Skinbiotherapeutics (LSE:SBTX) — Investor Presentation

0:02 Good morning, ladies and gentlemen. Welcome to the SKINBIOTHERAPEUTICS PLC investor presentation. Throughout this quarterly presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time using the Q and A tab just situated on the right hand corner of your screen. Simply type in your questions at any time and press send. The company may not be in a position to answer every question they received during today's meeting. However, the company can review your questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, we'd like to split the following poll, and I'd now like to hand you over to CEO, Stuart Ashman. Good morning. Morning. Thank you. Morning, ladies and gentlemen. Thank

0:34 you for taking the time to listen to this trading update today. You will have seen two RNSs released this morning, one in relation to the trading update and another in relation to an appointment of an adviser to the board, and I'll cover both of those areas in detail over the course of this presentation. Firstly, my sincere thanks to our long standing and existing investors for your patience this year. It has not gone unnoticed, and it's very much appreciated. I do, however, have to go through a brief introduction of the company because there are some new and potential investors joining us on this presentation. So my apologies for the duplication of some of the slides that you will undoubtedly have seen previously, but I do have an obligation to present the company to new investors.

1:21 Both myself and Manpreet will answer any questions that have been submitted. And there are quite a lot of duplications of questions, but we will will go on and and answer them to the best of our abilities in full. So firstly, name is Stuart Ashman. I've been in medical devices and life sciences for most of my professional career. I have quite significant operational experience in in the commercialization of complex science and

1:51 designing and developing the route to market. This includes quite significant mergers and acquisitions to supplement strategic growth. I'm formerly a senior director from Smith and Nephew, BSN Medical and Andover Healthcare. And I previously was the chief executive of a a Finnish based company called Onbon Oi, which is a med tech company. That was where I served with Manpreet Randhauer, who's our chief finance officer. Manpreet? Thank you, Stuart. Morning all. My name is Manpreet Rantower, CFO of SKINBIOTHERAPEUTICS PLC. I've been in post for just a little over two years now. My background, I am a chartered accountant. Started my career at Deloitte in London. I've And subsequently worked in early stage tech businesses in listed p and VC environments.

2:42 Stuart alluded to the fact that we previously worked together at a Finnish med tech business.

2:49 I've got operation experience across finance and other business functions like HR, IT, and operations. And I do have a a background in m and a as well, having worked in in rapid buy buy and build sort of environments in in the in the PE space. Thank you, Manpreet. So for those of us for those of you who don't know the company, SKINBIOTHERAPEUTICS was spun out of a technology from the University of Manchester. It began following an awful lot of work that had been done into the microbiome within within the gut with products like yakult, kimchi, kombucha, etcetera, etcetera, were all very well known, and and you can now see multiple gut health or probiotic and and then microbiome driven products in supermarkets and in health stores. But very little work had been done on on the skin microbiome, that microorganisms that live on the skin and are directly responsible for our health and the health of our skin.

3:49 So a lot of work had been done within the university and and and be began with looking at extracting positive strains of bacteria from from the gut and applying them to the surface of the skin to see if that would enhance and develop the skin's health, demonstrating the same positive attributes that they would have where they with with within on the surface of the skin with the same same attributes that they had within the gut. So that ended up with a lysis process of lactobacillus rhamnosus. That was basically applied to the surface of the skin as a lysate, which means it's neither alive nor dead. It's it's it's basically a much more stable technology. And that's what the company was was was IPO ed on the back of. That's led to strong, intellectual property, multiple patents worldwide, granted in in key territories, and that's for use in cosmetic, medical, and potentially wound care applications.

4:42 So, this is an area where we did a deal with Croda PLC, and I will come on to to talk about, that in in detail in a little while. And we are expecting revenues from that particular, strain of science at the back end of this year. The second area of technology that we have revolves around food supplements and complex formulations of probiotics that target the superhighway that exists between the gut and the surface of the skin, the gut skin axis as it's more commonly known. That led us to work with a company in The Netherlands called Windclove probiotics. They are experts in in probiotic formulations, particularly with food supplements. And that led on to a consumer study that we did during the lockdown in the pandemic that led to a pilot launch for a psoriasis product, which we are now selling, and we will update you on performance of that. We've had very strong discussions with multinationals, and and and we you know, they continue onwards.

5:40 They've asked us to develop additional products, and we've recently just finished an acne study. And and and the results of that were extremely extremely successful indeed, more so than the psoriasis study. So, that is that is basically two areas of technology. We split that into five strategic pillars, from left to right, SKINBIOTIX. This is the company's core technology, that lysated bacteria that we apply to the surface of the skin. It's designed to promote skin health by harnessing the beneficial properties of probiotic bacteria, very specifically in cosmetic applications. And this is where the Croda transaction sits, and I will detail, the progress on that in just a moment. The second pillar is what we call access biotics. That's those probiotic blends addressing the emerging area of science that's focused on the gut skin axis and its role in in in preventing and combating various diseases.

6:35 The third area is MEBIOTIX, and that targets the use of the SKINBIOTIX lysate in pillar one, but, applying that into the, medical device applications including topical treatment of skin diseases as well as accelerated wound closure and advanced wound care. The fourth area is clean biox. This focus is the use of our technology to address certain categories of, hospital acquired infections or healthcare acquired infections and the potential potential to reintroduce good bacteria into areas where bad bacteria become prevalent. And finally, an area that we don't talk an awful lot about, but it would be remiss of me not to mention it as a potential area of strategic importance is pharmabiotics, and this is the extension of the medical device pillar and the Axisbiotic applications to a pathway of Rx or medicinal prescription registrations.

