SkinBioTherapeutics plc

("SkinBioTherapeutics" or "the Group")

Full year results

Notice of AGM

30 November 2021 - SkinBioTherapeutics plc (AIM: SBTX), a life science business focused on skin health, announces its full year audited results for the year to 30 June 2021.

Key highlights

·    Formulation blend of probiotic food supplement, AxisBiotix-Ps™, produced ahead of schedule

·    Completion of consumer study of AxisBiotix-Ps™ with strong final results from participants who self-identified as having mild to moderate psoriasis

·    Croda-SkinBiotix® programme continued to progress to plan, with focus on scaling up lysate manufacture to commercial volumes

·    Potential additional cosmetic claims for SkinBiotix® being investigated. Initial royalty revenues anticipated as planned in calendar year 2022

·    Placing and open offer completed in November 2020 raising £4.45m (gross)

·    Cash as at 30 June 2021 of £4.6m (2020: £2.2m)

Post year end:

·   Successful product launch of AxisBiotix-Ps™ 12 months earlier than intended. Early sales in the UK and US have commenced; expansion into Europe to occur in H1 2022

·    Targeting acne as the next AxisBiotix opportunity; plans to develop a bacterial blend and initiate a consumer study during 2022

Stuart Ashman, CEO of SkinBioTherapeutics, said:

"2021 has been a landmark year for SkinBioTherapeutics. We have transformed ourselves from a research and product development business, to a commercial one.

"We successfully completed the AxisBiotix-Ps™ consumer study, receiving an overwhelmingly positive response from participants, and we continued to make good progress on our SkinBiotix® programme with Croda despite challenges from the global pandemic. The high point of the calendar year, post year end, has been the launch of AxisBiotix-Ps™ and our first sales to psoriasis sufferers."

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 and has been arranged for release by Doug Quinn, CFO of the Company. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

-Ends-

For more information, please contact:

About SkinBioTherapeutics plc

SkinBioTherapeutics is a life science company focused on skin health. The Company's proprietary platform technology, SkinBiotix®, is based upon discoveries made by Professor Catherine O'Neill and Professor Andrew McBain.

The Company is targeting a number of skin healthcare sectors, the most advanced of which are cosmetic skincare and food supplements to modulate the immune system by harnessing the gut-skin axis. In each area SkinBioTherapeutics plans to exemplify its technology through human studies. The first commercial product, AxisBiotix-Ps™, a food supplement targeting psoriasis symptoms, was launched in October 2021.

The Company listed on AIM in April 2017 and is based in Newcastle upon Tyne, UK. For more information, visit: www.skinbiotherapeutics.com.  

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.

Chairman's Statement

At an incredibly challenging time for everyone, 2021 was the year SkinBioTherapeutics demonstrated its resourcefulness by successfully executing a consumer study for AxisBiotix, paving the way for its commercial launch. Alongside this the Group continued to progress its core SkinBiotix technology through its partners Croda and Sederma. The placing and open offer completed in November 2020 provided the working capital to support the AxisBiotix consumer study, initiate new programmes of work with the University of Manchester and strengthen the Group's physical infrastructure.

In 2019 SkinBioTherapeutics' strategy identified five channels within which to progress its two core elements of technology - SkinBiotix and an emerging area of science focusing on the relationship between the gut and skin. To support this multi-channel approach and offer greater corporate flexibility, separate legal entities were established for each channel. With the progress made in AxisBiotix during the course of this year, SkinBioTherapeutics is presenting group results for the first time. Consolidated financial statements are presented along with Company (SkinBioTherapeutics plc) statements of financial position, cash flows and changes in equity.

AxisBiotix has been the Group's key focus as it sought to capitalise on the area of research exploring the relationship between the gut and skin. In the course of 12 months, from having identified a blend of bacterial strains aligned to the disease pathways of psoriasis, the Group designed, initiated and completed a 'self-managed' consumer study, reporting impressive results with c. 72% of participants who completed the study reporting improvements against the key indications. To have made such progress in the course of the financial year is testament to the pragmatic approach and hard work of everyone on the team.

