ACRUX LIMITED — Interim / Quarterly Report 2018

Feb 19, 2018

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Acrux (ASX: ACR) 1H FY18 results 20 February 2018

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Forward looking statements

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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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1H FY18 outcomes

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Cash reserves 31 December 2017: $32.36m 30 June 2017: $33.97m Net (Loss)/Profit 1H 2018: $(8.69)m includes a non-cash impairment loss of $(5.65)m After Tax 1H 2017: $6.32m Royalty revenue 1H FY18: $2.42m 1H 2017: $13.97m Pipeline progress At end December 2017, Acrux had 10 products in active development all of which are targeting the topical generic market in the United States

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Half year profit and loss

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Royalty revenue Interest & other income Total R&D investment Other operating costs Non operating costs Total expenses Operating (loss) / profit before impairment loss and income tax Impairment loss Operating (loss)/profit before income tax Income tax benefit / (expense) Net (loss)/profit for the half-year Earnings per share Basic (loss)/earning per share Cash reserves

• Royalty revenue from Axiron® decreased 84.3% to $2.2m reflecting a decline in global sales by our partner Eli Lilly and Company due to generic competition and the termination of the licensing agreement • R&D investment was $5.30m, up 49.3% on prior half year due to the increase in expenditure on our generic pipeline • Other operating costs were $1.68m, up 79.7% on prior half year materially due to non-recurring legal fees of $0.70 million associated with the Axiron® patent appeal litigation • Non operating costs are comprised of depreciation and amortisation • Impairment loss is a result of a reassessment of the estimated future discounted cashflows from Axiron®. The assessment included consideration of termination of Axiron® licensing agreement and U.S. Court of Appeals for the Federal Circuit decision. • Income tax benefit of $1.64m is attributable to the lower operating profit (excluding the impairment loss) and the reversal of the deferred tax liability associated with the impaired portion of Axiron® capitalised development costs not being realised as initially contemplated 31 December 2017 31 December 2016 $'000 $'000 % 2,420 13,969 (82.7%) 323 359 (10.0%) 2,743 14,328 (80.9%) (5,303) (3,551) 49.3% (1,682) (936) 79.7% (448) (791) (43.3%) (7,433) (5,278) 40.8% (4,690) 9,050 (151.8%) (5,647) - - (10,337) 9,050 (214.2%) 1,643 (2,728) (160.2%) (8,694) 6,322 (237.5%) (0.05) cents 0.04 cents 32,363 33,974 (4.7)% Half Year Ending

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Half year cash flow

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• Cash received from product agreements was $6.57m, down 36.9% prior half year due to lower Axiron royalty receipts • Payments to suppliers and employees was $7.18m up 37% due to increased investment in R&D pipeline and impact of one-off legal costs • Interest received is down 15.1% on prior year reflective of the maturity timing of invested cash reserves • Tax payments made during the half year were $1.07m or 63.4% lo than prior half year reflecting lower operating results across the Group • Capital expenditure was $0.16m down 20.5% on prior half year. T Group will continue to carry out upgrades on existing equipment t 31 December 2017 31 December 2016 $'000 $'000 % 6,570 10,420 (36.9%) (7,183) (5,244) 37.0% 253 298 (15.1%) (1,069) (2,924) (63.4%) (1,429) 2,550 (156.0)% (159) (200) (20.5%) (159) (200) (20.5)% (1,588) 2,350 (167.6)% 33,974 29,360 15.7% (23) 8 (387.5)% 32,363 31,718 2.0% Half Year Ending

Cash flow from operating activities Receipts from product agreements Payments to suppliers and employees Interest received Income tax paid Net cash (used in) / provided by operating activities Cash flow from investing activities Payment for property, plant and equipment Net cash used in investing activities Net (decrease) / increase in cash and cash equivalents Cash at beginning of half year Foreign exchange differences on cash holdings Cash and at end of the half year

• Cash received from product agreements was $6.57m, down 36.9% on prior half year due to lower Axiron royalty receipts

