ACRUX LIMITED — AGM Information 2016

Nov 9, 2016

Acrux (ASX: ACR) Annual General Meeting

10 November, 2016

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Acrux AGM 2016

Introduction: Ross Dobinson Non-Executive Chairman

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Company review: Michael Kotsanis CEO & Managing Director

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Forward looking statements

This presentation includes forward-looking statements that are subject to risks and uncertainties. Such statements involve known and unknown risks and important factors that may cause the actual results, performance or achievements of Acrux to be materially different from the statements in this presentation.

Actual results could differ materially depending on factors such as the availability of resources, the results of clinical studies, the timing and effects of regulatory actions, the strength of competition, the outcome of legal proceedings and the effectiveness of patent protection.

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Acrux AGM 2016

Axiron® IP outcome

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• United States District Court for the Southern District of Indiana judgment

• Formulation and axilla application patents granted by the US Patent Office for Axiron[®] have been invalidated

• Patents therefore would not be infringed by the commercialisation of generic versions of Axiron[®] by the generic companies that have challenged these patents

• The applicator patent is valid but not infringed by the majority of parties

• Acrux and Eli Lilly and Company have appealed the District Court decision

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Acrux AGM 2016

FY 2016 outcomes

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Revenue	2016: $28.6 million 2015: $25.4 million
Net Profit After Tax	2016: $13.0 million 2015: $11.1 million
Cash	2016: $29.4 million 2015: $23.1 million
Product approval	Lenzetto approved in European Union in 1H FY16 Milestones received 1H FY16 Lenzetto launched in numerous European markets in 2H FY16
Pipeline progress	Initiated and made solid progress on first three generic projects Encouraging progress on onychomycosis project formulations

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Acrux AGM 2016

Finance review: Tim Bateman CFO & Company Secretary

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Full year earnings

	2015/16	2014/15	%
Royalty	25,469	24,639	3.4%
Milestone	2,540	-	n/a
Other revenue	548	729	-24.8%
Revenue	28,557	25,368	12.6%
R&D investment	(5,536)	(3,780)	46.5%
Operating costs	(2,390)	(2,597)	-8.0%
Non-operating costs	(2,539)	(2,185)	16.2%
Total Expenses	(10,465)	(8,562)	22.2%
Profit before income tax	18,092	16,806	7.7%
Income tax expense	(5,111)	(5,676)	-10.0%
Pofit after income tax	12,981	11,130	16.6%

Earnings per share

7.8 cents 6.7 cents +1.1 cents

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Royalty revenue largely comprises Axiron revenue $25.5M

Milestone income reflects multiple marketing approvals of Lenzetto in the European Union by our licensee Gedeon Richter

R&D investment up $1.7M over prior year, reflecting investment in 3 generic and one speciality product

Operating costs have reduced 8%

Non-operating costs comprise non-cash costs and foreign exchange loss

Income tax expense represents 28.3% of profit before tax and is lower than the company tax rate of 30% due to utilisation of tax losses

Profit after tax up 16.6% or $1.9M over prior year

Cash reserves

29,360 23,068 27.3%

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Acrux AGM 2016

Full year cash flow

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2015/16 2014/15 %
Royalties received 25,668 25,203 1.8%
-
Milestones received 2,540 n/a
Interest received 515 639 (19.4%)
-
Other income received 23 (100.0%)
Total cash received 28,723 25,865 11.0%
Payments to suppliers & employees (7,923) (6,460) 22.6%
Purchase of capital (236) (66) 257.6%
Tax paid (4,294) (8,886) (51.7%)
Total cash payments (12,453) (15,412) (19.2%)
Dividends paid (9,992) (13,322) (25.0%)
Net increase/(decrease) in cash 6,278 (2,869) (318.8%)
Foreign exchange differences on cash holdings 14 162 (91.4%)
Cash at beginning of the year 23,068 25,775 (10.5%)
Cash at end of the year 29,360 23,068 27.3%
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Cash received from conduct of business activities $28.7M, up 11% over prior year due to milestones on Lenzetto

Increase in payments to suppliers & employees of 22.6% as investment in R&D is increased to drive pipeline program Reduction in tax payments of $4.6M or 51.7% due to lower net profit in FY15 as compared to FY14 (note: - final tax instalment payment falls into next FY)

As a result cash reserves at year end were $29.4M up 27.3% or $6.3M over prior year

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Acrux AGM 2016

Company review: Michael Kotsanis CEO & Managing Director

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Axiron volume and market share

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•
Axiron market share remains
Axiron Quarterly Net Sales
60 consistent at approximately 14%
50 • US District Court decision allows
40 Watson (Teva) generic to launch
30 •
A generic launch will impact Axiron
20 sales
10
•
US District Court decision has been
- appealed. Federal Circuit in
Washington will hear Appeal
20% Axiron Market Share 150,000 FY15 , FY16 TRx
15%
100,000
10%
50,000
5%
0%
0
Q3 Q4 Q1 Q2
USD $M
Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16
March-11 June-11 Septemb… Decembe… March-12 June-12 Septemb… Decembe… March-13 June-13 Septemb… Decembe… March-14 June-14 Septemb… Decembe… March-15 June-15 Septemb… Decembe… March-16 June-16
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• US District Court decision has been appealed. Federal Circuit in Washington will hear Appeal

