Good morning, everyone, and welcome to the Biome Australia Investor webinar. Today, myself, Blair Vega Norfolk, CEO and founder, and I have Geoffrey Sam on the line with me as well. First off, I might introduce Geoff, let him give a bit of a background. I'll provide a company update, and any questions that have been submitted, we will get to. If there are any further questions, submit them during the first 15 minutes, please, in the chat box, and then the team will do their best to feed them through to me. We should have about 10 minutes for questions after the presentation. We'll jump into that. Firstly, thank you. We've had incredible numbers attending this webinar, a huge amount of interest to come and hear a bit of an update on the company. Without further ado, we'll jump in. Welcome, Geoff.
Could you please give everyone a bit of an update on how you came to Biome?
Thanks, Blair. Good afternoon, everybody. Thank you for dialing in. Brief background to myself, now being the newly minted Chair of Biome. My background really goes back 40 years in healthcare, primarily in the hospital space. Over that time, I've worked with three different private equity companies to invest into the particular healthcare company that I was associated with at the time, to grow it into something that was of substance and of significant value, and then to exit. I have a lot of experience in growth and growing companies in a meaningful way, as I said, to provide that value to shareholders. I came into contact with Biome some years ago now when Blair and Doug Lowe were looking for seed funding to get Biome basically up and running.
I was very impressed, firstly, with their approach, secondly, with the product, and thirdly, with the scientific support behind it. It was something that appealed to me because it was different in the market, and I had a view that it could really develop into a very significant range of products and also a very significant company driven by Blair and Doug. I invested in the seed funding, and I have continued to invest and increase my shareholding through the pre-IPO, then IPO, and post-IPO. Last year, I had the opportunity to be invited onto the board. As I said, just recently, the former chairman chose to resign from the board to pursue his other commercial interests.
I'm now in place, and my aim is to work with Blair and Doug and their team and support them as we grow this business both domestically and internationally. Over to you, Blair.
Yeah, I've got one more question for you. Firstly, you didn't mention any interest in the executive team when you first looked at the company, but maybe we'll park that one and have a conversation about that later. Where do you see the vision for the board as Chair over the next 5 or 10 years?
I think with the board, obviously, we've started a process of rejuvenation. We'll take our time and look for additions to the board that are going to add the value, which is consistent with our strategic plan, as I say, domestically and internationally, and the range of products that we choose to grow over that time.
Fantastic. No, I appreciate that. I think that's nice for everyone to hear as well that we do have a business strategy, we have a growth strategy, and we have a strategy for the board as well, what we want to be able to support to open new doors, certainly for myself and the team. Into our market updates. It's been incredible. FY25 for Biome, only a few weeks to go, and what a great time to be able to just touch base with everyone ahead of the close of the financial year. I mean, we've just gone from strength to strength. While we haven't given out a final number yet, that's coming in a few weeks. What I can share is it will be a record quarter, as expected.
We get our biggest growth in Q4, and then in Q1, there's a huge amount of seasonality that drives the upswing in growth for us in the cold and flu season. I'm sure many people have heard we're in for a pretty tough one. We're already in it, but the new COVID strain, RSV, the flu, the reporting numbers from pharmacies at the moment is really significant in terms of the uptake of these vaccines, which is usually the strong indicator for the numbers of cold and flu instances as well. We will have another record quarter. We're approaching a really significant milestone as well. I know that the team put their forecast in for FY25, and we'll share an update on inventory and sell-through as well.
I can't say anything too much today that we haven't released to the market, so I need to be a bit careful. What I can say is we're absolutely on track for our Vision 27 forecast, one year in out of three. We'll be really pleased to get in and pick that apart as we get into the new financial year in July. We're about to launch several new products. I think we released to market a couple of weeks ago. There'll be a few new products coming into Activated Probiotics. That'll extend the range to roughly 19 products. Previously, we have also spoken about where does it go, how many products will we launch.
Biome's got a very strict and specific new product launch and new product development pipeline in that something has to have meaningful clinical evidence or human clinical trials, needs to be first to market. Where possible, we really need to own that indication as well. We're not looking to compete with others, and we're not looking to launch into a market that's already got competitive challenges. We've made a strong history now and a name for ourselves around tackling new topics and winning at those topics through education, through research. Right now, I'm sitting in Europe. I'm over here supporting the European team. A big part of Vision 27 focuses international markets. I'm very aware that people are quite interested to get a significant update on international markets, and they'll be getting one sooner than later.
