RE: What you got?30 Dec 2023 09:37
Elric, one thing you, Tom and Thomas all have in common is your assumption that sufficient revenues will be generated from the Croda deal early 2024, or at least in time to ensure that no further fundraises will be necessary to keep the lights on, and that may not be the case.
Put yourselves in Stuart’s shoe and cast your minds back to the 2021 Results RNS when the following commentary was given which would have been based on the information provided by Croda. “During the course of the year Sederma updated SkinBioTherapeutics that it had made significant progress against the key collaboration milestones. Lysate production had been optimised and analytical sample screening and formulation work had been completed. Manufacturing scale-up from 1 litre to 600 litres had been completed successfully and with the formal handover of the project from Sederma in Paris to Croda's manufacturing facility at Ditton, near Widnes, the final scale-up to 20,000 litres is now being progressed. This is the capacity required to mass produce the SkinBiotix® product at industrial levels to market to Sederma's portfolio of 12,000+ global cosmetic customers.
Throughout this collaboration, Sederma has identified additional potential scientific and marketing claims for the end ingredient. The eventual claims will be an important component of the launch and long-term commercial success of the ingredient. To this end, Sederma is continuing its lab work to further substantiate these additional potential claims. This work is not impacting the manufacturing scale-up. The Group continues to anticipate 2022 as the period for initial royalty revenues.”
Well 2022 has come and gone as has 2023 and far from the substantiation of additional claims impacting the manufacturing scale-up and subsequent commercialisation, the opposite has been true. So unsurprisingly, Stuart at the tail end of 2022 when it became apparent that Croda revenues would not be forthcoming within the timelines provided by Croda, decided to embark on an acquisition route to put pressure on Commercial Partners to deliver, whilst at the same time ensuring the Company could generate sufficient income and profit without the Croda revenue to prevent the need for further firefighting fundraises.
Hopefully, Croda will deliver on their forecasts this time and early revenues will find their way into Skinbio coffers, but if that does not happen and Stuart had passively done nothing to mitigate against this risk then shareholders would rightly be calling for his head. The nature of the early acquisitions proposed, a manufacturer and one with established front end sales outlets, provide an exciting opportunity to grow Skin through cross selling current/soon to be current products such as axisbiotix for psoriasis and acne, whilst enabling the new skinbiotix lysate, supplied at cost by Croda, and the brand promoted by their marketing team, to be quickly incorporated into the established products from the acquisition
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