ACRUX LIMITED — Investor Presentation 2021

Feb 24, 2021

==> picture [164 x 83] intentionally omitted <==

ACRUX INVESTOR PRESENTATION (ASX: ACR) February 2021

==> picture [92 x 540] intentionally omitted <==

IMPORTANT NOTICE AND DISCLAIMERS

This presentation contains forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this presentation, are expected to take place.

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

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of our Company, the Directors and our management.

We cannot and do not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this presentation will actually occur and investors are cautioned not to place undue reliance on these forwardlooking statements.

We have no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this presentation, except where required by law and under our continuous disclosure obligations.

These forward looking statements are subject to various risk factors that could cause our actual results to differ materially from the results expressed or anticipated in these statements.

==> picture [66 x 55] intentionally omitted <==

2

==> picture [92 x 540] intentionally omitted <==

	Total market Oral drugs Acrux focus: Prescription topical drugs Definition of market (all drugs including NCEs and generics) Total US prescription pharma market Drugs that are ingested orally (eg tablets, capsules) Drugs that are applied topically to the skin, eyes, ears and nose (egcreams,ointments, gels,solutions) Market size1 >US$510bn ~US$200bn ~US$16bn2 Generic market share ~90%3 ~91%3 47%4 Typical generic development complexity Variable Low Greater complexity than oral generic drug development Generic competition Variable High competition from many generic drug manufacturers Limited generic competition given niche market and development complexity Topical Generics – an attractive market segment	Total market Oral drugs Acrux focus: Prescription topical drugs Definition of market (all drugs including NCEs and generics) Total US prescription pharma market Drugs that are ingested orally (eg tablets, capsules) Drugs that are applied topically to the skin, eyes, ears and nose (egcreams,ointments, gels,solutions) Market size1 >US$510bn ~US$200bn ~US$16bn2 Generic market share ~90%3 ~91%3 47%4 Typical generic development complexity Variable Low Greater complexity than oral generic drug development Generic competition Variable High competition from many generic drug manufacturers Limited generic competition given niche market and development complexity Topical Generics – an attractive market segment	Total market Oral drugs Acrux focus: Prescription topical drugs Definition of market (all drugs including NCEs and generics) Total US prescription pharma market Drugs that are ingested orally (eg tablets, capsules) Drugs that are applied topically to the skin, eyes, ears and nose (egcreams,ointments, gels,solutions) Market size1 >US$510bn ~US$200bn ~US$16bn2 Generic market share ~90%3 ~91%3 47%4 Typical generic development complexity Variable Low Greater complexity than oral generic drug development Generic competition Variable High competition from many generic drug manufacturers Limited generic competition given niche market and development complexity Topical Generics – an attractive market segment	Total market Oral drugs Acrux focus: Prescription topical drugs Definition of market (all drugs including NCEs and generics) Total US prescription pharma market Drugs that are ingested orally (eg tablets, capsules) Drugs that are applied topically to the skin, eyes, ears and nose (egcreams,ointments, gels,solutions) Market size1 >US$510bn ~US$200bn ~US$16bn2 Generic market share ~90%3 ~91%3 47%4 Typical generic development complexity Variable Low Greater complexity than oral generic drug development Generic competition Variable High competition from many generic drug manufacturers Limited generic competition given niche market and development complexity Topical Generics – an attractive market segment
3 Source:		Total market	Oral drugs	Acrux focus: Prescription topical drugs
	Definition of market (all drugs including NCEs and generics)	Total US prescription pharma market	Drugs that are ingested orally (eg tablets, capsules)	Drugs that are applied topically to the skin, eyes, ears and nose (egcreams,ointments, gels,solutions)
	Market size1	>US$510bn	~US$200bn	~US$16bn2
	Generic market share	~90%3	~91%3	47%4
	Typical generic development complexity	Variable	Low	Greater complexity than oral generic drug development
	Generic competition	Variable	High competition from many generic drug manufacturers	Limited generic competition given niche market and development complexity

