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SkinBioTherapeutics (SBTX)

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Monday 15 March, 2021

SkinBioTherapeutics

Half-year Report

RNS Number : 1865S
SkinBioTherapeutics PLC
15 March 2021
 

SkinBioTherapeutics plc

 

Half year consolidated results

 

Manchester, UK - 15 March 2021 -   SkinBioTherapeutics plc (AIM: SBTX or the "Company") a life sciences company focused on skin health, announces its unaudited half year consolidated results for the six months to 31 December 2020.

Operational and financial highlights

· Successful combined and formulated blend of probiotic food supplement, AxisBiotix-Ps ™, by partner Winclove, completed ahead of schedule

Post-period end: commencement of supplement consumer study   with strong initial data from over 150 participants reporting at the 14 day timepoint

· SkinBiotix programme with Croda progressing to plan; current focus is scaling-up manufacture of lysate to higher (commercial) volumes; commercialisation on track for 2022

· Placing and open offer in October completed, raising £4.45m (gross)

· Cash as at 31 December 2020 £5.5m (2019: £2.5m)

 

Stuart Ashman, CEO of SkinBioTherapeutics, said:

"The Company has made strong progress over the first half of the year, which given the continued impact that the COVID-19 pandemic has had across the UK and internationally, has been an outstanding achievement by the team.

"We acted decisively and swiftly in adapting our AxisBiotix-Ps food supplement consumer study into a format that allowed for remote participation, which we successfully launched post-period end. Our SkinBiotix cosmetic programme is progressing on schedule, with Croda/Sederma making excellent strides on both the manufacturing and commercial positioning sides. We anticipate seeing significant progress in both areas of work during 2021.

"Our placing and open offer completed in October 2020 has given us resource to materially explore the use of our technology in other areas and expand our virtual R&D operations into true in-house capability. Coupled with our robust cash control, the Company is well-positioned to unlock the commercial potential of our world-class technology."

 

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

Stuart J . Ashman, CEO

Doug Quinn, CFO

Tel: +44 (0) 161 468 2760

 

 

Cenkos Securities Plc (Nominated Adviser & Broker)

Giles Balleny, Max Gould (Corporate Finance)

Michael Johnson (Sales)

Tel: +44 (0) 20 7397 8900

 

 

Instinctif Partners

Melanie Toyne-Sewell / Phillip Marriage / Nathan Billis

Tel: +44 (0) 20 7457 2020

[email protected]

 

 

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 has demonstrated, through scientific testing, that the SkinBiotix® platform can improve the barrier effect of skin models, protect from infection and repair wounds. Proof of principle studies have also shown that the SkinBiotix® platform has beneficial attributes applicable to each of these areas. The technology achieved positive results in clinical studies in human volunteers in early 2019.

The Company listed on AIM in April 2017 and is based in Manchester, 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 and Chief Executive's Statement

The aims of the Company for this first half of the financial year have been the preparation and progression of AxisBiotix™, the food supplement product into a consumer study, and the completion of a fundraise of £4.45m. Alongside these short term aims, has been maintaining focus on the skin care ingredient work with Sederma. All of these objectives have been achieved in the shadow of COVID-19, which has presented a variety of challenges, but has also demonstrated the agility and determination of the team to succeed. More detail of the individual business pillars has been provided in the operational summary below.

 

Financial review

Overall, expenditure in the period was lower than management's expectation, reflecting reduced activity at the University of Manchester due to COVID-19 and the Company pivoting to a self-managed consumer study for AxisBiotix-Ps ™. Research and development expenditure in the period was £205k (H1 2019: £455k) and ongoing operating costs were £423k (H1 2019: £434k). Overall, the Company made a loss from operations of £628k (H1 2019: £889k).

Operating cash burn during the period was £667k (H1 2019: £610k) but the overall cash position was aided by net proceeds from the October 2020 fundraise, where the Company completed a placing to new and existing institutional shareholders raising a total of £4.45m (gross). The funding enables the Company to expand its technology pipeline and transition from a virtual operation to one with in-house scientific capability. In this regard, the Company is in discussions with the University of Manchester for two discrete programmes of work which it expects to start in 2021 and has additionally secured laboratory space at the Biosphere complex in Newcastle.