7:29 So very specifically talking about SKINBIOTIX, this is the the initial, technology that we talked about. This is what the company was spun out on the IPO, our our original core technology. This is for cosmetic applications. It was by far the fastest regulatory path, the fastest route to market because we're talking about a product that goes on the surface of the skin to provide cosmetic enhancement rather than a mode of action registration in in medical devices. This is to enhance the skin's natural barrier to to restore elasticity, to increase hydration, to close those tight junctions. And this is where we did a partnership with Croda PLC. Croda are a a £6,000,000,000 FTSE 100 company. We work very closely with the cosmetic division that which are called Souderma, they're based in Paris as well as the guys in Ditton and Witness in The UK.

8:23 They've got a very large portfolio of global customers, 12,000 plus. And this to us was was was was absolutely the best deal we could possibly have done. So Croda have committed to replicating our science on an industrial scale, building a a production facility that would be able to provide those 12,000 plus customers with this raw material directly as an ingredient to put into their existing products. So think things like oil of Olay now includes advanced scientifically proven SKINBIOTIX. Not only does it give us access to those 12,000 customers, it actually secures our future supply chain. Had we done a deal with a cosmetic brand, we would have either had to build a manufacturing facility and and produce the lice in ourselves, and that's not really what we do.

9:10 Or we would have had to engage a manufacturing partner where we would have had to surrender significant royally. So we have secured the supply chain and and have the ability to buy back the raw material from Proto PLC to use in our in our own in our own applications, in our own other pillars. So the two slides there are quite simply the same piece of skin. Slide a is untreated, and you can see these sort of stunted dark purple lines at the bottom here. These are fibrillin microfibrils. Their job is to tighten the skin. This undulating or or mildly undulating line on the subderma, you you can see once the product's been treated with our proprietary SKINBIOTHERAPEUTICS technology, those fibrillin microfibrils reach out as long candelabra like structures, pulling the skin together, and that undulating line is deeper and pulling the skin tighter and tighter, increasing elasticity, increasing hydration, etcetera. This is what brought crawler to the table. This is how we developed the the the the deal that we have.

10:15 So we signed a deal in at at the end of two thousand nineteen with the intention of developing a a a a a replication of our of our technology that we could basically then introduce into the market. After about four years, they came back to us and said that they had seen significant increased bacterial activity when the product was scaled up through the various vessels and getting close to industrialization. They then asked permission if they could go ahead and and carry out a a a clinical trial. And that clinical trial commenced at the back end of last year and has run through the early part of this year. That is currently being written up by an independent third party, and we will get readout, which you heard directly from Cecile Jeancier, who is the project lead at Proda during our last IMC presentation. We'll get readout of that in September, and we expect to hear forecasts in October and and then receive revenue towards the back end of the year.

11:18 Just a little reminder of of the journey that we've been on with this with this particular strain of technology. It's gone through an enormous amount of of of processes to get to where we are. It's a thirty eight thirty eight step process, 38 stages to get to the point that we are at now, which is what Crowder and Souderma call industrialization. So this includes claims substantiation, marketing, regular regulatory affairs, intellectual property, and sales, and it's that phase that we are in now. It's been a very long journey to get here, but Soderma are very thorough in in in in in their processes, and and they have some blockbuster products there that have all gone through this 38 step process. So it is tried, tested, and and very robust indeed.

12:06 There are no shortcuts on this. And as I've said many, many times, the pathway to complex science is never linear. There is often additional stages that are brought in. Our extension was signed in last signed last November, and it's due to expire in November of this year. So as you heard directly from Cecile during our last investor meets company presentation, this will be completed in under five years. So readout in September, forecast in October, and and and then we move on to, the the long awaited commercialization and sales. So that that's basically the timeline. Just as a reminder, it's it's a replication of the same, slide that I showed at the last, investor meets company, but that is the journey that we've been on. Long and arduous, it may have been, but absolutely worthwhile in the long run.

12:56 I wanted to also, with great pleasure, announce the appointment of doctor Surinder Chahal, which was the second RNS that was released this morning. Doctor Chahal or Das as he's more commonly commonly known or referred to, was the the global vice president of long term innovation for personal care at Croda prior to which he was the global vice president of customer alliances in the technology development team. Das has been with Croda his entire professional career for more than thirty seven years and has just announced his retirement. I left on the phone with him very quickly and arranged a meeting, and we are his first consultancy, role. He has been intricately involved with this project from day one. He's the very first person from Prola that I met.

13:43 All of the negotiations that we've had, Das has chaired those negotiations. He has worked, shoulder to shoulder with doctor Damian Kelly, in the r and d team and is is now gonna be sitting on the other side of the table representing SKINBIOTHERAPEUTICS as we go into the readout of the of the clinical trial, which, doctor Chao will be presenting with me during that investor meets company and and basically translating that for us and telling us what it means. And he will also be side by side with me as we negotiate and and and and and come to terms with the forecast that will be released later on. So delighted to have him on board. There couldn't be a more perfect, ambassador for, the the company and the technology, and I'm delighted he sits on our side of the table now. So welcome aboard, doctor Chahal.

14:31 So just to sum that up, corona and SIDERMA have always believed that this additional activity is extremely positive. You heard from, from Cecile Jeancier on our last presentation that these projects normally run for seven years, and that's exactly the pathway that Matrixyl took, seven years to get to the point of commercialization. This project will complete, in their words, not mine, in less than five years. That contract extension does expire in November 2024, and that clinical trial was designed to quantify activity that is expected to, facilitate an increased evidence based price increase or pricing at at launch. This has been fully funded by Kronos, Souderma. It's not cost us anything more than time, which I appreciate is is is a commodity and is expensive, but they have very high expectations internally.

