Release Date: December 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SkinBioTherapeutics PLC (LSE:SBTX, Financial) reported a significant increase in revenue for the year, reaching £1.2 million, largely due to the acquisition of Derma Tonis.
- The company has successfully integrated two acquisitions, Derma Tonis and Biotech Solutions, which are expected to enhance manufacturing capabilities and expand product offerings.
- The partnership with Croda PLC has progressed to commercialization, with expectations of revenue generation before the end of the calendar year.
- Sales of Axis Biotics PS for psoriasis have doubled year-on-year, and the company is preparing for the launch of an acne product following successful consumer studies.
- SkinBioTherapeutics PLC has extended its cash runway through to summer 2026, reducing the need for additional fundraising for working capital.
Negative Points
- The company reported a consolidated EBITDA loss of £800,000, reflecting integration and acquisition costs.
- There are concerns about the gradual nature of revenue generation from the Croda partnership, with some investors focusing on the term 'gradual' as a potential negative.
- The use of a convertible loan note for the acquisition of Derma Tonis was criticized for being dilutive and aggressive.
- Gross margins have declined due to the mix of products and geographies, with some regions achieving lower margins.
- The company faces challenges in manufacturing a gum product for its acne treatment, which could delay its launch.
Q & A Highlights
Q: Can you provide details on the tiered royalties from Croda and any client feedback?
A: Stuart Ashman, CEO, stated that due to a strict confidentiality agreement, he cannot disclose specific details about the tiered royalties or client feedback. However, he mentioned that the royalties are double-digit percentages based on global sales, and the tiered aspect is not significant enough to impact the overall agreement.
Q: Will the company be cash flow positive in the interim results?
A: Manprit Randhawa, CFO, clarified that the company expects to be cash flow positive from FY25 onwards. The interim results will not reflect this, but the company anticipates a stronger cash position by the end of June 2024.
Q: When is the loan to David Briarwood expected to be repaid?
A: Stuart Ashman, CEO, explained that the loan is interest-free for the first two years, and the company plans to repay it as soon as cash flow permits, particularly with the expected revenues from Croda.
Q: Will future acquisitions be funded through group cash or debt to avoid dilution?
A: Stuart Ashman, CEO, assured that the company is not planning any acquisitions in the near term that would require dilution. Future acquisitions will be considered carefully, and the company aims to avoid unnecessary dilution.
Q: Could the company's wound healing products have applications in the veterinary sector?
A: Stuart Ashman, CEO, mentioned that Biotech Solutions has expertise in this area, and discussions are ongoing with existing customers to explore potential applications in the veterinary sector.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
