Full year results

RNS Number : 1031F

SkinBioTherapeutics PLC

25 October 2018

 

SkinBioTherapeutics plc

Full year results

Manchester, UK - 25 October 2018 - SkinBioTherapeutics plc (AIM: SBTX - "SkinBioTherapeutics" or the "Company") a life sciences company focused on skin health, has announced its full year audited results for the year to 30 June 2018.

Key highlights

·     SkinBiotix® passed key cytotoxicity safety tests

·     Replication of lysate manufacturing process by a third party and successful industrial volume scale-up

·     Production of a cream formulation that demonstrated effectiveness of SkinBiotix® technology

·     Expansion of intellectual property portfolio, with patents granted in Australia, Russia and New Zealand

·     Signing an MTA (Material Transfer Agreement) with global consumer goods company

·     Ethics approval for cosmetic human study

·     Extension to University of Manchester research agreement

·     Cash as at 30 June 2018 £3.2m (2017: £3.9m)

·     Post year end: commenced first human cosmetic studies  
 

Cath O'Neill, CEO of SkinBioTherapeutics, said:

"This year, our focus has been on preparing the SkinBiotix® technology for its first human study and longer-term preparations for commercialisation. On both fronts, we have made good progress.

"Firstly, we have demonstrated that our lysate can be freeze dried and scaled-up to industrial levels. On the commercial front, we have an ongoing dialogue, including an MTA, with a range of major FMCG and cosmetic companies who are taking a close interest in our technology and progress.

"Post year end, we initiated the cosmetic human studies which was a major milestone for the Company. On the basis that the results are positive, the validation will strengthen our position as a science-led business and enable further commercial discussions."

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:

SkinBioTherapeutics plc Dr. Cath O'Neill, CEO Doug Quinn, CFO	Tel: [phone]
Cairn Financial Advisers LLP (Nominated Adviser) Tony Rawlinson / Sandy Jamieson / Richard Nash	Tel: [phone]
Turner Pope Investments (Joint Broker) Ben Turner / James Pope Northland Capital Partners (Joint Broker) Dugald Carlean	Tel: [phone] Tel: [phone]
Instinctif Partners (Media Relations) Melanie Toyne-Sewell / Deborah Bell / Alex Shaw	Tel: [phone] [e-mail]

Notes to Editors

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 CEO Dr. Catherine O'Neill and Professor Andrew McBain.

SkinBioTherapeutics' platform applies research discoveries made on the activities of lysates derived from probiotic bacteria when applied to the skin.  The Company has shown that the SkinBiotix® platform can improve the barrier effect of skin models, protect skin models from infection and repair skin models.  Proof of principle studies have shown that the SkinBiotix® platform has beneficial attributes applicable to each of these areas. 

SkinBioTherapeutics received seed funding from the Tech Transfer office of the University of Manchester for the discovery of SkinBiotix®. The platform was subsequently spun out of the University of Manchester in March 2016 and was funded by OptiBiotix (AIM: OPTI).

The Company joined AIM in April 2017 concurrent with raising £4.5 million from a placing of new ordinary shares.

The Company is based in Manchester, UK. For more information, visit www.skinbiotherapeutics.com.

Chairman's Statement

During the past financial year, SkinBioTherapeutics' has focused on the development of its SkinBiotix® technology platform and the preparations for the start of the cosmetic human study. 

The Company has made significant progress across all aspects of these business objectives. The manufacturing process has been driven forward, from the scale-up of the lysate material through to the development of a cosmetic formulation. Having formulated a cream and demonstrated the extended stability of the technology, the Company has also been able to begin the first phase of its human study in September 2018. This is an important milestone for the business and a key step towards the future commercialisation of the technology.

Costs have been managed carefully and the Company ended the year with a cash balance of £3.2m (2017: £3.9m), which is line with management's expectations. 