• Tax payments made during the half year were $1.07m or 63.4% lower than prior half year reflecting lower operating results across the Group

• Capital expenditure was $0.16m down 20.5% on prior half year. The Group will continue to carry out upgrades on existing equipment to improve our internal analytical and testing capabilities

• Cash reserves at year end were $32.36m up 2.0% or $0.65m on prior half year

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Lenzetto® launch progress

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•
Hungary
•
Poland
•
Czech
• Germany Additional
• Croatia 2018+ new country
• launch plans
Latvia
Launches • Italy
Romania
Q4 2017
Q1 2016 • Denmark
Bulgaria
to
•
Slovenia
Q2 2017
Q3 2017 Spain
•
Slovakia
•
Estonia
•
Lithuania
•
Belgium
•
Sweden
•
Finland
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– United States market sales by dosage form

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20
Dosage proportion based on sales
18
16
Oral
14
Injectable
12
Liquids
10
Topical $200 billion
$130 billion 8
Aerosol
6
Powders
Other 4
2
0
Market size for topically applied
drugs
$ Billion
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Topically applied drugs generate $18 billion in sales in the United States Acrux pipeline is focussed on the development of generic topical/transdermal products

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Source: US market by dosage form, IQVIA Q2, 2015 MAT. US market sales. US$. Market size for topically applied drugs IQVIA Q3, 2017 MAT US$

The Acrux market opportunity

Acrux generic pipeline addressable market value

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20 addressable market value
1200
18
16
1000
14
800
12
10 600
8
400
6
4 200
2
0
0 Pipeline of generics - December 2017
Market size for topically applied
drugs
$ Million
$ Billion
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Acrux had 7 generic products in active development at end FY2017 Acrux currently has 10 generic products in active development Acrux plans to increase this to 12 generic products in active development by end FY18

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Source: IQVIA Q3, 2017 MAT. US market sales. US$

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Addressable market for Acrux generic pipeline

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Acrux generic pipeline
addressable market value
1200
1000
800
600
400
200
0
Pipeline of generics - December 2017
$ Million
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Acrux generic pipeline by
number of generic competitors
1200
1100
1000
900
800
700
600
500
400
300
200
100
0
0 Gx 2 Gx 3 Gx 4 Gx 5+ Gx
$ Million
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Source: IQVIA Q3, 2017 MAT. US market sales. US$

Addressable market for Acrux generic pipeline

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Acrux generic pipeline by
number of generic competitors
hormones
1200 (testosterone acne
estradiol)
1100
1000
900
800
700
Example
anti-
600 therapeutic analgesic
rheumatic
500 areas
400
300
200
100
0 corticosteroids antifungal
0 Gx 2 Gx 3 Gx 4 Gx 5+ Gx
$ Million
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Source: IQVIA Q3, 2017 MAT. US market sales. US$

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Dosage forms for Acrux generic pipeline

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Example therapeutic areas for
topically applied pharmaceuticals
Ointments
hormones
(testosterone acne
estradiol)
Creams
Sprays
Example
dosage
anti-
analgesic forms Lotions
rheumatic
Pastes
Solutions
corticosteroids antifungal
Gels
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Advancing our generic pipeline to create value

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MID-2018
Formulation Process Bioequivalence Regulatory Approved/
Development Development / Clinical Submission Launched
MID-2017
3
Formulation Process Bioequivalence Regulatory Approved/ Products
Development Development / Clinical Submission Launched
2
3 Products
Products
7
4 Products
Products
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*based on FDA Guidance, a number of products in the Acrux generic pipeline do not require a clinical study for product approval

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Future milestones

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Milestone	Update
• Plans to submit first generic dossiers to FDA for review mid CY2018	First dossier planned for submission mid 2018. Other dossiers to follow.
• Initial revenue from generic pipeline expected CY2019
• Portfolio of 12 topical generic products in development by end FY2018	On track
• Portfolio of 19 topical generic products in development by end FY2019

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Acrux (ASX: ACR) 1H FY18 results 20 February 2018

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