The Wetherby-based company has created a patented human skin equivalent called LabSkin, which emulates living skin tissue in research and product testing.
A new European regulatory framework ban is applicable to every cosmetic sold in Europe, irrespective of where the product was made in the world.
Affected cosmetics range from everyday hygiene products, such as soap, shampoo, deodorant and toothpaste to luxury beauty items including perfumes and make- up.
Animal testing for cosmetics has been prohibited in the European Union since March 2009, but companies have been allowed to do tests outside the EU.
The EU estimates that between 15,000 and 27,000 animals, including rats, mice, guinea pigs and rabbits, are tested on outside the EU every year.
The European Commission estimates that the European Cosmetics and Toiletries industry is worth more than EUR 70 billion (£59bn), which represents almost half of the global market for cosmetics.
Evocutis announced losses of £480,000 for the six months to January 31, up from losses of £370,000 the previous year.
Revenues fell from £340,000 to £230,000.
The group is in the process of changing itself from a purely contract-research company to a commercial firm selling LabSkin to pharmaceutical and consumer health companies.
LabSkin was launched as a product for direct sale last September.
The company has increased its capacity so that it can produce enough LabSkin to meet its internal needs as well as servicing customer orders.
Evocutis said collaboration with the London School of Pharmacy has shown that LabSkin is a good model for studying transdermal delivery of small molecule pharmaceuticals.
It has also started a collaboration with the University of Bradford to develop a LabSkin variant containing melanocytes, the skin cells that contain skin-darkening pigment melanin that protects skin from the sun.
The group’s goal is for global consumer health and pharmaceutical companies to use LabSkin as a predictive model for the behaviour of cosmetic products on human skin.
Evocutis said LabSkin’s ability to support the growth of skin micro-organisms has won it contract research business with major multinational companies.
During the six months to January 31, the company carried out several studies for UK, European and US companies on projects relating to toxic shock syndrome and anti-acne compounds.
Evocutis has said it is in talks with companies in the US and Europe about its strategic options.
These include signing up long-term strategic partners and could include a takeover of the company.
The group said the contracts won earlier this year have strengthened the company’s hand.
It said all the contracts are with well-known global consumer healthcare companies and will be delivered over a two to six-month period.
The contract values range from £9,000 for early exploratory research to £88,000 for larger scale product development analysis, and include early direct sales of LabSkin.
LabSkin is made up of both dermal and epidermal layers.
Studies have shown that its behaviour is closer to that of normal human skin than any other models.