15:21 The commercialization follows right up. And as I said, the results will be read by doctor Chahal as and when we receive them. Moving on to our AXIS Biotics PS. For those of you who don't understand or don't know the product, this is a product that was designed to alleviate symptoms associated with irritable skin conditions like psoriasis. We run a study for fifty six days. That's an important period of time. It is two blocks of twenty eight days. Twenty eight days is, the period of time which normal skin cells will renew themselves. So someone with a in a psoriatic environment, they would renew themselves more frequently than that. So we felt that two turns of twenty eight days was sufficient.

16:06 The, results that were run during the the the pandemic were extremely positive. 76% less itchy, 75% less red, 73% less irritable, and 65% fewer flaky patches. So that led on to the launch of AXIS SPIX PS, which was done as a pilot study, and it led to the beginning of negotiations with multinationals, which, as I've said previously, have been extremely positive. And and and as we've launched the acne study, they've become even more intense. The the the success of this product continues on, and I'd like to play just a very short video as we do pretty much on every presentation of a new customer who's just started using the product. I know in my head that psoriasis will never go away, but AXIS Biotix makes me feel better about myself. I know it's not now as bad as it might have been.

17:09 So my name is Candy, I'm 57. I've had psoriasis I think now for at least five years. It kind of crept up slowly, but got worse and worse. Tried all sorts of topical treatments and then my mum actually sent me a little newspaper clipping advertising AXIS Biotics and I just thought, do you know what, why not?

17:38 I've been taking AXIS Biotics for over a year now. I was greatly encouraged actually when I went on holiday to Corfu last year. My brother has a place out there. He noticed how awful my skin was but the next time I went to Corfu he said what an improvement. He could not believe how different my skin was and that actually really encouraged me.

18:05 I knew it was making a difference so I take it every morning first thing before my coffee and I do it it's it just it's just a habit now. I just do it automatically. It's the first thing I go to get up, go to the kitchen, have my little potion and then make a nice cup of coffee.

18:26 So I would say that Axis Biotics has helped me with my self care. I'm always very conscious of psoriasis and anybody looking at it. So I want to look my best at all times and I know that this is helping me.

18:44 I'm very happy to share this journey with other people. I would recommend it wholly, 100%. It's helped me. It can help you. Thank you. As you can see, the results continue to come in on AXIS BIOTHERAPETS. Continue to receive, very solid, reviews just like that one from Candy. It is it is heartwarming to hear that that we are helping, these people to change their lives. The success continues with our second study, which was for, the treatment of irritable skin conditions like acne. Again, this product was taken over an eight week period of time. The responses from nearly a 100, participants were were were astonishing.

19:32 So spot severity went from eighty three percent down to thirty three percent, appearance from ninety eight to forty one, pain from seventy percent down to twenty two, and self awareness from ninety two percent to thirty eight percent. That is a a stunning set of results yet again for this product. We this has now gone on to an advanced formulation stage, and that's more about getting the the the right vehicle to deliver the product. We've always said that we would like to put this product into a chewing gum, and and and that's the that's the challenge that we face at the moment, getting this into a chewing gum. We can deliver it as a sachet right now, but we'd very much like to to to prove that we can do this technically and get this into a chewing gum. So we are working with partners on on that very subject right now.

20:18 It has brought us closer to the multinationals. This does bring us closer to a deal with a a larger distributor that has greater reach. The sales continue to to increase, and Manfred will talk about that in a little while. Sorry. I'll talk about it now. Axis product sales are now circa £30,000 a month. You'll remember a time, the last presentation we talked about, they were £25,000 a month. Prior to that, they were £20,000 a month. So we forecast that we'll be going into next year with about £400,000 worth of sales. Remember that we sell this direct ourselves. There are no middlemen. The margins are hours and hours alone. Had we gone ahead and taken those distribution deals, we'd be on single digit margins. We are very far from that now.

21:03 We are in direct control of our pricing. We are proving to the multinational that these product lines are scalable. And, furthermore, we are now in discussions with two national high street retail chains because of the success we're having because of the testimonials, the likes of which you've just seen. We are now talking to the two largest national high street retail chains in in in over the counter pharmacy stroke food supplements. So our success continues. It's not as fast as as as we would have wished, but I think ultimately, if we continue with this growth rate, this product will be doing a million pounds a year with very, very little marketing spend indeed. It's taking a little bit longer than required, as I said, but we'll ultimately get there.

21:49 In terms of world products, you remember we brought in this Amazon Accelerator partner. These are healthcare specialists that deal specifically with food supplements and health care products. They've launched Dermatronics into, Amazon USA, and those sales are going very well indeed. Axispartis PS, Amazon launch has gone into France. It's underway in Spain and Italy. And then the launch into The US of AXIS PARTICS PS is expected to happen in the next month. There's a lot of regular prep work that needs to go on with that with the FDA given it's the most litigious country in the world. We want to get that absolutely spot on, And then hopefully, we'll fly off the shelves in The United States as well. Just a brief word about the third pillar, antibiotics.

22:35 We've put the slide up a number of times. It's there's a this is a very complex area of of technology. Wound care, given its very definition, we're putting bacteria that come from a human host originally into an open wound to accelerate wound closure to enhance the barrier around open wounds. We are, we've already commenced project Epiderm. It's now live and grant funded. That is professor Sheena Krukshank, who is a specialist in this field, and, professor Andrew McLean, who, was part of the founding technology team along with professor Cath O'Neill and has also worked on the oral program, with us. So so they are both both esteemed esteemed professors in their fields, and, we have very high hopes for the readout of of this project, and that's going very well indeed at the moment.

