Plus to answer some questions and get into a bit of a discussion on Biome Australia business. Please do that sooner than later, so the team can be funneling them through to Lauren and myself. Without further ado, we'll jump in. Quick background on Biome Australia. Biome Australia is a microbiome health company. We operate in the world of probiotics and live biotherapeutics, so those are targeted probiotics or strain-specific probiotics that can support patients with different conditions and prevent different diseases. Biome's unique position in the market is as first global mover in this targeted probiotic space, and as we will talk about through the presentation, we have made significant commercial progress through our business model as well. Some short overview notes as well on Biome.
Our flagship brand, Activated Probiotics, which many of you will have seen out in the trade on pharmacy shelves. We are really beginning to dominate that space of practitioner-only behind the counter, behind that pharmacist, which is the most valuable shelf space in the pharmacy. Activated Probiotics has had a fantastic first half and last few years within the Australian market. We've gone from a start-up to one of the largest probiotic brands and practitioner-only brands within the pharmacy space and the practitioner space. We're very pleased to say that Activated Probiotics is now the number two probiotic brand in Australia by revenue in community pharmacy, and we are about to pass the spot to have the number one product in Australia in pharmacy as well, within the probiotic space as well, and that's based on scan data.
We have been the fastest growth brand within the industry as well, growing last half more than 40%. We are over-indexing the market or industry that is growing between 6% and 7% in different channels, significantly outpacing the category, and from a reasonable base as well, now that we are at a run rate of AUD 22 million+, as a business. Something that's very unique to Biome that makes us quite special is the clinical trials and the IP that we're developing as well. Unlike other brands in our space, Biome has significant clinical trials, which we'll discuss throughout the presentation today, including the first on our new strain, BMB18, which we will get into. Lauren, I'd love for you to report some of the financial highlights.
Thank you very much, Blake. As your CFO, I'm delighted to present stellar financial scorecard for the first half of 2026. H1 2026 has been the strongest half-year period in Biome's history. The company delivered record sales revenue of AUD 12.4 million, representing 40% growth on the prior corresponding period, or PCP, with Q2 FY 2026 alone generating AUD 6.5 million in revenue, on 41% half year. It's the same comparable period. Importantly, half one also delivered record Adjusted EBITDA, excluding share-based payments of AUD 1.47 million, that also represents our eighth consecutive quarter of positive EBITDA in Q2 FY 2026. Net profit after tax was AUD 1.18 million for the half, this is a clear demonstration of the operating leverage in our business model, which we'll cover in the following slides.
Gross margin has been maintained above 61% throughout the half, confirming our resilience in our pricing architecture and the premium positioning of our brands. EPS, or earnings per share, at AUD 0.53, is up 165% from AUD 0.20 at first half 2025. This is a key indicator of our shareholder value creation in line with both revenue and operating profit growth. Okay. Our operating leverage is now visible, and it's evident in the earnings that are significantly outpacing revenue growth. Revenue, as we've spoken about, is up 40%, and this is driven by momentum across Activated Probiotics range and the newly launched Activated Therapeutics. Cash receipts were up 62% from first half of 2025, and this is really supported by enhanced working capital management and improved customer collections.
Adjusted EBITDA, including or excluding share payments, including R&D rebates. Net profit both increased by an impressive 100% and 172% respectively. This is spearheaded not only by sales growth, but margin control and diligent operating expense management throughout the half.
Thank you, Lauren. I thought it might be nice, this presentation, to go take a step back and see where the business could go. This is a bit of a summary slide on the global probiotic market and the Australian probiotic market, showing that at our current revenue rate of, let's say, AUD 25 million, based on Q2's exit rate, there's still a huge amount of opportunity to capture market share in Australia. Certainly acknowledging the fact that Biome is growing the category. We're not just taking market share from competitors, existing competitors in the market. I sit on the board of Complementary Medicines Australia and the International Probiotic Association, which has given a lot of insight into global trends and opportunities where we can continue to innovate and scale.
