SkinBio Therapeutics (AIM: SBTX) joined the AIM market today in a placing at 9p raising £4 million. Readers of GCI will already be aware of the background here because the company has been spun out of Optibiotix (AIM: OPTI), which has doubled in price since being recommended 18 months ago. Optibiotix is also the only pre-revenue member of the GCI Portfolio; so it’s a story we like. That’s because it has innovative technology that addresses large markets and should be relatively quick to commercialise.
Both SkinBio and Optibiotix look to modulate the human microbiome – the collection of bacteria in our bodies – to bring about changes in our health and wellbeing. This is a fast growing area of interest for food, cosmetics and healthcare companies as evidence builds on the influence that the microbiome can wield on the body. Optibiotix is progressing its food-related products which address issues like obesity, cholesterol and sugars; but it has chosen to float SkinBio as a separate listed company.
SkinBio originated in the University of Manchester’s research labs under CEO Dr. Catherine O’Neil, where its technology was picked up by Optibiotix. The University retains a 7 per cent equity stake in the company. It is focused on using bacteria to modulate the skin in three distinct areas. The lead application is cosmetic – using a cream to enhance the barrier function of skin and improve its hydration. ‘Proof of principle’ has been established in the lab, but human trials are needed to establish ‘proof of concept’. Cosmetic sector trials take around a month; so they’re much shorter and cheaper than clinical trials for health-related applications. SkinBio aims to run the first trial in the third quarter of next year, which will hopefully provide the springboard to a commercial partnership with a consumer products company.
The other two strands of development will take longer and be more expensive. One is preventing infection through the skin in a hospital environment and the other a companion therapy for eczema.
The company is funded through to the end of next year when there’s the prospect of a further fundraising on the back of the cosmetic trial results and a potential commercial deal to progress the product. Because of the longer timelines and greater capital requirements involved in moving SkinBio’s pipeline forward compared to Optibiotix’s remaining portfolio, the parent company decided to spin the unit off and separately identify it via an AIM listing. Optibiotix retains a 42 per cent stake.