Skinbiotherapeutics (LSE:SBTX) — Introduction to SkinBioTherapeutics

0:01 Good afternoon, ladies and gentlemen, and welcome to the SKINBIOTHERAPEUTICS Investor Presentation. The company may not be in a position to answer every question received during this meeting. However, the company review all questions submitted and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and we'll notify you by email when they are ready for your review. I'd also like to remind you that this presentation

0:32 is being recorded. Before we begin, we would like to submit the following poll. And if you would give that your kind attention, we would be most grateful. And I'd now like to hand over to Doug Quinn and Stuart Ashman from SKINBIOTHERAPEUTICS. Good afternoon to you both. Good afternoon. Thank you, Mark. Well, thank you all for giving us the opportunity to, to talk to you today. This is a slightly longer presentation than we would normally give. So, I I make my apologies in advance if there are some areas that I I cover that you've seen before. Please forgive me. I'm I'm acutely aware that there are some potentially new investors that won't have heard the full story or if they have, will have heard an abridged version thereof. So without further ado, Doug and I will switch our cameras off to make the the screen larger for you all to see the slides in more detail.

1:26 So here's our disclaimer, which gives the usual aim, warnings, etcetera, etcetera. I'll leave you to to look at that on our website if you wish to look at it in a little bit more detail. So I'm gonna be talking about the the microbiome. And so to give you a brief explanation of what that is when I use that word so many times in in an hour, The microbiome is a term that is used to describe the community of microorganisms that live in on and around the body. It's all kind of inter interconnected. The human microbiome has very extensive functions that we're just beginning to understand in more depth, such as the development of immunity, hosting nutrition against protection of, short chain fast fatty acids that are very important in energy metabolism, defense against pathogens, and synthesis of vitamins and fat storage, as well as having a very direct influence on human behavior.

2:23 And and all of this kinda makes it a very, very essential organ of the body without which we we wouldn't function correctly. So it is, to all intents and purposes, an organ in its own right. So who are we and and and what do we do? Well, our focus is on on skin health, and the the clue of the name is pretty pretty much in the name of the company. Specifically, we we focus on how skin looks, how it feels, and most importantly, how it repairs itself from injury and various diseases. In the past, there's been a great deal of work done on the gut microbiome and the impact of probiotics therein, and consumers have become very much more aware of gut health and its impact on our well-being through things like yakult, yogurts, Activa, kombucha, kimchi, etcetera, etcetera, which you see sold widespread in various outlets. But very little has been known about the skin microbiome.

3:16 So in 2009, professor Cath O'Neill, who is in her own rights, a world renowned scientist from the University of Manchester where incidentally she leads the translational dermatology team, and I'm also very proud to say is our chief scientific officer. She looked to replicate the benefits of probiotics used in the gut and transfer that benefit to the surface of the skin. And and that falls into two categories. So the first is what we call SKINBIOTIX. That is a proprietary platform of lysate technology that is applied topically to the outside surface, to the topical surface of the skin. So that's all about barrier enhancement and repair. The second area is access biotics as we call it. And this is complex probiotic formulas or blends, if you like, that target the gut skin access. And I'm gonna come on to talk about both of those areas in a little bit more detail in just a moment. But as a summary, we've taken those two platforms of science and developed them into five very clear strategic pillars, which range from everything from cosmetics right the way through food supplements and on finally to pharmaceuticals.

4:26 As one would, expect during the course of our of our trading, we built a very strong IP portfolio and multiple patents continue to be granted in geographic regions as and when they come due. And we continue to file patents as we continue our exploratory path. We've entered into our commercialization phase, and I'll be talking about that in in in much detail. We launched our AXIS Biotech product on Friday. We've signed two commercial agreements, one with Croda PLC and the other with Windcloak probiotics. We listed on the market in 2017, and we've raised currently 10,500,000 to date. And I think our market cap is sitting a little over that number now. We're sitting at about 66p last time I looked, so it's probably more like a 102, a 103,000,000.

5:16 So these are the five strategic pillars that I just talked about. And very simply from left to right, they represent SKINBIOTIX on on the left. This is the company's core technologies designed to promote skin health by harnessing the beneficial properties of probiotic bacteria very specifically in cosmetic applications and in cosmetic applications alone. That's the area where we signed a deal with product, and I will talk about that with some more flavor in just a moment. The second area is Axis Biotics. This uses probiotic blends, the second area that I talked about, to address the emerging area of science. It's very much focused on the gut skin axis and its specific role in treating various diseases. The third area is MEBIOTIX.

6:02 This targets the use of our technology for very specific medical device applications, including the topical treatment of skin diseases as well as accelerated wound closure and and also things like advanced wound care. The fourth area is, clean biotics that focuses on the use of our technology to address certain categories of health care acquired infections within hospitals and professional environments and the potential to reintroduce good bacteria into domestic environments. And the final pillar on the right hand side is pharmabiotics, and that is, an extension of our medical device and apps access biotics applications through the pathway of controlled medical prescription registrations.