1. US market by dosage form, IQVIA Q3, 2020 MAT, US market sales (US$); 2. Market size for topically applied drugs IQVIA Q1, 2020 MAT, US market sales (US$)

2. IQVIA Global Generic and Biosimilars Trends and Insights – 2018; 4. IQVIA, National Sales Perspectives, January 2019 – Unbranded generic share of dermatology, MAT

==> picture [66 x 55] intentionally omitted <==

==> picture [92 x 540] intentionally omitted <==

==> picture [40 x 39] intentionally omitted <==

Key Investment highlights

Acrux is a revenue generating pharmaceutical company with an extensive product pipeline of topical generic pharmaceuticals nearing additional regulatory and commercialisation milestones

▪ 2 products on market in over 30 countries. Testosterone solution ANDA approved and pending launch Focus on ▪ The topical generic market provides attractive returns with low-risk and low development costs for specialised and highly specialised drug developers lucrative topical ▪ The size of the topical generic market in the US is ~US$16bn generic market ▪ 13 topical generic products with an addressable market of ~US$1.1bn ▪ Licensing deals executed with recurring revenue and milestone payments for selected products ▪ Proven commercialisation strategy to bring a portfolio of products to market Highly skilled ▪ Led by an experienced management team, Acrux possesses unique development and development commercialisation know-how and capabilities team ▪ TGA approved, Good Manufacturing Practice (GMP) facility with 25 specialised scientists creates a substantial competitive advantage in generic product selection, development and commercialisation

==> picture [44 x 44] intentionally omitted <==

==> picture [44 x 44] intentionally omitted <==

▪ Two products currently sold through licensees in Europe, the United States and other countries R&D investment ▪ Additional products nearing FDA approval in addition to Testosterone Solution approved in January in product 2021 pipeline entering ▪ 4 product licensing deals executed with 4 different pharma companies for 9 products in CY 2020 commercialisation ▪ Objective to be cash flow positive by end of 2022

==> picture [44 x 44] intentionally omitted <==

==> picture [66 x 55] intentionally omitted <==

• 12 months sales to end Q1, 2020 based on IQVIA.

• US market by dosage form, IQVIA Q3, 2020 MAT, US market sales (US$)

4

==> picture [92 x 540] intentionally omitted <==

==> picture [50 x 49] intentionally omitted <==

Platform for growth established

Through investment in the platform over the past 5 years Acrux has a competitive advantage in the identification, development, registration and launch of generic topical drugs

==> picture [710 x 396] intentionally omitted <==

----- Start of picture text -----

Acrux Product Status Description
Acrux receives royalties on a quarterly basis.
2 products sold in Revenue from estradiol licensees grew by 48% in
ON MARKET 2 over 30 countries FY20 v FY19
4 product licensing Acrux expects a typical licence agreement to
LAUNCH 9 deals executed in CY2020 for 9 consist of a selected products, milestones pre and post recurring profit share stream and on
products commercialisation
Testosterone solution approved. Following initial
Products accepted
review there may be additional FDA questions to be
for FDA review in
3
APPROVE answered prior to approval [1] . Products can be
CY18, 19
launched following Final Approval.
R&D team with highly specific topical expertise
Generic products
drive development. Acrux has unique capabilities
DEVELOP 10 in development
for topical drug development.
53 Identified topical drugs, Each >US$100m in sales Continue to screen market to identify high potential
prescription topical products
Identified topical drugs,
IDENTIFY 94 Each $10-100m in sales
----- End of picture text -----

==> picture [66 x 55] intentionally omitted <==

5

1. Under GDUFA II, the FDA has committed to review 90% of Abbreviated New Drug Applications (ANDA) applications within 10 months. ANDA approval will follow if the FDA is satisfied during the review process

==> picture [92 x 540] intentionally omitted <==

==> picture [43 x 44] intentionally omitted <==

Acrux product portfolio

==> picture [321 x 449] intentionally omitted <==

The Acrux pipeline will add to the commercialised portfolio of products sold through the Acrux network of licensees