Since year end, the Group has reached the significant milestone of becoming a commercial business, with the launch of the AxisBiotix product on 29 October 2021, World Psoriasis Day.

Development of the Group's core technology, SkinBiotix, has continued through Sederma, the specialist ingredient manufacturer within Croda Plc. Sederma has progressed the scale-up of lysate manufacture through the various stepped increases and is currently preparing to manufacture at the commercial scale of 20,000 litres, in anticipation of sales in 2022.

In November 2020 the Group completed a placing and open offer raising a total of £4.45m (before expenses). The fundraise provided headroom to execute the consumer study for AxisBiotix and prepare for its subsequent commercialisation, as well as to provide funds to initiate new scientific development programmes with the University of Manchester and to support the transition of the Group from a virtual operation to one with an in-house scientific capability. The Group ended the financial year with a cash balance of £4.6m (2020: £2.2m).

On behalf of the Board, I would like to take the opportunity to thank everyone at SkinBioTherapeutics for the considerable progress achieved by the Group over the course of the year.

Martin Hunt

Chairman

Chief Executive's Statement

Overview

SkinBioTherapeutics is a life sciences business focused on harnessing the microbiome, the bacteria that live on and in the body, for human health.

The Group has two core areas of technology that form five strategic pillars addressing opportunities in cosmetics, food supplements, medical devices and longer term, the potential for therapeutics.

·    SkinBiotix®, the Group's proprietary technology, is designed to promote skin health by harnessing the beneficial properties of probiotic bacteria and the active components derived from them. SkinBioTherapeutics' approach is to use a 'lysate' of probiotic bacteria cells as a topical agent. The use of a lysate rather than live bacteria circumvents the possible safety considerations associated with applying live bacteria to the skin and the potential formulation difficulties of keeping bacteria alive in a cream. This form also stabilises the bacteria, making it easier to handle and store.

·    AxisBiotix™ technology is based on the rapidly emerging area of science that is focused on the gut-skin axis and how the constitution of the gut microbiome plays a role in various diseases, such as psoriasis. SkinBioTherapeutics has been exploring the relationship between the gut and the skin and the potential to introduce probiotic bacteria into the gut and effect a direct improvement on human skin. AxisBiotix-Ps™ is the first product developed by the Group that leverages the gut-skin relationship and is designed to alleviate the symptoms associated with psoriasis.

SkinBiotix® Pillar (skincare/cosmetics)

In November 2019, an agreement was signed with Croda Plc, a world leader in the field of active skincare ingredients for the cosmetic industry, which sells ingredients for skin and hair care products to major cosmetic brands across the world. SkinBioTherapeutics is working directly with Sederma, part of Croda and a specialist manufacturer of bioactive ingredients for the cosmetic industry. Sederma is responsible for the development, manufacturing and commercialisation of the SkinBiotix® technology.

During the course of the year Sederma updated SkinBioTherapeutics that it had made significant progress against the key collaboration milestones. Lysate production had been optimised and analytical sample screening and formulation work had been completed. Manufacturing scale-up from 1 litre to 600 litres had been completed successfully and with the formal handover of the project from Sederma in Paris to Croda's manufacturing facility at Ditton, near Widnes, the final scale-up to 20,000 litres is now being progressed. This is the capacity required to mass produce the SkinBiotix® product at industrial levels to market to Sederma's portfolio of 12,000+ global cosmetic customers.

Throughout this collaboration, Sederma has identified additional potential scientific and marketing claims for the end ingredient. The eventual claims will be an important component of the launch and long-term commercial success of the ingredient.  To this end, Sederma is continuing its lab work to further substantiate these additional potential claims. This work is not impacting the manufacturing scale-up. The Group continues to anticipate 2022 as the period for initial royalty revenues.  

