ORPH.L Regulatory News (ORPH)

First laboratory-grown human-skin test service, to use artifical intelligence, to provide clinical validation for cosmetic, personal hygiene and skin care products.

Labskin (Innovenn Ltd.), a wholly-owned subsidiary of Integumen plc., (AIM:SKIN) today announces that it has entered into a partnership with RinoLab (www.rinolab.com) to provide Labskin clients with access to an AI machine learning platform which accelerates development of cosmetics, skincare, woundcare, personal hygiene and pharmaceutical topical drug delivery products, and does not require animal testing. The service is expected to go live in Q4, 2018.

Labskin has also entered into a partnership agreement with AIM quoted Venn Life Sciences Holdings plc ("Venn") to integrate clinical validation protocols into Labskin AI. This will provide certified "Clinically Tested"product claim services to brand owners and producers of most skin care products. - see related party transaction detail below.

Labskin AI is an AI based laboratory-grown human-skin testing platform. It uses clinical trial test protocols and datasets, eliminating the need for animal testing completely for the development of all skin care products. The AI platform and physical Labskin laboratories offers clients an online end to end skin care product validation system, tested on laboratory grown human skin.

Due to the recent increase in demand for Labskin services, additional laboratory development support services are being provided through an agreement signed with Sheffield Hallam University, UK.

Gerard Brandon (CEO of Integumen plc and Director of Innovenn Ltd) commented:

"We are delighted to announce this collaboration of technologies and work with the skills and expertise of the RinoLab Team on the Labskin AI platform. Partnering with Venn Life Sciences and their clinical research organisation raises the bar for manufacturers of skin care products in quality control for consumer product information file (PIF) verification. Sheffield Hallam University has worked with Innovenn for many years in multiple Labskin development projects and extends the reach of our development services for our clients. Labskin has successfully moved from selling Labskin equipment supplies to being a fully fledged service provider during H2 2018, increasing our orders by 350% over H1. I believe that Labskin AI is now the ultimate go-to-market service for skin care product development, comprising formulation efficacy, testing and certification for EU and US consumer product launches."

Tony Richardson (CEO Venn Life Sciences Holdings plc) commented:

"This is an exciting development and extends our pharmaceutical clinical validation approach to the consumer health, personal and skin care industries in a way that has never been done before. We see multiple opportunities for cross selling of services to the same clients of both Venn and Labskin, not least the new services of topical drug delivery and drug metabolism through the skin. By partnering with Labskin and RinoLab using the AI platform we look forward to being able to offer a unique certification service to Labskin clients, as well as extend AI machine learning data analysis across our CRO service to pharmaceutical clients, helping them reduce their overall development costs by getting their products to the market faster."

Fin Murray (CEO of RinoCloud Ltd - RinoLab) commented:

"The RinoLab Team have developed a range of algorithms for the dissimination of big data specifically from scientific sources and is perfectly suited to analysing Labskin data to unlock trends and patterns that would normally be missed on a manual review. Using RinoLab, Labskin AI clients are provided with suggested alterations to improve product formulations to increase efficiency and efficacy. RinoLab analysis provides supporting data for the "Product Information File" required by cosmetic brand and skin care companies, prior to product launches in the US and EU markets.

Collaboration partners

Labskin (Innovenn Ltd - Integumen plc)

Laboratory grown human skin testing services. Specifically developed to host harmful bacteria on simulated human skin. It is the best testing platform for antimicrobial products, such as anti-dandruff shampoos and anti-acne creams, anti-aging, anti-fungal, UV sun exposure, toxic shock, and drug delivery through the skin, which cannot currently be carried out in vivo (animal models) due to ethical constraints of testing harmful bacteria.

RinoLab (RinoCloud Ltd)

www.rinolab.com

Rinolab is a set of software tools that ingests data from any source, in any format, interacts with it, learns from it and enrichs it to unlock insights and discoveries. RinoLab is developed by Rinocloud Ltd, a company focused on delivering big data type functionality, AI functionality and world class data management infrastructure.

Venn Life Sciences Holdings plc

Drug Development Partner

Venn Life Sciences Holdings plc is an Integrated Drug Development Partner offering a unique combination of drug development expertise, clinical trial design and execution services. With more than 170 professionals Venn creates, plans and executes drug and medical device development programs effectively and seamlessly for their pharmaceutical manufacturing clients. With dedicated operations in Ireland, France, Germany, the Netherlands, the UK, the US, and Europe-wide representation.

Related party transaction

Venn owns 16.03% of the current issued share capital of the Company, and is a "substantial shareholder" in the Company, and therefore a related party under the AIM Rules for Companies ("AIM Rules").

Entering into the agreement with a related party, as referred to above, constitutes a related party transaction under the AIM Rules. The terms of the agreement have been agreed by Innovenn and Venn, who are providing test validation protocols in exchange for a fixed percentage of new revenues.

Tony Richardson, the Chairman of Integumen, is also a director of Venn and is not an independent director for the purpose of considering the agreement referred to above in line with AIM Rule 13. Mr Richardson has therefore not taken part in the Board's deliberations concerning the terms of the partnership agreement. The independent directors, (being all the other directors of Integeumen, with the exception of Mr Richardson) have considered the terms of the partnership agreement. Having consulted with SPARK Advisory Partners Limited, the Company's nominated adviser, the independent directors consider that the terms of the partnership agreement are fair and reasonable insofar as Shareholders are concerned.