The Company finished the six month period to 31 December 2020 with a cash balance of £5.5m (H1 2019: £2.5m).

 

Operational review

 

SkinBiotix®

SkinBiotix® is SkinBioTherapeutics' core technology. 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.

In March 2021 Sederma updated the Company on the progress against key milestones in the collaboration:

· Final analytical sample screening and formulation work is ongoing, with results scheduled in Q2 2021 (calendar year);

· Lysate production has been optimised, with refined media conditions, achieving a >800% increase in lysate and total protein levels. The media is animal free and is defined as suitable for cosmetic ingredient certification. Activity has been confirmed in all protein isolates;

· Having successfully scaled up capacity past 2 litres and 20 litres respectively, the planned scale-up to 600 litres will be completed in Q2 2021. In Q3, this will be followed by a final scale-up to 20,000 litres; the capacity required to mass produce the SkinBiotix® product at industrial levels to supply Sederma's portfolio of 12,000+ global customers;

· Commercial positioning work has begun with the schedule for early customer engagement being prepared for discussion with SkinBioTherapeutics.

The project is progressing in line with the original plan and has not been adversely impacted by COVID-19. On the basis of continued progress, the Company anticipates licensed royalty revenue generation to commence in 2022.

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™

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

In July 2020 Winclove reported that it had been able to successfully combine and formulate the blend as a probiotic food supplement, branded as AxisBiotix-Ps™. The next step was to prepare for a consumer study, however, by this time, the COVID-19 pandemic had made the study impossible to execute in a clinical setting as initially intended in a suitable timeframe.

In light of this challenge, the Company redesigned the study so that it could be managed remotely without the need for participants to attend clinics. Enrolment for the study commenced post-period end in January 2021 and experienced extremely high level of demand for participation. Subsequently, the capacity of the study was increased from 200 to 265 participants. The expansion enabled the inclusion of an additional cohort of participants with non-psoriatic conditions e.g. acne, eczema, rosacea, to explore the possible impact of probiotics on additional skin conditions.

Participants have been sent two batches of supplements, each batch comprising 28 days of supply. The study is being monitored through a smart phone application whereby participants are able to submit feedback to weekly questionnaires as to the progression of their symptoms and have the option to upload photos of the affected skin areas. The study extends over a period of 56 days to reflect the natural lifecycle of human skin which ordinarily replicates twice within this timeframe.

As of Friday 12 March, 155 of the study's participants from 3 out of 6 cohorts have reached and reported at the 14 day timepoint (the remainder have yet to reach this timepoint). There have been no reported adverse events and, whilst too early in the study to draw any conclusions, the data thus far has been extremely encouraging. All participants are expected to have reached the day 56 timepoint by the end of April. In order to ensure the highest integrity of the study within the industry and academic communities, the Company will wait until the study is fully complete and analysed before reporting on outcomes. The Company therefore expects to report the detailed findings of the study during the course of May 2021.

Subject to a positive outcome from the study, the Company will then target a commercial launch of the product before the end of the calendar year.

Ahead of commencing the consumer study the Company filed a patent application related to a probiotic composition in the treatment or prevention of dry or sensitive skin conditions, such as psoriasis.

 

MediBiotix™

The MediBiotix channel will focus on medical device applications incorporating the SkinBiotix® technology. The initial target indication is eczema.

Following review of the submitted data pack by the MHRA (Medicines and Healthcare products Regulatory Agency), the Company is progressing further research work in the lab to support the required characteristics of a medical device application.

In 2020, the Company initiated discussions with a number of global advanced woundcare companies regarding the potential utility for its proprietary technology in the treatment of various skin wounds. These discussions continue and are expected to accelerate as travel restrictions are relaxed post COVID-19.

 

CleanBiotix™

The Company is investigating whether SkinBiotix® offers protection for other surfaces from Staphylococcus aureus-induced healthcare-acquired infections in both a domestic and healthcare environment.

Discussions continue with multiple potential global partners to explore this area.