6:45 So why did I talk about those five pillars, and why did I talk about them in that order? So to give you the best explanation as as to why we we we've moved in the in the order that we have, it's easiest to draw a time and a cost axis. So in terms of regulatory clearance, you know, what is the lowest hanging fruit? What where are the lowest barriers and lowest hurdles for us? So they they lie from the left hand side, the bottom of the staircase is the cosmetic application, which is SKINBIOTIX. This is where we signed the deal with Croda, and I will detail that in in in a moment. But that in terms of regulatory compliance, that deals very much with, safety trials. We conducted those two years ago, already completed. This is by far our fastest route to market from a regular perspective.

7:32 There are multiple applications here with from deodorants to hair care to to makeup to oral care, etcetera, etcetera, and sun creams. So this was our first point of of commercialization and the first deal that we signed. The next step up the staircase is actus biotics. Surprisingly, for a food supplement, so something that is ingested into the body, it is not as heavily regulated as one might initially imagine. It is not a medical device. It is it is simply a food supplement. And in order to have regulatory clearance, one needs to conduct safety studies and short consumer studies. And there are multiple applications also here in acne, psoriasis, rosacea, atopic dermatitis, etcetera. And this is the area where we signed a deal with Winklow probiotics, and again, I will detail that in just a moment.

8:22 The third area is is considerably more regulated. This is medibiotics, and this is the the medical device market. This is a class two a, class two b devices at very best. There are multiple applications here, and they all require multiple clinical trials. In fact, it requires a trial per application area, considerably more regulated, considerably more time consuming, and considerably more costly to get to the revenue bearing perspective. The fourth step is clean biotics. As I said, this is addressing health care required infection or associated infections. And this is looking at what we can do to bring good bacteria back into areas where bad bacteria are dominant, like hospitals, like our very homes and domestic dwellings.

9:07 As you can imagine, this is a complex area of science. It requires an awful lot of research, multiple trials, and multiple routes to market. It is a fascinating area of science, and it is very time consuming, but it shows you the strategic reach and potential of the company. And the final pillar, which we tend not to dwell too long on, is pharmabiotics. As one would imagine, it is by far the most time consuming and most most expensive of all. So it is a complex pathway fraught with regulatory hurdles, but it is a logical extension of access biotics and medibiotics. And and as I say, we don't dwell too much on that, but it shows you our strategic pathway for the future. So let's talk about those specific areas in a little bit more detail.

9:53 The first pillar, the first step, if you like, SKINBIOTIX. As I said, fastest regulatory path. And and what we found here when we did our safety study was we already knew that we could significant significantly reduce transepidural water loss or TUEL as it's called. What we found in our study is as well as being able to maintain the hydration within the skin, which is one of the holy grails of the cosmetic industry, stopping dry skin by retaining hydration. We also found a significant increase in elasticity, and that's another of the holy grails of the beauty industry. So these slides have been used many times, but they're an excellent example for those who've not seen them of what happens on the surface of the skin when we apply SKINBIOTIX, our proprietary lysate.

10:42 So on the left is the the the area that you can see is untreated. You can see that the there is a quite saggy skin there. There's no tightening at all. The purple candelabra like things that you're looking at, they they they are the sort of short and stunted. On the right hand side, you can see they've become long sort of candelabra pulling that skin in. You can now see significant dips in the skin where that tight junctions are being slammed together and closed together, and therefore increasing significantly the elasticity in the skin. And that is what brought us to a commercial agreement with Croda PLC. I am often asked the question, why did you not do a deal with a multinational beauty brand that you could have sold this product into instantly?

11:29 Why did you do a deal with Croda? Well, there's a number of of reasons why we did that. The first of all is they are an £11,000,000,000 FTSE 100 company. They're they're they're a very big, very well respected company. Secondly, they have a specialist division called Souderma in Paris that are cosmetic ingredient manufacturers par excellence. They have a they have a portfolio of 12,000 plus customers, and therefore, by doing the deal with them, this product will reach 12,000 plus customers rather than one. We'd also would have been very much beholden and and and limited to a single brand's customer loyalty. And and then also in doing so, we would have either had to buy the lysate from a third party or manufacture it ourselves by building a production facility, neither of which is what we do. So Croda PLC and Souderma have committed to spending up to £5,000,000 on a dedicated production facility to produce SKINBIOTIX, our proprietary lysate, to sell as an ingredient into those 12,000 portfolio customers.

12:35 And in doing so, we've secured our self supply chain to use that lysate, that proprietary lysate in all of the other strategic pillars that I've just discussed. They have now gone through successful scale up, so they've moved from two liters to 20 liters to 200 liters, 600 liters, and are now moving to 20,000 liters, which is the final scale of pressurized vessel, which will be used to supply their 12,000 plus customers. This is a huge area of growth. The cosmetic industry is booming, and we could not have signed a better deal. The whole project is on on running on track, and we're with the progress therein. So now talking a little bit more about Axis Biotic. So the concept of the gut skin axis is is is quite newly emerging, and it's a very important avenue of medical and scientific investigation, sort of healing skin from within if you like. And the best way to describe this is if you eat something that disagrees with you, you tend to develop a rash or become blotchy, and that is the gut skin access or the gut skin superhighway in in practice. That's like, it's sending a message to your skin, you so so that you'll take notice of that.

