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Integumen's digital revolution builds momentum

Snapshot

  • Lead product is Labskin, a laboratory-grown skin which allows to skip animal testing 
  • A database and an AI version are being developed as well
woman touching her skin

Quick facts: Integumen

Price: 1.48 GBX

AIM:SKIN
Market: AIM
Market Cap: £15.87 m
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What it does

Integumen PLC's (LON:SKIN) backbone of the company is a product called Labskin, a laboratory-grown skin that is used by cosmetics and pharmaceutical companies to see how their latest products will react with human skin.

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.

Other activities

It owns STOER, a premium skincare range for men and also has a 9.35% stake in Cellulac, which produces biodegradable plastic ingredients and natural oils.

Growth drivers

With the help of artificial intelligence firm Rinocloud, which it bought in April, the Integumen is 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 platform, 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.

In May, the firm announced the roll-out of a Labskin AI product designed to clone the skin of volunteers in clinical trials.

The company said the new test would cut the number of volunteers required for trials by 50%, reducing recruitment times and project management costs.

 

How it is doing 

New deals or contracts are never far away with Integumen.

In November for example, the company unveiled a collaboration with Parity to give it access to the recruiter's National Health Service, central government and private institutional client base.

At the same time, it provided 2020 revenue guidance of £4mln not including anything that might arise from the deal with Parity.

Also that month, an automated E.Coli detection project in Ireland (RAWtest) meanwhile reported 99.3% accuracy in under 4 seconds.

A placing in December raised £1.4mln to provide working capital to mee the rising sales profile.

 

What the boss says: chief executive Gerry Brandon

“There isn’t out there on the market any way that you actually can have a psoriasis testing platform unless you go into animal studies.

“You are saving multiple years of development time and getting the product to the market faster.”

 

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What the broker says

In January, Turner Pope Investments initiated coverage with 'buy' rating and share price target 3.23p, twice as much as it was trading at the time.

Analysts said in a note there is potential to reach positive monthly cash flows by the end of the first half of 2020.

"Integumen is seizing an opportunity presented by skincare and personal product manufacturers that find themselves overwhelmed by excessive data, strict new EU, US and Chinese regulations and the need to improve product claims while responding to consumer-led demands for an end to laboratory-based animal testing."

"Surging demand for its laboratory and data services has resulted in the Board reiterating guidance that anticipates a four-fold revenue increase for the year just ended being matched by a further, similar improvement in 2020."

 

Inflexion points

  • Full results from Rawtest reservoir trial
  • Sales start to accrue from Parity collaboration
  • Revenues of at least £4mln expected in 2020 not including any Parity contribution

 

 

 

 

 

 

 

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