OptiBiotix Health PLC (LON: OPTI) has announced an agreement with a US company for the use of its cholesterol reducing Lactobacillus plantarum strain as a pharmaceutical drug product. The US company has requested its identity and terms of the agreement to remain confidential.

The life sciences company, OptiBiotix Health, develops compounds to combat obesity, high cholesterol and diabetes.

OptiBiotix will offer the US company an exclusive licence. In return, the US company must take responsibility for all development, preclinical and human clinical testing, regulatory filings and approvals, product manufacture, marketing and product sales in the US Therapeutics market. However, OptiBiotix will be responsible for the manufacture of its Lactobacillus plantarum strain to pharmaceutical drug standards.

OptiBiotix is set to receive a six figure payment from the US company upon signing the agreement. Additionally, OptiBiotix will receive two subsequent amounts totalling a seven-figure sum. This will be followed by an additional six-figure sum on product launch.

CEO of OptiBiotix, Stephen O’Hara, said: “We are pleased to announce this agreement which extends the opportunities provided by OptiBiotix’s cholesterol reducing Lactobacillus plantarum strain into the high value pharmaceutical drug market.

“The agreement allows our US partner to develop our strain as a pharmaceutical drug product in return for upfront, development and product launch milestones payments, plus royalties on future product sales. This is a substantive investment by our US partner which recognises the potential of our strain and the scale of the opportunity in one of the largest and fastest growing markets around the world.”