ADHERIUM LIMITED — AGM Information 2018

Nov 19, 2018

Digital Health Company Focused on Medication Adherence

Company Update AGM 2018

Forward Looking Statement

The following material is of a general nature and has only been prepared as a presentation aid. This presentation does NOT contain all of the information that may be required for evaluating Adherium Limited ACN 605 352 510 (Adherium or the Company), its assets, prospects or potential opportunities.

This presentation may contain budget information, forecasts and forward looking statements in respect of which there is NO guarantee of future performance and which of themselves involve significant risks (both known and unknown). Actual results and future outcomes will in all likelihood differ from those outlined herein.

Forward-looking statements are statements that are not historical facts. Words such as “expect(s)”, “feel(s)”, “believe(s)”, “will”, “may”, “anticipate(s)” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding market size, future results, regulatory approvals, production targets, sales, staffing levels etc. All of such statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

These risks and uncertainties include, but are not limited to: (i) the possible delays in and the outcome of product development, (ii) risks relating to possible partnering or other like arrangements, (iii) the potential for delays in regulatory approvals, (iv) the unknown uptake and market penetration of any potential commercial products and (vi) other risks and uncertainties related to the Company’s prospects, assets / products and business strategy. This is particularly the case with companies such as Adherium which operate in the field of developing and commercializing medical devices and related services. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof, and we do not undertake any obligation to revise and disseminate forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of or non-occurrence of any events.

Additionally there are a number of factors, both specific to Adherium and of a general nature, which may affect the future performance of Adherium. There is no guarantee that Adherium will achieve its stated objectives/milestones, that any of its forecasts will be met or that forward looking statements will be realized.

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Digital Health Company Focused on Medication Adherence

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DATA-DRIVEN PLATFORM ADDRESSES >$10B OPPORTUNITY IN RESPIRATORY DISEASE

• $100B+ economic burden from respiratory medication non-adherence

• 40M+ people in the U.S. diagnosed with asthma or COPD

PROVEN CLINICAL EFFICACY & REGULATORY APPROVAL

• FDA 501(k) clearance, or under clearance review, for 80% of the prescribed inhalers in the U.S.

• 30 trials and 76 peer-reviewed publications

• Significant reduction in acute attacks, hospitalizations, missed days of school or work

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MOMENTUM IN U.S.

• Broadest compatibility with Rx inhalers on the market today

• Differentiated approach focused on home-health agencies, self-insured employers and leading pharmacies

• Partnerships with SmartAirLA (Blue Shield of California Foundation) & Vitalus Health

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RECURRING REVENUE STREAM MODEL

• Software-driven approach; subscription-based monthly fee

• Highly scalable model targeting Enterprise partners and Direct-to-Consumer channels

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Medication Non-Adherence: An Annual $300B+ Problem

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3 out of 4 patients do not take medications as directed by their physician

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Nonadherence leads to disease poor patient outcomes , lost time in school and work progression ,

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• ~30% waste in the healthcare system due to increased hospitalizations, ER visits and increased health costs

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$300B+ spent annually in the U.S. on avoidable direct healthcare costs (e.g., ER Visits, Hospitalizations, Emergency Meds, Office Visits)

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Chronic Respiratory Disease in the U.S.

ASTHMA

COPD

Patients Diagnosed

25M

Chronic or Severe 15M

Economic Burden from Non Adherence

Economic Burden from Non Adherence

$56B+

$50B+

• $100B+ Economic Burden of Avoidable Costs in the U.S. from Non-Adherence to Respiratory Medication

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Recent Highlights

		•	Shipped 27,000 Hailie™ sensors, a 49.1% year-over-year increase
	Global	•	Significant increase in commercial rollouts of SmartTurbo™ in Europe and Australia
	Commercialization	•	Strong clinical results in peer reviewed journals support more regulatory clearances
		•	Agreement with AstraZeneca to fund innovative design and engineering services
	Continued	•	FDA 510(k) clearance covering Symbicort, Proair, Qvar, Ventolin, Flovent, Advair HFA
	Innovation	•	FDA 510(k) clearance for OTC sales of Hailie™ sensor
		•	Next-gen mobile apps (iOS and Android) and cloud software platform
		•	Corporate headquarters moved to Silicon Valley, CA
	U.S. Market	•	Hired strong, experienced executive team (CFO, VP of Sales, Marketing, and R&D)
	Launch	•	First Enterprise-based commercial program launched with Vitalus Health
		•	Grew DtC to >10 new subscribers per day in first 90 days

• Hailie Sensors were rebranded in May 2018; formerly known as Smartinhaler™

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U.S. Payers and Target Customers

40M+ Asthma and COPD patients in the U.S.