13:49 We look to restore that vital balance by the addition of very specific blends of live probiotics targeted at very specific diseases, and we do this through the food supplement route, which is the fastest route to market as I explained from a regular perspective. We signed an agreement with Winclaw probiotics very specifically because they are experts in their field. There are undoubtedly bigger probiotic manufacturers out there, but in our opinion, there is nobody better. We signed an agreement with them and and thought that the validation of our blend would

14:20 take upwards of eighteen months. In reality, they cracked it in four months. And as such, we are going to market twelve months earlier commercially than we ever thought would be humanly possible. We started talking about, you know, which skin conditions that we could address, and and and effectively, we chose psoriasis. The reason why we chose psoriasis is is is multiple. Psoriasis is a skin condition, autoimmune skin condition for which there is no cure. It runs from mild through moderate to severe. The treatments fall into three categories. It's either lotions and potions that one applies topically on the skin when you have an outbreak, or there is some phototherapy, UV lights, and the and the final more at the severe end is oral injected medications that work throughout the entire body. It's important to understand that the topicals, and the systemic products are all steroid based.

15:14 You cannot endure taking these things. There has to be breaks within the treatment. We all know that steroids can't be taken indefinitely. You know, they're not good for you. There's significant side effects. So that was the the second reason we chose it. The third reason we chose psoriasis is because it's an autoimmune condition, and we were hit with a pandemic. So imagine that two to three percent of the population are taking drugs to suppress their immune system at the very time when we all need our immune system firing on all cylinders. So immunosuppressants is a massive part of the treatment regime for sort the psoriatic community. Another reason we chose them is that the psoriatic community are incredibly well educated about their condition. They are very vocal. They speak to each other about it, and they tend to listen to the national bodies. So for example, the National Psoriasis Foundation of the United States has 6,000,000 members who who use the National Psoriasis Foundation to obtain discounts and products because they don't want to jeopardize their their sort of medical insurance for much much larger diseases like cancer, etcetera, etcetera. So the reason for the membership is is quite simple. So what causes it? It's as I said, it's an autoimmune condition. It results from abnormal activity of the body's immune system. So what actually happens is, in a psoriatic gut, the the body overproduces new skin cells and pushes them to the surface of the skin before the old skin cells have had a time to shed. And

16:45 and you can see that in the pictures attached. That is a a sort of crashing, a plaquing, if you like, of new skin cells meeting old. So what we have decided to do or what we intended to do was to develop a food supplement to reintroduce that missing bacteria, that vital bacteria that is not present or sustainable within a psoriatic gut back into that environment on a daily basis. So we're targeting that relationship between the gut and the skin using a proprietary blend of probiotics for targeted blends of black tea sorry, four strains of bacteria designed to be taken as a sachet in a in a glass of water first thing in the morning or last thing at night. Extremely easy to use, very portable, etcetera. Now we had intended to do, a full blown medically led, clinically led study for this that would have cost us about a million pounds and taken about a year, a year and a half to get the results done. And along came COVID nineteen. So we had a couple of options here.

17:48 We either sit on our hands and do nothing and wait for this to pass. And and quite frankly, think many would agree that I'm not really sure it's passed yet. All of the access to the clinical assets that we required to take blood samples and measure stool samples and and and get them to the lab, all of the access to all of those assets was blocked. So we either did nothing or we reinvent the entire thing, and that's precisely what we did. We we basically came up with what we call the bright study. So this is developing a bespoke mobile phone application, asking people to download onto their cell phones during which they would answer some questions that we would send them remotely through the app, allow them to take photographs, tell us how they're feeling, and we would ship out the product via mail.

18:35 We looked to get originally 100 consumers to try this product, a 100 people to to to sit on this study. We increased that to 200, purely simply because we're inundated with responses of people wanting to get on the on the study. It went very rapidly over the thousands we we got into thousands and thousands of people that wanted to get on to this study. So we stopped at two hundred and sixty five, of which a hundred and seventy seven people had psoriasis. We decided to let some other, participants on the study purely out of academic interest to see what impact this particular blend would have on things like acne, rosacea, and eczema. We commenced this study in in February of this year and completed it in in at the end of May. And the reason why we did that for for fifty six days is that is all that is required to to measure the impact of this product.

