Skinvisible, Inc. (OTC-BB: SKVI), a research & development company that has developed a patented group of polymers trademarked Invisicare, which bind active ingredients topically to the skin, may be able to help improve existing dermatology skincare products developed by companies like GlaxoSmithKline plc (NYSE: GSK) and PURE Bioscience (Nasdaq: PURE).
Skinvisible, Inc. (OTC-BB: SKVI) is a pharmaceutical company that has developed a patented group of polymers capable of binding active ingredients to the skin. The result is a formulation that offers improved binding to the skin, resistance to wash-off and even a controlled release of the active ingredients. Its formulated in-house products include a line of over 30 dermatology products to treat acne, anti-fungal, moisturizers, sunscreens and much more. While its efforts have been largely in-house to date, it is quickly moving on to bigger licensing opportunities.
Skinvisible’s Revenues Increased 103% in Q1
During the first quarter of 2010, Skinvisible reported increased revenues totaling $158,230, which is up 103% from Q1 2009, due primarily to increases in royalty income based on licensed product sales. Specifically, its “Safe 4 Hours” first aid antiseptic skin protectant product went for sale across the U.S. in Walgreens and other major retail pharmacy stores, generating over $90,000 in royalty income for the first quarter.
Currently, the company has seven products licensed in the US, Canada, Europe, China Turkey, and S. America, with more approvals on the way. For each product developed, the firm receives an up front license payment for the right to manufacture and sell in a particular country, plus ongoing royalties based on the licensees product sales that range from 5% to 12%. This creates recurring revenue streams and delivers substantial value to shareholders – license fees and royalties have no cost of goods attached to them. On July 13 & 20 the company announced the signing of 2 new license agreements for $1.5 million in up-front license fees (see www.skinvisible.com/press).
Skinvisible Helps Combat Generic Drugs
One of Skinvisible’s most compelling value propositions is its ability to beneficially modify existing formulations. As a result, pharmaceutical companies with patent-protected Rx skincare products that are about to expire can integrate the Invisicare technology to create a new patent-able formula that can be re-released under a “new and improved” formulation to compete against the generic formulations.
This is especially important for large pharmaceutical companies that rely on key drugs to drive a majority of their revenues. Often times, generic drugs can take an immediate 70% or more of the market share as soon as the drug moves off of patent protection. As a result, having an improved formulation with a new patent as a back-up can create tremendous value.
A Great Investment for Growth Investors
Growth investors looking for an up-and-coming component to their portfolio may want to check out Skinvisible, given its impressive value proposition and rapidly improving fundamentals. With several near-term catalysts and a relatively cheap market capitalization of just $6.69 million, this stock could see significant upside down the road. At the same time, investors have a “lottery ticket” in hand with regards to its potential as an acquisition candidate.