23:25 We talked in the past about inorganic opportunities, about opportunities that would bring us revenue, accretive acquisitions inside out and outside in. What I mean by that is topicals that treat a condition from the outside and food supplements that treat it from an inside. So anything that fell into those spaces, very highly fragmented fragmented market, and we were kinda looking for a sort of dermatology consolidation or companies that brought next generation science that microbiome driven that we could complement our own in house technology that would accelerate some of our our systems and future proof our portfolio. And then, ultimately, they they will both have to be revenue generating that would attract multinationals multinationals even faster to our technology and and accelerate that pathway to profitability.

24:15 To that end, we acquired Dermatronics. We announced that at the end of January of this year. I made a much critic criticizing highly critical statement saying that I would transform the the the company by the end of quarter one, that the company would be unrecognizable. So at that stage, we were forecasting in December that we would do couple £100,000 worth of access parts PS sales as we waited for the quarter forecast to come come flowing in and the revenue from that. The delivery of Dermatronics as an acquisition, they closed 2324 with £1,900,000 worth of sales and just about £500,000 worth of EBITDA. We forecast today that we will be delivering 2,900,000 sales. That's a 52% increase year on year, and that's £700,000 worth of EBITDA, which is 40% growth in EBITDA.

25:09 This includes the Moldy sales and also some organic growth there. I am forbidden from giving you the exact number of the MALDI forecast, and that is because MALDI UMESH MALDI Group is a privately held company. They operate, in their own words, in the most competitive market in the world. The the Africa and India, Asia region is is is very, competitive indeed, and there are multiple competitors out there. The UMESHMORI group of us is not specifically forecast line items and and and brand names, etcetera. So what I can tell you is that that increase is is is a million pounds almost. And and it it it it it includes Modi and some organic growth as well. So it is an astonishing lift in sales. It underpins the reason why we bought the company and shows that it is truly accretive and very profitable indeed.

26:03 Just a reminder of the Umesh Mordi Group, they have 1,200 sales representatives in that India, African, Middle East, and Asia region. They have a dedicated training facility in New Delhi. The product is out on the market. It is being sold now. We are seeing that uplift now in sales, and that's given us the confidence to to go ahead and forecast that £1,000,000 up uplift. There's a total addressable market for dermatology and diabetic management of about 5,000,000,000 in that region. So, it is a very, very important deal for us. It's one of the main main reasons that we bought the company. Discussions are underway with UMesh Modi regarding other product product opportunities, and that is not just limited to the dermatology range. That is also, in line with the probiotic food supplement range that we have ourselves and about accessing that that very valuable market.

26:55 I'd like to take a little bit of time to talk about acquisition number two. I've gotta be very careful what I say here. I cannot identify the target. I did say that we would deliver two acquisitions by the end of quarter quarter one. We could not have foreseen the market's reaction to the use of the the convertible loan notes. So firstly, I apologize for any any discomfort and any any dilution that that may have caused. I I need to be quite clear that that was the best option that we had in order to access the capital required to make this acquisition. Were we to have done, a a placing or to have done a fundraise to go out there and raise the necessary capital to buy this, we would have had to do that as at a significant discount, and it would have been dilutive as a result. Now I can't I don't have a crystal ball. I can't tell you what that dilution looks like. What I can tell you is access to non EIS and VCT funds is extremely limited at the moment. The city is all but dry in terms of of that sort of capital. It's very, very difficult indeed to access. So we felt given the strategic nature of dermatomics that the convertible loan was the only option that we had.

28:07 Target number two, we as I say, we we we put an end to that convertible loan note. It was necessary to get us to where we are. And as I say, I do apologize for for the pain that that's caused. We now wholly own that asset. There is more debt associated with this. You see, we are now at a position where that company belongs to us, lock, stock, and barrel. Acquisition number two is of a similar sort of size, circa 3,000,000 turnover. The EBITDA is about 1,100,000 after group synergies, and this company has the ability to manufacture the Dermatronics product. So it is very valuable to us in particular because of that ability. We have a debt instrument secured that and and and and that debt instrument will be secured with the fixed assets of the target. This is an extremely scalable business.

28:58 So if we were to put acquisition one with of Dermatronics in with acquisition two, who I can't identify, the group turnover is potentially £6,300,000. That's without product or without any acne launch. The acquisitions combined EBITDA is potentially with synergies, £1,800,000, again, without Krola or AXIS BIOTHERAPEUTICS for acne. And that would bring the group to just about EBITDA breakeven. So that would mean no more fundraisers, you know, for working capital. We would be we'd be a much stronger entity at that point. I can't give any more details on that. Should we have done the acquisition by now? Yes. But what I wanted to do, what Manpreet and I both wanted to do is to clear that convertible loan note before we entered into any further financial instrument facility.

29:47 We've done that now. The due diligence is very advanced on this. We are moving at pace, and we do have debt instruments secured to to secure that that transaction.

29:59 I'll pass over to Manpreet now for the financial results and outlook going forward. Thank you, Stuart. So I'm pleased to present our unaudited results for the year end 06/30/2024. Please bear in mind that we are currently in the process of going through an audit over the next few months, and we will announce our final results towards the middle, back end of November or early December as we have done in prior years. So the on order to results for the 06/30/2024 also incorporate the the Dermtonix acquisition, and the results for Dermtonix are from the period 01/26/2024 through to through to the year end. So in terms of revenue, it came in marginally ahead of the analysts' expectations through some some small overperformance in in Dermatronics.

30:53 Sales were in line with management's expectations across the three sectors that we report under for dermatology. Those three segments that we report under are UK retail, which incorporates the likes of Boots, Superdrug, small pharmacy chains, and Amazon in The UK.

