BIOTRON LIMITED — Capital/Financing Update 2014

Oct 14, 2014

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Level 2, 66 Hunter Street Sydney NSW 2000 Tel: (61-2) 9300 3344 Fax: (61-2) 9221 6333 E-mail: pnightingale@biotron.com.au Website: www.biotron.com.au

15 October 2014

The Manager Companies ASX Limited 20 Bridge Street SYDNEY NSW 2000

(17 pages by email)

Dear Madam

FULLY UNDERWRITTEN RIGHTS ISSUE

• Fully underwritten rights issue to raise $4.1 million

• Strong support from institutional and sophisticated investors

• Book significantly oversubscribed

• Attractive pricing – 51% discount to 1 month VWAP of 16.4 cents

• Free attaching options (exercise price 12 cents, two years) to be listed

• Shareholders can renounce their rights or apply for additional shares

• Rights to start trading from 17 October 2014

Sydney, Australia, 9 October 2014 – Australian drug development company Biotron Limited (ASX:BIT) today announced a fully underwritten renounceable rights issue to raise $4.1 million. Net proceeds, in conjunction with existing cash reserves, will be used:

• To complete the current Phase 2 trial that is in progress (BIT225-008 - HCV genotypes 1 and 3 trial for 3 months dosing with BIT225 in combination with IFN/RBV).

• For studies to complete IND filings with the USA FDA:

• drug-drug interaction studies with new DAAs to be used with BIT225 in the IND trial;

• modelling pharmacokinetic data from previous trials to determine optimal BIT225 dose and frequency in the IND trial; and

• additional in vitro laboratory studies of BIT225's antiviral activity, including studies with other DAA drugs.

• For commercialisation negotiation legal fees, travel and personnel costs.

• For general working capital.

The offer will be made to shareholders on a two for nine basis at the issue price of $0.08, which represents a 51% discount to the 1 month volume weighted average price (VWAP) of $0.164 and a 48% discount to the 3 month VWAP of $0.153.

Shareholders will be given the opportunity to apply for additional shares in excess of their entitlement, however, allocations are not guaranteed. The issue is renounceable and shareholders will be able to guarantee an increase to entitlements by the purchase of additional rights.

The Directors are pleased with the strong demand received from the institutional and sophisticated investors. The bookbuild closed significantly oversubscribed, indicating a level of demand in support of the potential of the Company’s drug development program, positive clinical trial results to date and commercialisation potential.

Patersons Securities Limited acts as Lead Manager and the Underwriter.

Enquiries Dr Michelle Miller Rudi Michelson Managing Director Monsoon Communications Biotron Limited +61-3 9620 3333 +61-(0)412313329

About Biotron and BIT225

A presentation on the Company’s activities is attached.

Biotron Limited is engaged in the research, development, and commercialisation of drugs targeting significant viral diseases with unmet medical need, with a major focus on HIV and HCV. The Company has BIT225 in clinical development for both HIV and HCV, and also has several earlier stage preclinical and research programs for several other viral infections including Dengue.

BIT225 has recorded encouraging data against HCV in clinical trials. A phase 2a trial in HCV demonstrated that 100% of HCV genotype 1 infected patients receiving BIT225 (400 mg) in combination with current standard of care therapies interferon and ribavirin had undetectable virus after 48 weeks. A phase 2 trial in HIV/HCV co-infected patients showed that all HCV genotype 3 patients completing 28 days of treatment with BIT225 in combination with interferon and ribavirin achieved SVR12, with undetectable HCV 12 weeks after completing all therapy.

BIT225 is also in development for treatment of HIV, and is the first in a new class of antiviral drugs that may provide a new approach to eradication of this virus. It has shown clinical efficacy against HIV in reservoir cells, and has the potential to be combined with new or existing anti-retroviral drugs to eradicate long-lived pools of virus that are not eliminated with current treatments.

Yours sincerely

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Peter J. Nightingale Company Secretary

pjn7862

2

BIOTRON
LIMITED (ASX:BIT)

Investor
Presenta;on October
2014

==> picture [720 x 50] intentionally omitted <==

This
presenta,on
may
contain
forward-­‐looking
statements
with
respect
to
the
financial
condi,on, results
and
business
achievements/performance
of
Biotron
Limited
(ACN
086
399
144)
and
certain of
the
plans
and
objec,ves
of
its
management.
These
statements
are
statements
that
are
not historical
facts.
Words
such
as
“should”,
“expects”,
“an,cipates”,
“es,mates”,
“believes”
or
similar expressions,
as
they
relate
to
Biotron
Limited,
are
intended
to
iden,fy
forward-­‐looking
statements. By
their
nature,
forward-­‐looking
statements
involve
risk
and
uncertainty
because
they
reflect Biotron’s
current
expecta,ons
and
assump,ons
as
to
future
events
and
circumstances
that
may
not prove
accurate.
There
is
no
guarantee
that
the
expected
events,
trends
or
results
will
actually occur.
Any
changes
in
such
assump,ons
or
expecta,ons
could
cause
actual
results
to
differ materially
from
current
expecta,ons.

