REG - SkinBioTherapeutics - Half-year Report
28/03/2023 07:00
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RNS Number : 3831U SkinBioTherapeutics PLC 28 March 2023
SkinBioTherapeutics plc
Half year consolidated results
Newcastle, UK - 28 March 2023 - SkinBioTherapeutics plc (AIM: SBTX or the
"Group") a life sciences company focused on skin health, announces its
unaudited half year consolidated results for the six months to 31 December
2022.
Operational and financial highlights
· Good progress with the ongoing commercialisation of probiotic
food supplement, AxisBiotix-Ps™ in the UK
o Revenues increased consistently month on month and at period end, totalled
£77k (H1 FY22: £22k)
o Retention rates at 80%+ of month end subscribers
o Post year end, health authority approval received for launch in Spain from
13 March; entry into other European markets, Italy and France, is anticipated
during 2023
· Croda/Sederma project continues to progress with further
potential claims being investigated
o Exploring in-human studies to further validate potential additional claims
o Successful scale-up of manufacturing to 600 litres and testing of scale-up
to 20,000 litres as previously announced
o Further formal discussions to commence regarding applications of other
areas of SkinBioTherapeutics' technology
· Currently developing a stabilised bacterial blend for acne and
working with formulation partners to develop an end product for consumer study
in H2 2023
· Research programmes with the University of Manchester are
progressing
o Skin health and disease research programme - feasibility study outcome
expected during 2023
o Oral health and wellbeing - positive early indications; programme extended
into next phase (formulation) with data anticipated in 2024 as previously
announced
· Inorganic growth strategy: management remains actively engaged
with due diligence ongoing.
· Cash as of 31 December 2022 £766k (30 June 2022: £3,154k)
o Post period end, Placing and Open Offer raised £2.6m
Stuart Ashman, CEO of SkinBioTherapeutics, said:
"Our priority focus for the first half of FY23 to drive forward new product
development and sales in AxisBiotix, with the ultimate goal being a
partnership opportunity with a multinational, along with the continued
progression of work with Croda and the research programmes with Manchester
University and the pursuit of an accretive acquisition opportunity that could
bring solid sales revenue. We are pleased to report advancements in all areas.
"For AxisBiotix-Ps™, we have grown our customer base in the UK consistently
month on month. The sales in the UK are still at a relatively early stage;
however, the customers who have adopted AxisBiotix-Ps™ into their daily
regimes have shown fierce loyalty to the product, as demonstrated by their
very positive feedback and the 80%+ retention rate. With continued targeted
marketing in the UK and entry into new European geographical markets during
2023, the aim is to further expand sales.
"The next programme in the AxisBiotix pillar is in acne which has been
progressing well with the consumer study anticipated to commence during H2
2023. The focus for the SkinBiotix programme with Croda/Sederma has been on
manufacturing scale-up, and the development programmes in oral care and skin
health are showing promise.
"As stated in the FY22 results, we are investigating external opportunities
that provide synergies and accelerated routes to market, to run alongside our
own product commercialisation. We continue to actively engage in discussions.
However, we will only pursue such opportunities if they make sense for the
business and create immediate value for our shareholders."
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
Group. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
-Ends-
For more information, please contact:
SkinBioTherapeutics plc Tel: +44 (0) 191 495 7325
Stuart J. Ashman, CEO
Manprit Randhawa, CFO
Cenkos Securities Plc (Nominated Adviser & Broker) Tel: +44 (0) 20 7397 8900
Giles Balleny, Max Gould (Corporate Finance)
Dale Bellis, Tamar Cranford-Smith (Sales)
Instinctif Partners Tel: +44 (0) 20 7457 2020
Melanie Toyne-Sewell / Tim Field / Adam Loudon SkinBioTherapeutics@instinctif.com (mailto:SkinBioTherapeutics@instinctif.com)
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.
The Company listed on AIM in April 2017 and is based in Newcastle, UK. For
more information, visit: www.skinbiotix.com (http://www.skinbiotix.com/)
http://www.axisbiotix.com (http://www.axisbiotix.com) .
Chairman and Chief Executive's Statement
The focus for the first half of FY23 was to drive forward new product
development and sales in AxisBiotix, with the ultimate goal being a
partnership opportunity with a multinational, along with the continued
progression of work with Croda and the research programmes with Manchester
University and the pursuit of an accretive acquisition opportunity that could
bring solid sales revenue. The Board is pleased to report advancements in all
areas.