Sales and distribution rights are for the cosmetic sector in "active skincare" alone, leaving SkinBioTherapeutics to focus on further applications of its technology in other sectors. A key component of the Croda agreement is to provide access to a reliable supply of material to SkinBioTherapeutics, whereby Croda will supply SkinBiotix® for the Company to be able to use in other sectors outside of those covered by this agreement.

AxisBiotix Pillar (gut/skin axis)

In February 2020 SkinBioTherapeutics signed an agreement with Winclove Probiotics B.V. for the development of a probiotic blend of 'good' bacterial strains based on the modifying properties of specific bacterial species in known psoriasis pathways.

Psoriasis is a chronic relapsing inflammatory condition of the skin with a prevalence of c.2-3% in the western world. The worldwide market for psoriasis treatments was valued at approximately $30bn in 2018 and is expected to grow to $47bn in 2022 with a CAGR of 11.5%. Current treatments include moisturising treatments or emollients to soothe and hydrate the skin for relatively mild disease, through to biologic therapies in severe cases.

For the group with mild-to-moderate psoriasis, the mainstay therapies tend to be steroid-based, which cannot be used long term and have side effects. In the management's opinion, there is a clear unmet clinical need for new, safer ways of treating patients with mild to moderate psoriasis. In addition, anecdotal evidence from sufferers suggests that many have turned to oral probiotics as an 'alternative' therapy as a result of preferring more 'natural' treatments and have reported success in control of their disease. To date, scientific evidence is scarce; the effects of probiotics on psoriasis have been investigated in only two studies which did not make the choice of probiotic organisms based on known disease pathways.

Having successfully formulated a bacterial blend as a probiotic food supplement, branded as AxisBiotix-Ps™, the Group intended to initiate a study in a clinical environment. Prevented from doing so by the COVID-19 pandemic, the Group redesigned the study as a 'self-managed' consumer study that could be managed remotely, without the need for participants to attend clinics.

Of the 265 participants that enrolled onto the study, 177 identified themselves as suffering from mild to moderate psoriasis. The participants that self-identified as suffering from psoriasis and completed the study reported the following results:   

·    76% reported that their skin felt less itchy;

·    75% reported that their skin appeared less red;

·    73% reported that their skin felt less irritable; and

·    65% reported that they had fewer 'flaky patches' of skin.

Participants who responded positively about their skin health, also reported positive changes to their lifestyle. On average, at day 56:

·    62% reported having more energy;

·    64% reported better sleep; and

·    66% reported positive changes to their general mood.

In addition, participants in the study who self-identified as suffering from psoriasis and at least one other condition - 80% reported a reduction in itchiness and 85% reported their skin felt less irritable. Benefits were also experienced by participants who self-identified as having either eczema, acne or rosacea.

The Group is pursuing a 'direct to consumer' commercialisation model for AxisBiotix-Ps™, selling the product through the website AxisBiotix.com. The psoriatic community is highly communicative regarding the condition and its treatment, therefore, management considers that engagement with sufferers both directly through social media and via the national psoriasis associations in the target country markets is an efficient and cost-effective way of penetrating the market.

Post year end, SkinBioTherapeutics launched AxisBiotix-Ps™ on 29 October 2021 - World Psoriasis Day. AxisBiotix-Ps™ is targeted to be sold on a subscription basis with sufferers subscribing on a four or eight-week cycle. The product is sold in boxes containing 28 daily sachets and is priced per sachet at £1.50 in the UK and $2.00 in the US and in due course in Europe at €1.80 (prices include sales tax and exclude duty and shipping costs). As demonstrated in the consumer study, it can take three to four weeks for the benefits of AxisBiotix-Ps to be achieved and consequently new customers receive their second month's supply of the product free. Management therefore expects it to be 3-4 months post launch for an indication of customer retention levels and will update the market on initial product sales in March 2022 when the Company releases its half year financial results. 