We will also talk about a market that Biome has access to beyond the probiotic market as well, which we feel is an exclusive opportunity for Biome. The products that support the business, I mentioned Activated Probiotics already. I'm gonna highlight a few of the key products that some of you may know about or may not, that are really key to our success and how we've generated such a strong position in the Australian market and some of our international markets over the recent periods. First, Biome Lift, the yellow product in the top left. Biome Lift is subject to three randomized, placebo-controlled, double-blind studies now looking at depressed mood, stress, anxiety, and most recently, sub-threshold depression as well. Actually moving from a healthy population into a diseased population.
This is a wonderful intervention for health professionals to be able to use for, as I said, the healthy population of people dealing with stress or even anxiety, but also those who are on medication for clinical depression and as a supporting tool. A standalone product or a product that can be used alongside the medication. Next, Biome Breathe, the one on the bottom left in green. Biome Breathe was the one that really started the research journey for Biome as a brand deeply entrenched in clinical trials on probiotic strains. Biome Breathe, as you can see, the second clinical trial here, this was a large randomized controlled trial on 440 children. We saw a 64% reduction in the incidence of asthma attacks in that pediatric population.
Absolutely incredible outcome for a product that is now providing a new tool for pharmacists and health professionals to be able to support patients with asthma, and one of my favorite products as well, the idea of absolutely being able to potentially save a child's life. Biome Daily Kids. Biome Daily Kids is mentioned over here on the bottom right. This is our everyday purpose, everyday full-purpose probiotic for children's general digestive health, reducing winter colds and illness, and also supporting children with gastro as well. This product was developed in combination with a partner in Italy, but more recently, we conducted a clinical trial with Federation University in Australia on children in a daycare setting and reducing winter illness.
Why this one's so critical to Biome as well, as one of our entry-level, most affordable everyday products, it's still clinically proven, unlike anything else on the market. Biome Cholesterol is one I also like to mention as well to the market. This is the world's first, cholesterol-lowering probiotic product with five published clinical trials used alongside a statin medication, two studies, and three as a standalone. Biome Cholesterol helps reduce LDL cholesterol while leaving HDL cholesterol intact, unlike statin medications. As we start to look at the different health areas and medication classes our products can support, cholesterol is one of the highest, with statin medications being number one and two by volume on the Australian PBS. Finally, I'll mention Biome Her.
Biome Her is subject to a clinical trial using the probiotic as a preventative tool for women with bacterial vaginosis and thrush, but also as a intravaginal product for more acute flare-ups. Very unique product in that it can be used for prevention and acute, and these are conditions that are not always easy for women to talk about with their health professional. Having a tool that can prevent that recurrence and needing to come back for antibiotics over and over again is a very powerful product within the Biome range. Activated Probiotics is our core, it's our foundation, it's where we built the business. Our research and development team have not stopped, and they've continued to innovate beyond just the microbiome and started to look into other gut health-adjacent products.
We launched Activated Therapeutics within the first half, FY 2026, it's still brand new to us, but it's allowed Biome to move, as I said, beyond the world of just bacteria into other adjacent categories. We're able to support patients with other high-volume health conditions, also alongside medication classes as well. In the Activated Therapeutics range, we have Pepti-BIOTIC, which is developed and clinically proven to reduce reflux, GORD or GERD. We have the Oestro-ISO product, which is a perimenopausal symptom product based on a soy isoflavone. We have Synbio-GOS, with the world's most well clinically validated fiber product, a GOS fiber, which is essentially developed to repair the gut, to support the patient to then move on to the Activated Probiotics products if they need them. We also have is looking to increase their nutrient intake as well to prolong life.
What makes us so special is, as I've already mentioned and talked about, are these clinical trials. It really is our competitive advantage. While we do have the business model, the education, which I'll speak about a little bit further in a moment, these clinical trials are really world-first. In the world of complementary medicine, it's very unusual to have a product that is a clinically proven product. That's the type of evidence, the gold standard that you would normally expect to see on a pharmaceutical medication. Biome has invested heavily in our marketing program, on research, on clinical trials, with more than 30 clinical trials now on our finished products throughout the range.