For FY23, the main pillar of the corporate strategy has been focused around
the Company's first product, AxisBiotix-Ps™ probiotic food supplement. Sales
and marketing have continued in the first half of the year, with a focus on
the UK market, where we continue to see excellent retention rates at 80%+
(being the number of subscribers remaining at the end of each monthly period,
compared to those at the start of month period) and total subscriptions
overall growing on a month by month basis. Revenues have increased at a higher
rate than in the year ending 30 June 2022, despite lower marketing spend as
the business has adapted and focused its marketing strategy.
As previously announced to the market, AxisBiotix-Ps™ will be released for
sale into Europe in the first half of 2023, with Spain and Italy the first
countries to be targeted, followed by France. The business expects to see a
gradual uplift in sales following the launches in these countries through the
second half of 2023.
The oral programme, the use of probiotic-derived, screened, and selected
actives has progressed into development. A lead complex has been selected with
research progressing in collaboration with Professor Andrew McBain at the
University of Manchester.
Part of the strategy of the Company is to investigate inorganic opportunities
that would provide synergies and accelerated routes to market. We continue to
pursue such deals and remain actively engaged with the previously announced
accretive and synergistic opportunity, where due diligence and negotiations
are continuing. However, there is no certainty of timing or execution, as the
Company would need to agree additional funding using debt and/or equity and
any acquisition would be conditional on satisfactory diligence and agreement
on terms.
Financial review
Revenue and gross margins
The Company reported revenues of £77k (H1 FY22: £22k) during the first half
of FY23, which reflects an increase on the revenues achieved in FY22 from
launch date of October 2021 through to June 2022. 90% of the revenues achieved
were derived from the UK market, with subscribers accounting for 39% of
overall revenues. Gross margins for the period increased to 67% (H1 FY22: 61%)
which reflects less discounting from the initial launch phase of
AxisBiotix-Ps™ which ran from October 2021 through to February 2022.
Research and development
Research and development costs for the first half of FY23 amounted to £445k
(H1 FY22: £397k), with the increase in expenditure relating to the Company
entering into the next phase of the Oral research programme with the
University of Manchester, which began in 2021.
Administrative expenses
Administrative expenses for the first half of FY23 were £958k (H1 FY22:
£775k), highlighting the increase in the operational footprint of the
Company. These expenses include £40k (H1 FY22: £10k) of shipping and
distribution costs; during H1 FY23, the Company decided to service the UK
customer base from a dedicated warehouse in the UK, thus decreasing shipping
costs and customs charges as well as improving the time and efficiency of
deliveries in the UK. The warehouse in the Netherlands currently serves the US
customers and will also be the distribution hub for all European (non-UK)
country shipping.
Other increases in expenses largely related to an increase in headcount (H1
FY22: 8 to H1 FY23: 12) from the prior period, as the business had to bring in
commercial and operational support for AxisBiotix-Ps™, as well as the
recruitment of a full time CFO. The operational footprint also increased with
the use of offices and labs in Newcastle in 2022.
Cash
Net cash decrease for the period was £1,039k (H1 FY22: £1,456k). Cash as at
the end of the period at 31 December 2022 was £766k (H1 FY22: £3,154k). Post
period end on 4 January 2023, the Company successfully raised gross proceeds
of £2.6m to fund future operations.
Operational review
During the first half of the financial year, the Company's strategy was driven
by ongoing developments within AxisBiotix-Ps™, as well as research and
development activities within the Acne and Oral health areas.
SkinBiotix Pillar (skincare/cosmetics)
SkinBiotix is the Company's core technology and since late November 2019 has
been subject to an agreement with Croda International Plc (Croda) and its
specialist cosmetic division Sederma, whereby Sederma is responsible for the
development, manufacture and commercialisation of the technology.
Sederma has successfully scaled-up manufacture to 600 litres and is testing
the scale-up to 20,000 litres in a custom built vessel in Widnes. The project
with Sederma continues to progress with further potential claims as previously
communicated. Sederma is exploring in-human studies to further validate this
additional activity and potential additional claims. It should be noted that
the Company is subject to strict confidentiality agreements with Croda and as
such is limited in what information it can publish.
In the spirit of the "smart partnership" that the Company has with Croda, it
is now preparing for further, formal discussions with Croda regarding
applications of other areas of the Company's technology.
AxisBiotix Pillar (gut-skin axis)
AxisBiotix-Ps™
During the full year results announcement on 23 December 2022, the Company
announced that the strategy for AxisBiotix-Ps™ had evolved, with a shift
away from long ranging regional distribution-related deals to exclusive deals
with multi-national partners being the better long-term strategy to enhance
shareholder value. As such, the Company has continued to market for sale its
AxisBiotix-Ps™ food supplement with a reduction in marketing expenditure.