31:12 UK wholesalers who, partner with us to get products into the NHS. And the third segment is, international. So that's through distribute partnerships as well as the Amazon USA partnership with World Products that Stu alluded to earlier.

31:30 Gross margins were down year on year, but this is because of the mix of the dermatomes gross margin coming through. That came through at about 55% for the roughly six months that they were under our ownership. Access gross margins were in line with prior year at 64%, and we are pleased with that progress. We do see internally when we review our management accounts that the the the combined gross margin does shift month to month. This is all due to the product and volume mix that that Dermatonic Springs.

32:04 Overheads were 12% up for the year, although, again, this was due to the inclusion of the overheads attributable to Dermatronics, and that was largely salaries and marketing expenditure. EBITDA came in lower than previous year, as a result of the accretive nature of Dermatronics, although the net loss was higher than than prior year. Included in the net loss figure is, roughly 75 thousands of noncash amortization charges relating to the acquisition of Dermatonics, where we've accounted in line with, IFRS or IS 38, to to account for the intangibles acquired. The cash balance at the end of June was 800,000. This was impacted by the £500,000 earn out payment that we made for Dermatronics in May of this year.

32:53 As we've outlined in the r and s, management do not have any short term concerns over cash requirements.

33:04 The next chart I presented at the prior IMC, this gives us a bit of a flavor of how the AXIS BIOTHERAPEUTICS product is, is is evolving and and the sales that we are generating through subscribers and the excellent retention rates that we are we are seeing still. You can see that the retention rates are still within that 85% plus band. Obviously, we've seen it higher than that in in prior months at roughly ninety, ninety two percent. But, nevertheless, it's still pleasing that we're seeing that retention progress. The subscriber numbers have grown as well considerably since December 2022, to sort of mid five hundreds now, and you'll see that tailing off a little bit, over the last couple of months.

33:49 This is not unexpected. We do sometimes see at this time of year the numbers reduce as as symptoms start to ease during the summer months. But what we then see in sort of three, q four of of the calendar year is that those subscriber numbers pick up as those symptoms start to come back. In terms of the the group's trading outlook for the financial year to 06/30/2025. So as Stuart mentioned, we forecast Dermatonics to add 2,900,000 of revenue, representing a 53% uplift for the full year to 06/30/2024, where they delivered 1,900,000 of revenue. This incorporates growth across all the three segments that I referred to earlier, including the impact of the much more group revenues.

34:37 As a result, we expect the EBITDA within Dermatronics to increase to £700,000, and that is that is a significant improvement on on the prior year where where they delivered circa £500,000. With Access PS, we forecast growth of over 60% as we roll out the product through Amazon in conjunction with our world with our partner world products into those European territories, Spain and Italy, and then in the latter half of this calendar year into The US. Stuart alluded to the acne product where we expect a launch similar in in similar vein to how we launched AXIS Piox PS at the end of twenty twenty two. We'll we will launch something similar at the end of twenty twenty four, and then we'll update the market with management's forecasts closer to the time.

35:26 The quota clinicals are due in in h two, as Stu alluded to earlier. And, again, once we've got the forecast from quota, we will be announcing those to the market and updating our forecasts for the year ended June 2025. I'm pleased to say that the monthly cash burn has reduced by 32% since the acquisition of Dermatronics. This is a combination of both accretive nature of of of Dermatronics business as well as a reduction in the overheads of, the SKINBIOX, group.

35:57 If Dermatonic's performance meets management's expectations in the forthcoming year, this cash burn rate will reduce to over 50%. We talk about a further acquisition, acquisition number two, as Stuart mentioned before. The financing office will include a raise of 500,000 to fill the hole from the first earn out payment, and this, again, extends our cash runway even further than q one twenty twenty five. Can I just jump in there, Manpreet, and say that that is an option? We don't have to take that. That is that is at our request. If we require that £500,000, we can draw it from that facility, but we don't have to draw it. Should quota revenues come in strong, we absolutely would not draw that down at all, and that is debt, not dilution. Thank you, Stuart.

36:44 We've we've discussed the CLN in in quite a bit of detail in the previous IMC, and Stuart's mentioned it as well. Just a couple of points I want to raise now that the facility's cleared. The overall interest expense on the 1,600,000 was roughly 31,000, which works out about 2% interest on on that facility. And the overall dilution was about 10.95%, so less than what the the worst case scenario was that we had to announce when we took the facility on. We have got a term sheet for a debt facility for the second acquisition, although we are exploring other options as well, and we will make the the best decision and the right one for the business going forward. Thank you, Rupert.

37:29 Thank you. So in summary, as you've heard, the corona project remains on track. It will complete in less than five years. Their words, not mine. The industrialization phase, which is highlighted in in in their visuals, commenced in, June of this year, and we're in the middle of that right now. Very high expectations internally at Souderma. Also on that point, obviously, the appointment of doctor Sarendra Chahal is a major cue for us. Obviously, he he's been intricately involved in the in the project internally and now crosses the line to work with us on the other side. I would like to say that if there if there was nothing to this, then I don't think doctor Chahal would put his professional reputation on the line to join us if if that that wasn't the case.

38:15 Axis Biotics, PS is launching through World Products in The United States, and the acne acne results were excellent being delivered, and we continue that advanced formulation. We will launch a product towards the back end of this year. I hope that will be in a gum format. That brings us closer and closer to a deal with the multinational. It proves that we're not a one trick pony. It proves that we can actually deliver on multiple skin conditions and it proves the resilience of the team that we can get these products with a very small team formulated and out onto the market through a study and then launched. In terms of governance, we announced a 20% reduction in executive remuneration. We backdated that to the start of the year that we continue to maintain that. And that the burn rate has been reduced by thirty two percent as Manpreet pointed out, that is due to the accretive nature of dermatomics and also due to the cost saving measures that we put in place internally.

