BLT - Blis Technologies

[emearg]

Emearg - glad your bowels are good.

Thanks for the kind thought Cannibal but I never said my bowels are good I just said my movements hadn't changed...

Not sure if this is old or not -

In response to the growing demand for an effective breath-freshening solution, Frutarom, the exclusive marketer of BLIS K12T, a new oral cavity probiotic bacteria, released study results showing BLIS K12 can effectively treat bad breath. In 2007, Americans spent nearly $6.7 billion on mouth-freshening products, according to the market-research firm Euromonitor International.

Here is Frutarom full press release which was released back in March:

Probiotic Bacteria BLIS K12 Supports the Maintenance of Fresh Breath
2009-03-02 - Frutarom USA Inc.

In response to the growing demand for an effective breath-freshening solution, Frutarom Inc., USA, the exclusive marketer of BLIS K12, a new oral cavity probiotic bacteria, released study results showing BLIS K12 can effectively manage bad breath. In 2007, Americans spent nearly $6.7 billion on mouth-freshening products, according to the market-research firm Euromonitor International.

“BLIS K12 is an oral cavity probiotic with multiple functions, including helping to maintain a healthy ear, nose and throat plus maintaining immune function,” notes Laurent Leduc, VP Health Division for Frutarom. “The research on bad breath explores one of it’s many interesting activities.”

Most cases of bad breath are the result of protein breakdown by odor-causing bacteria thriving on the tongue. Bacterial by-products of this protein breakdown include foul-smelling gases which make the breath unpleasant. Good oral care, such as brushing and flossing every day, can help prevent bad breath by removing food debris and other sources of protein for these bacteria. However, for many people with chronic bad breath or on high protein diet, these steps alone do not provide a satisfactory solution.

“It’s all about bacterial balance,” explains Jocelyn Mathern, M.S., R.D., Technical Health Specialist for Frutarom USA. “ BLIS K12 can inhibit odor-causing bacteria and contribute to long-term fresh breath, rather than just masking bad breath, like most oral hygiene products do.”

Research conducted by scientists at the BLIS Technologies Center for Innovation, University of Otago, Dunedin, New Zealand, found that administration of BLIS K12 after an oral antimicrobial mouthwash reduced volatile sulfur compound levels in the mouths of individuals suffering from chronic bad breath. The outcome of this study indicates the replacement of bacteria causing bad breath by colonization with competitive bacteria, such as BLIS K12, could prove an effective strategy to reduce the severity of bad breath.

BLIS K12 was designed specifically to protect the entire oral cavity and is clinically shown to reduce the incidence of sore throat while boosting the immune system. It can be used in many applications and in combination with other probiotics.

Contact:
Laurent Leduc
VP US Health Division and US Marketing
Frutarom USA Inc
E-mail: lleduc@us.frutarom.com www.frutarom.com
Tel: (952) 920-7700

About Frutarom
Established in 1933, Frutarom is a rapidly growing global flavor and fine ingredients company. Frutarom develops, manufactures and markets an extensive variety of high quality flavors and natural fine ingredients for customers in the food, beverage, flavor, fragrance, pharmaceutical, nutraceutical and cosmetic industries. Frutarom's 20,000 products are sold to more than 10,000 customers in 120 countries around the world. The Frutarom Group has 1,500 employees worldwide and manufacturing facilities in Europe, North America, Israel and Asia.
Frutarom operates through two divisions.

Frutarom provides tasty and healthy solutions to its customers fulfilling our vision: To be the Preferred Partner for Tasty and Healthy Success.

Frutarom Industries Ltd. is a public company whose stock is listed on the Tel Aviv and London Stock Exchanges. As of January 1, 2003 Frutarom has been included in the Tel Aviv 100 Index.

Let me write that out for you - US$6,700,000,000 per annum on mouth freshening.

Now a mere 1% slice of that market would be...

Yup, it is a huge market and with our new Marketing department at Frutarom on the job it looks likely Blis will start earning some revenue from it this financial year.

1% is 67 million (US$)!!

I can't see that level of market penetration being achieved quickly, but 0.1% might be achievable in the next couple of years? Yet again I am happy to have my expectations exceeded...

And as annouced at the AGM, Blis had been granted a US patent for it's BLIS K12 probiotic for the treatment of halitosis. Here are Barry's words:
“We have been waiting a long time for the US patent office to grant us this property right around BLIS K12 and halitosis. This means that we have a clear advantage in the world’s largest market for those keenly interested in maintaining fresh breath and good oral hygiene”.

[simla]

Emearg, I thought about your question on PE etc for the next couple of years, now that things are finally moving. It's a fair question.

On the technical front, the prefs are three years away, and it seems unlikely to me that people will factor that in much for a couple of years yet in valuations. So I think probably the 138 million will be the relevant figure for a couple of years, and then there will be an awkward transition to include the preference shares. As for PE, I would have a guess at 15. 10 or less would be bearish, which seems unlikely to attach to Blis at present. I'd cheerfully go for 20 to 30 if we were in a full on bull market, but life's too gloomy for that, I'd have said.

