ACRUX LIMITED — Interim / Quarterly Report 2016

Apr 26, 2016

ACRUX (ACR) - ASX ANNOUNCEMENT

27 APRIL 2016

ACRUX PRESENTS AT BIOTRINITY IN EUROPE

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Acrux (ASX: ACR) today announced that CEO and Managing Director, Michael Kotsanis will be presenting at the BioTrinity conference in London today.

“I am pleased to present at one of the leading European biotech conferences to discuss the growth strategy for our business and to provide insights into the attractive development programs we are currently executing” said Mr. Kotsanis.

The BioTrinity presentation follows this announcement.

For further information, contact

Michael Kotsanis, CEO and Managing Director: 03 8379 0100

About Acrux

Acrux (ASX: ACR) is a drug development company focused on commercialising topical products using its proprietary drug delivery technology. Incorporated in 1998 and using in house facilities and capabilities, Acrux has successfully developed and licensed a number of pharmaceutical products in the US and Europe using the Patchless Patch[TM] , a fast-drying and invisible topical application technology. Acrux will continue to innovate and bring its developed products to the market in collaboration with licensees.

For further information on Acrux, visit www.acrux.com.au

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Acrux (ASX: ACR) Michael Kotsanis CEO & Managing Director

BioTrinity London 25-27 April 2016

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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 and the effectiveness of patent protection.

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BioTrinity London 25-27 April 2016

Acrux key events

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MONASH UNIVERSITY
US APPROVAL FOR LENZETTO (ESTRADIOL)
CREATES IP FOR
AXIRON APPROVED IN EUROPE
PENENTRATION OF DRUGS
THROUGH SKIN
ACRUX SIGNS AXIRON ACRUX BEGINS
ACRUX ACRUX LISTS (TESTOSTERONE) DEAL DEVELOPMENT OF GENERIC
INCORPORATED ON ASX WITH LILLY TOPICAL DRUGS
ACRUX RECEIVES US$50 ACRUX RECEIVES
BIOTRINITY,
MILLION UPFRONT US$25 MILLION
LONDON
FROM LILLY SALES MILESTONE
FROM LILLY
ACRUX RECEIVES US$87 ACRUX RECEIVES US$2
MILLION APPROVAL MILLION APPROVAL
MILESTONE FROM LILLY MILESTONE FROM RICHTER
200319977 200419988 2005 2006 200720044 2008 2009 2010 2011 2012 2013 2014 2015 2016
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• Acrux was founded in 1998 and listed on the ASX in 2004

• Acrux generates the majority of its revenue from royalties from Axiron

• Axiron is licensed to Eli Lilly and was launched in the United States in 2011

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BioTrinity London 25-27 April 2016

FY 2015 Business milestones

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• $11.1 million – Acrux records its sixth consecutive profitable year $23.1 million – cash reserves at end June, 2015 Estradiol – approved in Europe. Milestones of US$2 million triggered FY16 Topical generic pipeline – portfolio identified NSAIDs – superior formulations developed $1.02 per share – total capital returned to shareholders over the past 5 years

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BioTrinity London 25-27 April 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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BioTrinity London 25-27 April 2016

- Growth Strategy Framework for continued growth

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Existing topical portfolio
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• Includes Axiron®, Lenzetto®, Evamist®

• Strong cash inflow – facilitating our growth strategy

• Territory expansion being executed

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• $

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BioTrinity London 25-27 April 2016

Existing Topical Portfolio Marketed Products

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Axiron [®]
Evamist [®] / Lenzetto [®]
Recuvyra [®]
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BioTrinity London 25-27 April 2016

Existing Topical Portfolio – Lead Product Axiron

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• 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

• Only approved testosterone replacement therapy applied in the axilla

  • Patented application site

• Marketed by Eli Lilly

• Acrux receives royalties and milestones on sales from Lilly

• Axiron patent litigation case is currently scheduled for June 2016

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BioTrinity London 25-27 April 2016

Existing Topical Portfolio Axiron volume and market share

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•
Axiron Quarterly Net Sales Most recent testosterone FDA Drug
60.0 Safety Communication in March 2015
50.0 •
FDA and sponsors working towards
40.0
30.0 collaborative long term safety trial
20.0 • Testosterone replacement therapy
10.0
market remains attractive and
-
substantial in size
•
Axiron market share remains
Quarter consistent at approximately 14%
Axiron US Market Share (TRx weekly) Axiron US quarterly prescriptions - prior 4
16.0% quarters (000s)
120
14.0%
100
12.0%
10.0% 80
8.0%
60
6.0%
40
4.0%
2.0% 20
0.0%
0
Units March Units June Units September
Quarter 2015 Quarter 2015 Quarter 2016 Quarter 2015
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
11 12 13 14 15 16
March- March- March- March- March- March-
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• Most recent testosterone FDA Drug Safety Communication in March 2015