39:11 Project Epiderm is grant funded and could lead to very significant commercial partnerships. It is the evidence we need in order to land a transaction with a multinational wound management company. First acquisition is complete. It's accretive from a cash perspective. The Modi contract was pulled forward. We've now seen the forecasts of that, that million pound uplift. And we also announced very shortly after we entered into whether we would not use the convertible loan facility again. On that note, you know, I must say in conclusion that, again, I apologize to to to shareholders for the dilutive nature of that. I've been described as having a cavalier approach to to dilution. I can assure you that that is categorically not the case. We are using the debt instruments going forward, and that's because they are now available to us because we have a profitable acquisition made. It was necessary to get us to where we needed to be.

40:09 We remain as positive of as we have always been about the future prospects of this company. The fact that, you know, Croda are are coming to the end of the clinical trials fills us with anticipation and excitement. We do not see a a cash haul coming forward. That is because there are multiple things that I can't talk about that are material price sensitive and, you know, until I get clearance to do so, I can't talk about them. In terms of acquisition two, you've seen how accretive that could potentially be. We have not executed that acquisition yet. We have still to do so that that is a potential. Please do not take that as a given. I would be I would be very remiss of me to say that that was in the bag. The due diligence has gone extremely well. It's a very competent company, very scalable, but we have yet to get that over the line. As Manpreet said, we do have a facility available to us. We are still exploring alternative opportunities, and we will take the best option for the company that does not involve dilution.

41:08 It involves debt alone. So I know that will come as, as as good news to many out there. We remain, as I say, we remain as confident as as confident as possible, about the the future of this company on all fronts. Within SKINBIOTHERAPEUTICS, the Croda deal is secured, AXIS Biotic sales continue to grow, MEBIOTHERAPEUTICS project and with, project Epidermis continuing at pace, CleanBiox is on the back burner as is Pharmabiox until we can get enough bandwidth to continue with those projects. That's great, Stuart. Manpreet, thank you very much indeed for your presentation. Ladies and gentlemen, do please continue to submit your questions just using the Q and A tab situated on the right hand corner of your slide or screen. It's nice, Stuart and Manpreet, take a couple of moments to review the questions submitted already. I'd just 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.

42:03 Stuart Manprove, I will just return your cameras back up. As you can see, you've had a number of questions from investors throughout today's presentation. So thank you to everybody for your engagement. If I just make sure you got the tab open, the correct tab open there, the results of the acne study were pretty impressive is the first question. If I could ask you please just to read out those questions, and I'll pick up from you at the end. Okay. The first question says the results for the acne study were pretty impressive. So why do you feel the need to tinker with the end formulation? And will a commercial launch need to wait for a multinational partner with the necessary marketing budget to make the launch a success? I'll take that in two parts. Thank you for saying the results were pretty impressive. They were indeed. We're not tinkering with the formula. We've got a formula that works. The results speak for themselves.

42:50 We believe that the best vehicle to deliver this product to market is a gum. If we are not able to do that, we'll launch it as a powder or or as a capsule. But we we we I think we we would like to explore the possibility of a gum, and I think it would show how versatile the technology truly is. And do we need a multinational partner for the necessary with the necessary marketing budget to make the launch a success? That would be lovely. It would be wonderful. We are planning until we hear otherwise. We're planning to launch this ourselves as we did with AXIS PIALX PS. As I said before, we are talking to multinationals. The fact that we've just got a second product out there shows the resilience of the of the science and shows the resilience of the team. And and I think it brings us ever closer to a a successful partnership with a multinational.

43:40 The second question, five months after announcing the Umesh Moldy launch of Feet Once Heal Balm and other products across Asia, Middle East and Africa had been brought forward to the 03/01/2024, there is still no Internet presence for the brand or release of forecasted sales figures. When can we expect to hear what financial contribution is expected from this launch? And how soon will revenues be received by SKINBIOTHERAPEUTICS? I think I'd like to think we've answered that in the presentation. We have released the forecast for dermatomics for the next trading year, 2425, it being a million greater than it was the previous year. A large part of that uplift is the Umesh Modi contract, and we are start seeing the revenues now. So I think that answers that in full.

44:29 The first extended phase of developing a new lysate for the oral program ended in January of this year. When can we expect to hear about the findings? Great question. We require a little bit more work on on the on the oral program, and it and it's gonna cost us a little bit more money to get there. It's gonna cost us about 200 to £250,000. We have better uses of cash at the moment. The technology is not going anywhere. We own that technology. We will move on to that as and when we we we we move forward. Yeah. And and professor McBain is actually working with us on on the project Epiderm, so we're still in in regular contact with him. As I say, the science is not going anywhere. We own it. We have to put things in in a in a prioritized list. This is a little a little further down that list than some of the other areas.

45:19 The next question is during the January 2024 meeting, you mentioned feedback was expected from Newcross Hospital following a heel pressure ulcer trial using one one's heel balm. When can we expect an update? Yeah. Thank you for asking that. There has been a change of personnel, at the top level, the the people handling that study at Newcross Hospital. So we're gonna require just a little bit more time on that. It is ongoing. We are currently working with the Legs Matter campaign, which is a a very vocal, and very fast moving campaign, very well respected. The product is still being used in Newcross Hospital, to prevent heel pressure ulcers and prevent diabetic foot ulcers, on at risk patients. The good news is the Ipswitch team that, we run a very successful study with are now very keen to get involved with this project at Newcross, and they are huge advocates of the product. And they're working, hopefully, with us on on the legs matter campaign as well. So that gains even greater momentum, but we're not quite there yet. And as soon as I do have a readout of that, we will RNS that immediately.

