Momentum is building, page-20

I agree with the 10 cent prediction doss, but the reasons are much more complicated - the pending 4C is just one relevant factor which you have correctly identified. Conditions for the company are ripe for a market re-rating in my humble opinion and for that reason I believe the time has never been for holding an investment in OBJ. Here are the essential reasons why I think that to be the case:

1. The next 4C due at the end of this month: I predict in excess of $1m in revenues will be declared. The roll-out and sales of both the SK-II Magnetic Booster and the OLAY Magnemask devices is finally catching up in terms of royalties payable by Procter & Gamble to OBJ. Sales in Asia and North America will finally start to be accounted for in OBJ’s coffers. Roll-out by Procter & Gamble of OBJ’s technology in its products is clearly increasing. The soft-launch of the SK-II wand in 2014 is well and truly behind us. As Procter & Gamble continue to embrace the technology in their product innovation and development strategies, OBJ’s royalty entitlements continue to increase at an exponential rate when the products designed are introduced into the market. The upcoming 4C will be the first strong indication of exponential growth in revenues for OBJ derived from the Procter & Gamble relationship.
2. New leadership: Steven Schapera has been a breath of fresh air and a critical injection of international business acumen that OBJ needed last year. With the retirement of OBJ’s former chairman earlier in the year, the path was cleared for Mr Schapera to identify and secure the commitment of two additional international business leaders to direct OBJ’s commercial development for the foreseeable future. These three individuals – Schapera, Varano and Reynolds – I think will come to be aptly described as “The Holy Trinity” from the point of view of long-term OBJ investors. I have high expectations in terms of what the three of them will do for the company, particularly with respect to the immediate term prospects of the development of current projects which I now refer to below.
3. Bodycare (ibuprofen trials): The results of the trial conducted by Curtin University using OBJ’s magnetic microarray were announced by OBJ only a few months ago. The results were astounding and unprecedented, and have the potential to completely disrupt the pain relief market. Oral ingestion and intravenous delivery of ibuprofen and other forms of pain relief, which have been standard industry practice for centuries, will now potentially have to compete with a method that is just as effective but considerably more comfortable and convenient from an administration point of view – transdermal delivery via magnetic microarray-backed patch. The clinical results and disclosures made by OBJ about this potential drug delivery revolution were very clear. They also made reference to a number of potential international partners they are negotiating with. Needless to say, these prospective partners are likely to include the likes of Pfizer, Reckitt Benckiser, Johnson & Johnson and Beiserdorf (potential partners which OBJ disclosed at last year’s AGM). I predict that an agreement between OBJ and one of these companies to conduct their own stage 1 clinical evaluation of the technology for this purpose is inevitable. Of course, it could be at least 4 or more years before we see a product on the shelves put out by one of these companies. But that is not the point. The execution of an agreement of this nature, albeit for early clinical trials, by a scientifically-minded and sceptical pharmaceutical behemoth will give OBJ all the validation it needs. OBJ will no longer be riding on the coat tails of the cosmetic skincare arm of P&G. It will have been given significantly more scientific credibility by a pharmaceutical global corporation.
4. Bodyguard (as distinct from ibuprofen bodycare): OBJ has been very silent since announcing its relationship with a world leading sports tape manufacturer based in Japan since the AGM last year. But we know that they have long been in a collaborative relationship with this company for some time. Remember that they showed us pictures of the kneeguard all packaged up and ready to be sold (i.e. we weren't just shown the prototype device). The silence on the topic indicates to me that a finalised and “publicly announce-able” commercial arrangement for the roll-out of bodyguard products is very close. Given the scientific validation of the technology with the ibuprofen results, any such agreement result in the market seeing the significant revenue growth that is now at OBJ’s doorstep.
5. Personalisation: This is top secret and we are now told very little about it. But all of the evidence over the last year or so indicates that Procter & Gamble is attempting to fully immerse itself in innovation and development in this area. This I think will include the technology that OBJ has developed in this space and, once rolled out, OBJ will be handsomely rewarded by way of royalties. The terms of any such agreement will be much better than the previous P&G terms for the magnetic micro-array simpliciter given that we have The Holy Trinity now negotiating any new deal.
6. Surface Hygiene: Another untapped market that OBJ has been silent about. We know that they have been conducting tests and evaluations with an international company for a considerable period. Again, another indicator of significant revenue growth for the company once a finalised deal is announced to the market.
7. Potential Media Interest: OBJ has struggled to get much attention amongst financial media outlets and mainstream media. However, with the launch of Olay Magnemasks in Australia just over a week ago, and with Jesinta Franklin (Campbell) as the ambassador for the product, there is now a very tangible reason why the Australian public might have cause to be interested in the Australian company that created the technology behind this novel Olay device. That is likely to attract media outlets to OBJ – the “diamond in the rough” underdog on the ASX in partnership with global brand OLAY. It’s a simple formula, but the actual product on the shelf in the local chemist warehouse, and with Jesinta’s ‘pull-power’, a story about OBJ’s involvement in mainstream Australian media has to happen at some point in the near future. Mum & Dad investors will then come a flocking, and perhaps the more conservative financial media outlets will start to give the company more serious attention.

The stars are aligning... at long last.

All IMHO of course.

J