Very pleased to say, though, anecdotally, within the first six to nine months, Canada is going very, very well, ahead of my expectations, certainly. Right now, I'm here based between Ireland and the U.K., working on developing that pharmacy market, looking at closing new distribution deals, new sales deals. It has been a very rewarding trip to date. Not to get into too many specifics because we haven't released them, but there will be a material update on what's going on in international markets in terms of FY25. I'd say more importantly, how we're set up for FY26 and beyond. Other new products as well. Activated Therapeutics, our new sub-brand launch, is the brand that allows us to move on from just simply focused on probiotics.
As the Microbiome Health company, as the most trusted probiotic brand and professional brand in the Australian market now, we'll be looking to leverage our new product development beyond probiotics into other gut health-adjacent products. The first four products that have been released now will be rolling out from this month. I believe two have already gone out to wholesale, and the next two will be going out first or second week of July, just to give the team a little bit of a break in what they're talking about, not to dump four or six or eight new products on them all in one week. We are very pleased to say that there's been huge support from our retail partners with ranging these, all of our new products.
They should be getting out to some of the familiar names out there in retail pharmacy land as well. The big familiar banner groups that we work with are all looking to support the new products. There is a key reason for that. Within FY25, we are by far the market leader for growth. If you look at the vitamin category, the probiotic category, and the practitioner-only category, the three categories that we sort of sit between, those categories are growing 4-7% over the last year. I think we last released a scan cells update that we were growing about 70%. That number is well above 50%. If you look at how Activated Probiotics is actually doing day in, day out, we are growing more than 10 times other brands in the market or the category.
It is a position that is quite enjoyable to be in when we get to go and renew terms, renegotiate with our partners to be able to gain more shelf space and get more share of voice. Our successes in the trade were acknowledged. TerryWhite Chemmart awarded us their retail supplier of the year, I believe about six weeks ago, which is the largest pharmacy chain in Australia, and an incredibly proud acknowledgement of the work we're doing with the leading service and health-providing pharmacy chain in Australia. I look to have more shelf space rolling out this month, next month, and the following months in those stores. Activated Probiotics and Activated Therapeutics having a larger share of the category, more visibility, more access to patients.
The international markets, as I already touched on, the core focus for me right now is to close some deals over the next couple of weeks before coming back to Australia for roadshows and end-of-financial-year meetings as well with all of the funds. We are looking to expand our footprint into pharmacy wholesale, both in Ireland and the U.K., and also spend some time on strategy with the team just to make sure that FY26 and seven, the international markets, are replicating the growth that we saw in the Australian business model. Just making sure to keep a close eye on that. I am very pleased with how things are going over here. I suppose only other follow-up points are getting onto questions. Geoff, is there anything else that you would like me to touch on?
No, I think you've covered it pretty well so far, Blair. Let's see what we.
Okay. We're a little bit ahead of schedule. If you just give me 30 seconds, I'll have some questions passed over to me. This is on the new product launches on Activated Probiotics. How many SKUs? In your announcement, you mentioned two new additions to the Activated Probiotics range. How many SKUs or products in total do you think the range will grow to? Currently, we have 18 products. With the two new launches, that takes us to 20. I have said at previous presentations that we do not want to follow, I suppose, the path of some of the bigger vitamin companies where they end up with so many products. They create a problem for themselves in that they're not all selling, and they end up with mass returns each year from the retailers.
Our focus is we want to launch products that are going to help people and improve patient health outcomes. We are an impact-driven business. With that said, we have a lot of the most exciting IP in the world around probiotics already. As new research comes out, we will launch new products. At this stage, I think long-term, it's probably 25-30 products. We also want to drip-feed them so our team have the time to really develop them. You have to remember the process for Biome. It's much more labor-intensive than a generic FMCG health product. We'll love on these products for a year, detailing integrative doctors, general practitioners, medical specialists, naturopaths, and pharmacists, and then pharmacy staff. There is a lot of work that goes into it. Once we capture that market, we seem to keep it as well.
That's evidenced by the repeat purchase rates of the products. Do you think Activated Therapeutics can be launched into overseas markets? Yeah, that's an interesting one. We're initially launching the four Activated Therapeutics products, which are the non-probiotic products. Just to run over those really quickly, there is a really unique product for gastric reflux, which is either medically termed GORD or GERD. That's a really interesting product in that PPIs, so medications like Nexium, are one of the largest volume medications on the PBS or in the market in OTC. That's going to be a really nice product for health professionals to be able to work with on their patients as an adjunct or even as a standalone. There's a gut healing product with two of the world's leading evidence-based probiotics, but then also a prebiotic.