 

Outlook  

Having initiated the AxisBiotix consumer study in early 2021, the Company anticipates this being completed and reported in May 2021. Thereafter and subject to a positive outcome, the Company will target the launch of a product before the end of the calendar year.

Alongside this over the course of 2021, further progress is anticipated on Croda's commercialisation plan for its cosmetic ingredient incorporating the SkinBiotix® technology. The Company also expects to initiate two programmes of work with the University of Manchester and move into its own lab facilities at the Biosphere in Newcastle upon Tyne.

 

Martin Hunt (Non-executive Chairman)

Stuart J. Ashman (Chief Executive Officer)

15 March 2021

 

 

Consolidated Statement of Comprehensive Income

For the 6 months ended 31 December 2020

 

 

 

 

 

Notes

6 months to
31 Dec 2020

6 months to
31 Dec 2019

12 months to
30 Jun 2020

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

£

£

£

 

Continuing operations

 

 

 

 

 

Research and development

 

(205,027)

(455,052)

(635,226)

 

Operating expenses

 

(423,214)

(433,950)

(984,816)

 

Loss from operations

 

(628,241)

(889,002)

(1,620,042)

 

 

 

 

 

 

 

Loss before taxation

 

(628,241)

(889,002)

(1,620,042)

 

Taxation

4

47,664

64,698)

119,956

 

Loss for the period

 

(580,577)

(824,304)

(1,500,086)

 

 

 

 

 

 

 

Total comprehensive loss for the period

 

(580,577)

(824,304)

(1,500,086)

 

Basic and diluted loss per share (pence)

6

(0.44)

(0.64)

(1.17)

 

 

 

Consolidated Statement of Financial Position

As at 31 December 2020

 

 

 

 

 

 

Note

As at
31 Dec 2019

As at
30 Jun 2020

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

£

£

£

 

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property, plant & equipment

 

-

4,250

1,700

 

Intangible assets

 

471,316

378,949

420,538

 

Total non-current assets

 

471,316

383,199

422,238

 

Current assets

 

 

 

 

 

Other receivables

 

56,975 

78,167 

70,622

 

Corporation tax receivable

 

166,426

275,049

118,763

 

Cash and cash equivalents

 

5,482,741

2,483,243

2,159,054

 

Total current assets

 

5,706,142

2,836,459

2,348,439

 

Total assets

 

6,177,458

3,219,658

2,770,677

 

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

Equity

 

 

 

 

 

Capital and reserves

 

 

 

 

 

Called up share capital

5

1,558,899

1,280,835

1,280,835

 

Share premium

 

8,686,812

4,923,890

4,923,890

 

Other reserves

 

442,790

301,554

403,483

 

Accumulated deficit

 

(4,722,929)

(3,466,570)

(4,142,352)

 

Total equity

 

5,965,572

3,039,709

2,465,856

 

Liabilities

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

 

211,886

179,949

304,821

 

Total current liabilities

 

211,886

179,949

304,821

 

Total liabilities

 

211,886

179,949

304,821

 

Total equity and liabilities

 

6,177,458

3,219,658

2,770,677

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statement of Cash Flows

For the 6 months ended 31 December 2020

 

 

 

 

6 months to
31 Dec 2020

6 months to
31 Dec 2019

12 months to
30 Jun 2020

 

 

 

Unaudited

Unaudited

Audited

 

 

 

£

£

£

Cash flows from operating activities

 

 

 

Loss before tax for the period

(628,241)

(889,002)

(1,620,042)

Depreciation

1,700

2,550

5,100

Share option expenses

39,307

53,882

155,811

 

(587,234)

(832,570)

(1,459,131)

Changes in working capital

 

 

 

Decrease / (increase) in trade and other receivables

13,647

164,413

171,958

Increase / (decrease) in trade and other payables

(92,935)

58,615

183,487

Cash generated by / (used in) operations

(79,288)

223,028

355,445

Taxation received

-

-

211,544

Net cash used in operating activities

(666,522)

(609,542)

(892,142)

Cash flows from investing activities

 

 

 