==> picture [720 x 50] intentionally omitted <==

-­‐ First
in
class
drug
and
new
drug
target
for
treatment
of
HIV
and
Hepa,,s
C
virus
(HCV) -­‐ Prepared
based
on
above
aVer
the
August
Board
mee,ng -­‐ Seven
clinical
trials
completed;
one
in
progress -­‐ Guided
the
wording
of
the
prospectus
draV
and
the
use
of
proceeds -­‐ Over
170
subjects
dosed
with
BIT225
to
date -­‐ While
capital
requirements
are
d-­‐ HCV
GT1
(BIT225-­‐005)
–
100% r e ct e iving
400mg
(28
days
in
crmined
based
on
prop o mbina,on with 48
weeks
IFN/sed
plan,
the
final
schedule RBV)
were
virus-­‐free
at
48
weeks ~~of work will be largely dictated by available capital~~ -­‐ BIT225
increases
the
rate
at
which
HCV
is
cleared
(especially
for
GT3) -­‐ Co-­‐infected
HIV/HCV
GT3
(BIT225-­‐006)
–
100%
comple,ng
course
of
300mg (28
days
in combina,on with 48 weeks IFN/RBV) were HCV-­‐free 12 weeks post-­‐treatment (SVR12) -­‐ Independently shown to have pan-­‐genotype ac,vity in vitro -­‐ Efficiently
inhibits
HIV
replica,on
in
monocyte/macrophage
reservoir
cells in
vitro and in
vivo -­‐ Patent
posi,on
over
compound
and
its
uses -­‐ Compound
is
rela,vely
easy
to
make
and
formulate;
very
stable
at
room
temperature
–
important for
supply
chains

-­‐ Significantly
undervalued
compared
to
other
HCV
drugs

Slide
1

INDICATION	COMPOUND	DISCOVERY	PRECLINICAL	PHASE 1	PHASE 2	PHASE 3
Hep C	BIT225
HIV/Hep C	BIT225
HIV	BIT225
Next genera;on - HCV	BIT314
Dengue	Leads

Slide
2

• Worldwide
  market
  for
  Hepa,,s
  C
  forecast
  to
  grow
  from
  $4.7bn
  in
  2012
  to
  over
  $19bn
  by
  2016

• 180
  million
  people
  infected
  worldwide
  (3%
  world
  popula,on)

• Es,mated
  3
  to
  5
  million
  pa,ents
  in
  US

• Es,mated
  30
  million
  pa,ents
  in
  China

• New
  drugs
  have
  demonstrated
  significant
  pricing
  power

• Gilead’s
  Sovaldi
  (Sofosbuvir)
  at
  US$84,000
  for
  a
  12
  week
  course

• Q1
  2014
  sales
  US$2.3
  bn;
  Q2
  2014
  sales
  US$3.5
  bn

• Need
  for
  op,mal
  HCV
  drug
  combina,ons

• Pan-­‐genotypic

• Much
  shorter
  treatment
  period
  (ideally
  4
  weeks)
  and
  oral
  therapy
  only

• Partnering
  s,ll
  ac,ve

• Merck
  bought
  Idenix
  for
  US$3.8
  bn
  in
  June
  14

Slide
3

**BIT225

–
First
of
a
New
Class
of
HCV
Drugs**

ü Novel,
oral,
small
molecule

POLYMERASE/PROTEASE INHIBITORS
e.g. Sofosbuvir/Simeprevir

ü Only
one
of
its
class
(p7
inhibitor)
in
clinical
trials

ü Inhibits
viral
assembly
and
infec,vity

• ü Pan-­‐genotype
  ac,vity:

BIT225
-­‐
ASSEMBLY/ BUDDING
INHIBITOR

• ü Ac,ve in
  vitro against
  all
  main
  genotypes

• ü Clinically
  ac,ve
  against
  hard-­‐to-­‐treat
  HCV Gen
  1
  (1a
  and
  1b)
  and
  Gen
  3

• ü Poten,al
  to
  add
  to
  other
  new
  HCV
  drugs
  to:

ü Shorten
treatment
,mes

• ü Improve
  outcome
  in
  specific
  pa,ent
  groups

Slide
4

• :

• BIT225-­‐001

Phase
1a,
single
dose,
dose
escala,ng
study
in
healthy
volunteers
(48
subjects;
Aust)

• BIT225-­‐003:

Phase
1b,
7-­‐day,
repeat
dose
study
in
HCV+
pa,ents
(35
and
200
mg
BID;
18
subjects;
Aust)