19:27 Normal skin recycles itself every twenty eight days. So fifty six days gives us two cycles of of healthy skin. Fifty six days could give you 20 or 30 cycles of psoriatic skin skin if it's in the middle of a flare up. So it was more than enough to to show whether this product actually worked or not. Here are some examples of the of the actual app itself. So the app is personalized. We'll welcome you each morning by name, and then it will also allow you to set a reminder of to take your supplement. Now that's quite important as a companion to the actual food supplement itself. The reason for that is a lot of people at the mild end of the psoriatic chain apply their their top their treatments topically on a very reactive basis. They'll only apply the cream when they get a flare up.

20:18 What we're ask acting asking them to do here is to act proactively and take this product every single day, whether you have a flare up or not, because we're trying to balance the gut microbiome to make it normal. No longer psoriatic. We're trying to block that leaky gut and stop that or slow down that overproduction of new skin cells. So we then asked them a range of daily questions. We didn't want this to be particularly intrusive. So the questions were one click on on on the screen of your phone. Has your skin feel less itchy? You just touch the the icon. And we asked them three or four questions. Each week, we would ask them a wider range of questions with a little bit more detail. And then each week, we would ask them to take a photograph of their skin. The results at the end of fifty six days were quite simply stunning.

21:08 We had always thought that if we could get more than 50% of people to say that there was an improvement, that we would be we'd be very happy with that. To see that we got seventy six percent of those that finished the study were less itchy, seventy five percent were less red, seventy three were were less irritable, and there were fewer flaky patches was absolutely astonishing. And I think probably rather than listening to my dose of tones, it's probably easier if we play you a video that gives some some feedback from some some of the participants themselves.

21:42 Irritable skin conditions like psoriasis affect millions of people globally. It is caused by an increased production of skin cells, resulting in red inflamed skin that can be sore and itchy which can have a significant impact on quality of life both physically and mentally. My name is Vineetha Rajeev, I am a general practitioner. I have suffered with psoriasis and eczema for nearly ten years now. I will actually have almost a dandruff kind of thing falling on if I was wearing a black dress or something. I would feel very embarrassed myself thinking what the hell. I'm Pete, 74 years old. I've had psoriasis since I was 20. And people do look, you know, I've had children in the past who go, ew, what's wrong with you?' Earlier this year, skin specialist SKINBIOTHERAPEUTICS began exploring the relationship between the stomach and the skin and has developed a food supplement called Axis Biotics, which contains a blend of good bacteria designed to balance the gut microbiome and address the overproduction of new skin cells.

22:46 So Axis Biotics is a blend of different bacteria and between them they help to calm down the immune system because that's really overactive in people with sensitive skin conditions like psoriasis. And the other aspect to it is that it helps to, kind of enhance the gut barrier because we also know that that can be a little bit leaky in people with sensitive skin conditions like psoriasis. So between them, these clever bacteria calm the immune system down and enhance the gut barrier. Over the past two months SKINBIOTHERAPEUTICS has conducted a study in The UK with two sixty five participants taking the supplement every day. And whilst not a clinical study, the initial results are extremely encouraging with over seventy percent of active participants reporting that the skin was less itchy, less irritable and less red after taking the supplement. I'm so thankful that I actually went on the trial because it has actually made my symptoms so much better that I'm not thinking about it, I'm not bothered about it, I'm not itching in front of my patients anymore.

23:53 I started taking the AXIS Biotics product I think it was the beginning of March. Within two weeks I noticed that some of the psoriasis was really disappearing quite dramatically. For me this has meant peace of mind and excitement for the future. Fifty four years of putting up with this and now I can see an end in sight. The outcomes reported by patients in the BRITE study are incredibly promising. This is really exciting for the future of SKINBIOTHERAPEUTICS. SKINBIOTHERAPEUTICS is now focused on making AXIS Biotics commercially available later this year. So we're really pleased with the results. I think having seen the pictures and can understand why we would never want a customer to be without this product. So we're building a robust supply chain to ensure that that happens. We launch this in quarter four and I would urge anyone that has an interest in this product to register their interest at accessbiotics.com.

25:03 So as you can see, it's significantly impacting people's lives that have suffered from this product from from this disease for for for decades in in many, many cases. What is important for people to understand is that at the end of the fifty six day study period, we we had intended to have a period of cessation. We'd intended to have all of the participants stop taking the product for twenty eight days and then see how their skin returned back to that psoriatic state. We were literally inundated with calls and emails from the participants begging us not to remove the product from from supply. As you can see from some of the photographs that we've got, this has made a massive difference to the quality of people's lives.

25:52 I think that's that's best indicated in if I can just get to the next slide. In the next slide.

26:02 After day 56, you can see there's a there's a remarkable improvement. It continues. So at day 98, the psoriatic flare up is all but gone. This particular participant, you know, has has had a significant change, And I would urge you all to have a look on our website. There are about eight or nine participant videos. Now these are genuine participants. They've not been paid in any way, shape, or form to to give their comments. They are speaking from the heart, and and they are the feedback videos that have been sent to the associations. Psoriatic people listen to psoriatic people, and that's very much our intent, and that's very much our marketing drive. So our path to commercialization. I talked at the end of that video about our priority being to ensure that we have a reliable and consistent supply chain. I cannot stress that enough as the biggest mistake that we could ever make right now is to overreg this and get greedy.

