DeepVerge upbeat on expansion of operations
DeepVerge updated the market on its operations on Monday, reporting that additional investment from its recent £10m placing had facilitated the completion of a laboratories upgrade in York, providing capacity for processing up to 20,000 ‘Skin Trust Club’ home test kits each month for the UK market, subject only to delivery of gene sequencing machines, which was expected in early September.
The AIM-traded firm, which was holding its annual general meeting, said demand received from consumers and business partners, such as beauticians and dermatologists, had resulted in completion of more than 5,000 tests which was the limit of capacity up to the end of June.
Further demand had arisen from Labskin skincare corporate clients requesting to include home test kits before and after product and ingredient tests for each human test subject in contract clinical trials, which exceeded its current service capacity, and was expected to increase outside of any consumer-related marketing campaign.
As well as processing capacity for 20,000 units in the UK by the fourth quarter of 2021, preparations were underway for the same volume for the United States market, expected to launch in the first half of 2022.
In addition, Labskin was completing development of ethnic skin model testing, which would enable a similar volume of 20,000 units per month in China, targeted for launch in the second half of 2022 in five major Chinese cities that had a combined population of around 80 million.
Looking at its ‘Microtox PD’ wastewater project, DeepVerge confirmed the successful first data transfer of the detection of SARS-CoV-2 via Microtox PD units, with unidentified clients from installed units in undisclosed locations, under strict non-disclosure agreements.
Final housekeeping and validation involved duplicate timestamped samples for independent PCR testing with third=party labs, and included deeper data integration with Strathkelvin Instruments.
The company said it was planning to manufacture at scale in negotiation with China Resources, for rolling out at a national level via its partners Dell Technologies and EPS Group.
Beyond the success of current single pathogen target chips, multiplex chips would begin testing for multiple targets that include SARS-CoV-2, norovirus and pepper mild mottle virus in wastewater.
Finally, looking at China Resources, DeepVerge said that since the signing of a memorandum of understanding in April, “complex” commercial and legal negotiations and detailed due diligence between the parties had been underway.
The scope of the original joint venture had been extended beyond what was originally contemplated, the board said.
However, both parties were “actively seeking” to reach agreement as quickly as possible, with the timeline of signing a deal extended into the fourth quarter, due to additional elements being added to the proposed agreement.
“Today's annual general meeting will of course discuss the outcome of 2020, which by itself was remarkable, but also focus on the future of each division within the group,” said chief executive officer Gerard Brandon.
“It is impossible to put in black and white what has, is, and will be achieved by the team at DeepVerge over the next 12 to 24 months, so I look forward, with chief of operations Fin Murray and chief financial officer Camillus Glover to providing sufficient colour to allow you to see where the company is heading.”
At 1528 BST, shares in DeepVerge were up 0.18% at 28.55p.