Retention rates remain high for subscribers at 80%+ (being the number of
subscribers who are remaining as a subscriber at the end of each monthly
period, compared to the same cohort that were in existence at the start of a
month period). The positive impact is also evident in the effect the product
has on the lives of psoriasis sufferers through customer testimonials.
Post period end, the Company commenced its Spanish launch following regulatory
clearance in February 2023. The Spanish market for psoriasis incidence rates
is similar to the UK in that between 1%-3% of people suffer from psoriasis.
The Company will initiate marketing activities to target this group of people
specifically in its first rollout across the country.
Following the launch in Spain, the Company will target Italy and France as its
next territories. The Company awaits Italian regulatory clearance for launch,
whilst activities to operate in France are at an early stage.
In addition, the Company is working with its formulation partner, Winclove, to
investigate other vehicles for
AxisBiotix-Ps™ product delivery such as capsules, tablets etc following
feedback from consumers. This work is on-going and testing will take place in
H2 2023 to identify the optimum delivery method for the food supplement.
Acne
The next product in the AxisBiotix pillar will be a food supplement for
alleviating the symptoms associated with acne.
As announced in December 2022, the Company is working on a stabilised
bacterial blend, and is now engaged both internally and externally (with
formulation partners) on an end product which is expected to be tested in a
consumer study in H2 2023. Assuming a positive outcome from the study, the
Company will then seek to commercialise the product.
MediBiotix Pillar (medtech applications e.g. woundcare)
The MediBiotix Pillar is focusing on applying SkinBiotix technology in topical
medical device applications, looking at targeting eczema in the first
instance. This development route is still being explored by management.
As announced in December 2022, the other areas for this pillar involve
advanced wound management, which has the potential to be a significant
opportunity for the Company. Early discussions with several potential global
partners in the woundcare space are ongoing, and a positioning paper is
currently being scoped into a partnered project plan.
CleanBiotix Pillar (anti-infection)
With the impact of the pandemic coupled with the increasing incidence of
healthcare acquired infections, such as MRSA, preventing infection is of
paramount concern to healthcare practitioners. From early studies of
SkinBiotix, there is data demonstrating its effectiveness in preventing the
most common skin pathogen, Staphylococcus aureus (SA), from adhering to and
growing on skin surfaces. The potential for SkinBiotix technology in this area
is exciting, but is also challenging, therefore, this would be another area
where management is investigating opportunities to out license the programme.
Other Research Programmes
The Company has two additional programmes of work underway at the University
of Manchester - the first, running until the end of 2023 is focusing on how
the microbiome can influence and rebalance the body's response to inflammation
in skin health and skin disease. This programme is progressing in line with
expectations and management expects to see an outcome of the feasibility study
during 2023.
The second programme is exploring the use of different bacteria, including
SkinBioTherapeutics' proprietary lysate SkinBiotix along with other strains of
bacteria and lysates, for oral health and wellbeing. This programme looks to
identify methods to assist in the prevention of gum disease, tooth decay and
halitosis that could ultimately be commercialised in a toothpaste or
mouthwash. This programme has progressed into development and a lead complex
has been selected with research progressing in collaboration with Professor
Andrew McBain at the University of Manchester.
Working in collaboration with a UK-based formulation, material, and
manufacturing provider, prototype formulation formats have been generated.
Laboratory performance of the specialist formats, selected to maximize the
oral epithelia contact time are underway, using established biological
performance assay platforms. The format has been selected to address consumer
needs that can be tuned to specific market segments. In parallel product
features and consumer prototyping work is progressing at the Company's
formulation suite at its Newcastle-Upon-Tyne facilities.
There can be no guarantees that any of these formats will meet the strict
criteria set by the Company for advancing into scale-up and consumer testing,
but management remains encouraged by the progress made in demonstrating the
technology in commercially acceptable formats.
Outlook
The Company has made significant strides over the past year with developments
in three out of the five pillars of strategy, with what is still a small but
growing team. Management continues to progress the partnership with Croda and
anticipates that 2023 will see the commercial launch of the cosmetic
ingredient. The launch of AxisBiotix-Ps™ has shown some traction with a
relatively modest marketing budget, and management expects to increase sales
at a steady pace following the launch into Europe over the coming months.
Work continues with the University of Manchester on a range of programmes,
including feasibility of the technology in inflammation and oral applications.
The focus of 2023 and beyond is to reach commercial traction with Croda,
launch AxisBiotix-Ps™ into Europe, develop a product for acne, continue
engagement with potential multi-national commercial partners for the
AxisBiotix pillar, and strike a deal with a large global partner within the
MediBiotix pillar. In addition, the Company will continue to pursue inorganic
accretive opportunities, specifically with one such target which management
has been in discussions with since the end of 2022. This target has the
potential to be transformative for the Company from both financial as well as
operational perspectives.