The product has initially been launched in the UK and US with Europe expected to follow in the first half of 2022. There are country specific requirements for food supplements in Europe, including labelling instructions and languages. The product is manufactured in the Netherlands by Winclove, and finished goods are held at a third party logistics company, also in the Netherlands, from where they are onward shipped directly to consumers. Longer term and subject to demand, SkinBioTherapeutics will consider bulk shipping finished goods to the US and UK and then onward shipping locally to consumers. Outside of these markets, for example, Asia, the Group is considering partnering opportunities for distribution and, having begun engagement with potential partners, will look to make progress in this regard in 2022.

Having initially targeted psoriasis as the first opportunity to leverage the gut-skin axis, the Group is now assessing other skin conditions that may benefit from a food supplement. As demonstrated in the consumer study, suffers of eczema, rosacea and acne benefited from taking AxisBiotix-Ps™. The Group believes that a number of the bacterial strains within AxisBiotix-Ps™ could form the basis of a core blend to target symptoms of other skin conditions beyond psoriasis.

SkinBioTherapeutics is now targeting acne as the next opportunity and anticipates being able to develop a bacterial blend and initiate a consumer study during the course of 2022.

MediBiotix Pillar (medtech applications e.g. woundcare)

The MediBiotix channel is focused on medical device applications incorporating the SkinBiotix® technology. To date, the initial target has been eczema and generating a data pack to support the mode of action claims for a medical device application. Work is continuing in this regard and in parallel, recognising the progress made with AxisBiotix, management is considering developing a food supplement that addresses the symptoms of eczema through the gut-skin axis.  

Management also believes there is significant utility for the technology in the treatment of various classes of skin wounds and is in discussion with a number of global advanced woundcare companies in this regard. The Group is targeting a commercial agreement to develop and test the SkinBiotix® technology in these advanced indications.

CleanBiotix Pillar (anti-infection)

The area of healthcare acquired infections (HAI) and bacterial resistance remains an area of critical concern for healthcare providers and has been brought into sharp focus through the pandemic. The growing resistance of certain infection strains, the lack of new antibiotics, and the rise of the "superbug" is driving the need to discover and develop new methods of controlling bacterial growth and infection.

Staphylococcus aureus (SA) is the most common and one of the most aggressive skin pathogens and is one of the major causes of HAI. The Group's SkinBiotix® technology has been shown to have significant capabilities in preventing SA from adhering to and growing on the skin and thus offers a potential route of protection from SA-induced healthcare acquired infections. The Group has been in discussions with leading companies in the domestic and commercial hygiene sectors as to the utility of the SkinBiotix® technology within these environments.

This is a challenging area both from a technology and regulatory perspective but equally offers significant opportunities. SkinBioTherapeutics will continue discussions targeted at identifying a partner to work with to develop all aspects of this market channel.

Other Research Programmes

In April 2021 SkinBioTherapeutics extended its collaboration with the University of Manchester for two new research programmes. The first programme, which will run for two years, will focus on how the microbiome can influence and rebalance the body's response to inflammation in skin health and skin disease. The aim is for SkinBioTherapeutics to develop immune-supporting microbiome formulations to market through everyday products such as skin lotions and creams where there is an increasing consumer preference for natural ingredients.

The second programme addresses oral health and will explore the use of different bacteria, including SkinBioTherapeutics' proprietary lysate SkinBiotix, for oral health and wellbeing. The 12-month programme will develop, and test formulations designed to support the health of skin surfaces in the oral cavity targeting disease prevention, oral care and hygiene. These formulations could be positioned as standalone products or work alongside traditional oral health and wellbeing products.

Financial review

In support of its strategy to develop its technology in a number of channels, SkinBioTherapeutics established separate legal entities for each channel. Activity commenced in AxisBiotix Limited during the course of the year and consequently SkinBioTherapeutics is presenting group results for the financial year. Separately presented are Company (SkinBioTherapeutics plc) statements of financial position, cash flows and changes in equity.