Payments for intangible assets

(50,778)

(32,079)

(73,668)

Net cash used in investing activities

(50,778)

(32,079)

(73,668)

Cash flows from financing activities

 

 

 

Net proceeds from issue of shares

4,040,987

-

-

Net cash generated by financing activities

4,040,987

-

-

Net decrease in cash and cash equivalents

3,323,687

(641,621)

(965,810)

 

 

 

 

 

 

Cash and cash equivalents at the beginning of the period

2,159,054

3,124,864

3,124,864

Cash and cash equivalents at the end of the period

5,482,741

2,483,243

2,159,054

 

 

Consolidated Statement of Changes in Equity

For the 6 months ended 31 December 2020

 

 

 

 

 

Share capital

Share premium

Other reserves

Retained earnings

Total

 

 

 

£

£

£

£

£

 

 

 

 

 

 

 

 

As at 1 Jul 2019

1,280,835

4,923,890

247,672

(2,642,266)

3,810,131

Loss for the period

-

-

-

(824,304)

(824,304)

Share-based payments

-

-

53,882

-

53,882

As at 31 Dec 2019

1,280,835

4,923,890

301,554

(3,466,570)

3,039,709

 

 

 

 

 

 

 

 

As at 1 Jan 2020

1,280,835

4,923,890

301,554

(3,466,570)

3,039,709

Loss for the period

-

-

-

(675,782)

(675,782)

Share-based payments

-

-

101,929

-

101,929

As at 30 Jun 2020

1,280,835

4,923,890

403,483

(4,142,352)

2,465,856

 

 

 

 

 

 

 

 

As at 1 Jul 2020

1,280,835

4,923,890

403,483

(4,142,352)

2,465,856

Loss for the period

-

-

-

(580,577)

(580,577)

Issue of shares

278,064

4,170,964

-

-

4,449,028

Costs of share issue

-

(408,042)

-

-

(408,042)

Share-based payments

-

-

39,307

-

39,307

As at 31 Dec 2020

1,558,899

8,686,812

442,790

(4,722,929)

5,965,572

 

 

 

 

 

 

 

 

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 Company 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 2019, 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 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 2020.

 

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 that of identifying and developing formulations that harness the human microbiome, all within the United Kingdom.

 

4. Taxation

 Income taxes recognised in profit or loss

 

 

 6 months to
31 Dec 2020

 6 months to
31 Dec 2019

 12 months to
30 Jun 2020

 

 

 

 

 

 

 

 

 

 

 Current tax

 

 

 

 

 

 

 

 R&D tax credit

 

 

 

47,664

64,698

118,763

 R&D tax credit - prior year

 

 

 

-

1,193

 Tax credit for the period

 

 

 

47,664

64,698

119,956

 

 

 

 

 

 

 

 

 

 

 

5.

Share capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Issued share capital comprises

 

 

 

 31 Dec 2020

 31 Dec 2019

 30 Jun 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  155,889,922 ordinary shares of £0.01 each

 

 

1,558,899

1,280,835

1,280,835

 

During the 6 months to 31 December 2020 the company issued ordinary shares of £0.01p each, as follows:

 

 Date Issued

 

 

 

 

Price

Type

Number

 

 

 

 

 

 

 

 

 30/11/2020

 

 

 

£0.16

Placing

25,000,000

 30/11/2020

 

 

 

£0.16  

Open offer

2,806,428

 

 

 

 

 

 

27,806,428

 

 

 

 

 

 

 

 

 

 

                   

 

6.

Loss per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 6 months to
31 Dec 2020

 6 months to
31 Dec 2019

 12 months to
30 Jun 2020

 

 

 

 

 

 

 

 

 

 

 Basic and diluted loss per share

 

 

 

 

 

 

 Loss after tax (£)

 

 

 

(580,577)

(824,304)

(1,500,086)

 Weighted average number of shares

 

 

 

132,919,395

128,083,494

128,083,494)

 Basic and diluted loss per share (pence)

 

 

(0.44)

(0.64)

(1.17)

 

 

 

 

 

 

 

 

 

 

                     

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 2020 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.

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