We have developed a synbiotic product, our first synbiotic. What is meant by that is we have actual clinical data showing that putting the specific Bimuno GOS fiber with our two probiotic strains, both of the ingredients work more effectively as a combination. That will be our first gut healing product as a preparation for people to move on to the Activated Probiotics range. We have our first menopause product, Estro-ISO. This has clinical backing on reducing menopausal symptoms. Finally, Macro-Pro, which is addressing the large weight support category and malnutrition category. I think everyone will be aware with the celebrity drug, the GLP-1 drug, sort of covering the world at the moment and certainly propping up a number of share prices on some of the big pharma companies.
Not to chase a trend, absolutely, that's not where Biome sits, but having really meaningful support products for those patients that one of the side effects of these medications is losing significant muscle mass. This is a product that our pharmacy partners have really asked us to push on innovation to be able to support those patients as one of the biggest growth categories in the market. Internationally, Activated Therapeutics, some of the products may have different claims or different regulatory conditions. We now have pre-approval for New Zealand on all of the products, and we're looking to also work through that over the next couple of weeks for Canada, U.K., and Ireland. The intention is to take over the products that do meet REGS requirements, and I believe that the majority of them will. Will the new products be located behind the counter? Yes.
We've learned over the years on what we're good at and what we're not good at. What we're great at is education, research, highly technical detail in building trust, and leveraging that recommendation or the support from a health professional to actually essentially be part of our sales funnel and our sales team in recommending our products. Activated Therapeutics is a practitioner-only brand. It'll sit behind the counter right next to Activated Probiotics. We've put a fair bit of pressure on the retail pharmacy partners to understand that they are a joint, almost a co-branded ranging, one of the probiotics, one of the therapeutics, so the non-probiotic natural medicines. The idea is that they'll just take up further shelf space in this category. The products are also very clearly supported and set up to have a significant medical market as well.
We look forward to these new practitioner-only products really being able to add new patient categories and conditions. Update on our Biome-owned strain, BMB18. I do have updates, but I'm not sure how many of them I can actually share without an announcement. That's an implication. There are things going on in the background. What I can share is what was released recently. We already completed our first in vitro clinical study. We understand the mechanistic actions of the strain. We're very pleased with those initial results going back a couple of months. What I can say is we are in late-stage planning for the first study on this. Just to be clear, the budget on that has already been pre-budgeted into FY25. Don't expect a massive R&D expense from Biome.
We'll be working with existing university partners and relationships on a cost-effective study, and we'll have some updates on that. The intention is for BMB18 to start to get into some of our products within FY26 and certainly FY27 to be able to meaningfully impact new product development. Any other questions are welcome. I think in the chat, the team are filtering them through. Sorry if there's a little bit of delay. There are probably three people that are sending them and then passing them over to me. It might be about 30 seconds after you type it that I'll get it. What are the main challenges with the rollout of the product range internationally versus Australia? Look, that's a really good question. It's not straightforward.
Biome operates above the requirements of the TGA from a quality, from a GMP manufacturing perspective, from an evidence perspective in clinical backing on our products. In different markets, there are different challenges. The two that are most aligned are the TGA, where we're a listed medicine, and Health Canada, where we have a national product number identifier, which is similar to that of a listed medicine. Health Canada and the TGA, very specific guidelines. You submit your approvals, you get your claims, you launch on the market. The European market's governed by EFSA, which is the Food Safety Authority. It's a little bit less obvious. It's more about making sure that you don't launch with the wrong ingredient in the wrong dose and you don't have any health claims. The challenges for us with international markets, first, there's regulatory, which we have under control.
There's quality because each market requires different quality standards. In Australia and with the TGA and also Biome's internal quality processes, we sit above every market in terms of our requirements for REGS. However, making sure that we've got more of the commercial side downpacked. When you can't have health claims, it means we need to be a bit more creative around our educational resources. When we're detailing our customers internationally, we go straight to the health professional where we share the clinical trials. We explain how the product works. We gain their trust. They recommend the product. That's the core to the business and sales strategy. We obviously work on our own marketing to grow our brand and to drive foot traffic in the store. The core to it is that recommendation.
As a result, Biome has a significant competitive advantage over any other front-of-shop brand or non-practitioner-only brand, being that we get the ear of the health professional. In a market like Europe, where there are no health claims, competitor offerings are sitting on the shelf with no word probiotic on them, no health claims. They are just sat there with no ability to sell their product outside of high-level above-the-line marketing. We sit there with the ear of the health professional and the evidence. In the less regulated markets, I would say we have a competitive advantage from that perspective. Can you comment on the share price? I was wondering how long that one might take to come up, Geoff. Look, I can absolutely comment on it. I am happy to.
