Half year results

RNS Number : 9510P

SkinBioTherapeutics PLC

14 February 2019

 

SkinBioTherapeutics plc

Half year results

Manchester, UK - 14 February 2019 - SkinBioTherapeutics plc (AIM: SBTX or the "Company") a life sciences company focused on skin health, has announced its half year results for the six months to 31 December 2018.

·     Successful completion of safety and irritancy human studies, even at very high doses

·     Commencement of efficacy human study with 60 subjects treated; study on track to complete during Q1 2019

·     Ongoing commercial discussions ahead of efficacy data readout

·     Loss from operations of £632k (H1 2017: £386k) based on ongoing R&D and operating expenditure

·     Cash as at 31 December 2018 £2.5m (H1 2017: £3.6m), in line with management's expectations

·     Dr. Cath O'Neill to transition from CEO role during 2019

Martin Hunt, Chairman of SkinBioTherapeutics, said:

"The past six months has continued to be busy, as we put the scientific and manufacturing foundations in place to support SkinBiotix® through human safety studies and onto commercialisation. The next half of the financial year will be focused on progressing partnerships around the technology on the back of the human study data.  We expect the next six months to be as equally busy.

"As mentioned in this statement, we are also approaching a point where the focus of the Company is changing. Consequently Cath is going to be transitioning from her role as CEO. She has played a central part in the science and the Company from the start, by discovering the technology, wrapping a company around it and leading it through the IPO and early life as a listed company.  We are very grateful to her for her contribution to date as CEO.  The aim now is to find someone as dedicated and passionate about the technology who will take the Company to the next stage."

Dr. Cath O'Neill, CEO, added:

"I am very proud of everything that has been achieved by SkinBioTherapeutics in such a short time. Our ambition to enter the skin health market with a microbiome-based technology founded on a credible science, is progressing well.  As a member of the Board, I am determined to find a suitable individual for the CEO role with the same passion for the science, as well as commercial acumen. Until someone is appointed, my priority is to continue to guide the Company through its first major human study and talks with potential partners."

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.

For more information, please contact:

SkinBioTherapeutics plc Dr. Cath O'Neill, CEO Doug Quinn, CFO	Tel: [phone]
Cairn Financial Advisers LLP (Nominated Advisor) Tony Rawlinson / Sandy Jamieson / Richard Nash	Tel: [phone]
Turner Pope Investments (Joint Broker) Ben Turner / James Pope SP Angel Corporate Finance (Joint Broker) Vadim Alexandre / Abigail Wayne	Tel: [phone] Tel: [phone]
Instinctif Partners Melanie Toyne-Sewell / Deborah Bell	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. Cath 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 PLC (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 and Chief Executive's Statement

During the first half of the financial year SkinBioTherapeutics continued to deliver on its stated objectives.

Of particular note was the commencement of its human studies and during the period the Company reported successful safety and irritancy data. Furthermore, the Company completed testing on 60 of the total 120 volunteers in its efficacy study, with no compliance or safety concerns. The final 60 volunteers are currently being treated and the Company expects to complete the study during Q1 2019.

Since the IPO, the Company has been in a scientific growth phase; where the focus has been on developing SkinBiotix® technology, working on formulation, manufacturing and scale-up and being in a position to commence human studies. The current study will generate efficacy data which will be of relevance to ongoing discussions with potential partners interested in commercialising the technology. 

During the course of 2018 the Company has achieved a number of important product development milestones which have reduced investor risk and reinforced the Board's confidence in the potential of SkinBiotix® to deliver a wide range of cosmetic and dermatological applications. These applications are designed to address unmet needs in the large Cosmetic Skin Care (forecast to reach $180bn by 2024) and Dermatology (forecast to reach $14.2bn by 2021) markets.

Science continues to be a primary driver for the business and having commenced its efficacy clinical study the Company is considering how best to address other applications for its SkinBiotix® technology, for example in the oral cavity or on the scalp. In addition, the Company is assessing how it can apply its microbiome and dermatological expertise to other skin conditions, for example psoriasis where the Company is in discussions with a third party for a potential joint development agreement.

As the Company continues to develop, both broadening its scientific focus and its intentions to extend commercial discussions following the completion of the human studies, the Board considers this is an appropriate time to split the currently combined role of Chief Executive and Chief Scientific Officer. With these combined roles Dr. O'Neill has been responsible for the considerable success of the Company to date, delivering on all the key objectives outlined at the IPO and commencing the various commercial negotiations.

The Board has commenced a search process for a commercially experienced individual to succeed Dr. O'Neill as Chief Executive and expects this, together with a managed transition, to be completed during the course of 2019. During this time, Dr. O'Neill will continue to lead the scientific developments of the Company as well as the ongoing commercial discussions. 

The Board and Dr O'Neill intend to retain a strong ongoing relationship; either in a direct Company role or as part of her role as Professor of Translational Dermatology at the University of Manchester, the Company's key partner for research and development activities.

Financial review

R&D expenditure in the period was £392k (H1 2017: £125k) and combined with other operating expenditure of £240k (H1 2017: £261k) resulted in a loss from operations of £632k (H1 2017: £386k).