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Source: Axiron Net Sales, Eli Lilly; Axiron market share and prescription volumes, IMS

• AXIRON is used to treat adult males who have low or no testosterone due to certain medical conditions

• Approved in the United States and selected other countries

• Testosterone replacement therapy market is $1 billion+ in United States

• Licensed globally to Eli Lilly and Company

• Acrux receives royalties and milestones on sales from Lilly

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Acrux AGM 2016

Lenzetto® (estradiol) spray Launched in Europe

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• Lenzetto® is a hormone replacement therapy for women

• Lenzetto® has been launched in a number of territories since January 2016, through our licensee Gedeon Richter, including Germany, Hungary and Romania

• Progressive European roll-out to new markets expected through 2016 and 2017

• Additional four country launches planned following European Summer

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• Topical estrogen-only HRT market is valued at over EURO 85

million

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Acrux AGM 2016

Growth Strategy

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Acrux is building a sustainable business model with a broader portfolio which leverages its existing topical expertise in compelling market segments

How:

• Core competency – utilise current technology, skills and capabilities

• Highly experienced formulation team

• Product development focused on commercially compelling opportunities

Measures of success:

• Portfolio with multiple products in various stages of development

• Valuable products licensed and commercialised

• Profitable and sustainable business

• Partner with strong and capable licensees

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Acrux AGM 2016

Total US pharma market size

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Aerosol Powders Other
Topical
Liquids
Injectable
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Oral
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• Oral market exceeds $200 billion

• • Injectable market exceeds $130 billion

• Both oral and injectable markets are heavily competitive.

• Topical transdermal market is relatively small at under $20 billion

Source: Acrux analysis. IMS June 2015 MAT. US market sales. US$

Topically applied drugs generated sales of over $18 billion in 2015. Oral and injectable markets account for 84% of total market.

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Acrux AGM 2016

Topical Generic Portfolio

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US Transdermal and Topical market size

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US$8.5 billion
Generic market
sector Initial
Acrux
portfolio
US$440 million ACR068
ACR071
ACR072
Branded market
sector
US$9.6 billion
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Source: IMS June 2015 MAT. US Transdermal and Topical generic and branded market segments

• First three generic formulations completed. CMO selection underway

• Topically applied generic products in commercially attractive market segments

• Reduced development timeframes compared to topical speciality portfolio

• Building portfolio of topical generic programs with sustainable returns

• By end FY17 development activities would have been initiated on 7 topical generics

• Targeting US market

• Generic market sector grew by 17% year on year. Branded market sector declined by 2%

Our topical generic pipeline is commercially compelling

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Acrux AGM 2016

Acrux antifungal development Onychomycosis

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Indication

For treatment of fungal infection (onychomycosis) of toenails and fingernails

Formulation and intellectual property

• Solution for topical administration

• Improved formulation of efinaconazole selected

• New patent has been filed

• IPR Petition for review of existing Jublia patent filed

Market

• An oral anti-fungal has been the subject of recent FDA Drug Safety Communications

• New topical products growing market volume

• Over 30 million Americans with onychomycosis

• Efficacy of currently marketed topicals is low

Acrux is targeting best in class efficacy in an attractive growing market

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Acrux AGM 2016

Future milestones

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• Draft and submit patent application for ACR065 for onychomycosis

• • Gedeon Richter to continue country specific launches of Lenzetto in the European Union

• • Scale up activities to manufacture exhibit batches for initial generic products

• • Contract manufacturing organisation to be engaged to manufacture multiple generic products

• • Commence first bioequivalence study

• • Portfolio of 7 topical generics in development by end FY17

• • Axiron Appeal outcome

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Acrux AGM 2016

Formal Business: Ross Dobinson Non-Executive Chairman

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Resolution 1

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Adoption of Remuneration Report

Proxy votes received prior to the meeting are as follows:

For	33,645,905 votes	90.2 % of available votes
Open	805,886 votes	2.2 % of available votes
Against	2,845,171 votes	7.6 % of available votes

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Acrux AGM 2016

Resolution 2

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Re-election of Ross Dobinson as Director

Proxy votes received prior to the meeting are as follows:

For	35,304,738 votes	93.8 % of available votes
Open	892,921 votes	2.4 % of available votes
Against	1,447,959 votes	3.8 % of available votes

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Acrux AGM 2016

Resolution 3

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Re-election of Timothy Oldham as Director

Proxy votes received prior to the meeting are as follows:

For	34,529,037 votes	91.7 % of available votes
Open	1,863,046 votes	5.0 % of available votes
Against	1,253,535 votes	3.3 % of available votes

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Acrux AGM 2016

Resolution 4

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Election of Simon Green as Director

Proxy votes received prior to the meeting are as follows:

For	34,609,474 votes	91.9 % of available votes
Open	1,863,046 votes	5.0 % of available votes
Against	1,168,598 votes	3.1 % of available votes

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Acrux AGM 2016

Resolution 5

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Election of Geoffrey Brooke as Director

Proxy votes received prior to the meeting are as follows:

For	34,175,026 votes	90.8 % of available votes
Open	2,041,446 votes	5.4 % of available votes
Against	1,413,596 votes	3.8 % of available votes

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Acrux AGM 2016

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Acrux AGM 2016