46:27 The next question, can you confirm that The US launch, of Dermatonic's products has taken place and sales, meeting management's expectation? Also how our AXIS Biotics launches on Amazon sites in France, Spain, and The USA progressing. I think we've answered that. The US launch has taken place in of Dermatonics. It's also, on AXIS Biotics, PS, it's been launched in France and Spain, and it's just going through The US launch now, and that's because of regulatory requirements. But, yeah, we're very happy with the progress that we've got now. Obviously, nothing ever moves as fast as you'd like. We are constantly being held to to account on timelines. I was at a meeting of other CEOs, listed CEOs of AIM companies a number of weeks ago, and and everyone now is very reluctant to give hard timelines to investors because of the of the of the of the torture that we receive on the boards about missing timelines by a day, a week, a month.

47:24 I would like to deliver everything I possibly can to you tomorrow morning. I'm afraid life just isn't like that. You know, we have to we have to move forward at the pace of our partners and the pace of technology. What are the value of the earn outs associated with the Dermatronics acquisition? How do they get triggered, and are they included in the cash runway? That's an excellent question. I've gotta be careful what I say here because there's there's obviously individuals involved in this, and those earn outs are very personal to them. But let me be very clear about this. The earn outs are based on pre agreed profitability targets. You've seen forecast now. This is this is, they are very hardly measured. They're very severely measured. There is no ratchet. There is no pro rata. They hit the targets or they don't.

48:11 If if if the team doesn't hit the targets, there is no earn out. It's as simple as that. It's a straightforward win or lose. The team are very confident that they're gonna hit the numbers. That's why they agreed to them. But there is no if you hit 30% of the numbers, get 30% of the earn out. It doesn't work that way. They are it's it's very much binary. The next question is any timeline with crawler news. I think we've answered that. The next question, you've used the term transformational on several occasions, but to me, at least the time scale seems to be slipping backwards. I'm fully aware you have little control over other party's actions, but that word is quite emotional. Can you make any comments? I did use the word transformational. Do I regret using it? No. No. Actually, I don't.

48:58 I think had the market not reacted the way it did towards the, the convertible loan note, we would have closed the second acquisition by now. I think I've outlined what that might look like, that second acquisition. I would say in two parts. The first one is in December when I used the words transformational, we were forecasting a couple £100,000 worth of sales. You've now just seen a forecast that's, you know, base basically 2,900,000 plus 400,000 of, Access BIOTHERAPEUTICS PS sales. So to have a a a £3,400,000 revenue, I would say that's fairly transformational from a £300,000 forecast. To say that with the second acquisition, we'd be over 6,000,000 and and and cash breakeven, I think that that is truly transformational.

49:46 The person that asked the question goes on to say, I am, for me at least, quite heavily invested here. I was disappointed when I didn't receive my full entitlement at nineteen p on the last fundraise. With hindsight, I'm lucky I didn't. I asked you at a previous investor meet why I should buy more shares at that time at thirteen p, and you gave several good reasons. However, a few weeks later, I could have bought them on for under nine p. I'm also fully aware that the risks of investing in any company, but I'm asking more of the same question today. Why should I buy more shares? I think we've given multiple reasons now. Croda is is news is imminent. Their timeline is not mine. Doctor Surinder Chahal joining the board gives us should give everyone a great degree of confidence.

50:32 We've now shown a £1,000,000 uplift in the dermatomics sales brought on by UMESHMORI and some some organic growth in within the company outside of UMESHMORI. We've outlined the potential of a second acquisition. We've detailed the ACNE AC results and our intent to launch this year. I I think there's more than one reason there to to to invest in the company. I still say that the the price today is very, very cheap. I'm not a financial adviser. I operate this company, and I'm very proud to do so. The person goes on to say, in any individual company I invest in, I always look to see how many shares the board of director of other connected parties hold. I believe you need to show us that you have skin in the game. I am aware of the restrictions imposed on owners, employees, and connected party, but I don't really see it here at present. Can you make any comment?

51:24 I have invested in the company to the amount that I have been permitted to with every fundraise where I've been permitted. Normally, amount is is is £25,000, and that is the amount that I'm allowed to buy. Right now, we're in a closed period, so I cannot legally invest. We are not doing a fundraise at the moment nor in the foreseeable future. I am heavily incentivized on share options to the tune of millions and billions of shares. My my share options are are triggered by share price. The next share price trigger for me is ATP, and I intend to see that fulfilled. The one after that is over a pound. I intend to see that fulfilled too. I hope that gives you some comfort. At the next opportunity to invest, I will absolutely do so as are all of my family and most of my friends. The next question, do you know how big the world of payments will be from corona?

52:14 I I can't give an answer to that question until we get formal forecasts. Have you indication of what the customer's response to SKINBIOTHERAPEUT SKINBIOTHERAPEUTICS product would be in terms of revenue from Croda? Again, I'm being asked, are they 5,000,000, 10,000,000 or north of that? I really can't answer that question until I get that's material and price sensitive. The moment that I get forecast, we'll issue them. What we do know is that Matrixyl is is £350,000,000. We have a double digit royalty deal. You know, you you can you can put a thumb in the air. I'm I'm not in the in the in the habit of guessing. I'm in the habit of of of giving you I'm in the business of giving you facts that are material and price sensitive. As soon as that that forecast comes in, the shareholders will be the very first people to know.