27:01 We need to make absolutely certain that when someone subscribes to this product, when they go onto our website and they buy this product, they expect it to arrive every single month on time. We we know that in a very short space of time, a psoriatic gut disposes of the bacteria that it believes is alien to them, and that psoriatic foundation is lost. So this is why this is a daily supplement. It needs to be taken every single day. The product is available on our website. We launch on Friday in the use UK and The United States. We'll follow with Europe for for for a number of reasons. The UK and The US is a big enough market for us to start with. Secondly, we've received all the regulatory clearance we need there. In Europe, because of Brexit, this now requires independent member state regulatory approval and independent packaging for each independent country. So the the the French packaging is totally different to the Dutch and the Danish, etcetera, etcetera. So that is quite a logistic task for us. So we start with The UK and The US. And as I say, launches Friday, which happens to be World Psoriasis Day.

28:08 We've worked very closely with the National Psoriasis Foundation in The US in particular who have 6,000,000 members. We've we've released podcasts, and we've got a series of of of the participant testimonials that are being released on a time basis over the course of the next week or so. As I said at the end of that video, we've driven pre registrations of interest to our website at ax AXIS BIOTHERAPEUTICS. They are simply that pre registrations of interest. They're not contracts to buy. And and I'm sure somebody, if they haven't already, will ask a question, how many people are on the waiting list, which is a great question. Unfortunately, I'm not legally allowed to answer that question. And the reason for that is if we were, it would have an impact on the share price, and they are simply pre registrations of interest of people that want to try the product.

28:58 So in terms of other opportunities within access biotics, we don't just stop at psoriasis. We're currently working on a blend for acne. Now there is some truth that the the blend that we currently have does help to alleviate symptoms of of many skin conditions, and that's very understandable. We're calming down the gut microbiome, and we are stabilizing the immune system. But we believe that this is not snake oil. This is not a product that you take for all skin conditions. We want to release very specific targeted, bacterial blends that are aimed directly at specific skin conditions. So we will build and develop a suite of products over the course of the next few years to basically address specific skin conditions. So just going back a little bit to, where we began. We've talked about SKINBIOTIX.

29:49 We've talked about AXISBIOTIX and the and the imminent launch on Friday. Just to talk a little bit more about MEDABIOTIX, it is a very important pillar of our strategy. It is our core science. It's the the bacteria lysate, exactly the same product that is being manufactured in bulk by Croda Soderma, and we do have access to that that raw material at cost. This would be the introduction of that lysate to act as a skin barrier around open wounds to prevent infection and also into open wounds to accelerate wound closure. And a good example of that, is looking at these these slides here. You can see, the slide on or the green slides, the slide on the left is the skin without

30:33 our our product applied. The slide on the right with a brighter green shield around it is our is our product applied. That becomes very more prominent when you look at the slides below. The blue area that you can see is the surface of the skin, and the red misting that you can see above that is a bad bacteria called staphylococcal aureus, which is a particularly aggressive form of bacteria that has under a microscope very large claws. You can see that it's broken through the architecture of the skin and

31:04 is now under the surface of the skin and and and running right within the architecture. The the slide on the right is the skin with our product applied, and you can see that the staph aureus is nowhere to be seen. So this is a this is a a particular area of opportunity. It's a significant area of opportunity. It does require clinical trials. It does require the partnership of some larger companies. My background is former Smith and Nephew BSN Medical at at vice president level. We are talking to the some of the biggest advanced wound care players in the world. It is a complex piece of science. And there is also a leap of faith if you think about that from a a conceptual perspective. Putting live bacteria into an open wound is is a huge leap of faith. So it is, as I say, a huge area of opportunity, and it is something that we are actively working on and will continue to do so. This is not a product we would bring to market ourselves. This would be an upfront payment

32:04 for exclusivity, milestone payments throughout, and then a success payment and a royalty agreement at the end. So this is just bringing science to the people that can actually get it out there where it's needed. It's appropriate that we we showed that last slide with the red misting and the red dots and the blue barrier. That that shows the blocking of staphylococcal aureus and and in particular, the protection of a barrier. Now skin is basically adding a on that previous slide, you can see us adding a barrier to to skin, which is effectively a surface, albeit a very, very complex living and breathing surface, but it's still a surface. So we looked at what we could do to reintroduce good bacteria to inert surfaces like a hospital bed, an operating table, protecting vulnerable areas like geriatrics, pediatrics, operating rooms, etcetera, recovery rooms, etcetera.