• B ~~IT225-004:~~

• B ~~IT225-005 :~~

• B ~~IT225-006:~~

• B ~~IT225-007:~~

• BIT225-­‐008:

• ~~Phase 2a, 10-day, repeat dose study in HIV+ pa,ents (400 mg BID; 21 subjects; Thailand) Phase 2a, 28-day, repeat dose study in HCV G1 pa,ents in combina,on with PEG/RBV (20~~ 0
  and ~~400 mg BID; 24 pa,ents; Thailand)~~

~~Phase 2, 28-day, repeat dose, open label study in HIV/HCV G1 and 3 co-infected pa,ents~~ in ~~combina,on with PEG/RBV (300 mg BID; 12 pa,ents; Thailand)~~

~~Phase 1, BE/PK study in healthy volunteers, cross-over, single dose comparing capsule formula,on with exis,ng powder (400 mg BID; 12 subjects; Aust)~~

Phase
2,
3
month,
repeat
dose
study
in
HCV+
pa,ents
(G1
&
3)
in
combina,on
with
PEG/RBV ~~(200 mg BID; 60 subjects; Thailand) IN PROGRESS~~

NB
BIT225-­‐002
was
an ex
vivo study
of
BIT225
on
HIV-­‐infected
cells
isolated
from
HIV-­‐posiBve
paBents

CONFIDENTIAL Slide
5

**BIT225

-­‐
Clinical
Ac;vity
in
HCV
and
HIV/HCV
Pa;ents**

BIT225-­‐005 (HCV) BIT225-­‐006 (HIV/HCV)

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NB
All
paBents
were
stable
on
ART
before
BIT225
300
mg
BID
+
n=8
Placebo
+
IFN/RBV
IFN/RBV
IFN/RBV
IFN/RBV
–
n=4
and
throughout
the
study;
HIV
remained
HCV
Genotype
1
undetectable
during
the
treatment
period
BIT225
200
mg
BID
E ETVR
IFN/ No
n=8
+
IFN/RBV
V RBV
IFN/RBV
drug
IFN/RBV
R
IFN/RBV
BIT225
300
mg
BID
+
IFN/RBV
–
n=8
BIT225
400
mg
BID
+
IFN/RBV
HCV
Genotype
3
n=8
ETVR
SVR12
Week
4
12
48
Week
1
5
24
48
60
%
Complete
Median
log
%
ETVR
EVR
Week
60
reduc;on
Treatment
(<50
IU/ml
at
All
GT3
pa,ent
(<50
IU/ml
at
at
35
days
48
weeks)
who
12
weeks)
completed
400
mg
BIT225
+
SOC
-­‐4.957
86
100
treatment
are
200
mg
BIT225
HCV-­‐free
-­‐4.351
88
88
+
SOC
(SVR12)
Placebo
+
SOC
-­‐3.649
63
75

Slide
6
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**BIT225-­‐008:

Phase
2
HCV
Three-­‐Month
Dosing
Trial**

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

Placebo
+
IFN/RBV
n=20
(HCV
Genotype
1
or
3)
IFN/RBV
ETVR
n=20
BIT225 200 mg BID + IFN/RBV HCV Genotype 1 IFN/RBV
ETVR
BIT225
200
mg
BID
+
IFN/RBV
HCV
Genotype
3
IFN/RBV
n=20
Week
12
24
48
----- End of picture text -----

Design:

• -­‐ Randomized,
  placebo-­‐controlled,
  double-­‐blind
  trial
  (n=60) -­‐ Treatment
  naïve,
  HCV
  gen
  1
  and
  3 -­‐ 3
  months
  dosing
  with
  BIT225
  in
  combina,on
  with
  IFN/RBV

Aims:

  - -­‐ Demonstrate

safety
of
BIT225
with
3
months
dosing

  - -­‐ Extend

HCV
gen
3
efficacy
data

• -­‐ Using
  new
  capsule
  formula,on

• -­‐ 1.6
  fold
  higher
  blood
  levels
  than
  previous
  formula,on

• -­‐ IN
  PROGRESS
  (Thailand);
  Preliminary
  data
  expected
  late
  2014

Slide
7

**HIV

–
Towards
a
Cure**

==> picture [309 x 254] intentionally omitted <==

•

• Infec,on
  rates
  in
  Australia
  are
  at
  20
  year
  high Over
  1.1
  million
  people
  living
  with
  HIV
  in
  the USA,
  with
  1
  in
  6
  unaware
  of
  diagnosis US$11.9
  bn
  sales
  in
  US,
  Europe
  and
  Japan
  in 2013;
  expected
  to
  grow
  to
  US$16.8
  bn
  by
  2020 HIV
  pa,ents
  need
  to
  stay
  on
  an,retroviral
  drugs (ART)
  to
  keep
  virus
  levels
  under
  control New
  mode
  of
  ac,ons
  drugs
  are
  needed
  to eradicate
  or
  cure
  HIV
  infec,on