53:10 The next question is, if the lysate becomes a major ingredient for Silderma, surely they will want to buy the intellectual property or even the whole company like they did with Matrixyl. Can you see that happening? Again, I don't have a crystal ball. It is very much the modus operandi of Croda and indeed, you know, all of their operating divisions to be very motivated to buy companies. They did that. You're absolutely right with Soderma. Would they buy us? Well, you know, I can see if they were if if if the the license is a huge success and they're paying us tens of millions of pounds a year, in royalties, then I can see the motivation for them, indeed anyone, paying that sort of output, to buying, the technology themselves. That's why we we designed the company with the five pillars.

54:00 As I've mentioned before, look to those of you who don't know, the five pillars are not just a pretty picture. They're actually a legal structure. Each one of those pillars is a separate legal entity that holds the IP relevant to its sector. So we're a company, be it Croda or whomever, would wish to to buy the technology related to that sector. We could simply carve off one of the pillars and continue on with the other areas of the business. So can I see that happening? I I again, I don't have a crystal ball. It's certainly possible, and they've certainly done it in in in the past. Next question. It was very interesting to watch the short visit video of Candy. I have a friend using Axis Piotics whose psoriasis improved only slightly, so she is in the middle and neither satisfied nor dissatisfied, but she doesn't want to stop just in case.

54:49 Because every person is different, have you any plans where individuals may be may be in the future able to personalize their dosage? That's an excellent question and a very difficult one to answer. I draw back to the comments that I made after the psoriasis study. I actually visited in person some of the people who were very successful on the study, but I was more interested in the people who were not. I met people who had very large body mass, and that was very difficult for one sachet of power to have the same impact on them as it was for somebody who's, know, a a third of their their their body mass. I met people who, in their own admission, didn't hydrate particularly well, didn't drink a lot of water, people who had not an optimum diet, people who drank a lot of alcohol.

55:34 And as you rightly say, Andrew h, the the everybody is different. And and and do we see any any opportunity to personalize this in the future? It's certainly something we've talked about internally. We do have some connections with people that do look at at at testing people's gut microbiome beforehand and then optimizing a dose. It it is expensive, but it is something that we have considered. Right now is not the time. What I would say to the individual, your friend, is that many people have taken this product and it's taken six months for them to see a real significant change. In fact, we've got one extreme case where it was nearly nine months. But once that change kicked in, it was it was quite significant indeed. The next question is regardless sorry. Regarding making the right decision on the next debt facility, given the negative response to former's facility, please tell us how you will improve your approach in determining correct funding facility. Will you solicit additional advise you who from thanks.

56:40 Yeah. So that that that yeah. That's a very good question. We listen to the market on on on the convertible loan. Trust me. That was the best instrument we could have used out there. I know that there are people that will disagree with us on that and say that I have a cavalier approach to dilution. I categorically do not. You know, I received just as much flack from family and friends as I did from from from our retail investors. The institutional investors were a little bit more patient. They understood that there was an end plan. I'm hoping that people see the jigsaw in getting us, you know, over 6,000,000 with a second acquisition and getting us past cash breakeven without Croda shows that, we built a solid platform, and that we're not relying on one single strand of income, that we have multiple revenue streams, and that makes us stronger.

57:26 We we do solicit as much advice as possible. We do have, you know, some very solid advisories advisers. We do listen to our our advisers. On on the on the occasion of the last convertible, we had a very little choice, and I think I think we've demonstrated we've we've just delivered an extra million pounds on top of last year's performance on on the target that we just acquired. So I think that kind of underpins the value of the acquisition. I believe the second acquisition is more valuable again, and it's the two pieces of the jigsaw coming together that shows that, you know, it's it's a very valuable combination indeed. The next question, what is the thinking behind using a gum rather than a powder? That is purely the addressable market.

58:13 We're we're targeting the teenage community. Imagine if you could rather than taking a sachet of powder and putting it into a a glass of water every morning, you could just pop pop a piece of gum in your mouth and chew that on the way to school. If we could make that taste nice and minty and even put a tooth whitener in there, why would you not chew that gum? It's probably gonna have much greater compliance than it would do if it was a powder. So, yeah, that that's that's the that's the thinking behind that. And and certainly, the formulation team and and and the team that we have on advisory are are all in agreement that is probably the right vehicle to go by. I'm not sure if a 100% of it's possible. We're certainly looking at it. Sure. That's fantastic, Manpreet. Thank you very much indeed and perfect timing as we come up to the hour. So thank you once again to everybody for your questions. And if any further questions come through, Stuart, we'll make those available post today's meeting. I know investor feedback will be particularly important to you both, and I'll shortly redirect those on the call to give you their thoughts and expectations.

59:07 But perhaps I can come back to you, Stuart, for a couple of closing comments. Yeah. Thank you. Thank you all for your time. Afraid I've run out of time. There are a number of additional questions. I'm afraid I couldn't get to them all within the time span. A lot of them are duplicates of of of of what I've already answered, and some of them were answered in the presentation. You can always email the investor relations line if you have a direct question, and I will do my utmost, myself and Manpreet, to answer that. Finally, I thank you all for your patience, those long term patient, long suffering, as they often describe themselves, investors. We are getting there. We are delivering on everything that we said we would. It's been a it's been an arduous journey, but I I think we'll prove in the next six to twelve months that this was worth every penny of your investment. Thank you once again for your patience, and have a good morning. That's great, Stuart.

59:58 Manpreet, thank you once again for updating investors. If I could please ask investors not to close this session as we're now automatically redirect you for the opportunity to provide your feedback in order that the company can understand your views and expectations. This may take a few moments to complete, but I'm sure it'll 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. Good morning to you.