Other key operational achievements which are described more fully in the CEO's report include:

·     SkinBiotix® passed key cytotoxicity safety tests

·     Replication of the lysate manufacturing process by a third party and industrial volume scale-up

·     Production of a cream formulation that demonstrated the effectiveness of the SkinBiotix® technology

·     Granting of patents in Australia, Russia and New Zealand

·     Signing an MTA (Material Transfer Agreement) with a global consumer goods company

·     Provisional ethics approval for the cosmetic human study

·     Progress with the eczema and infection programmes

·     Extension to the research agreement with the University of Manchester.

Interest in the microbiome as a sector continues to grow and it is noteworthy that the cosmetic industry is transitioning to products and applications with scientific validation. This latter development has been an important factor in the discussions the Company has had to date with potential commercial partners. This reaffirms SkinBioTherapeutics' strategic approach to establish itself as a 'science-led' skin healthcare business.

During the current financial year, the Company expects to complete its first human study and further commercial negotiations in partnering and licensing opportunities.

Martin Hunt

Chairman

CEO's Statement

Overview

SkinBioTherapeutics seeks to harness the microbiome for human health. The best understood members of the microbiome are the bacteria that live in the gut and these have led to the rise in ingesting 'probiotics' to promote health. However, an increasing area of focus is the microbiome of the skin.

SkinBioTherapeutics' proprietary technology, SkinBiotix®, is designed to promote skin health by harnessing the beneficial properties of probiotic bacteria and the active components derived from them. The approach taken is to use a 'lysate' of probiotic bacteria 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.

The Company is developing SkinBiotix® to address a number of indications and has an ongoing research agreement with the University of Manchester to identify and develop new and different technologies. Proof of principle studies have shown that the molecules found in the human microbiome can be used to protect, manage and restore the skin. On the basis of this data, the Company has identified potential applications for SkinBiotix® in the areas of cosmetics, the reduction in the incidence of eczema flares and for the prevention of infection.

Commercially, the Company intends to license its technologies to large corporates once human proof-of-principle has been established and generate income through licence revenue. The Company is in early level discussions with a number of third parties and in April this year signed an MTA with a global consumer goods company.

Dialogues are continuing with each of the engaged parties and a common theme from the discussions is the focus on scientific validation which reinforces SkinBioTherapeutics' strategy to position itself as a prominent 'science led' business. To this end the directors anticipate more tangible progress on the commercial discussions on the readout of the cosmetic human study.

This route to commercialisation, in conjunction with the approach to R&D with the University of Manchester, enables the Company to operate virtually with a small employee base and a consequently low cost of operations.

Financial review

Whilst operating expenditure has increased following the Company's IPO in April 2017, this is in line with management forecasts and the Company held £3.2m of cash at the year-end (2017: £3.9m).

Research and development expenditure was £416k (2017: £157k) comprising development work with the University of Manchester and the manufacture, scale up and preparatory work for the cosmetic human study.

Ongoing operating costs were £526k (2017: £305k) covering employment, consultancy, PLC support costs and marketing.

Overall the Company made a loss before tax of £941k (2017: £688k).

Operational review

During the year the Company achieved several important milestones with its SkinBiotix® technology - manufacture of the lysate, the passing of key safety studies and the successful formulation of the technology into a cream.

Manufacture of the lysate had previously only been achieved on a small scale in the laboratory. However, the process of manufacture has now been successfully replicated with a third party and subsequently scaled up by to a level appropriate for commercialisation. 

In addition, the base lysate material, which to date has been manufactured and supplied in a liquid form, has now been successfully freeze dried. The ability to freeze dry a material of this kind is an important step towards commercialisation as it enables mass production, storage and transportation.

The technology has also passed various cytotoxicity tests and demonstrated that it is safe to use on human skin. The studies were performed by Charles River Laboratories, a global contract research organisation (CRO). The CRO tested for adverse reactions to the use of the SkinBiotix® technology, firstly when applied to human cells, secondly after exposure to UV and visible light and thirdly when applied to eye cells. Successfully passing these studies was a precursor to progressing the cosmetic human study.

Cosmetic programme

With the scale-up and manufacture of the SkinBiotix® technology finalised, the focus with the cosmetic programme has been to establish a formulation, containing SkinBiotix®, that can be applied to the skin and perform in the same way as the technology on its own.