It is something that we keep leaning into, and we hear feedback from doctors, pharmacists, and other health professionals that we are the only trusted brand because we have the evidence to prove that our products do what they say they do. I mentioned a little bit earlier in the presentation, the idea of a new market outside of the general probiotic market in Australia and abroad. I focus in Australia first, which is our core market and is our core volume, the adjunct medication market, as we like to term it, is the concept of a pharmacist or a doctor prescribing one of our probiotics alongside pharmaceutical medications or prescriptions in the pharmacy setting. I walk you through one product, Biome Cholesterol, as you can see here, based on 2020, 2021 data, 29 million prescriptions for statin medications in that year.
Biome Cholesterol, as I mentioned, five clinical trials. Two alongside statin medications, improving their effectiveness and reducing their side effects as well, reducing the need to constantly increase the medication every year. That will lead to increased side effects as well. This is an opportunity in the pharmacy setting or via the doctor for that product to be put in the script basket, and for that health professional to be detailing this product as an improved patient outcome. The other side to this is, it's not just about the patient. There's a huge opportunity for pharmacy as well to grow a new basket line of revenue, improve their gross margin, and improve and grow their category as well in a world where they're constantly being squeezed by the PBS with 60-day dispensing and lower margin per script.
We spoke about this briefly, but the market position of Activated Probiotics and Biome Australia. Within community pharmacy, that's excluding Chemist Warehouse, we are now the number one probiotic brand by revenue. Including Chemist Warehouse, we are now number two, but we believe we'll take the number one position in total pharmacy within the very, very short-term future periods. I'm not going to put a date on it, but looking at the data, it is coming sooner than later. Within TerryWhite Chemmart, our number one pharmacy partner, who have more than 650 pharmacies in Australia, we're number two in the total vitamin category.
That includes big names such as the, you know, the 40, 50-year-old Australian vitamin companies, all of the practitioner brands, all of the probiotic brands as well, and we expect to take out that number one position for total vitamins as well, in the recent or coming future. Pharmacy growth as well. This is MAT scan sales growth within Priceline Pharmacy. Priceline is our second-largest pharmacy group and is growing or outpacing the rest of our market, growing almost 50% MAT, so rolling 12 months. Priceline and Terry White are strategic partners, and we'll look to continually report on the advancement of those strategic partnerships well beyond the number one position in their vitamin categories over the coming years. A little bit of background on why Biome does what we do.
We like to identify and explain this practitioner-only model in a simple way. The traditional vitamin model is a push model. We're talking about vitamin mineral supplement products that are driven by price, advertised through catalogs and promotion. They are on e-commerce stores, and essentially, it's all about convenience. These products have become almost commodities. Biome's model is based on a premiumized pull strategy. We gain the trust and recommendation of all types of health professionals. In any given month, there might be 20,000 or 30,000 health professionals in Australia alone recommending one of our products in a medical clinic, in a pharmacy, in a practitioner clinic, and/or a health food setting as well, more recently. We're able to maintain a strong gross margin.
Traditionally, in the VMS or the vitamin mineral supplement model, with the push model, as the business scales, the margin erodes and the price erodes as well. Biome's been able to maintain our retail price, our gross margin, and keep that premiumized element where we are pulling the patient into the pharmacy to get the product, rather than making it too easy. This does generate higher loyalty. It does generate higher repeat purchase as well. We do have data from TerryWhite Chemmart's reward database showing that the average customer is buying 2.5 boxes of our product. Those are monthly boxes per transaction, and are returning to visit more than six times a year.
That is the average customer buying more than 12 boxes every 12 months, which is incredible data to show that the business model really works, and that it is a very long-term approach that will not erode with time. This explains a little bit further that, as we say, the practitioner flywheel, so the trusted recommendation. If I think back to the time when my wife was pregnant, those late nights where there might have been a migraine, and you run to the pharmacy at 11:00 P.M. to get some paracetamol or ibuprofen, run into the pharmacist and ask: "Can I please get this?" You know that the generic is on the shelf for 80% less than the premium brands, but the pharmacist will recommend it. You buy it without even thinking.
That premium and quality recommendation that is offered by a health professional does lead to the right product getting in the right hand, but also the trust that then is passed on to Biome and our brands, Activated Probiotics and Activated Therapeutics. Lauren?