• Evamist® sold by Perrigo in the United States and Lenzetto® sold by Gedeon Richter in the European Union and a number of other countries outside the EU

• Testosterone Solution ANDA licensed to Dash Pharmaceuticals, FDA approved and pending launch

▪ 6 products licensed to TruPharma

▪ 1 product licensed to Amring Pharmaceuticals ▪ 1 product licensed to Harris Pharmaceutical

• Profit share payable to Acrux for the duration of the term of the licence following ANDA** product launches with milestones on selected products pre and post commercialisation

==> picture [66 x 55] intentionally omitted <==

6

• Acrux submitted its ANDA for a generic of EMLA® to the FDA in June 2020 and the dossier was accepted for review in August 2020 ** Abbreviated New Drug Application

==> picture [92 x 540] intentionally omitted <==

==> picture [44 x 43] intentionally omitted <==

Business overview

1. Acrux is a specialty topical and transdermal drug development and commercialisation company

2. Acrux is revenue generating with an extensive product pipeline of topical generic pharmaceuticals creating additional regulatory and commercialisation milestone payments.

Acrux products ▪ Estradiol spray Sold as Lenzetto® in 37 countries with royalties and milestones received by Acrux from FY17 Products onwards. Sold as Evamist® in the United States. commercialised ▪ Testosterone solution by Acrux Sold in 6 countries with royalties and milestones received by Acrux from FY10 – FY18. Peak annual sales were US$179 million in 2013. ▪ Acrux has a development pipeline of 13 topical Acrux Pipeline generic pharmaceuticals with 3 of these products submitted already to the FDA

Recent Acrux outcomes

▪ Acrux revenue from its Estradiol licensees grew 48% in FY20 over prior financial year ▪ Royalties payable to Acrux are expected to further grow and exceed $1 million in FY21 ▪ Testosterone Solution ANDA recently approved by the FDA and pending launch

▪ 4 licensing deals executed in FY20

• Profit share payable to Acrux following product launches with milestones on selected products pre and post commercialisation

==> picture [66 x 55] intentionally omitted <==

7

==> picture [92 x 540] intentionally omitted <==

==> picture [52 x 46] intentionally omitted <==

Future catalysts

The success of Acrux’s strategy and management’s execution will be driven and measured by:

==> picture [39 x 39] intentionally omitted <==

ACRUX STRATEGY

• Commercial launch and cash flow generation from new topical generic drugs

• Licensing and profit share agreements with generic pharmaceutical companies

• • FDA approvals for new products • Ongoing screening and initiation of new products in development

• Continued royalty growth of existing on market products

• • 4 additional products submitted for FDA review • 2 product launches with profit share and other payments to Acrux

CY 2021 OBJECTIVES

==> picture [39 x 39] intentionally omitted <==

• Continued royalty growth of existing on market products

• • Objective to be cash flow positive by end of 2022 • Ongoing screening and initiation of new products in development • 2 additional products submitted for FDA review

==> picture [39 x 38] intentionally omitted <==

CY 2022 OBJECTIVES

==> picture [66 x 55] intentionally omitted <==

8

==> picture [92 x 540] intentionally omitted <==

==> picture [37 x 37] intentionally omitted <==

Revenue generating business model supporting long-term growth

==> picture [434 x 287] intentionally omitted <==

----- Start of picture text -----

1 2
Product development
Generic drug
and technology
identification
transfer to CMO
4 Product launch 3
and profit share FDA submission,
revenue from review
commercial marketing and approval
partners
----- End of picture text -----**

▪ On market products are generating growing royalty revenues for Acrux

▪ Through the Acrux GMP* facility with 25 specialised scientists, Acrux possesses the capabilities to develop and commercialise generic topical and transdermal pharmaceutical products ▪ Acrux has 6 licensees with products commercialised in 38 countries