This year has started well and Management looks forward to updating
shareholders on the Company's progress.
Martin Hunt (Non-executive Chairman)
Stuart J. Ashman (Chief Executive Officer)
27 March 2023
Consolidated Statement of Comprehensive Income
For the 6 months ended 31 December 2022
Notes 6 months to 6 months to 12 months to
31 Dec 2022
31 Dec 2021
30 Jun 2022
Unaudited Unaudited Audited
£ £ £
Continuing operations
Revenue 76,985 21,949 74,761
Cost of sales (25,248) (8,560) (29,424)
Gross profit 51,737 13,389 45,337
Selling and distribution (40,136) (10,408) (43,804)
Research and development (444,588) (396,695) (861,383)
Operating expenses (918,103) (764,750) (2,122,238)
Loss from operations (1,351,090) (1,158,464) (2,982,088)
Finance costs (4,739) (5,274) (10,135)
Loss before taxation (1,355,829) (1,163,738) (2,992,223)
Taxation 4 70,826 88,812 199,622
Loss for the period (1,285,003) (1,074,926) (2,792,601)
Total comprehensive loss for the period (1,285,003) (1,074,926) (2,792,601)
Basic and diluted loss per share (pence) 5 (0.82) (0.69) (1.78)
Consolidated Statement of Financial Position
As at 31 December 2022
As at As at As at
31 Dec 2022
31 Dec 2021
30 Jun 2022
Note
Unaudited Unaudited Audited
£ £ £
ASSETS
Non-current assets
Right-of-use assets 110,702 128,752 126,903
Intangible assets 652,548 570,478 625,504
Total non-current assets 763,250 699,230 752,407
Current assets
Inventories 88,257 412,064 122,571
Trade and other receivables 126,274 191,893 138,150
Corporation tax receivable 244,555 156,106 266,916
Cash and cash equivalents 765,976 3,153,631 1,804,923
Total current assets 1,225,062 3,913,694 2,332,560
Total assets 1,988,312 4,612,924 3,084,967
EQUITY AND LIABILITIES
Equity
Capital and reserves
Called up share capital 6 1,567,802 1,567,802 1,567,802
Share premium 8,758,037 8,758,037 8,758,037
Other reserves 459,471 405,914 437,316
Accumulated deficit (9,572,797) (6,570,119) (8,287,794)
Total equity 1,212,513 4,161,634 2,475,361
Liabilities
Non-current liabilities
Lease liabilities 82,823 101,473 100,647
Total non-current liabilities 82,823 101,473 100,647
Current liabilities
Trade and other payables 666,290 323,723 481,742
Lease liabilities 26,686 26,094 27,217
Total current liabilities 692,976 349,817 508,959
Total liabilities 775,799 451,290 609,606
Total equity and liabilities 1,988,312 4,612,924 3,084,967
Consolidated Statement of Cash Flows
For the 6 months ended 31 December 2022
6 months to 6 months to 12 months to
31 Dec 2022
31 Dec 2021
30 Jun 2022
Unaudited Unaudited Audited
£ £ £
Cash flows from operating activities
Loss before tax for the period (1,355,828) (1,163,738) (2,992,223)
Right-of-use assets depreciation and interest 20,938 19,850 39,557
Amortisation of IP 150 - 250
Share based payments charge 22,155 21,302 52,704
(1,312,585) (1,122,586) (2,899,712)
Changes in working capital
Decrease/(Increase) in inventories 34,314 (412,064) (122,571)
Decrease/(Increase) in trade and other receivables 7,138 71,779 130,796
Increase/(decrease) in trade and other payables 184,016 (56,097) 101,922
Cash used in operations 225,468 (396,382) 110,147
Taxation received 93,188 116,534 116,534
Net cash used in operating activities (993,929) (1,402,434) (2,673,031)
Cash flows from investing activities
Purchase of IP (27,194) (41,537) (96,813)
Net cash used in investing activities (27,194) (41,537) (96,813)
Cash flows from financing activities
Lease payments made (17,824) (12,287) (35,122)
Net cash used by financing activities (17,824) (12,287) (35,122)
Net decrease in cash and cash equivalents (1,038,947) (1,456,258) (2,804,966)
Cash and cash equivalents at the beginning of the period 1,804,923 4,609,889 4,609,889
Cash and cash equivalents at the end of the period 765,976 3,153,631 1,804,923
Consolidated Statement of Changes in Equity
For the 6 months ended 31 December 2022
Share capital Share premium Other reserves Retained earnings Total
£ £ £ £ £
As at 1 Jul 2021 1,567,802 8,758,037 384,612 (5,495,193) 5,215,258
Loss for the period - - - (1,074,926) (1,074,926)
Share-based payments - - 21,302 - 21,302
As at 31 Dec 2021 1,567,802 8,758,037 405,914 (6,570,119) 4,161,634
As at 1 Jan 2022 1,567,802 8,758,037 405,914 (6,570,119) 4,161,634
Loss for the period - - - (1,717,675) (1,717,675)
Share-based payments - - 31,402 - 31,402
As at 30 Jun 2022 1,567,802 8,758,037 437,316 (8,287,794) 2,475,361
As at 1 Jul 2022 1,567,802 8,758,037 437,316 (8,287,794) 2,475,361
Loss for the period - - - (1,285,003) (1,285,003)
Share-based payments - - 22,155 - 22,155
As at 31 Dec 2022 1,567,802 8,758,037 459,471 (9,572,797) 1,212,513
Share capital is the amount subscribed for shares at nominal value.
