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TheStreet Open House

Busy 2010: Biotech Developer Divine Skin (DSKX) Goes Public, Enters New Markets, Earns Record Revenue

MIAMI BEACH, Fla., Dec. 20, 2010 /PRNewswire/ -- In a year-end letter to friends and shareholders, CEO Daniel Khesin of Divine Skin Inc. (OTC Bulletin Board: DSKX), wished everyone happy holidays and reviewed the biotech developer's many successes in 2010, achieved even in the face of macroeconomic difficulties:

GOING PUBLIC. In late 2009, Divine Skin went public, and on May 20, 2010, trading began at $.30 per share. Seven months later, with the share price at $.36, the stock is showing steady growth.

FINANCIAL COVERAGE. Zacks Investment Research, a consulting firm that provides investors with analytical tools and financial information, initiated coverage of Divine Skin with an "outperform" recommendation and a 12-month target price of $.50.

SALON EXPANSION. In early 2010, the DS Laboratories brand began executing a new distribution agreement with Fantastic Sam's, one of the largest salon chains in the United States. Its 1,300 franchised outlets were expected to generate $4.7 million per year, and many are exceeding their estimates.

EDUCATION TEAMS. To train salon personnel and optimize revenue, DS Laboratories built sales-education teams in California, Florida, New Jersey, and New York.

HEALTH-CARE DIVISION. In July, the company launched a health-care division, targeting both over-the-counter and ethical drug sectors, to capitalize on pharmaceutical research conducted during development of topical treatments for hair and skin.

RESEARCH. Divine Skin spent significant resources on painstaking research in biotechnology, which led to several breakthrough compounds to be implemented in products during 2011. In particular, the company made significant advances to boost the efficacy of topical formulations.

Q2 REVENUE GROWTH. Second-quarter revenue of $1.35 million set a new record, up 26 percent from the first quarter and up 44 percent from the previous year.

NEIMAN MARCUS . The super-premium Sigma Skin line of cosmeceuticals for men was selected by prestigious retailer Neiman Marcus, with 41 upscale stores and 28 clearance centers around the United States. Bergdorf Goodman, the New York fashion leader of the Neiman Marcus Group, already represented Sigma Skin.

THE PURE GUILD. A major new brand was created and launched during the year. The Pure Guild offers botanical compounds proven effective in rigorous clinical trials, extracted mechanically using no industrial solvents or damaging heat, and sold through premium markets that deal in natural and organic products.

BRAZIL . In October, Divine Skin announced its first Latin American subsidiary, DS Laboratories do Brasil Ltd., with a local office, resident pharmacist, and sales force in Brazil, a diverse mix of 201 million people and the second largest cosmetics market in the world.

Q3 REVENUE GROWTH. Third-quarter revenue of $1.52 million set a new record, up 17 percent from the second quarter and up 59 percent from the previous year. For the first nine months of 2010, revenue increased to $3.82 million, up $1.17 million or 44 percent from the $2.65 million of the first nine months of 2009.

Khesin wrote, "Going forward into 2011, our focus will continue to be on meeting the exploding demand from our dealers, who in the past have received product late due to orders outstripping inventory. Resolving supply-chain and operational challenges is now our top priority, and the streamlining of logistics has already led to a significant increase in revenue."

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