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SkinBioTherapeutics looks forward to first revenues in 2021


There’s good bacteria and bad bacteria: while we often focus on pushing the latter away, we forget the estimated 100 trillion ‘good’ germs naturally present in our body.

Most of these, called probiotics, reside in the gut – but the wider public yet is to discover the benefits of the good bacteria sitting on our skin.

SkinBioTherapeutics PLC (LON:SBTX) has set out to make use of these skin probiotics, which according to Fortune Business Insights are at the forefront of a market expected to reach US$74.7bn by the end of 2025.

The life sciences firm, which has patented its proprietary technology SkinBiotix in various countries, continues making good progress with its two main partnerships.

First revenues are expected in late 2021 as part of its collaboration with Dutch firm Winclove Probiotics to develop a food supplement, called AxisBiotix, to alleviate symptoms of psoriasis.

The pair, which started collaborating in February, are planning a 60-day human study for early 2021 where participants will not be required to come to the clinic in respect of social distancing rules.

They will be shipped sachets and will have to send data through a mobile phone app, communicating information such as mood, sleeping patterns – which psoriasis influences – as well as uploading pictures of their skin.

Chief financial officer Doug Quinn told Proactive they may still conduct the longer study initially envisaged, which would take 12-18 months to complete.

Following positive response from the psoriasis community, the AIM-listed firm has also decided to build its own online platform to launch and sell the product by itself, though it is not ruling out potential retail partnerships.

The other main partnership is with speciality chemical producer Croda International PLC (LON:CRDA) to design and manufacture ingredients for the cosmetics market.

The initial target was enhancing the barrier effect of the skin to stop infections, but during the human safety studies the researchers came across significant anti-ageing indications, too.

The junior researcher is providing its technology to the FTSE 100 company’s unit Sederma, while SkinBio gets access to Sederma’s huge base of customers, including prestigious brands such as Chanel, Garnier and L’Oreal.

It is a straight royalty model, with first cash expected for the end of 2022.

However, the company is mostly virtual and recently raised GBP4mln to fund work on new product applications and expand its research and development capabilities.

“Our general strategy is and has been to look to partner at the fairly early stages… It would be nice not to always go to third parties to do work,” Quinn told Proactive.

“I think we would definitely benefit if we had our own development capability, this funding will enable us to put a footprint down as a lab, not particularly big, something with two or three scientists where we can do our own development work.”

The plan is to research further applications for SkinBiotix in indications such as oral, haircare and possibly UV.

The new uses will be almost certainly done through partnerships, Quinn said, and involve more work with The University of Manchester.

The broker’s forecast

House broker Cenkos reckons SkinBio could achieve operating breakeven once revenues reach GBP5mln thanks to its relatively low-cost base.

That would require around 14,000 patients treated with AxisBiotix and does not include contributions from other revenue channels.

For the year ending June 2022, Cenkos forecasts GBP300,000 of revenues based on 1,600 users of the food supplement.

The period is expected to end with GBP1.2mln of net cash, assuming operating expenses of GBP2.3mln in 2021 and GBP2.6mln in 2020, with capital expenditure of GBP400,000 and GBP100,000 in 2021 and 2022 respectively.

“We believe SkinBioTherapeutics is well-positioned to be a leader in the emerging skin health probiotic market,” analysts noted.

“We see the company offering an exciting opportunity to access an emerging market, with a growth potential that has been demonstrated by the large and growing gut health probiotic market.”

Shares were trading at 16.71p on Tuesday afternoon, having recovered 190% from the lows at the start of the pandemic.

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