Share premium is the amount subscribed for share capital in excess of nominal
value.
Other reserves arise from share options granted and exercised.
Retained earnings represents accumulated profit or losses to date.
Notes to the Consolidated Financial Statements
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 address of its registered office is The Core Bath
Lane, Newcastle Helix, Newcastle Upon Tyne, England, NE4 5TF.
The principal activity of the Group is the identification and development of
technology that harnesses the human microbiome to improve health.
The financial information set out in this half yearly report does not
constitute statutory accounts as defined in Section 434 of the Companies Act
2006. The statutory financial statements for the year ended 30 June 2022,
prepared under International Financial Reporting Standards ("IFRS"), have been
filed with the Registrar of Companies. The auditor's report on those financial
statements was unqualified but included a reference to the material
uncertainty related to going concern in respect of the outcome of the
fundraise which completed in January 2023 and did not contain statements under
Sections 498(2) and 498 (3) of the Companies Act 2006.
Copies of the annual statutory accounts and the Interim Report can be found on
the Company's website at www.skinbiotherapeutics.com.
2. Significant accounting policies and basis of
preparation
2.1 Statement of compliance
This Interim Report has been prepared using the historical cost convention, on
a going concern basis and in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the United Kingdom, IFRS Interpretations
Committee (IFRIC) and the Companies Act 2006 applicable to companies reporting
under IFRS, using accounting policies which are consistent with those set out
in the financial statements for the year ended 30 June 2022.
2.2 Application of new and revised International Financial
Reporting Standards (IFRSs)
There are no IFRSs or IFRIC interpretations that are effective for the first
time in this financial period that would be expected to have a material impact
on the Group.
3. Segmental reporting
In the opinion of the Directors, the Group has one class of business, in three
geographical areas, namely that of the identification and development of
technology that harnesses the human microbiome to improve health.
Revenue analysed by geographical market 6 months to 6 months to 12 months to
31 Dec 2022
31 Dec 2021
30 Jun 2022
£ £ £
UK 70,328 16,860 57,687
Europe 560 - -
US 6,097 5,089 17,074
76,985 21,949 74,761
4. Taxation
Income taxes recognised in profit or loss 6 months to 6 months to 12 months to
31 Dec 2022
31 Dec 2021
30 Jun 2022
£ £ £
Current tax
R&D tax credit 70,826 88,812 173,729
R&D tax credit - prior year - - 25,893
Tax credit for the period 70,826 88,812 199,622
Loss per share
5.
6 months to 6 months to 12 months to
31 Dec 2022
31 Dec 2021
30 Jun 2022
£ £ £
Basic and diluted loss per share
Loss after tax (£) (1,285,002) (1,074,926) (2,792,601)
Weighted average number of shares 156,780,236 156,780,236 156,780,236
Basic and diluted loss per share (pence) (0.82) (0.69) (1.78)
As the Group is reporting a loss from continuing operations for the period
then, in accordance with IAS 33, the share options are not considered dilutive
because the exercise of the share options would have an anti-dilutive effect.
The basic and diluted earnings per share as presented on the face of the
income statement are therefore identical.
6. Share capital
Issued share capital comprises 31 Dec 2022 31 Dec 2021 30 Jun 2022
£ £ £
156,780,236 ordinary shares of £0.01 each 1,567,802 1,567,802 1,567,802
Events after the reporting date
7.
The Group has evaluated all events and transactions that occurred after 31
December 2022 up to the date of signing of the financial statements.
On 4 January 2023 the Group raised £2.6m of gross proceeds following a
placing of ordinary shares which were admitted onto AIM on 5 January 2023.
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