The latest Investing Matters Podcast episode with Inclusive Asset Management's Alexandra McGuigan has just been released. Listen here.
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What I got was that people are expected to pay £25 a month for a test that gives them some details about their skin 'biome', which can then be passed to their beautician. The implication is that it will somehow make them look better.
But isn't that what dermatologists do if that's a service they actually need?
Wouldn't this customer demographic be more inclined to put the extra £25/month into designer label makeup?
Chanel lipstick, Dior foundation or some analytical data which may or may not be useful? I think I know what most people would be more inclined to pay for.
HelloSanDiego, You've completely missed the value of Skin Trust Club data.
See my DVRG research at https://discord.gg/frd55mTvaA, here's a bit about the indirect benefits/revenue from the mirobiome data Skin Trust Club will generate:
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I believe the real value is in the microbiome data and virtual clinical trials for Labskin corporate customers.
Clinical trials are damn expensive, skincare companies can no longer rely on relatively inexpensive animal testing, many countries have/are banning it and rightly so, we shouldn't be testing cosmetics on animals!
With Labskin AI backed data they can run virtual clinical trials, I'm estimating (educated guess) each virtual test subject will be worth around £500 per test. The margin on this revenue will be HIGH, VERY HIGH.
I also expect different microbiomes profiles will fetch different £ values. I'm estimating the average test subject will be worth £500, Labskin have no serious competition here, so they can set the price.
Consider a skincare company which wants to test a product on normal skin, there's going to be a lot of users with normal skin, so Labskin will have lots of normal skin microbiomes. Now compare that to a company testing a product which treats Psoriasis, Eczema, Rosacea... Labskin will have less microbiomes with that profile, they could fetch a higher value.
As Skin Trust Club grows its user base, the Labskin database gets larger with many more types of skin types and microbiomes. They already have the largest microbiome database in the world, this adds to their data pool: their moat gets deeper and deeper overtime protecting their position.
So where it takes 3,333 users to generate £1m in direct revenue a year, those same 3,333 users could generate a further £1.67m a year if each microbiome sample is used in ONE virtual clinical trial at a cost of £500 per virtual sample.
To gain useful data a skincare company will want a decent amount of virtual test subjects, 1,000 per virtual clinical test probably won't be unusual. A single virtual clinical trial could generate DVRG £500,000 in high margin revenue. These are not one off revenue amounts, the same 1,000 virtual test subjects could be used in dozens of clinical trials over a long-period of time.
It's impossible to estimate how much value there is here, but the fact DVRG have ramped up labspace and people so they can offer the Skin Trust Club service strongly suggests they are expecting to make huge revenue gains here. They already work with 18 of the top 20 skincare businesses and Labskin have no serious competition, they can set the price high because the alternative is pay a lot more for clinical trials with real people and wait weeks/months for the results.
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I wrote the above before we knew they planned to be able to test 60,000 skin swabs a month over 3 continents by the end of 2022. This has the potential to generate £100m+ in revenue a year.
HelloSanDiego - best you watch the AGM Presentation and research for the full answer - or just accept YES from me ...
Does Skin Trust Club actually offer the customer anything useful, or is that question just being swept under the rug?
I worry that its main purpose is just to distract shareholders from the unfullfilled promises we were given about the breathalyser last September.
PART 3
4. Skin Trust Club
I have always been sceptical regarding the level of potential for this part of the portfolio but I have to say the pure enthusiasm and confidence of both Fionan Murray and Gerard Brandon is contagious and they are certainly putting our money where their mouth is.
.The SKT Android App to be launched by the end of August
.Announcement of a major marketing/Brand partner to be announced imminently with a view to build SKT into a global brand
. A major marketing initiative to be launched Sept/Oct
. Lab space by Sept/Oct will be geared up to 20,000 test kits capacity per month
.Launching the SKT Apps into us and China by mid 2022 and along with existing partners in US and china territories gearing up for a further 20,000 test kits per month
.Clients for test kits are B2C direct sales, small B2B (pharmacies, Dermatologists, beauticians etc) and large B2B (large cosmetics companies many of which are existing clients of Labskin) G Brandon has hinted on more than one occasion of the test kits being available in US drugstores so time will tell if that is just hot air or not
The additional AI data collected visa SKT is proving even invaluable for the Labskin clients services
For me if only a fraction comes to fruition the SP will be far above the current targets in the near/medium term and if most of it comes off in the med/long term the sky is the limit – you pays your money and takes your choice
PART 2
3.Microtox BT
I try to be relatively level headed and not look through rose tinted glasses. So for me Mictotox BT development timescale is a disappointment. In the medium term this has the potential to literally be a game changer, but there are clearly delays in the development procedure and expectations created by G Brandon are not being fulfilled. I felt he whaffled a bit on this subject.
