Featuring Elric Langton & John Jack | 20 April 2025
I, Mike Cain, Alex Langton, and John Jack, have a financial interest in SkinBioTherapeutics.
John and I discuss a variety of conspiracy scenarios around the possible buyout of SkinBioTherapeutic and even Croda itself.
Broad overview of discussions
Croda Eyes SkinBiotix: A Strategic Buyout with Layers of Logic
Croda International is weighing a strategic acquisition of the SkinBiotix platform. This move could consolidate its position at the intersection of cosmetics and medical-grade skincare, and potentially save the FTSE 100 chemicals group around £300 million over time, plus future royalties.
Under the hypothetical terms, Croda would acquire full ownership of the SkinBiotix IP while licensing it back to current partner SkinBioTherapeutics, a neat sleight of hand that secures operational continuity and cash flows, while consolidating the core value driver behind several of SBTX's commercial arms.
The Financial Frame: How Much is Too Much?
Croda’s current net debt to free cash flow ratio sits at a modestly stretched 2.94x, based on:
Net debt: £532.3 million
Free cash flow: £181.1 million
If SkinBiotix generates a projected £20 million annually at full margin, valuation benchmarks would likely fall between:
£100 million (5x revenue multiple)
£200 million (10x revenue multiple)
Even at the upper end, the transaction would leave Croda’s leverage just nudging its self-imposed limits. Still, with high-margin revenues and strong EBITDA conversion potential, the numbers are not only workable, they’re attractive.
Strategic Rationale: A Neurocosmetic Revolution?
The real draw, of course, is Zenakine™, the flagship asset within the SkinBiotix platform and touted as the world’s first neuroactive cosmetic ingredient. With clinically proven effects on both skin and neurological health, it opens the door to an entirely new product category: neurocosmetics — a blend of skincare and science fiction.
For Croda, acquiring Zenakine™ outright would:
Internalise 100% of its economic benefit
Remove licensing costs and dependency risks
Enable medical-grade R&D beyond current cosmetic applications
Provide a bridgehead into broader dermatological markets
Regulatory hurdles for IP transfer are estimated at 6–9 months, a manageable delay in light of the long-term strategic upside.
Platform Power: More Than Just One Molecule
SkinBiotix isn't a one-trick pony. It underpins multiple commercial pillars at SkinBioTherapeutics, all of which rely on the same core lysate technology derived from a probiotic developed at the University of Manchester.
Key verticals include:
MediBiotix – tackling eczema and wound healing via medical devices
CleanBiotix – targeting hospital-acquired infections with anti-adhesive properties
PharmaBiotix – pushing into prescription therapeutics as a logical evolution from AxisBiotix
As CEO, Stuart Ashman succinctly put it:
“Strategic consolidation of our IP portfolio remains central to our value creation roadmap. The SkinBiotix platform offers untapped potential across multiple high-growth verticals.”
A Fly in the Neurocosmetic Ointment?
One sticking point could be regulatory scrutiny, particularly around the exclusivity of Zenakine™. With Croda’s existing distribution clout and the molecule’s patented status, there’s a non-trivial chance that competition watchdogs (and perhaps even L’Oréal’s lawyers) may raise a brow or two.
In a world increasingly allergic to monopolistic behaviour — even in niche segments like neurocosmetics — this could delay or derail a deal.
Final Thoughts: Bold, but Believable
This isn’t just about acquiring a molecule — it’s about securing a technology platform with applications well beyond beauty. Croda has the balance sheet and commercial firepower to scale Zenakine™ globally, and the deal structure, with a license-back to SkinBioTherapeutics, is elegant.
It’s strategic, forward-looking, and makes financial sense.
If it clears antitrust hurdles, SkinBiotix may just prove to be the most important skincare ingredient Croda has ever acquired, even if it doesn’t come with a spa day.
Remember, this is all conspiratorial at this stage, and a bit of fun, nothing more. I doubt anyone wants any part of this to become true.
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