BioGaia develops, markets and sells probiotic products. Probiotics are useful bacteria that have documented positive health effects in the body. The applications for BioGaia products are mainly in gastrointestinal, oral and immune health and the products are available in a variety of different types of bottles. Sales are mainly through distribution partners in pharmacies worldwide. The company has two business areas: Pediatrics and Adult Health.
We believe that BioGaia will benefit from the solid underlying market growth (7-9% annually) in the probiotics market and develop products in several different indications. We see opportunity for BioGaia to continue to deliver high sales growth by improving its market position. In addition, BioGaia can take care of the opportunities to develop drugs based on probiotics.
We note a number of risks factors for BioGaia, including market risk, partnership risk, competition, legal and regulatory risk, product development risk and currency and macroeconomic risk. From a short-term perspective there is a risk of destocking effect in some markets.