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Deepverge

Monday, 12th April 2021 07:16 - by Moosh

I have been invested in Deepverge (LSE:DVRG), formerly Integumen, since November 2019. I was initially drawn to it because the company’s primary revenue driver was from its Labskin services. Labskin is a living human skin equivalent which can be used for a variety of tests in the laboratory for cosmetics and pharmaceuticals in healthy or diseased skin models, and my curiousity first piqued when Labskin was being developed by Evocutis a few years ago. With more countries banning the testing of skin products in animals, Labskin provides the perfect opportunity for a smooth transfer of testing protocols to in vitro conditions. It’s a great example of the right product being market ready at the right time.

Fast forwarding to current times, Labskin has come on leaps and bounds, especially with the recent launch of its Skin Trust Club app, which allows users to send off a swab sample from their skin to be analysed by the folks at Labskin HQ in order to determine the individuals unique skin microbiome, and with the help of a vast databank of research results, artificial intelligence (AI) algorithms will pull out the preferred products suitable for the individual’s skin microbiome and local environment. Personalized therapy is the way of the future in the world of pharmaceuticals and Labskin is a forerunner in the world of skincare. It will be interesting to see the story of Skin Trust Club unfold, especially with the prospect of market expansion across the globe. Revenue initially comes from Skin Trust Club clients, but the collective data from them will add to the growing databank which can then be sold to companies for their own research needs. It’s a win win win situation for consumers, Deepverge, and cosmetic/pharmaceutical companies.

I consider DVRG to be a defensive stock as revenue generation from its core Labskin business should underpin the fundamental story. Add-on revenue from its Modern Water arm should also begin to have greater impact year on year, especially with newer features being included to the Microtox range including use of AI to identify contaminants, as well as monitoring for a wider range of pathogens in the waste and water cycle, including but not limited to, the coronavirus.

It has been a while since I last posted on my blog so I will keep this one concise for now and I look forward to more developments from DVRG as the year progresses

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.

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