Having said that the science that has been proven in PD is exactly the same as that for BT. The breathaliser science (PBM Hale) is proven to work. The ongoing challenge is to develop that into a marketable and cost effective personal medical device which requires far more hoops to jump.
Now that we appear to be coming out of the covid pandemic and knowing that the Microtox BT has the potential of detecting over 40 other pathogens, and the fact that they are now working on the multi chip develoment, I do wonder if the emphasis is moving away from a ‘Covid test’ alone as in reality they have probably missed the boat and now looking more towards the other more long term applications.
A large emphasis was made on the multi chip development and how this would be utilised in the Microtox BT. The overall impression was that the target for Microtox BT was now more for the medical profession ie GPs which could revolutionize the referral process. Imagine a scenario where a simple breath test at GP level can eliminate several different possible ailments without the need to taking blood samples and sending off for testing.
Having said that talk of the cruise industry was again discussed so there is clearly some negotiations going on in that sphere.
All in all Microtox BT remains one of the most exciting prospects in the portfolio with the potential to be a real game changer but is going to take a longer time to develop than would have been hoped for. The latest snippet from Dr Moschos on 23rd July clearly shows the development is ongoing.
So we are off measuring particle sizes at the various places of the device under various conditions using a @particlesplus 8506 6 channel counter kindly loaned to @AnilNamdeoNCLwho is helping us here. We should have these results soon- again we're checking every i and t.
It is worth keeping an eye on Dr moschos twitter as he is quite active.
PART 1 -
Most informative post I have read, reproduced to help prospective investors.
I have now reviewed the recent presentation in depth and thought I would post a synopsis of my views and thoughts for what they are worth. I haven't bothered to proof read so apologies for grammar/spelling etc
1. Microtox PD
Following on from the RNS confirming the technology not only works but is amazingly accurate multiple sites have been retrofitted and are deployed and working. There are over 3000 existing units in over 60 territories worldwide so we don’t know exactly how many have been fitted but they stated that they are currently receiving real-time Covid test results every 15 mins.
The plan now being implemented is to scale this production up to deploy to the new customers and they are currently in the process of developing stand alone microtox BT unit that is far more cost effective and scalable. This makes absolute sense to me. Current Mictrotrace units that can be retro-fitted can cost £50k so to produce a far more cost effective smaller unit is the route to MASS PRODU TION and large scale take up.
When there were numerous comments on this board about contracts I made my views clear that nothing should be expected probably this year on that front, and they have now confirmed that this scale up operation is planned over the next 12 months.
The categorically confirmed that they were in discussions with public health agencies and at government level regarding this scale up which for me again makes perfect sense as governments will be looking for cost effective options.
EXPECTATIONS WERE THE DEPLOYMENT OF 200 MICROTOX MONITORING UNITS PER MONTH BY MID 2022. This is huge.
Pure speculation but to produce a unit for say £10k each would produce £24m in revenue plus the recurring reagents sales.
One very exciting development is that they are now working on a multi-chip to detect numerous pathogens. This could have huge implications for both Mictotox PD and BT. For the PD units it means that the installed units could be looking for several pandemic potential viruses, helping to make sure this damn thing doesn’t happen again.
2. China Resources
For me this is the most exciting issue in the short term. Following the heads of terms RNS the scope of the original draft have been extended and the proposed timescale has over-run. From personal experience in selling companies this is no surprise. I know there will be those here that think there are problems, and possibly there are, but I have never has a HoT timescale come in on time, and although I have dealt in multi-millions china Resources are on a wholly new level. For me I saw no hint of concern from the directors in fact they were more than confident that this was coming soon. I don’t see the point in going on about the potential here except to re-affirm that you are basically in partnership with the state of china who have committed to invest over £18 billion into waste water over the next f