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Slimmed-down Integumen looking to AI for next stage of Labskin’s evolution

Integumen’s Labskin technology has been used by some of the biggest names in pharma for years, but a small tweak in how it is sold has led to a surge in sales since new boss Gerry Brandon came in
skin cream
Labskin is a lab-grown skin used by firms to see how their latest products will react to human skin

Gerry Brandon has been a busy man since taking over the reins at Integumen PLC (LON:SKIN) last August.

He took the job after speaking to the company’s chairman, Tony Richardson, who he grew up with in Dublin back in the 1970s.

WATCH: Integumen boss hails firm's technology platform after transformational year

The pair would go on to work with each other at wound care specialist Alltracell Pharmaceutical, which they floated on AIM just after the turn of the millennium.

Before his arrival, Integumen had been burning through the funds and debt they had secured, faster than their ability to cover costs, without much to show for it.

“There were seven board members and eight members of staff when I took over,” says Brandon. “It was far from an integrated group of four companies and management had simply overlooked, or perhaps misunderstood what it was that they actually had.”

What they couldn’t see was Labskin, a laboratory-grown skin that is used by cosmetics and pharmaceutical companies to see how their latest products will react to human skin.

The 'Rolls-Royce of lab-grown skin'

It was this piece of technology that convinced Brandon to take the top job at Integumen.

“Labskin is the Rolls-Royce of laboratory-grown skin for testing, but they were selling it for the price of a Mini Cooper,” he explains to Proactive.

“Every other laboratory-grown skin testing product operates in a sterile environment: In other words, you put the product on to a sterile skin.

“With Labskin, we can grow bacteria on it, so we can create models for acne, eczema, psoriasis and so on. It has even been tested on Ebola.”

In short, Labskin gives scientists a much better idea of how their cream or gel or make-up will react in the real world.

Not only does it make animal testing redundant, the added accuracy it gives researchers reduces R&D costs by helping to improve success rates when the product is eventually taken through to Phase II clinical trials.

But before he could start to make the most out of Labskin, he needed to slim the business down.

Brandon ditched the loss-making oral health brand, TSpro, as well as Integumen’s Visible Youth anti-ageing products. He also trimmed the number of board members from seven to four.

Now a marketing tool for cosmetic giants

With the company restructured, Brandon was able to focus on growing the sales of Labskin, which were relatively small even though some of the world’s biggest companies had been using it for years.

“The old management were selling it into laboratories with a restricted R&D spend,” Brandon explains.

Realising the potential for Labskin to be used as a stamp of quality, he started to approach companies’ marketing decisionmakers – the ones within a business who always have more money to spend.

“It was just a matter of selling it into a completely different department of the same company.

“Instead of selling that proposition into companies as a test for sensitivity or allergens, we now offer the marketing department an opportunity to say, ‘our product can give you this benefit or that benefit’.”

As a result, clients who used to pay £2,000 for a simple test are now paying upwards of £50,000 to qualify claims about the impact of their product as an anti-ageing solution or balancing the skin’s good and bad bacteria.    

That had an immediate effect on Integumen’s top-line: Labskin revenues totalled £149,000 in the first six months of 2018, but that figure surged by almost 350% in the second half of the year.

AI is the future of Labskin

Brandon isn’t standing still, either. With the help of artificial intelligence firm Rinocloud, he and his team are building Labskin-on-a-chip, which will record every treatment tested on the Labskin platform and store its effects in a database.

That will give every dermatology clinic with a computer, the ability to take a swab of a patient’s own skin bacteria, place it on the Labskin, run it against the database, and advise what the best course of treatment might be.

Then there’s Labskin AI, a digital extension to the lab-grown skin which Brandon likens to the life science equivalent of Airbnb.

It offers remote contract rental of laboratory equipment from service providers to buyers of those clinical test services, much like Airbnb matches holidaymakers with accommodation, without ever owning the house or apartment.

Brandon says the combination of Labskin-on-a-chip and Labskin AI should take Integumen to the next level as it is a combination of scaling as a software rather than a physical operation only, and he is targeting 150 companies with revenue in excess of £500mln.

That might sound ambitious, but Brandon reckons it is far from impossible.

“There are 3,685 companies that are large enough in the world to fit within that category. So, 150 is more than achievable.”

The near-500% rise in the share price since his arrival would suggest that the market shares his optimism for the future.

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