But having said that, I'm not sure that it's going to matter. Psychology may dominate pricing for a couple of years or more, leaving technicals in the dust. We are already seeing that now, with the price going up because of the shortage of supply versus the demand. We think we know that Blis' revenues could increase dramatically, though we don't know the time scale. If the half year and full year results are as heartening as I would expect, then Blis could reach "must have" status in the wider market within a year, if not much sooner. But Blis shares are fairly tightly held, so the price could do anything. If Blis kept releasing ever better results every 6 months, that mania could go on for some time.

But never mind the technicals or the psychology, because there's a third factor: Blis' actual results. The Blis price might reach three times what the current news justifies, and yet still Blis could announce a result even better than that. Blis has a very large number of irons in the fire, and many of them could be very big irons. For the next two or three years, it is hardly impossible that any given announcement will have double or triple the income of the previous announcement. Indeed, in the shorter term it could even be as much as six or seven times if several irons paid off at the same time. Too, we know that Blis often have another iron or two hidden off stage. M18's release was one of those. As another example, India (pop 1.21b) hasn't been mentioned for a while. Yoghurt. Food. Toothpaste. And we've just been talking how a small part of the US fresh breath market would be big. Equally, of course, results could be relatively disappointing at any given time too.

Put all that together, and I have a gut feeling that the Blis share price is just going to go up and keep going up to a fairly high level before taking a breather. How long will that take? Will that be 30 cents, or 60 cents or $2? Who knows. Would the "breather" be a 70% downward correction, or just a gentle pause? Will it then go up again? All this we do not know. But behind it all I believe will be the "must have" status that I suspect will soon attach to Blis, and the knowledge that a seemingly wild price may turn out to be quite justified by the next results. And if psychology does become dominant like that, ups and downs will be heavily exaggerated, and movements in world sharemarkets will become a fact of life in Blis valuations.

If things do turn out this way - and this is obviously very much just a guess about the future - it will be very trying for shareholders. Valuations could fluctuate wildly, testing nerves. Those who want to hold on will watch big downward movements with bated breath. Those choosing to sell out at "artificial highs" will risk losing out too - sell out at 30 cents, only to watch it soar to a dollar, for example.

In short, I think the technicals will be swamped by hot money in the not too distant future. Those wanting to sell out to the hot money will be happy, if they can pick the right moment. Those wanting to hang on, like me, might have to wait 3 or 4 years for things like PE to become relevant again. All of this, in my view, will be driven mainly by Blis' financial results being very open to big jumps during that time, while they find a stable market position.

All of the above is nothing but opinion, of course. Anything may happen. Perhaps Blis will still be selling at 9 cents in 3 years! Anyone else have ideas? Will Blis shares become a target for hot money?

[Cannibal]

Simla - I describe my self as an "Optimistic ingenue" but you leave me for dead on the optimism stakes!

"Will that be 30 cents, or 60 cents or $2?"

Two dollars = my retirement sorted!

[simla]

"Optimistic ingenue" AND "Cannibal"? Very subtle!

I seem to recall being called too optimistic before! Can't help it, the facts on Blis just look good to me. A turnover of $25 million might produce a profit of $15 million, which would price out at $1.63 on a PE of 15 on 138 million shares, I think.

Interesting to note that the rights issue papers for 8 November 2007 included the sentence "to achieve an annual turnover of more than $25M within the next 5 to 10 years" (p16). Of course, nobody could hold them to that, but apparently that was thought possible then. And things have moved along spectacularly well since then, no?

In passing, also interesting to note, on the same page, "to market products in the oral health care sector as well as in food applications, personal care applications, animal nutrition and health." Room for some more surprises yet, perhaps.

[emearg]

Funnily enough, even at $2, the market cap of the current ordinary shares would still be less than the market cap that Plus SMS reached backed in its day. And that was all based on hype and lies. Now their market cap is less than 1% of what it once was.

Madness may prevail...

[simla]

There's an underlying reality here. Blis has suddenly gone from one of a list of biotech startups that might succeed, to a genuinely profitable sustainable company. But that leaves wide open the question of how much it is worth. It will take at least 3 or 4 years to establish what size sales markets it might establish, and it will probably also take 3 or 4 years for the stock market to decide on a pricing regime for Blis. All of that will take trial and error and time, and could be dramatic anyway. The possibility I see on top of that is the hot money having a go at it in the meantime.

[emearg]

There's an underlying reality here. Blis has suddenly gone from one of a list of biotech startups that might succeed, to a genuinely profitable sustainable company.

Odd thing to say as they have yet to make a profit??!!?

[emearg]

The share price has doubled in the last 10 business days. What a difference an AGM can make...

[winner69]

simla and emearg - not each others alter ego are you

Keep the banter up anyway .... its good

[simla]

Funnily enough I was accused of being someone else only about 6 months ago. That was also because more than one of us was optimistic at the same time! That optimism has been proved justified, but only time will tell about this one.

More seriously, though, chip in with ideas. What DO you think the outlook is, whether for the company or the share price? The idea of this group is to gain knowledge and ideas by shared discussion.