Thank you. The business has now achieved a rolling 12-month sales revenue of AUD 22 million, with an increase in proportion flowing through to earnings as we scale, as we've discussed. This chart really just depicts that trending growth on a quarterly basis. As you can see in Q2, we have sales of AUD 6.45 million, up 41% on the same previous comparable period, representing an annualized run rate of AUD 25.8 million. Okay. This slide is really just talking about how Biome has grown its Australian distribution from 100 distribution points back in 2019, to now an impressive over 7,000, as we present to you today, on a total addressable distribution market for Biome in Australia, locally of approximately 12,000.
The chart to the right illustrates the top-line sales growth on a rolling annual basis, and its correlation to growth across those distribution points. We expect to close the financial year with over 7,500 distribution points, which, looking at the chart, it would be a representation of about 25% on the FY 2025 result.
Thank you very much. The future of Biome as well looks very bright with our clinical pipeline and IP development strategies that we are working on predominantly at this stage on our Lactobacillus plantarum BMB18 strain. We did give a recent update to the market in January this year. We have now completed the discovery, identification, and quantification. We've done the preclinical work, we've received ethics approval, and we've now commenced our first human clinical trial on the BMB18 strain. That strain, we'll be looking for patents for Biome as well, which is another incredible value add for Biome that previously we've leveraged clinical trials on borrowed or long-term exclusive IP. We've developed our own products that we own, which are the core part of our volume in our sales channel.
Now we are setting up for BMB18 to be a long-term competitive advantage, protection for the business against any future competition, an opportunity to continually develop new products with our unique strain, but also there is the opportunity for licensing that strain out as well. The strain is now registered with the DSMZ Strain Bank in Germany. We are working through the program with the first clinical trial, and we'll give an update as we continue to work on this with outcomes, but also the status of any patents around the strain BMB18. This is just a little bit of a background on the initial in vitro study, which was incredibly strong. It was a successful outcome for Biome for our first strain. The BMB18 strain got results in the in vitro study.
It displayed strong characteristics to be able to modulate the immune system, reduce oxidative stress, and improve the gut barrier integrity. Why are all of those the key things important? They are the foundation for a lot of disease and also the foundation for the way to prevent disease as well. If you've heard of the term leaky gut, which is a big foundation of a lot of microbiome and gastrointestinal research, this is the idea that inflammation is starting in the body via intestinal hyperpermeability, also known as leaky gut. Showing that this strain is able to thicken the intestinal mucosa, sorry, it's a tongue twister, and improve that gut barrier integrity, is a critical proving point to show that BMB18 will be a very strong probiotic strain in human clinical research.
Over here you can see a bit of a summary of the first clinical trial as well. It's a randomised controlled trial. We have 240 patients across two dosage levels and placebo, so it's a significant size clinical trial run with La Trobe University and now underway. You can see that the cost of the study is very manageable for Biome as well, which was all pre-budgeted in our long-term R&D budget. It is not significant. We've done a great job of negotiating with the university to make sure that they're contributing significantly with goods in kind, being that we are bringing them breakthrough research in new IP in the probiotic and gut microbiome world. The international markets for Biome. We believe we're well on the journey to proving our scale.
The Australian market, I think everyone will agree, we're doing very well and continuing to grow at a rapid rate. Top to bottom, Canada, which is only 15 months old, we started with a trial with Ecotrend Ecologics, our bricks and mortar practitioner distribution partner, who's also supporting in a smaller way with pharmacy and the health food channel. We launched back in September 2024, have had very strong initial results as well. Much so that we've decided to launch into Fullscript, which is North America's largest practitioner distributor. They essentially operate on a telehealth model, where they're sending a script through to a patient, allowing an online purchase, however, in a protected professional environment, which leans into Biome's strength as practitioner only.
Biome now has three territory managers in Ontario, British Columbia, and Quebec, so Vancouver, Toronto, and Montreal, and that is giving us complete coverage at the moment over the key markets that we're focused on. We'll continue to look at where there could be an opportunity to grow that sales team as the sales continue to prove up in Canada. Ireland and the U.K., the key update in half one, FY 2026, was the launch with Uniphar and Uniphar retail pharmacies in Ireland. I'm pleased to note we've just been given another batch of stores from Uniphar in the last two weeks, and are looking to have a very strong result in the Irish market for half H2 FY 2026, and we're continuing to grow the British business, the U.K. business as well, with our direct supply to health food stores and pharmacy.