I'm not going to sit here and blame the White House for what's happening to Microcap in Australia. What I will say is, looking at same time last year, the company's up 40%. While the last three to six months, it definitely has had a significant pullback, the company is on track and growing exactly how we said we were going to and how we want to. I think the point is, operationally, I'm focusing my time, my attention on communicating with the market, but most importantly, strategy, execution, and delivering growth. As I mentioned earlier, we're tracking 10 times ahead the category average, and our retail partners appreciate that, and they're backing us as we continue to do that. Our view, I think, as a board and management team is we continue to execute. We continue to deliver.
Long-term, the market always gets it right. With the news flow that will be coming over the next couple of months, we're confident that new eyes will be coming onto the stock. We believe as we continue to get new eyes onto the stock and hearing the story, that will continue to go in the right direction long-term. What is your strategy to enter the US market? That's an interesting one. Obviously, with the White House I mentioned, that makes it slightly more complicated for international brands to look at the US market. The US market has always been a watch and wait for us, as has China. All of our, I suppose, international competitors have their strategy completely fixated on what's the highest volume product, what's the highest volume market, and then how do I compete in that market?
Biome's strategy has been, what's the product that people need the most, what's going to solve the most problems, and how can we build that while everyone else is competing over the crumbs in America, China, and on the more generic end of the market? Our strategy is to succeed in Canada. Canada is seen, in terms of health, as the higher quality products in North America. Health Canada being a strict regulator and the FDA not regulating our category, I'm sure people will be aware of those statements. The FDA has not evaluated the claims on this product. Please consult with your health professional. That's a disclaimer for American brands to minimize the lawsuits that they're going to deal with. America is the Wild West, as is China. Our strategy for America is to develop the Canadian market to be a top brand there.
At the right time, from the right location, depending on where the tariffs are best, we would have the ability to enter either from Canada, Europe, or Australia, whatever is commercially the best option for Biome, being that we have product in all those different places and the ability to manufacture product in those different places. Watch this space. We have not released the official strategy, but at some point, we will look to do a test market in other parts of the world. North America is one of the biggest markets. I think that is a good enough implication that it is something we are considering. One other one for me, then I have got one for you, Geoff. As you grow, is it getting harder to maintain your growth rates? Look, I think everyone absolutely understands that growth works against you.
For us, the most important thing is that the dollar value growth each year is increasing because that is real growth, and the profit keeps increasing. One point that I have not reflected on, we expect to have our first full year of profit, which is an incredible milestone for Biome. It really sets us up to stand on our own two feet into FY2026 and beyond. Growth rate, I mean, we are still tracking very high growth levels. The goal is to maintain high growth. We expect to be a growth company by definition for the next few years. We hope that the market will agree and reward us for being a profitable growth company. Yes, it is harder because every sale that you get, you have to add an extra one on top of that to continue a higher growth rate.
We have strategies in place to ensure that growth stays high. We're not just going to go visit more pharmacies. We have new products we're launching. We have a new brand we're launching. There are other categories and sideways steps that we're considering with product and brand that we believe will significantly improve the underlying growth of the business over the next few years. The strategy for us is to absolutely maintain positive cash flow, EBITDA, and profitability, but the focus is all on growth. We'll have an update on new things as we get into the new financial year. Beyond the products we've just released and the new brand, there's a number of growth initiatives, and we believe that we will be able to continue this high growth pattern for the coming years.
For Geoff, from your position as Chair, do you think the Biome team is properly sourced? I'm guessing this means resourced to deliver on its target growth. Yeah, that's a good question. I think where I sit at the moment and where the board sits is that obviously we're there to support Blair and Doug and their team as we grow. As resource is required, obviously, we'll support that. As Blair said, we've got a fair few opportunities still sitting in the chute, and they will be achieved with additional resource. We're also very conscious of not getting in front of ourselves. As we grow, we'll resource it appropriately. Right now, we're reasonably content with where the resourcing is. Yeah, thank you, Geoff. I'm happy to also just add to that.
I mean, we believe we've got the business to the point where we have turned profit because we're at a sustainable level now in terms of our expense line, our OpEx line. Reinvestments are really only for material step changes in the business. As we get through the Vision 27 period, we believe we are very well resourced to not require a significant investment. Now we will have that net profit line. Should the board and management decide, we can reinvest some of those profits to ramp up growth and to take on new opportunities. It is a very nice position to be in. I'm quite excited because it's 13 years coming to get to this point for me anyway. Are you meeting with any overseas investors or potential investors as a part of your travels, or is the share register predominantly Australian?