▪ The core business model of generic drug development is supported by ongoing licensing opportunities for commercial marketing and distribution

==> picture [66 x 55] intentionally omitted <==

• Good Manufacturing Practice

9

** Contract Manufacturing Organisation

==> picture [92 x 540] intentionally omitted <==

1H FY21 Profit and Loss

==> picture [477 x 417] intentionally omitted <==

----- Start of picture text -----

Profit and loss for the year ended 31 December 2020
31 December 31 December
2020 2019 Mvt
$’000 $’000
Revenue and Other Income
Revenue from licensing agreements 788 436 80.7%
COVID relief payments 364 0
Other income 12 140 -91.4%
1,164 576 102.1%
Less: Expenses
R&D investment (7,418) (5,144) 44.2%
Other operating costs (1,117) (1,045) 6.9%
Non Operating Costs (191) (279) -31.5%
(8,726) (6,468) 34.9%
Loss before income tax (7,562) (5,892) 28.3%
Income tax benefit/(expense) (224) (543) -58.7%
Net loss for the year (7,786) (6,435) 21.0%
Basic loss per share (4.46) (3.86)
1
Cash reserves 11,461 14,336
----- End of picture text -----

1. A Share Purchase Plan was offered to shareholders in January 2021 at the same price as the Placement and a further $9.9 million dollars was raised. A total of $17.7 million dollars was raised from the SPP and the two tranche placement between December 2020 and February 2021.

==> picture [66 x 55] intentionally omitted <==

10

==> picture [92 x 540] intentionally omitted <==

1H FY21 Cashflow

==> picture [507 x 435] intentionally omitted <==

----- Start of picture text -----

Cashflow for the year ended 31 December 2020
31 December 31 December
2020 2019 Mvt
$’000 $’000
Operating Activities
Receipts from product agreements 700 416 68.3%
Payments to suppliers and employees (7,630) (6,075) 25.6%
Interest received 27 163 -83.4%
COVID Relied payments 364 0
Finance costs (94) (97) -3.1%
Grant income 2,328 2,015 15.5%
Net cash used in operating activities (4,305) (3,578) 20.3%
Net cash used - property, plant and equipment (52) (177) -70.6%
Financing Activities
Lease liability principal repayments (82) (61) 34.4%
Proceeds from share issue 6,694 0
Net cash used in financing activities 6,612 (61)
Net decrease in cash and cash equivalents 2,255 (3,816) -159.1%
Cash at beginning of year 9,206 18,152 -49.3%
1
Cash at end of year 11,461 14,336 -20.1%
----- End of picture text -----

1. A Share Purchase Plan was offered to shareholders in January 2021 at the same price as the Placement and a further $9.9 million dollars was raised. A total of $17.7 million dollars was raised from the SPP and the two tranche placement between December 2020 and February 2021.

==> picture [66 x 55] intentionally omitted <==

11

==> picture [92 x 540] intentionally omitted <==

==> picture [65 x 65] intentionally omitted <==

BENEFITS OF A POOLED DEVELOPMENT FUND

1 Companies with PDF status are taxed at 15% on their income and capital gains received from their investments 2 Australian resident shareholders are exempt from capital gains tax after selling their shares

3

Unfranked dividends received by an Australian resident shareholder from the Company will be exempt from tax in the hands of the shareholder 4

Franked dividends will also be exempt from tax unless the shareholder elects to treat the franked dividend as taxable

Shareholders should seek professional advice from their tax advisor regarding Pooled Development Funds and the benefits specifically available to their situation

==> picture [66 x 55] intentionally omitted <==

12

==> picture [211 x 540] intentionally omitted <==

Thank you

Michael Kotsanis

CEO & Managing Director Acrux Limited

P: + 61 3 8379 0100 E: michael.kotsanis@acrux.com.au Visit our website: http://www.acrux.com.au/ Follow us on LinkedIn:

==> picture [47 x 47] intentionally omitted <==

==> picture [66 x 55] intentionally omitted <==