The New Zealand market also had a good update in the first half, with Biome launching into the ProPharma Group, which is EBOS, the sister company to Symbion in Australia, one of our largest pharmacy distributors in Australia. We've completed a deal and launch with Green Cross Health, who have two of the largest pharmacy chains in New Zealand, and are now operating both in the practitioner channel and the pharmacy channel. At that point, I'd be quite happy to hand over to questions. Douglas and Eloise, if you could start handing them over. The first one is the perfect topic. It's in line with international and Australian sales. The question is: Can you give some indication of the regional breakdown of your sales? How much revenue arose outside of ANZ, and how does this compare with PCP?
We reported at the end of FY 2025, international sales were roughly 7.5% of total. The goal is to have it over 10% sooner than later. However, we have not reported in the half, so we can't give out new information on the webinar, but do expect a significant update at the end of the financial year. The goal long term is to have three core markets: Australia, Europe, and North America, of equal sizes. It will take some time to do that, but the results we are seeing in these core markets, certainly Canada, and the growth Canada's achieving, we are seeing growth well above the level of the Australian business. For now, that's the most I can share on that. Are there Australian manufacturing options being evaluated currently for the probiotic range and/or other products?
Yes, this is part of the Vision 27, three-year strategic plan, onshoring manufacturing in Australia. While I can't talk about anything confidential, what I can say is we are assessing a number of viable options for contract or toll manufacturers in the Australian market. There is a lot of bidding going on for our business, being that we now have the largest volume of any probiotic brand in Australia, outside a couple of majors that are doing their own manufacturing. We are at the top of the list for anyone doing probiotic manufacturing, and I'm pleased to say there's been a major investment in the last three or four years by Australian GMP manufacturers to be able to support the probiotic industry as it is the highest growth part of all complementary medicines.
Do expect to see an update in a plan for Biome to move its products into Australia. I can't give an exact date, because we do have purchase orders already running in Italy for of roughly six months time from now. We will give an update sooner than later, but yes, that project is moving ahead. That does remind me, we had another question on that as well, is the cost associated and the availability of all of our IP. All of Biome's partners have been happy to transfer our product from finished goods to semi-finished or raw strains, allowing all the current IP that we either own or have access to either transfer to Australian manufacturing, and the cost involved in that is next to nothing.
It's setting up a new manufacturer who will bear their own setup costs, we'll just have an equivalent fixed price per unit on our manufacturing as well. Really, the cost is time and energy for the team to transfer and to set up all the new regulatory approvals, but not a significant cost. Of the 12,000 Australian outlets, what percentage is Chemist Warehouse? How likely is it that Biome will become a supplier to Chemist Warehouse? Of the 12,000 outlets, 6,000 of those are pharmacies. There are 300 or 400 health food stores, there are honestly more than 10,000, 12,000 practitioners, we only identify about 5,000 of those as meaningful practitioners with significant clinics. Chemist Warehouse is only 450 to 500 pharmacies out of the 600.
While they're very significant in revenue terms, even though they're only roughly 10% of the market, they are over-indexed in the vitamin industry. However, what I am really pleased to share further is the professional or practitioner in this space is not an area that they're particularly strong in, because that does require highly educated staff and a business model that is about supporting health outcomes. Chemist Warehouse is a tremendous business, but I would argue they're not in the industry of health, they're in the industry of retail with a pharmacy supporting that business. Will Biome be in there one day? We'll never say never to any part of the market.
We don't know what could change in the future, the fact that we've positioned ourselves as the number two in total revenue in the market without being in Chemist Warehouse, and the profitability of the channels we're in, which are much more profitable than being in Chemist Warehouse as well, bodes well for our long-term business strategy, excuse me, of working with community pharmacy over the deep discounters. I have heard anecdotally from a number of brands that they are not making any margin working within that model, and being forced into things like 50% discounts is not something that Biome would look to support ever. You've reported 40% annual growth over the last 1.5 years of the three-year Vision 27 plan. If this continues, you'll achieve over three years, AUD 80 million in cumulative sales. How likely is this?
