SkinBioTherapeutics plc

("SkinBioTherapeutics" or "the Company")

Trading & Business update

SkinBioTherapeutics' oral health study successfully identifies bacteria that fight gum disease

31 August 2022 - SkinBioTherapeutics plc (AIM: SBTX), a life science business focused on skin health, has today provided an update on the successful progress of the Oral programme and on trading following the soft launch of AxisBiotix-Ps™.  

Oral Programme

The Company is pleased to announce, the successful completion of the first phase of its oral health programme. The project, conducted by Professor Andrew McBain of The University of Manchester, strongly supported the use of specific bacterial (probiotic) strains or lysates in the prevention of periodontal (gum) disease.

With nearly 50% of adults over 30 suffering from this condition, rising to 70% for those aged 65+, prevention of gum disease represents a sizeable potential market of $1.1bn, presenting an opportunity for SkinBioTherapeutics to develop products that deliver significant returns.

Application of the bacteria and lysates to oral cells showed its efficacy in protecting against the pathogen associated with periodontal disease. The candidate technologies discovered as part of the study showed great potential to not only protect oral cells from pathogens, but also have a dampening effect on inflammation. Furthermore, the bacteria/lysates strengthened the integrity of oral cells, potentially increasing their resistance to gum disease.

This study identified several bacteria/lysates each with differing abilities to protect oral cells. Future studies will identify the optimal bacteria/lysates to take forward into human studies.

The success of this first phase study provides a solid foundation for transition into future clinical studies and strongly positions SkinBioTherapeutics as a potential player in the periodontal disease treatment market, unlocking additional opportunities with global multinationals.

Trading Update

·    AxisBiotix-PS

Having launched the AxisBiotix-PS product 18 months earlier than anticipated and as noted in the Company's interim results announcement on 29 March 2022, revenues for the full year (8 months of trading) to 30 June 2022 were expected to be materially below market expectations. Actual revenues came in at £75k (2021: £nil). Cash as at the year-end was £1.8m (2021: £4.6m).

Sales are lower than originally forecast, however, subscriber retention rates have remained high. As noted in the market statement on 13 June 2022, retention rates for subscribers were 80%+; retention rates are now consistently at 85%+, which the Company believes gives strong endorsement to the product and the desired impact it is having on those customers.

Progress continues to be made to grow revenue, with month-on-month AxisBiotix-PS subscriptions increasing gradually. In addition, the Company continues to adapt its marketing strategy since the initial launch in October 2021, and is becoming more informed of what the optimal sales and marketing strategy is going forward

In the longer term, the Board believes it is in the interests of the Company and a better way to return long term value to its shareholders to secure an exclusive deal with a global multinational for its products, including AxisBiotix-PS, rather than signing multiple distribution deals across different markets. This is a view that has been reinforced during early discussions with a number of such global multinationals in which the Company is currently engaged.

While it enters discussions with potential parties around out-licensing, Management continues to look at developing new markets and refining its operations to build a stronger validation case around the AxisBiotix-PS product. The Company expects to launch AxisBiotix-PS into Spain in the coming months, in line with its business strategy of growing the customer base within mainland Europe. It is also enhancing its operations to facilitate smoother and more efficient logistics and distribution by relocating the warehousing for its growing UK customer base from the Netherlands to the UK. With the expected growth into other European markets, this will allow the existing warehousing to focus on delivery across mainland Europe. 

·    Croda/Sederma

Further to previous announcements, the Company continues to engage with Croda and its active ingredient arm, Sederma, and awaits the outcome of its marketing activities to its 12,000 VIP global cosmetics clients, expected in Q4 2022.

Stuart J. Ashman, CEO of SkinBioTherapeutics, said:

"Firstly, we are delighted with the results of the oral programme study and encouraged by the strong foundation this data provides for our continued research into the benefits of probiotics on oral health. This latest development is testament to our continued focus on bringing innovative products to market which could benefit countless individuals and the potential they bring for many commercial opportunities. We will look to continue the development of this product pathway and commence negotiations with future partners."

"The second-half of the financial year was dominated by building up early sales for AxisBiotix-Ps.

"The Company was floated, structured and funded to be a B2B entity and not a B2C entity. Our move into direct-to-consumer commercialisation was born out of COVID 19,  and with commercialisation coming 12 months earlier than we had planned and the desire not to do a deal with a high street retail partner at that time. The "soft launch" has given us a much deeper ranging understanding of our consumers' requirements, market dynamics and brought us excellent retention levels, which are all important to multinationals when discussing a global launch with global exclusivity.

"During our 'soft launch" commercialisation phase, we spent very little on marketing and continued to control our funds frugally as we began discussions with multinationals about the future of AxisBiotix-PS and other products within this pillar. We do not intend to become a long term B2C entity, but rather to de-risk our science by proving that the product works in a real-life environment whilst building solid retention levels and repeat business.

"At various stages throughout the last six months, we have been approached and have had the opportunity to sign multiple distribution deals with regional specialists. Each one of these potential partners required a minimum of five years exclusivity. We decided to decline these offers and pursue a more global and wider reaching deal with a multinational. Taking a short-term win with the stocking orders that are associated with such transactions and subsequently having to unpick multiple regional distribution deals would have proved too complex in terms of diligence.

"We believe it is in the best long-term interest of the company to secure a long-term partnership, and that this opportunity lies with multinationals. We believe that now we are in a position to negotiate a much better deal than if we had attempted to do so in the summer of 2021. We are dealing with sector blurring products here in the truest sense of the phrase, `this is the beginning of the microbiome revolution'."

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 Manprit Randhawa, CFO of the Company. Upon the publication of this announcement, this inside information is now considered to be in the public domain. 

-Ends-

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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 Company's first product, AxisBiotix-Ps™, a food supplement to address the symptoms of mild to moderate psoriasis was launched on 29 October - World Psoriasis Day.

The Company listed on AIM in April 2017 and is based in Manchester, UK. For more information, visit: www.skinbiotix.com.