Where Do I See OBJ Going In 2012?

Out of all of the stocks I hold OBJ is perhaps the hardest one to predict as it operates in the bio-tech sector timeframes and achievements are largely affected by the regulatory process as well as the speed at which our partners wish to work.

As a result it is hard to state specific achievements that I will be keeping an eye out for. But in a general sense I would like to see the following:

1.    Continued improvement in discussions with each of our partners. This will be achieved with the signing of new development agreements, collaborative agreements and other initiatives that highlight to me that the company is moving forward and making progress.

2.    Continued strong management of the company’s finances and remaining cash. If there is one thing that OBJ does well it is minimising cash burn. I will obviously be following this closing in 2012 as any increase in cash burn could signify that a capital raising many be needed. As you may recall the company’s decision to move ahead with their own product development raised my concern over this issue a couple of months back.

3.    The securing of the all-important first agreement. At the recent AGM the management team indicated that they are confident of securing at least one agreement this year. If you look at the graphs provided in the presentation a number of our partners are also getting close to the prototype and product development phase where positive news must be forthcoming (if an agreement is reached to produce the product).

4.    Any new agreements of partners that come on board. The recent AGM presentation highlighted a new FMCG (Global) that we were unaware of. Currently OBJ has five irons in the fire (FMCG UK, FMCG USA, FMCG International, GSK and their internal program) the more partners we sign up the greater potential that one of them will take our technology to market.

Overall OBJ remains a speculative stock. The value of the business remains in its ability to turn one of these partnerships into a revenue generating relationship. The potential returns of doing so far outweigh the risk of holding by such a huge margin that I remain confident and comfortable holding this stock as part of my portfolio.