32:59 That that red

33:01 bad bacteria that you saw on the previous slide, staphylococcal aureus, that is the SA in MRSA, which is methicillin resistant staphylococcal aureus, and that is the superbug that runs right through hospitals. And and and let me be quite clear about this. There is a very popular misconception about this superbug. First of all, people think it's a mutation made in a lab, and it's absolutely not. We've we've created this ourselves by the overuse of antibiotics. I think we've all been to the doctor, in years gone by and be that that first question you're asked is, are you allergic to penicillin? And you're prescribed, penicillin or antibiotics, whether you've got a broken foot or whether you've actually got a bacterial infection. I think you'll find now when you go to the doctors, they are considerably more reluctant to issue antibiotics than they were ten to fifteen years ago. And that is because an antibacterial resistance is a massive issue worldwide and and, you know, has the potential to become very, very serious indeed.

34:00 That MRSA, the perception is that when someone acquires that within a hospital or its contracts that in a hospital, that that hospital is dirty. You could not be further from the truth. It means that the hospital is too clean. It is way too clean. And and as a result of which, there is no good bacteria surviving because it's all being killed with antibacterial sprays. So they kill the good bacteria as well as the bad. So we are talking to very large multinational hygiene companies about the introduction of targeted good bacteria into hostile environments to make them to make them a more balanced environment. And that same goes for our domestic environments. I'm sure we all have a bottle under our sink at home that says something like either antibacterial spray or kills ninety nine percent of all bacteria dead. And that's very true, but it's killing the good stuff as well as the bad, and we are getting sicker as a race. Mankind is absolutely getting sicker.

34:58 So it's an area of focus. It is a longer term play for us. It is

35:01 something that we would need a large partner with, but we bring the science and they bring the deployment. The final area that we talk about, pharmabiotics, and again, I've said all along, we don't dwell on this. We have had lengthy discussions with the big pharma companies. We are in touch with them. They are watching with great interest what we're doing in, for example, Axis Biotics. And one can quite easily imagine that if we have three years success in treating psoriasis, acne, etcetera, etcetera, that they would want to come along and do some very lengthy trials that cost an awful lot of money to bring this to a prescription model or to bring this to an Rx and controlled level. But as I say, it's not something we're about to spend 5 to £10,000,000 and five years trying to prove.

35:49 So as if we're not busy enough, let's talk about what's next. We are quite literally, and excuse the pun, scratching the surface here. This is a huge fascinating area of science. It's becoming more and more popular. You will see adverts on the TV saying microbiome friendly shower gel. Professor Kath and the team have no idea what that actually means. I think it just means it doesn't bleach your skin. But we have two live projects that are running at the University of Manchester. One is an inflammation project, that looks at sun care and and topical creams and the application therein. That's a two year project. The second is a twelve month project with professor Andrew McBain, and this is looking very specifically at the oral cavity and oral microbiome. So looking at gums for things like prevention of gum disease.

36:38 You're we're reducing good bacteria back into that space, which is heavily dominated by bad bacteria that can cause cause things like halitosia, etcetera, etcetera. We also continue in our new laboratories in Newcastle, our lysate exploration and our cosmetic formulations, and continue to to sort of push the edge of the envelope there to bring new products to bear within within all of our five pillars. Doug, would you just like to step in now and talk a little bit about the financials? Sure. So we're a June year end. So the numbers you're seeing here were the six months to the end of December twenty and the twelve months to to last June, obviously, somewhat out of date now. So we'll be reporting our June year end numbers towards the back end of this year.

37:23 Obviously, cash is a key element for us as a pre revenue business. We did a fundraising twelve months ago, which a number of you participated in. And so at the end of December, we had a cash position of 5,500,000, and we raised that for for three areas. One, knowing that we were looking to do the consumer study and commercialize AXIS Biotix and, you know, trying to anticipate some headroom for that. Also, as we look to build some infrastructure with labs and increases in headcount and also to support those research programs that Stuart talked through on the on the previous slide. So, obviously, the the access rollout is very much to plan. It was, you know, it was a very cost effective study, running it through the mobile phone app, and then we've had, you know, the opportunity to build up some inventory before we launch the product.

38:12 The appeal of the business model that we're pursuing with AXIS, it's direct to the consumer. So the plus side is both we get to benefit from the extra margin, needing to share it with retailers. And also, there's the working capital benefit from a cash flow point of view that people are paying for the product when they subscribe for it. So, again, we're not waiting on sort of ninety, hundred and twenty days from from retailers to be paying it. So we're, you know, kind of comfortable position at the moment with the working capital to see through the launch of AXIS. This next slide shows our kind of key shareholder base. So, as many of you will know, Optibiotics was supportive in bringing the technology and spinning it out to the university. They are currently at 23% shareholder.

38:57 Seneca Partners supported the IPO and fundraising since. Tindles, they've been, you know, very supportive investor building their investment over time. And then the two founders, both in terms of the university and professor Kath O'Neill. Thank you, Doug. That that concludes the formal part of our presentation. We received a number of written questions before the presentation began yesterday. We've answered as many as them as we are legally able, and I do believe the organizers will be sharing them with you all at the end. Absolutely. Thank you, Stuart. That's indeed correct. And thank you to those investors that did submit the questions. And Stuart quite rightly pointed out, they'll be published and made available to you after this meeting has ended.