Slide
8

**BIT225

Targets
HIV
in
Reservoir
Cells**

• BIT225
  inhibits
  assembly
  and
  budding
  of
  new
  virions

• Phase
  2a
  trial
  (004)
  showed
  that
  BIT225
  can
  reduce
  HIV
  levels
  in
  macrophage
  cells in
  vivo , paralleling in
  vitro studies

• Poten,al
  benefits
  on
  immune
  aging
  and
  HIV-­‐associated
  demen,a

• Poten,al
  for
  use
  in
  future
  virus
  eradica,on
  treatment

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

A
B
----- End of picture text -----

==> picture [314 x 18] intentionally omitted <==

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

(A)
Untreated
Controls

(B)
BIT225
treated
cells
----- End of picture text -----

==> picture [303 x 175] intentionally omitted <==

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

Effect
on
HIV
Replica1on
in
vitro
200
150
100 +BIT225
50
16 17 19 21 22 23 24 25 26 27 28
Time
(days)
+HIV-­‐1
----- End of picture text -----

Slide
9

• HCV
  and
  HIV
  are
  high
  growth,
  mul,-­‐billion
  dollar
  markets

• Treatment
  gaps
  remain

• BIT225
  is
  a
  novel
  approach
  with
  demonstrated
  promising
  efficacy
  in
  Phase
  2a/2
  clinical
  trials

• Represents
  a
  new
  class
  of
  direct-­‐ac,ng
  HCV
  drugs

• Poten,al
  to
  fill
  significant
  HCV
  treatment
  gaps

  • HCV
    Genotype
    3

  • HIV/HCV
    co-­‐infected
    pa,ents

  • Cirrho,c
    pa,ents

• Poten,al
  to
  eradicate
  important
  HIV
  reservoirs,
  plus
  may
  impact
  on
  HIV-­‐associated
  demen,a

• • Flexibility
  to
  combine
  with
  any
  other
  HCV
  and
  HIV
  drug
  combina,ons

• Significantly
  undervalued
  in
  comparison
  with
  other
  HCV
  companies

Slide
10

• Complete
  HCV
  trial
  currently
  in
  progress

• Preliminary
  data
  expected
  late
  2014

• Engage
  with
  US
  FDA
  -­‐
  Inves,ga,onal
  New
  Drug
  applica,on(s)
  (INDs)

• Complete
  IND-­‐related
  ac,vi,es

• File
  IND
  applica,on(s)

• Con,nue
  commercialisa,on
  ac,vi,es
  aimed
  at
  avrac,ng
  partners

• Expand
  earlier
  stage
  drug
  programs
  e.g.
  Dengue
  virus
  when
  funding
  becomes
  available
  through commercialisa,on
  of
  later
  stage
  programs

Slide
11

• En,tlement
  issue

• 2:9
  @
  8
  cents
  with
  1:1
  30/9/16
  op,ons
  @
  12
  cents

• Raise
  $4.1
  million
  before
  costs,
  to
  fund:

  • Comple,on
    of
    the
    BIT225-­‐008
    trial
    currently
    in
    progress
    in
    Thailand

  • Comple,on
    of
    ac,vi,es
    leading
    to
    filing
    INDs,
    including

    • Drug-­‐drug
      interac,on
      studies

    • Modeling
      of
      pharmacokine,c
      data
      from
      previous
      trials
      to
      determine
      op,mal
      BIT225 dose
      and
      frequency
      in
      IND
      trials

    • Addi,onal
      IND-­‐suppor,ng in
      vitro laboratory
      studies
      with
      BIT225

• Expansion
  of
  the
  Company’s
  execu,ve
  team
  as
  it
  moves
  towards
  commercialisa,on

• Working
  capital
  for
  day
  to
  day
  ac,vi,es

Slide
12

**Key

Financial
Metrics**

Ticker
Code ASX:
BIT Share
Price
(10
Oct
2014) A
$0.15 Market
cap A
$34.2
million 12
Month
Trading
Range A
$0.075
–
0.315 Shares
Outstanding 228
million Cash
Posi,on
(06/14) A
$1.76mn

Board

Michael
Hoy Non-­‐exec
Chairman Michelle
Miller CEO
and
MD Susan
Pond Non-­‐exec
Director Rob
Thomas Non-­‐exec
Director Denis
Wade Non-­‐exec
Director

**12

Month
Share
Price
Performance**

Ticker
Code ASX:
BIT Share
Price
(15
Sept
2014) A
$0.115 Market
cap A
$26.3
million 12
Month
Trading
Range A
$0.075
–
0.315 Shares
Outstanding 228
million Cash
Posi,on
(06/14) A
$1.76mn

Slide
13