Cash burn during the period was £666k (H1 2017: £273k) and in line with management's expectations. The Company finished the six-month period with a cash balance of £2.5m (H1 2017: £3.6m).

Operational review

For the past six months the Company has been busy driving the clinical programmes forward, especially the human study for the cosmetic application. The Company commenced the human study in September 2018 with three elements: a skin irritation study, a moisturisation potential study and an efficacy study. The other clinical programmes have also progressed during the period.

Skin Irritation Study

24-72 hours test - involved applying a cream containing SkinBiotix® to 30 healthy subjects in a series of five doses of increasing concentration. The area of skin treated was then covered to drive absorption of the cream into the skin. At 24, 48 and 72 hours following application, subjects were assessed for any signs of irritation. There were no instances of irritation in any of the subjects - even at 20 times the standard use dose of SkinBiotix®.

Repetitive, longer term test - involved repeated application of the cream at five doses to the skin of 31 healthy subjects. The product was in contact with the skin for 12 days, using an exaggerated exposure method to provide a more rigorous test of skin tolerance. The volunteers were regularly monitored for signs of irritation for up to 15 days following the initial application. While one volunteer experienced irritation in response to the cream (which occasionally happens in tests using prolonged exposure under exaggerated test conditions), no irritation was observed in the remaining 30 volunteers, even at concentrations of SkinBiotix® well above that of therapeutic use (up to 20 times the standard dose).

Moisturisation Potential Study

The moisturisation effect of the SkinBiotix® technology was tested in a 12-hour study - an industry standard test - using 21 healthy subjects. In this study, the cream containing SkinBiotix® was applied to an area of skin and the moisture content of the skin was measured for up to 12 hours. The moisturising effect of the cream without the technology was also measured as a control for comparison.  As in-house laboratory tests have indicated that SkinBiotix® requires at least 24 hours to produce its effects, no difference was anticipated when compared against the control.

The cream containing SkinBiotix® provided good moisturisation which was generally higher than that provided by the control cream, but the difference was not significant.

No irritation was observed in this study in any volunteer.

Efficacy Study

The final phase of the human study commenced in November 2018 and is assessing whether the SkinBiotix® technology retains the same beneficial property to improve skin health when in a cream formulation. By the end of 2018 the Company had completed testing on 60 of the total 120 volunteers in this study with no compliance or safety concerns. The remaining 60 subjects are currently being treated and the Company expects to complete the study during Q1 2019.

The study is double-blinded, meaning neither the volunteers nor the experimenters know who is receiving a particular treatment, to prevent any bias. For this reason, SkinBioTherapeutics will need the full dataset before it can be 'unblinded' for statistical analysis. The data will then be assessed to determine effectiveness - whether the SkinBiotix® technology retains the same beneficial property of improving skin health when in a cream formulation.

The Company has continued to progress discussions with third parties interested in commercialising the SkinBiotix® technology and once available, will share the data of the various elements of the human study to further the discussions.

Eczema Programme

The Company is working with its regulatory advisors to prepare the medical device dossier for the eczema programme for submission to the notified body. Subject to 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.

Outlook

The Company has made significant progress over a relatively short period of time - manufacture of its lysate and volume scale-up, production of a cream formulation incorporating the SkinBiotix® technology and completion of its human safety studies. This progress has culminated in the efficacy study for the cosmetic application which will complete in the first quarter of 2019. This will be a key milestone, bringing the total number of people treated with the cosmetic formulation close to 200 and placing the Company in a strong position to both commercialise the technology with suitable industry partners and continue exploring other avenues for its core technology.

The splitting of the CEO/CSO role during the course of 2019 will result in the expansion of the executive team which will provide additional resources to support the parallel scientific and commercial growth of the Company.  On behalf of the Board, we would like to thank everyone for their endeavours to drive the programmes further, especially Cath for her considerable contribution to the business so far.  

Martin Hunt (Non-executive chairman)

Dr. Catherine O'Neill (Chief Executive Officer)

 

Statement of Comprehensive Income

For the 6 months ended 31 December 2018

			Notes	6 months to 31 Dec 2018	6 months to 31 Dec 2017	12 months to 30 Jun 2018
				Unaudited	Unaudited	Audited
				£	£	£
Continuing operations
Research and development				(391,907)	(125,283)	(415,902)
Operating expenses				(240,372)	(261,240)	(525,549)
Loss from operations				(632,279)	(386,523)	(941,451)
Loss before taxation				(632,279)	(386,523)	(941,451)
Taxation			4	99,546	43,479	97,033
Loss for the period				(532,733)	(343,044)	(844,418)
Total comprehensive loss for the period				(532,733)	(343,044)	(844,418)
Basic and diluted loss per share (pence)			6	(0.45)	(0.29)	(0.71)

