MIDAS SHARE TIPS: OptiBiotix Health is developing snacks to help you LOSE weight and could pile on the pounds

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Tasty prospect: Now OptiBiotix plans products that include fruit drinks

Imagine if a snack bar or fizzy drink could help you to lose weight. Imagine if eating a yogurt could lower your cholesterol, not by a fraction like some existing products, but by more than 70 per cent.

These claims may sound too good to be true, but OptiBiotix Health is well on the way to turning them into reality. The shares are 33½p and should rise considerably over the next two years as the company’s wares hit the market.

OptiBiotix was set up just three years ago with a specific purpose: to develop products that could improve health by changing the way that microbes in the body work and interact.

The human microbiome has become a buzz phrase in certain circles. Essentially, everyone carries about 100 trillion microorganisms, many of which live in the gut. Scientists and doctors are increasingly convinced that these could contribute to a wide range of diseases and conditions, ranging from obesity to heart problems to diabetes.

Work on mice, for example, has shown that fat mice that are given the microbes of thin mice become thin and vice versa. There was even an ill woman who was given microbes from her obese daughter and became obese herself.

OptiBiotix chief executive Stephen O’Hara analysed much of the latest research on the microbiome and realised there was the potential to create a firm that could put all this research and information to commercial and social advantage.

A microbiologist by training, O’Hara spent 20 years in the NHS before leaving in 2000 and setting up a company that helped to diagnose infections such as MRSA. The business was sold in 2007 for £40 million to American conglomerate 3M, where O’Hara then worked for several years.

Founded in 2012, OptiBiotix listed on AIM last year and has established a pipeline of products that can lower cholesterol, suppress the appetite and affect the way calories are absorbed by the body. The products are not like faddish diet pills – they are safe and have been through rigorous scientific analysis.

First off the block is a weight management formula being developed in partnership with Dutch group Nizo Food Research, one of the world’s most prominent organisations in food innovation. The formula has been tested in bread and yogurt but may be used in other products, such as fruit drinks and snack bars. Designed to make consumers feel full faster, increase their metabolic rate and change the way the gut absorbs calories, it should effectively cut daily calorie intake by between 6 and 10 per cent.

Health benefits Tests on mice have shown that changing microbes can reduce weight

The food products are expected to go on trial in Asia by early next year, before hitting Europe a few months later.

At the same time, O’Hara is working on an even more effective weight loss product, using a range of newly developed sugars that have no calories and can change the way microbes work in the body, reducing calorie intake by up to 18 per cent.

The sugars have so far only been tested in laboratories, but OptiBiotix signed an agreement this month with Instituto de Quimica Organica General, a Spanish research organisation that will help to take these sugars to the human testing stage late next year. Though commercial sales are some way off, the impact of these sugars could be enormous. A number of large food and drink makers have already shown an interest, as they could be used in a variety of different snacks and beverages.

In the meantime, OptiBiotix is making progress with its cholesterol-reducing formula. It is undergoing human trials now and the results should be known in the autumn. Currently in capsule form, other products are being developed such as snack bars and drinks. Giving this product further credibility, O’Hara signed a deal last month with a major American consumer goods company, which now has an option to license the formula if the trials on people prove successful.

Research on microbes is at a relatively early stage but the entire field is widely believed to have enormous implications for human health and wellbeing. OptiBiotix has been working with scientists and top universities, it is moving towards commercial sales and in time, its formulae could be adapted to help treat diabetes as well.

The company is loss-making so far, but raised £3.5 million on AIM last year and has £2.5 million left, enough to see it through to 2017, by which time it should be generating revenues.

Midas verdict: OptiBiotix is in its early stages so there are obviously risks attached to the shares. However, O’Hara has built successful businesses before and is determined to deliver shareholder rewards at his latest company. City supporters believe that this business, valued today at £25 million, could be worth £200 million by 2017. Adventurous investors should snap up a few shares now – at 33½p.

Traded on: AIM Ticker: OPTI Contact: optibiotix.com