39:46 Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. Just while Stuart and Doug take a few moments to review the questions submitted during this meeting, I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard. I've just said that would be sent to you by email. I'd also like to remind you that your feedback is important to the company. And immediately after this presentation has ended, you'll be redirected for the opportunity to provide feedback in order the company can really better understand your views and expectations. Stuart, Doug, obviously investors have submitted a number of questions throughout today's presentation. So thank you once again to those that have. If you would be so kind, if I could just hand back and if I could ask you to read out the question and give a response where it's appropriate to do so, and then I'll pick up from you at the end. Certainly.

40:35 Okay. So the first one from, not surprisingly, from Elric. Can you explain the gross margins from the lysate produced by Croda? I'm assuming you mean what we would earn from this. So the Croda deal is a double digit royalty deal. There's the the I can't give specifics of what the double digits are. I do fully appreciate that runs anywhere from 10 to the 99. So it is there's a leap of faith required there. The way that this works is we are paid on on gross sales globally. So once Kroner are paid, we are then paid and it's we're paid on a monthly sort of basis, rolling monthly basis. That becomes very much passive revenue for us. Once the project is done and the product's delivered, there's very little that we need to do.

41:22 So it's time for us then to move on to other things. But, yeah, it it it is a as I said, was the best deal we could ever have done there. I can't give you specifics on on the double digits, as I say, but it was significant enough to be compared to Matrixyl, which I think we've you've heard us talk about before, which is a £250,000,000 turnover product. There is very little scientific evidence behind Matrixyl, whereas we have those claims that we can reduce transeptidural water loss. We can also close-up tight junctions, etcetera, and the added barrier to the skin to prevent any infections from pimples, etcetera, etcetera. What type of own brand products? James is asking what type of own brand products could you make with the lysate that you can buy from SIDERMA, and what might timescales be from that? That's an excellent question, James.

42:16 We we could basically put our lysate as it stands now into what are called day creams, night creams, vanishing creams. We can actually use it in powder formats, in blushes, etcetera, etcetera. We we have actually just recently employed a commercial manager by the name of Jeff Bell. Jeff's background is very heavily L'Oreal, Tony and Guy, etcetera. So he has a a strong background in the beauty world. He was also interestingly on Dragon's Den where he launched his own range of shampoos, and and all of the dragons wanted to invest in his business about some time ago. But, yeah, an interesting guy who also has vast amount of experience in selling into the youth market and teenage market, which is very handy for us when we come to address access biotics for acne.

43:06 So, yeah, that's that's the sort of products that we would be looking at, day creams, night creams, that sort of stuff. And and it could it could literally go into eye shadows and all sorts of things as a raw product. What we would do ourselves is own label. We we haven't quite decided that yet. The time scales for those products run with Souderma run through next year. They're running to plan back end of this year for beauty parades into next year and then the back end of next year for their actual launch out. So all running very much as they said they had. They're they're very detailed and diligent. Steve and Jerry I'll jump in there if you like, Stuart. So we had a few questions regarding the follow on from the study. So one here, what's the longest that somebody has been taking the product, and you anticipate it being a permanent thing? So we're certainly at, over two hundred days for some people. Some people have been very diligent in continuing to feedback. We've not analyzed that data, but we are tracking and looking at some of the photos over time and continuing to see improvements.

44:04 I think as Stuart alluded to earlier, it's not anticipated to be a permanent thing because the bacteria can't permanently establish itself within the gut. And it's actually been quite interesting anecdotally talking to some of the participants and, you know, their sense of continuing to take it, and it's very much a sort of shrug of the shoulders. Well, I know this works. I didn't change anything else. Why would I not continue taking this every day? It's very simple. You know, it's part of my routine at the beginning of the morning, so I I don't think we'll have any difficulty there. Okay. Thanks, Doug. The the next question from Chris s on further food supplements. Do we think that the next food supplement that we'll launch will be for eczema or something else like acne? How long do you think it would take to bring the market? So we we are we're very interested in both those areas, acne and eczema, and professor Kath and her research team are looking at both of those areas.

44:56 In terms of how long would it take to bring to market, the magic here is in the concentration levels and and and the very specific science that goes around the formulation. So once we believe we've identified the right areas of bacteria, the right strains of bacteria, we then take this to to to WingClover, and we work with them in their labs to get the concentration levels perfect. Now we had anticipated last time that that would take about a year, and it took them four months. I'm not saying for one minute that they can replicate that again. I think there was some no small amount of luck involved in that and some serendipity therein. But we would say that it would take us about a year to get to get that formulation correct before we could get that out, but we are working on it now. And act acne and eczema are equally important to us.