I spend 40% of my time on investor relations. It's a key part of our business. I think any public company CEO, it's always there. We do have a number of significant overseas investors, but I'm not at liberty to name any funds. We do have a number of funds. That's the next question. I'm going to put them together. We do have a number of funds on the register, and several new have joined in FY25 as well. I've been doing fund roadshows now for, I think I've done two significant ones within FY25, at the start of the year and only about six weeks ago as well before this trip, the sales trip. Yes, we have a lot of additional interest, a lot of new funds that have come onto the register.
It is the never-ending negotiation between, will you give us a capital raise to come in, yes or no? Politely, up to this point, we've said, "No, we will not." It is very interesting as, I suppose, the shareholder base evolves over time. We now have more than 3,200 shareholders on the register. At IPO in 2021, we had 700. The retail base has grown. More recently, the institutional base has grown. As I'm overseas, I'm seeing more and more funds and high net worths in Singapore, in Hong Kong, in the U.K., in Scandinavia, and more recently, the U.S. as well. I think U.S. investors are a little bit problematic. That is not our core focus. Can you talk a bit about your capacity to continue manufacturing and supplying market with your exceptional growth?
Manufacturing is one of the top, one of the five key strategic points of Vision 27, our plan that released back in September for the three financial years. There's a lot going on in that place. I need to be a bit careful. We have three work streams. The top one is onshoring. Going back even 12 months on Biome's review, in our perspective, there wasn't a single local co-packer or packaging manufacturer that we'd validated them all. We didn't see that they met our quality requirements. However, there are a number of new probiotic potential manufacturers now to do CMO or finishing manufacturing in the Australian market. We're reviewing a number of alternatives. We know that there now are people that can handle our products.
We have all the approvals in place to be able to do that transfer from our Italian CMO in Northern Italy to Australia. That option's there. We're just reviewing everything and making sure we get things right before we make any move. Biome's also open to continuing to look at, at the right time, do we buy, do we build something as well? We certainly do not have any open M&A. I'll be really clear on that point. We are considering at what time it makes sense to become more vertically integrated because there is a strong margin story. There is a strong opportunity to support international growth. That is something that we have not been shy to talk about as a longer-term target for the business as well. I think there was a second part to that question and how it impacts growth.
How it impacts growth is the flexibility with a local co-packer or our own facility at some point down the line will give us the ability to flex. Smaller batch runs, better shelf life. Most importantly, as we scale, we'll be able to do batch production runs for different markets on the same line. I'll give you one example. We just launched into Canada. We don't want to be loading up $2 million of inventory on the whole range at minimum order quantities with an Italian manufacturer.
If we were able to do a standard run of, say, Biome Daily, which we're now doing at 100,000 plus monthly batches, we would be able to change a package, I suppose, turn the machine off, put a new set of boxes in, a new blister pack in, and just do the last couple of thousand boxes of the same product for a different market with a different regulatory environment. That is a key part of why we want to be able to look at controlling manufacturing locally or ourselves down the line. It gives us huge scale advantage to be able to quickly move on opportunities in international markets and also significantly improve our lead times, which supports growth.
If TerryWhite Chemmart called me and said, "I need a product for this," and it lines up with something that we're working on and that we have, we could turn it around in eight weeks rather than six months. It is critical to growth and scale, and that's why it's one of our strategic focuses. The next one, I think we're about ready to wrap up because I think we're over time, is have you attracted new institutional investors onto the share register? I think I may have already answered this, but yes, we've had several new institutional investors come on in FY25. I shouldn't be naming them without their permission, but they are there, and they are very excited about the future potential of the company.
I think with the share price question earlier, people have communicated with me that they think this is a very good entry price into the stock. I should not comment on share price low or high or where good value exists. Our goal is certainly to be a much larger company. With that, we would like to see the value of the company continue to grow as our successes and our performance continues to scale. It has been communicated that this is a point that in-stores are really interested. Should anyone have a significant parcel of shares that they would like to sell, I have a number of in-stores that would like them. I am happy to go on record and say that. Always open to help people with that if it is something they are interested in because we have a lot of interest there, frankly.
Any other final questions or okay? Look, I think that's been good. We've had a solid 20 minutes of questions. I hope everyone enjoyed that brief update. I will be giving a more material update in the new financial year in only a couple of weeks, where we'll have some juicy numbers to get into on growth, on sales, on specific performance metrics, on net profit, on EBITDA. Thank you very much. Hopefully, that is just a good update for everyone. We've had record attendance. Thank you, Geoff. Welcome to the board. We'll speak to you all soon.