Having achieved this with a cream, the formulation was then tested for its stability. Stability addresses the requirement of the technology to be effective within the formulation over an extended period of time. This stability is specific to the formulation required for the human study and the study duration. The Company is not intending to market the cream, rather the technology will be licensed to a third party who will incorporate it into a product formulation with the requisite stability. 

In September 2018, the Company announced it had started its human study which comprises three sub components with data readouts occurring between November 2018 and April 2019.

Other programmes

Work in the lab this year has demonstrated that SkinBiotix® fulfils a 'physical mode of action' with regard to the pathogen Staphylococcus aureus (S. aureus), i.e. it prevents the attachment of S. aureus to the skin. The skin of eczema sufferers is commonly infected with S. aureus and there is documented evidence that this infection is the most common cause of eczema flares. On this basis, technologies that can reduce S. aureus load on skin have the potential to reduce the incidence of flares.

The physical mode of action of SkinBiotix® allows the Company to progress the eczema programme as a medical device rather than a pharmaceutical treatment. This regulatory pathway is potentially a faster route to market. The Company is working with its regulatory advisors to prepare the medical device dossier for submission to the notified body. Subject to acceptance of the eczema programme following the medical device pathway, the Company anticipates seeking approval in the second half of 2019 for the commencement of a clinical trial.

The Company considers the SkinBiotix® technology to have utility beyond general healthcare acquired infections and intends to broaden the scope to encompass specific skin infections, for example athlete's foot.  The technology may also be effective in blocking the adhesion of other pathogens not only to skin but also in the oral cavity or on the scalp. Hence the Company envisages a development programme to test SkinBiotix® against a range of pathogens during the course of 2019.

Outlook

Having established manufacturing scale-up and formulated an effective cream, the human study initiated in September defined an important phase for the Company. A positive readout from the study will be an important validation of the SkinBiotix® technology and a basis to further progress the various commercial discussions that are in hand.

Reaffirming and progressing the eczema programme as a medical device following the preliminary regulatory assessment will also be a significant workstream in 2019 together with establishing programmes to address other skin infections and assess the impact of SkinBiotix® on other pathogens.

Good progress has been made this year across the business and the Board and management team are optimistic for the outlook in 2019.

Dr Cath O'Neill

CEO

Income statement

For the year ended 30 June 2018

			Notes	For the year ended 30 June 2018		For the year ended 30 June 2017
Continuing operations				£		£
Research and development				(415,902)		(156,726)
Initial public offering costs				-		(211,477)
Operating expenses				(525,549)		(304,496)
Loss from operations			2	(941,451)		(672,699)
Finance costs				-		(15,540)
Loss before taxation				(941,451)		(688,239)
Taxation				97,033		42,685
Loss for the year				(844,418)		(645,554)
Other comprehensive income				-		-
Total comprehensive loss for the year				(844,418)		(645,554)
Basic and diluted loss per share (pence)			3	(0.71)		(1.11)

 

Statement of financial position

As at 30 June 2018

					Notes	As at 30 June 2018			As at 30 June 2017
						£			£
Assets
Non-current assets
Intangible assets						287,672			215,412
Total non-current assets						287,672			215,412
Current assets
Other receivables						93,421			151,189
Corporation tax receivable						86,272			42,685
Cash and cash equivalents						3,182,898			3,922,903
Total current assets						3,362,591			4,116,777
Total assets						3,650,263			4,332,189
Equity and liabilities
Equity
Capital and reserves
Called up share capital						1,187,085			1,187,085
Share premium						3,577,640			3,577,640
Other reserves						170,418			98,559
Accumulated deficit						(1,494,173)			(649,755)
Total equity						3,440,970			4,213,529
Liabilities
Current liabilities
Trade and other payables						209,293			118,660
Total current liabilities						209,293			118,660
Total liabilities						209,293			118,660
Total equity and liabilities						3,650,263			4,332,189

 