For those that have followed Biome for a long time, you all know that we have never missed a number. We're very proud to put out a three-year plan, which is very unusual on the ASX, but we wanted to show the confidence we have in our business as we continue to scale. We believe very firmly that we're on track for the Vision 27 targets, and as we continue to grow, we're now halfway through that period, 18 months through the 36 months. We are absolutely on track from a distribution perspective, from a research and IP perspective, from a manufacturing perspective, and from a revenue perspective. Many retail brands have increased retail prices in the last 18 months. Has Biome increased its prices? Something that we're very proud of in Biome is our values and our focus on improving patient outcomes.
While we are a commercial business and we have experienced incredible growth, something that's been very important to me as well is making sure that we can keep our products accessible to patients. We all know the last four or five years have been incredibly tough on the community, and we're really proud to say that we have not increased our prices once for retail consumers or patients in the Australian market. The products that we launched with in November 2019 with Activated Probiotics are still the prices we have today. We've managed to also improve our gross margin through that period, and you'd ask, how have we done that? I suppose we've been able to negotiate improved terms with our supply partners. We've been able to optimize our logistics and supply chain.
This isn't to say that prices won't be raised at some point in the future, but for the time, we've managed to grow our margin and not increase our prices. I'd say this has also given us a further competitive advantage when other products or brands in the market have put their prices up, I'd say every second year over the last six years. Not sure if we have any other questions. There's one for you, Lauren.
You reduced borrowings by AUD 1.4 million in the half and generated AUD 2.1 million or AUD 2.15 million in operating cash flow. For a growth company, how do you think about the right capital structure? Does that current trajectory support continued debt reduction while funding international expansion? It's a great result. We've been able to demonstrate financial discipline, and that the NAB facility that we have in place across trade financing and invoice financing, AUD 5 million, is completely manageable. To reinforce that, we're not going to dilute shareholders to fund growth. Just being really targeted.
We haven't done a capital raise since the IPO, so almost five years. One final question I have on the marketing, on the marketing line as well, or marketing, distribution, and sales line. On the marketing, distribution, and sales line as well. There was a comment that we are spending significantly more than people think we should on marketing, but part of being a small, growing company is we also are working to improve our cost centers and our financial reporting as well. What I'm pleased to share is the breakdown of sales, marketing, and distribution, and also show that Biome is actually only spending 7.5% of our sales revenue on actual marketing and promotion. That is incredibly AUD 1,000 on promotions and marketing.
The rest of that AUD 4.7 million that was reported for the half in marketing, sales, and distribution, a bulk of that was staffing, so human resources, sales activity, and a fixed distribution cost that grows as we scale. The most important point to note on that is half one FY 2025, we spent 6.3% on marketing based on our total sales. Half one FY 2026, AUD 930,000, or 7.5%. It is a very lean marketing model. We are able to achieve our results based on the research and based on the education, and in future periods, Lauren and I have already discussed the opportunity to break out some of those costs to give more visibility to the market and investors, and actually champion how well we are doing without spending significantly in that area.
Absolutely. I think there's a real opportunity there to revisit just how we disclose, and, yeah, make sure that it is actually conveying, the true story of how the business is operating.
Time for one more question. I have one here on the international markets, predominantly focused around the Fullscript launch. Fullscript, I mentioned earlier, is the largest practitioner distributor within the North American market, so Canada and the U.S.A. We launched initially just in Canada, just to be very clear, but they are the number one distributor for that market. We see a significant upside moving to a joint model with Eco-Trend for traditional wholesale distribution and also Fullscript with that digital health model. It does also open the door to the potential to test the waters in other parts of North America.
While we have not announced a U.S.A strategy, and we'll be very careful before making any moves south of the border, we will have opportunities and partnerships in there in future periods, and we have been clear that the 10-year plan will be North America-centric as well. Thank you, Lauren. Thank you for everyone joining today. Appreciate the questions as well. Hope we were able to add some value by answering those. The webinar has been recorded, so we will review it and aim to distribute it in the coming days. Thank you all for your ongoing support. We will speak to you soon.