45:45 Chris g, have you had has asked, have you had more people showing interest and signing up from The UK or The US? Well, I would say that's a bit of a seesaw. This started with most of the people being in The UK and is now flipping over to The US as the National Psoriasis Foundation pick up their efforts and push this out. And there's a very simple explanation for that. As the NPF themselves have said, our American cousins don't really like to to queue up for things, don't really like to sit on waiting list. They they consider something akin to rationing, which I find rather amusing, you know, as humorous as it was. But, yeah, as we move towards launch date on Friday, the The US is is significantly outweighing The UK right now. A couple of questions from a sort of investor point of view. So one around Opti shareholding.

46:32 Now the long term holders given the lock in has expired. Yeah. As many people will be aware, when we did the fundraising twelve months ago, OptiBiotics agreed to a lock in. What their plans are going forward, you know, I'm not party to that. What we can say is they've been a very supportive shareholder. And whenever they have sold down, they've done that very much in conjunction with the with the company to make sure that the share price isn't impacted. Another question asking about main FTSE listing. Yeah. I think that that would be some way off. I think, you know, there are many large companies on AIM that could be listed on the main market. I think what's been key for us is seeing that step up towards a sort of 100,000,000 market cap capitalization, you know, that puts you on the radar with different types of institutional investors.

47:19 So I think we see sort of plenty of growth potential remaining on the on the AIM market for the time being. Just just one that we I brushed over there. There's one from Lee that talked about the partnership with the National Psoriasis Foundation. Yeah. We've we've just come I think I mentioned there, we've just completed a series of podcasts that are being released over there by the NPF. They do describe us in their adverts as a partner. Is there a formal partnership agreement site? No. That's that's we do have an agreement with them to basically take up some space on their media channels and on their social media and on their their their website. And we do have some targeted marketing, so we don't intend to spend tons of money on marketing here. We don't need to. The the the most the smartest way to do this is to target the psoriasis community themselves.

48:10 Big adverts, the billboards just aren't gonna work for this product. Whilst everybody knows somebody with psoriasis, this is much better coming from the national body. So we do have a partnership with them. They describe it as such themselves. I would describe it as such myself too. But is there a formal legal agreement in place? No. There's not. There's a question there about what what's the market for psoriasis. So the the National Psoriasis Foundation themselves, this is from Stephen g. The National Psoriasis Foundation themselves would say that the market is a hundred and twenty five million people worldwide. So they're saying about two percent of the global pop population in the developed worlds. So that that's that that that they are the numbers that they put on their website, and that ranges from a very mild psoriasis right through to to to very severe psoriasis.

49:03 So in terms of associated revenue numbers from competing products, it is a it is a multibillion pound market. I think we talked about, you know, in the past, there's various sources when you you look at an AXIS BIOTHERAPEUTICS of what the size of this market truly is. It's and and it ranges from, you know, sort of 3,900,000,000. The source of that was Reuters in 2019. Other people would say it's more like 5,000,000,000, but there is a confirmed source of $3,900,000,000 with a compound annual growth rate of 3.8%, and that was Reuters in 2019. One more question going back to the study. How many of the 177 psoriasis sufferers continued? So as Stuart said earlier, we you know, at the request of the the people on the study, we continued providing product afterwards, and we've been sending that out to roughly about a 100 people a month since the the study completed. Yeah. We've seen continuous improvement.

50:02 Stuart, Doug, I might just jump in seeing as you fight through every single question that's been submitted by investors. So thank you for that, and thank you to the investors for taking the time to submit those questions. Stuart, Doug, if any further questions do come in, obviously, we'll make those available to you after the meeting. But I do know that investor feedback is particularly important to you and to the company, and I will shortly redirect investors to give you their thoughts and expectations. But before doing so, Stuart, perhaps I could just hand back to you for a few closing comments. Thank you. Thank you very much for all taking the time to to listen to us. It's it's very rare that we get an opportunity to talk for this length of time. Normally, our presentations are twenty minutes in in total with five minutes of questioning and then five minutes to switch to the next speaker. So I do thank you. And we I realized we've all got very busy lives, thank you for taking the time to listen to what we've got to say. We are very, very excited about what what what we've got ahead of us. I think it probably tells a little bit in my voice.

50:59 I get a bit runaway at times because it is a very exciting area of science. We are particularly excited this week because we launch on Friday on World Psoriasis Day, and and and we're very excited not only for the commercial prospects for the company, which are which are glittering and revenue potential, but also the fact that we are actually delivering a product that really, really does make a difference to people's lives. And it's it's very heartwarming for the the management team, but in particular, professor Cath O'Neill, who developed this to to hear the wonderful feedback from the participants that have taken the product so far. And she's she's incredibly proud of of where we are today as we are of her. So thank you all for your time. Please, if you got any further questions, please go through the portal and send them. And I think we intend to do these fairly very frequently as it seems a very good medium to reach people. Thank you.

51:52 Stuart, Doug, thank you once again for updating investors today. Can I please ask investors not to close this session as we'll now redirect you for the opportunity to provide your feedback in order the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of SKINBIOTHERAPEUTICS PLC, we'd like to thank you for attending today's presentation. That now concludes today's session. Good afternoon to you all.