPSIDE brings out different emotions in me:


ie - on joining the OBJ dots and interpreting recent announcements


- The REALIST in me says there is one only deal currently confirmed being negotiated - with the FMCG global beauty partner.
So when I think of this deal I KNOW it is a matter of time (the optimist in me says - very soon; the realist says - should be soon though things can drag on; the pessimist says – things always go wrong; the fatalist say – who cares, we’re all going to die).


- The REALIST/OPTIMIST says we may have 2 deals more currently at various stages of negotiation – Being GSK (Sensodyne, teeth whitening, oral care) and RB (Nurofen anti-pain patch, possibly more).
When I think of these deals I am LESS SURE of the timing (the optimist in me says – any day this financial year; the realist says - things can drag on but it should happen; the pessimist says – these companies are so big, it’ll never happen; the fatalist says – who cares, we’re all going to die).


- The OPTIMIST says we may have 3 deals more currently at various stages of negotiation – I have no firm sense of timing and haven’t thought about it (the 3 potential deals mentioned above is what I'm more intersted in).


- The DREAMER says we also have a heaps of additional unknown deals in the pipeline so we all are going to be rich – the REALIST in me then tells the DREAMER to SHUT UP and just focus on the one deal we know – the FMCG beauty deal, it’ll be a nice earner when it comes.


The OBJ DOWNSIDE also brings out different emotions in me:


ie – on joining the OBJ dots and interpreting recent announcements to establish just how “derisked” is OBJ (this is a question I constantly keep track of and so should we all)


- The OPIMIST in me says - the SP is tracking up, so skim all announcement details, as all is good.


- The REALIST in me says ALLWAYS read the fine print:


ie- From The last quarterly, as best summarised by Investorpaul (Post #: 7352543)

SUMMARY OF COSTS OVER LAST 4 QTRS

Staff Costs

This QTR = 66k
June QTR = 68k
March QTR = 66k
Dec QTR = 75k

Note: No material change

R & D
This QTR = $305k
June QTR = 229k
March QTR = 194k
Dec QTR = 197k

Note: Gradual increase in expenditure. Previously approx 200- 230k, this quarter >$300k. This represents an increase of up to 50% on past quarters expenditure for internal R & D. However 300K is not a massive amount of money and this could just be a "one off" before we go back down to circa $200k again. We need to see one or two more qtrlys to see if there is a pattern here.

So I sent a question to Glynn asking about the R&D jump. Here is his reply:

Thank you for your email.

The R&D expenditure reflects additional laboratory staff that have been added to the OBJ team during the year as the research efforts increase. OBJ is now able to undertake its own testing using human skin, an activity that was previously outsourced. In addition, a lot of testing work has been undertaken by external testing laboratories in the U.K. This all reflects a general increase in activity over the period.

Thank you for your enquiry and your support to OBJ Ltd.


I am happy with his explanation (in light of confidentiality agreements) as it supports previous OBJ announcements and some of the past OBJ observations posted here.

let me also add - if expenses stay at current levels, we still have cash for a few more years – more than enough time when waiting for our first deal.


Now back to the voices in my head on the OBJ downside:


- The DREAMER says all is good – but speaks with his head buried in the sand expecting nothing bad will ever happen - the REALIST then kicks him in the ass, telling him to SHUT UP because we still haven’t had that first deal that can put food on the table. The OPTIMIST agrees this is the right interpretation.


SUMMARY: So now I wait for at least one deal to come through very soon. The OPIMIST in me expects there’ll be at least 2 more deals this financial year: plus the REALIST beleives, if nothing happens, we at least know there is money to keep OBJ going for a few more years.

Anyway, that’s my take on things... and the REALIST would like to add - feel free to pick any holes you find in what I've written; though the OPTIMIST thinks - it's all good; the PESSIMIST thinks - Oh no, here comes the critics; and the fatalist says – who cares, we’re all going to die.

Have a great weekend all!