Statement of cash flows

For the year ended 30 June 2018

							For the year ended 30 June 2018		For the year ended 30 June 2017
							£		£
Cash flows from operating activities
Loss before tax for the period							(941,451)		(688,239)
Convertible loan interest paid as equity							-		15,540
Share option expenses							71,859		98,559
							(869,592)		(574,140)
Changes in working capital
(lncrease)/decrease in trade and other receivables							57,768		(120,582)
Increase in trade and other payables							90,633		85,019
Cash generated by/(used in) operations							148,401		(35,563)
Taxation received							53,446		-
Net cash used in operating activities							(667,745)		(609,703)
Cash flows from investing activities
Payments for intangible assets							(72,260)		(79,198)
Net cash used in investing activities							(72,260)		(79,198)
Cash flows from financing activities
Net proceeds from issue of equity instruments of the Company							-		3,955,137
Net proceeds from issue of convertible loan notes							-		400,000
Net cash generated by financing activities							-		4,355,137
Net (decrease)/increase in cash and cash equivalents							(740,005)		3,666,236
Cash and cash equivalents at the beginning of the period							3,922,903		256,667
Cash and cash equivalents at the end of the period							3,182,898		3,922,903

 

Statement of changes in equity

For the year ended 30 June 2018

				Share capital	Share premium	Other reserves		Retained earnings		Total
				£	£	£		£		£
As at 1 July 2016				1,000	393,048	-		(4,201)		389,847
Loss for the period				-	-	-		(645,554)		(645,554)
Issue of shares				893,048	3,606,952	-		-		4,500,000
Costs of share issue				-	(544,863)	-		-		(544,863)
Issue of convertible loan notes				-	-	93,151				93,151
Conversion of convertible loan notes				293,037	122,503	(93,151)		-		322,389
Share-based payments				-	-	98,559		-		98,559
As at 30 June 2017				1,187,085	3,577,640	98,559		(649,755)		4,213,529
Loss for the period								(844,418)		(844,418)
Issue of shares				-	-	-		-		-
Costs of share issue				-	-	-		-		-
Issue of convertible loan notes				-	-	-		-		-
Conversion of convertible loan notes				-	-	-		-		-
Share-based payments				-	-	71,859		-		71,859
As at 30 June 2018				1,187,085	3,577,640	170,418		(1,494,173)		3,440,970
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 the equity element of a convertible loan issued and converted in the period to 30 June 2017, and from share options granted on 5 April 2017
Retained earnings represents accumulated profit or losses to date.

 

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 Company is the development of technology to protect, manage and restore skin utilising proteins found in the human microbiota.

	2.    Operating loss
																			30 June 2018						30 June 2017
																			£						£
	An analysis of the Company's operating loss has been arrived at  after charging/(crediting):
	Other income																		(84)						(5)
	Research and development																		415,902						156,726
	Directors remuneration (including share-based compensation)																		212,541						38,881
	Auditors remuneration
					- audit fees														10,995						14,000
					- other services														1,750						11,049
	Foreign exchange differences																		345						69
	Other operating costs																		300,002						240,502
	Initial public offering costs																		-						211,477
	Total operating expenses																		941,451						672,699
	The Company has one reportable segment, namely the research and development of the Skinbiotix® technology, all within the United Kingdom.
	3.    Loss per share
																			30 June 2018						30 June 2017
																			£						£
	Basic and diluted loss per share
	Loss after tax (£)																		(844,418)						(645,554)
	Weighted average number of shares																		118,708,494						58,307,324
	Basic and diluted loss per share (pence)																		(0.71)						(1.11)
	As the Company is reporting a loss from continuing operations for the year 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.

4.    Posting of the Annual Report and notice of AGM

A copy of this announcement may be found on the Company's website today and the Annual Report and Accounts will be published later today.

The Company's Annual General Meeting will be held on 19 November 2018 at 11am at 111 Piccadilly, Manchester, M1 2HY.

 The financial information set out in this announcement does not constitute the company's statutory accounts for the period ended 30 June 2017 or the year ended 30 June 2018. The financial information for the period ended 30 June 2017 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 2018 is derived from Group's financial statements for the year ended 30 June 2018 which were approved by the directors on 24 October 2018. 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.

 

END

 

 

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