Expenditure for the financial year was lower than management's expectations as a consequence of pivoting to a self-managed consumer study for AxisBiotix-Ps and reduced activity at the University of Manchester due to COVID-19. Research and development expenditure was £506k (2020: £635k) and other operating expenses were £989k (2020: £985k). Overall, the Group made a loss before tax of £1,498k (2020: £1,620k).

In November 2020, SkinBioTherapeutics completed a placing and open offer raising a total of £4.45m gross proceeds. The funding enabled the Group to expand its technology pipeline with two additional programmes of work with the University of Manchester and secure lab space at the Biosphere complex in Newcastle. Cash used in operating activities was £1,555k (2020: £892k) and the Group had a cash balance of £4,607k (2020: £2,159k) at year-end.

Outlook

In the space of 12 months, SkinBioTherapeutics has managed to conduct and report on a 'self-managed' consumer study and prepare for the launch of its first product for sale.

A key focus for the Group during the financial year 2022 will be raising awareness of AxisBiotix-Ps™ amongst the psoriatic communities and building market share, following its launch at the end of October. With the initial focus on the UK & US markets, attention will then turn to Europe and Asian markets, such as China and India.

Building on the gut-skin axis research, the Group will look to finalise a similarly blended bacterial formulation to address acne, generate human data and push towards the commercial launch of a second AxisBiotix product.

With the Croda/Sederma partnership, the focus for 2022 will be to confirm the cosmetic claims for the SkinBiotix® technology as a cosmetic active ingredient and generate traction with Sederma's key clients, with the aim of future potential revenue streams for SkinBioTherapeutics.

2021 has been a transformational year for SkinBioTherapeutics despite a challenging environment, which is very much down to the expertise and dedication of the Group's team and partners. We look forward to another exciting year in 2022.

Stuart J. Ashman

CEO

Consolidated income statement

For the year ended 30 June 2021

Consolidated statement of financial position

As at 30 June 2021

Consolidated statement of cash flows

For the year ended 30 June 2021

Consolidated statement of changes in equity

For the year ended 30 June 2021

Company statement of financial position

As at 30 June 2021

Company statement of cash flows

For the year ended 30 June 2021

Company statement of changes in equity

For the year ended 30 June 2021

Extracts of the notes to accounts

1.    General information

SkinBioTherapeutics plc is a public limited company incorporated in England under the Companies Act and quoted on the AIM market of the London Stock Exchange (AIM: SBTX).  
 
The principal activity of the Group is the identification and development of technology that harnesses the human microbiome to improve health.

The Group has evaluated all events and transactions that occurred after 30 June 2021 up to the date of signing of the financial statements.  No material subsequent events have occurred that would require adjustment to or disclosure in the financial statements.

A copy of this announcement may be found on the Company's website today and is included in the Annual Report and Accounts which will be published and sent to shareholders later today.

The Company's Annual General Meeting will be held on 23 December 2021 at 11am at The Core, Bath Lane, Newcastle Helix, Newcastle upon Tyne, NE4 5TF.

The financial information set out in this announcement does not constitute the Group's statutory accounts for the years ended 30 June 2020 or 30 June 2021. The financial information for the year ended 30 June 2020 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) of the Companies Act 2006.

The financial information for the year ended 30 June 2021 is derived from Company's financial statements for the year ended 30 June 2021 which were approved by the directors on 29 November 2021. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) of the Companies Act 2006. These accounts will be delivered to the registrar in due course.

Whilst the financial information included in this announcement has been computed in accordance with International Financial Reporting Standards (IFRS), this announcement does not in itself contain sufficient information to comply with IFRS. The accounting policies used in preparation of this announcement are consistent with those in the full financial statements that have yet to be published.

Full notes to this statement are contained in the Company's Annual Report and Accounts.