Statement of Financial Position

As at 31 December 2018

			Note	As at 31 Dec 2018	As at 31 Dec 2017	As at 30 Jun 2018
				Unaudited	Unaudited	Audited
				£	£	£
ASSETS
Non-current assets
Property, plant & equipment				9,350	-	-
Intangible assets				308,104	242,745	287,672
Total non-current assets				317,454	242,745	287,672
Current assets
Other receivables				26,227	35,812	93,421
Corporation tax receivable				185,818	86,164	86,272
Cash and cash equivalents				2,516,876	3,649,476	3,182,898
Total current assets				2,728,921	3,771,452	3,362,591
Total assets				3,046,375	4,014,197	3,650,263
EQUITY AND LIABILITIES
Equity
Capital and reserves
Called up share capital			5	1,187,085	1,187,085	1,187,085
Share premium				3,577,640	3,577,640	3,577,640
Other reserves				205,166	134,709	170,418
Accumulated deficit				(2,026,906)	(992,799)	(1,494,173)
Total equity				2,942,985	3,906,635	3,440,970
Liabilities
Current liabilities
Trade and other payables				103,390	107,562	209,293
Total current liabilities				103,390	107,562	209,293
Total liabilities				103,390	107,562	209,293
Total equity and liabilities				3,046,375	4,014,197	3,650,263

 

Statement of Cash Flows

For the 6 months ended 31 December 2018

			6 months to 31 Dec 2018		6 months to 31 Dec 2017		12 months to 30 Jun 2018
			Unaudited		Unaudited		Audited
			£		£		£
Cash flows from operating activities
Loss before tax for the period			(632,279)		(386,523)		(941,451)
Depreciation			850		-		-
Share option expenses			34,748		36,150		71,859
			(596,681)		(350,373)		(869,592)
Changes in working capital
Decrease in trade and other receivables			67,194		115,377		57,768
Increase / (decrease) in trade and other payables			(105,903)		(11,098)		90,633
Cash generated by / (used in) operations			(38,709)		104,279		148,401
Taxation received			-		-		53,446
Net cash used in operating activities			(635,390)		(246,094)		(667,745)
Cash flows from investing activities
Purchase of property, plant & equipment			(10,200)		-		-
Payments for intangible assets			(20,432)		(27,333)		(72,260)
Net cash used in investing activities			(30,632)		(27,333)		(72,260)
Net decrease in cash and cash equivalents			(666,022)		(273,427)		(740,005)
Cash and cash equivalents at the beginning of the period			3,182,898		3,922,903		3,922,903
Cash and cash equivalents at the end of the period			2,516,876		3,649,476		3,182,898

Statement of Changes in Equity

For the 6 months ended 31 December 2018

			Share capital	Share premium	Other reserves	Retained earnings	Total
			£	£	£	£	£
As at 1 Jul 2017			1,187,085	3,577,640	98,559	(649,755)	4,213,529
Loss for the period			-	-	-	(343,044)	(343,044)
Share-based payments			-	-	36,150	-	36,150
As at 31 Dec 2017			1,187,085	3,577,640	134,709	(992,799)	3,906,635
As at 1 Jan 2018			1,187,085	3,577,640	134,709	(992,799)	3,906,635
Loss for the period			-	-	-	(501,374)	(501,374)
Share-based payments			-	-	35,709	-	35,709
As at 30 Jun 2018			1,187,085	3,577,640	170,418	(1,494,173)	3,440,970
As at 1 Jul 2018			1,187,085	3,577,640	170,418	(1,494,173)	3,440,970
Loss for the period			-	-	-	(532,733)	(532,733)
Share-based payments			-	-	34,748	-	34,748
As at 31 Dec 2018			1,187,085	3,577,640	205,166	(2,026,906)	2,942,985
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.

Notes to the half yearly report

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 15 Silk House, Park Green, Macclesfield, SK11 7QJ.

The principal activity of the Company is that of research and development into the effects of lysates derived from the human microbiome on skin.

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 2018, 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 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 half yearly report can be found on the Company's website at http://www.skinbiotherapeutics.com/.

2.            Significant accounting policies and basis of preparation

2.1          Statement of compliance

This half yearly 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 European Union, 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 2018.

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 Company.

3.            Segmental reporting

The Company has one reportable segment, namely the research and development of the SkinBiotix® technology, all within the United Kingdom. 

Notes to the half yearly report

4.	Taxation
Income taxes recognised in profit or loss										6 months to 31 Dec 2018		6 months to 31 Dec 2017		12 months to 30 Jun 2018
										£		£		£
Current tax
R&D tax credit										97,509		43,479		86,272
R&D tax credit - prior year										2,037		-		10,761
Tax credit for the period										99,546		43,479		97,033
5.	Share capital
Issued share capital comprises										31 Dec 2018		31 Dec 2017		30 Jun 2018
										£		£		£
118,708,494 ordinary shares of £0.01 each										1,187,085		1,187,085		1,187,085
6.	Loss per share
										6 months to 31 Dec 2018		6 months to 31 Dec 2017		12 months to 30 Jun 2018
										£		£		£
Basic and diluted loss per share
Loss after tax (£)										(532,733)		(343,044)		(844,418)
Weighted average number of shares										118,708,494		118,708,494		118,708,494
Basic and diluted loss per share (pence)										(0.45)		(0.29)		(0.71)
As the Company 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.
7.	Events after the reporting date
The Company has evaluated all events and transactions that occurred after 31 December 2018 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.

 

END

 

 

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