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Axiron US quarterly prescriptions - prior 4
quarters (000s)
120
100
80
60
40
20
0
Units March Units June Units September Units December
Quarter 2015 Quarter 2015 Quarter 2016 Quarter 2015
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BioTrinity London 25-27 April 2016

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

Existing Topical Portfolio Lenzetto® (estradiol) spray approved in Europe

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• LENZETTO is a hormone replacement therapy for women

• Initial European regulatory approvals granted 2H 2015

• US$2 million milestones received

• First product launches took place in January 2016

• Progressive European roll-out to new markets

• Topical estrogen-only HRT market is valued at over

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EURO 85 million

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BioTrinity London 25-27 April 2016

Topical Specialty Portfolio

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Prevalence in
major markets
from 2 – 12%
of population
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37 million
cases in US by
2022
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Market
forecast of
US$3.7 billion
by 2017
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Acrux antifungal development

Indication

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

Formulation

Solution for topical administration

Target profile

• Fast drying time with no residue

• Easy and convenient delivery

• Better efficacy than comparator product

• Once daily application

• Low systemic absorption

• Long patent life, with new IP

Sources: www.companiesandmarkets.com; www.podiatrytoday.com

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

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BioTrinity London 25-27 April 2016

Topical Generic Portfolio

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Reduced
development
timeframe
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Existing
topical
capabilities
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Commercially
attractive
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• Portfolio being built, developing topical generic products in commercially attractive markets

• Reduced development timeframes compared to topical speciality portfolio

• Generic development opportunities identified through screen of marketed topical/transdermal products

• Initial portfolio of 12 potential products identified, development has been initiated. Current market value US$2.4 billion

• Building portfolio of topical generic programs with sustainable returns

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Our topical generic pipeline is commercially compelling

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BioTrinity London 25-27 April 2016

– Growth Strategy Product Pipeline

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	Indication	Product Name		Formulation design	Pre-clinical development	Phase 1	Phase 2	Phase 3	Registration	Commercial	Partner
Existing Topical Portfolio	Hypogonadism	Axiron®									Eli Lilly
	Menopausal symptoms	Estradiol MDTS® USA – Evamist®									Perrigo
	Post-operative pain in dogs	Recuvyra®									Elanco
	Menopausal symptoms	Estradiol MDTS® Europe – Lenzetto®									Gedeon Richter
Topical Speciality Portfolio	Onychomycosis	ACR-065
	Diclofenac	ACR-046
	Ibuprofen	ACR-048
Topical Generics Portfolio
	Various	Initial generic portfolio*

*Development work has been initiated on 3 generic products

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BioTrinity London 25-27 April 2016

- Half year earnings result

	31 Dec 31 Dec 2015 2014 $'000 $'000
Earnings summary
Royalty revenue Milestone revenue Interest income Other income Total revenue and other income	15,224 13,729 2,534 - 242 313 4 176 18,004 14,218 26.6%

Expenses Profit before income tax expense Income tax expense Net profit after tax Earnings per share Cash & cash equivalents	4,700 3,934 19.5% 13,304 10,284 29.4% 3,558 3,266 8.9% 9,746 7,018 38.9% $0.06 $0.04 50.0% 21,539 15,792 36.4%

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Strong earnings growth, earnings per share $0.06 cents (Dec 14: $0.04)

Revenue largely comprises Axiron royalties and Lenzetto milestones.

Axiron sales US$83.0M for half year ended Dec 15 and consistent with prior year of US$83.9M

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Lenzetto milestone triggered upon marketing approval being granted in the first 3 countries within Europe

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Favourable foreign exchange contributed to revenue growth

Investment in the Company’s growth strategy continued, largely resulting in the recruitment of research and development staff to bring products to market

Income tax expense decreased as a percentage of sales due to utilisation of prior accumulated tax losses

Well positioned to execute growth strategy with cash reserves of $21.5M at Dec 15 and nil debt

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BioTrinity London 25-27 April 2016

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michael.kotsanis@acrux.com.au ph: +61 3 8379 0100 www.acrux.com.au

Acrux Management Team

Michael Kotsanis CEO & MD

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Vvv

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Ex – Faulding/Mayne/Hospira, Synthon

Sharon Papworth Felicia Colagrande CFO & Company Secretary Product Development & Technical Affairs Director

Nina Webster Commercial Director

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Joined Acrux 2001 Ex – Austin Hospital, Faulding

Joined Acrux 2013 Ex – Wyeth

Joined Acrux 2014 Ex – KPMG, Mayne/Hospira, Salmat

Charles O’Sullivan Project Director Joined Acrux 2015 Ex – Royal Children’s Hospital GSK, Mayne/Hospira

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BioTrinity – London, 26 April 2016