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Uninsured

Traditional Payors, IDNs*, Medicare, Enterprise Medicaid, Partners and VA, etc. DtC Channel )

A D D R E S S A B L E M A R K E T O P P O R T U N I T Y

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Home Health Self-Insured Pharmacies Agencies Employers (Top 9) ~1M Patients ~10M Covered Lives ~16M Customers

Addressing a $10B Market in Respiratory Disease

*Integrated Delivery Network

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Aspirational Subscriber Growth / Market Share

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Number of Subscribers
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1,400,000 6.00%
Consumer
1,200,000 Self-Insured Employers
5.00%
Home Health Agencies
1,000,000 Large Pharmacies
4.00%
Market Share
800,000
3.00%
600,000
2.00%
400,000
Guidance for FY2019
20,000 Subscribers by year-end
1.00%
200,000
0 0.00%
01/01/19 01/01/20 01/01/21 01/01/22 01/01/23
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Market Share Percent
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Sources of Patients

	INDICATIVE UNIT ECONOMICS PER	INDICATIVE UNIT ECONOMICS PER	INDICATIVE UNIT ECONOMICS PER	INDICATIVE UNIT ECONOMICS PER	INDICATIVE UNIT ECONOMICS PER
Monthly list subscription fee per unit Annual revenue per unit Annual gross margin per unit As a percent of revenue Incremental EBITDA per unit As a percent of revenue	Patient	Employer	Home Health Agency	An IDN Hospital	Store With Pharmacy

Units:

Patient: One patient or their caregiver enrolled via one of several DTC such as our web store - Target >10 per day. Employer: A corporation employing > 5,000 employees that enrolls ~400 covered lives. Home Health Agency: An independent company managing ~5,500 COPD patients at a point in time. IDN: A group of acute care hopsitals (~19 per system with ~4,235 beds) discharging ~4.8M COPD patients annually. Store With Pharmacy: One retail outlet of a national chain providing ~500 asthma and COPD customer patients.

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Enabling Data-Driven Information to Improve Outcomes

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Healthcare
Patented,
Ecosystem
Approved
Relationships with
Sensor
Enterprise Partners to
support wellness and Compliant with 80%
reduce expenses of Rx inhalers on
the market today
Scalable and Flexible
Architecture
Data Analysis Cloud-based
Interface
Real-time data provides
physicians and patients
Provides usage data
insights into adherence, and reminders on iOS
efficacy, and treatment
and Android platforms
options for all devices
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Compelling Clinical Outcomes with Hailie™

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Reduction in Improved adherence in Improved inhaled steroid
reliever medication use children by use in adults
by children
45.4% 180% 59%
Reduction in Reduction in asthma- Reduction in
days of school missed related hospitalization acute asthma
in children attacks
26% 80% 61%
CHANGE
BEHAVIORAL
RESULTS
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NOTE: Specific clinical studies referenced in presentation appendix

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Cost of an Asthma Patient in the U.S.

$14,000 Prescriptions Hospitalizations Outpatient Visits ER Visits $12,000 $11,324 $53.6B $10,000 $9,180 in Annual Cost Savings Hailie reduces the $8,000 incremental costs of an asthma patient by $2,144 $5,874 $6,000 per patient per year for 25M asthmatics $4,000 $2,000 $0 Asthma-free Person Asthma Patient w/out Halie Hailie Managed Asthmatic

Hailie Managed Asthmatic

Source: Cost of Asthma in the U.S., Sarah Beth Barnett, MA J Allergy Clin Immunol Vol 127, No.1

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Growth Opportunities

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Expansion of DtC &
Enterprise Partners
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Leverage
AstraZenca
Success
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Beyond U.S.
Respiratory
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• Extend the reach of platform and grow subscriber base across DtC and Enterprise channels

• Broaden the dataset to enhance value (tiered level of subscriptions)

• Grow addressable market through traditional payors, Medicare/Medicaid, VA, etc.

• Add devices – accelerate sales as partnership agreements grow

• Focus on large scale global rollouts in high-growth markets

• Expand into new medications and chronic diseases

• Sign contracts with other biopharmaceutical companies

• Expand into other key markets across the globe

• Monetize data – create value from most extensive respiratory database

• Leverage channels to expand beyond asthma and COPD to other chronic diseases

Establish comprehensive platform for chronic disease management

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Proven Leadership Team

Experienced US-based leadership team already established

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Chairman has successfully brought multiple offshore healthcare companies to the US market

Adherium HQ now located in Silicon Valley, anchoring strong commercial team with extensive US-based tech experience

Proven track record of growing multiple US healthtech companies. CEO grew Somanetics from US$8m to US$60m (acquired by Covidien for US$350m).

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Thomas Lynch
Chairman
US/EU
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Arik Anderson CEO US

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David Allinson CFO US

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Vik Panda VP of Marketing US

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Tim Houchin VP of Sales US

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Digital Health Company Focused on Medication Adherence

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Chronic Disease Platform Validated in Respiratory Disease

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Large Market Opportunity in 40M patients with Asthma and COPD
Respiratory Disease Data-driven platform addressing >$10B market
Data-Driven Platform Connects Entire Healthcare Ecosystem
Approach Patient + Caregiver + Healthcare Provider + Enterprise
30 Trials = 76 Peer Reviewed Publications
Clinically Proven
Significant reduction in ER visits, missed days of school or work
.
130K+ Hailie™ Sensors Distributed
Commercial Traction
Material shift from clinical to commercial sales
Leverageable Enterprise and DtC Opportunities
Channels to Market Targeting 20K subscribers by 6/2019
>150% Y-o-Y Revenue Growth
Rapidly Scaling Business
Software-driven, recurring revenue model
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• Hailie Sensors were rebranded in May 2018; formerly known as Smartinhaler™

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THANK YOU

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