INVION LIMITED — Interim / Quarterly Report 2016

Jan 27, 2016

ASX ANNOUNCEMENT: APPENDIX 4C

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28 January 2016

The Manager Company Announcements Office ASX Limited 20 Bridge St SYDNEY NSW 2000

Dear Sir

APPENDIX 4C

Invion Limited (ASX:IVX) is pleased to lodge its Appendix 4C for the quarter ending 31 December 2015.

The Company held cash reserves of $2.107 million at the end of December, consistent with forecasts.

In the December quarter, cash outflows relating to operating expenses were $2 million, with R&D expenditure comprising $1.2 million of this amount. Operating and R&D cash outlfows continue to be significantly reduced from earlier quarters following the completion of major R&D programs across all three drug assets.

In December, the company announced the completion of a share purchase plan to eligible shareholders and a placement to existing professional investors, raising approximately $2.1 million.

During the quarter, the Company announced data from its phase 2 clinical trial of INV102 (nadolol) in patients with chronic bronchitis or COPD who were trying to quit smoking. The data from the 155 patient study demonstrated that INV102 treated smokers were more likely to stop smoking completely or dramatically reduce the number of cigarettes smoked, and that INV102 is a safe and effective treatment for patients with chronic bronchitis who are enrolled in smoking cessation programs. Data also demonstrated that treatment with INV102 (nadolol) showed a statistically significant effect on biomarker MUC5AC independent of an effect on markers of inflammation.

The Company has since submitted an abstract to the 2016 American Thoracic Society (ATS) annual meeting, and a request to the US Food and Drug Administration (FDA) for an End of Phase 2 (EOP2) meeting, to facilitate the commencement of the phase 3 program for oral INV102. The EOP2 meeting is scheduled to be held by the end of the current quarter (March 2016).

Following the successful completion of major milestones across its four drug development programs during 2015, during the quarter the Board appointed Ferghana Partners Group (New York, London, Boston) to progress various potential opportunities under review. Ferghana’s expertise is in acquisitions, divestitures, corporate partnering and financial transactions in the global healthcare sector.

An Appendix 4C accompanies this announcement.

For and on behalf of the Board of Invion Limited

MELANIE FARRIS Company Secretary and Head of Operations

Invion Limited ABN 76 094 730 417

GPO Box 1557, Brisbane, QLD 4073 P +61 7 3295 0500 F +61 7 3295 0599 www.inviongroup.com

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Introduced 31/3/2000. Amended 30/9/2001

Name of entity
INVION LIMITED
ABN 76 094 730 417	Quarter ended(“currentquarter”)
76 094 730 417	31-December-2015

Consolidated statement of cash flows

Cash flows related to operating activities Payments for (a) staff costs (b) patent costs (c) research and development (d) leased assets (e) other working capital 1.3 Dividends received 1.4 1.5 1.6 Income taxes paid 1.7 Other (a) Research & Development tax refund (b) Other 1.1 Receipts from customers 1.2 Interest and other items of a similar nature received Interest and other costs of finance paid Net operating cash flows	Current quarter $A’000	Year to date (6 months) $A’000
	(445) (15) (1,163) (2) (338) - - (23) - 2,406 - 140	(834) (126) (2,872) (4) (798) - - (62) - 2,406 - 140
	560	(2,150)

Appendix 4 C Page 1

Appendix 4C Quarterly report for entities admitted on the basis of commitments

	Current quarter $A’000	Year to date (6 months) $A’000
1.8 Net operatingcash flows(carried forward)	560	(2,150)
(a) businesses (b) equity investments (c) intellectual property (d) physical current assets (e) other non-current assets (a) businesses (b) equity investments (c) intellectual property (d) physical current assets (e) other non-current assets 1.11 Loans to other entities 1.12 1.13 Other Net investing cash flows 1.14 Cash flows related to investing activities 1.9 Payment for acquisition of: 1.10 Proceeds from disposal of: Loans repaid by other entities Total operating and investing cash flows	- - - - - - - - - - - - -	- - - - - - - - - - - -
	-	-
	560	(2,150)
1.15 1.16 1.17 1.18 1.19 Dividends paid 1.2 Net financing cash flows Repayment of borrowings Other Creditors (costs of fund raising) Cash flows related to financing activities Proceeds from shares not yet issued Proceeds from borrowings Proceeds from issues of shares	2,099 - (974) - (67)	3,100 - - (974) - (213)
	1,058	1,913
1.21 1.22 1.23 Exchange rate adjustments to item 1.20 Cash at end ofquarter/year to date Net increase (decrease) in cash held Cash at beginning of quarter/year to date	1,618 498 (9)	(237) 2,285 59
	2,107	2,107

Appendix 4 C Page 2

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.24 1.25 Aggregate amount of payments to the parties included in item 1.2 (a) Aggregate amount of loans to the parties included in item 1.11	Current quarter $A'000
	273
	-

• 1.26 Explanation necessary for an understanding of the transactions

Payments to directors includes directors fees and executive directors salaries.

Separate to the amounts noted at 1.24 above, for the December quarter, approximately $18,600 in fees were paid or were payable to McCullough Robertson Lawyers. Mr Brett Heading is a Partner at McCullough Robertson Lawyers.

Non-cash financing and investing activities

Details of financing and investing transactions which have had a material effect on consolidated assets and 2.1 liabilities but did not involve cashflows

N/A

Details of outlays made by other entities to establish or increase their share in businesses in which the reporting 2.2 entity has an interest

N/A

Financing facilities available

Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).

3.1 Loan facilities 3.2 3.3 Convertible loan facility Credit standby arrangements	Amount available $A’000	Amount used $A’000
	-	-
	-	-
	-	-

Appendix 4 C Page 3

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
4.1 4.2 Deposits at call 4.3 Bank overdraft 4.4 Other (provide details) Cash on hand and at bank	2,107	498
	-	-
	-	-
	-	-
Total: cash at end of quarter(item 1.23)	2,107	498

Acquisitions and disposals of business entities

5.1 Name of entity 5.2 5.3 5.4 Total net assets 5.5 Nature of business Place of incorporation or registration Consideration for acquisition or disposal	Acquisitions	Disposals
	N/A	N/A

Compliance statement

This statement has been prepared under accounting policies which comply with accounting standards as

• 1 defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

2 This statement does give a true and fair view of the matters disclosed.

Sign here: Original signed Date: 28-January-2016 (Company Secretary)

Print name: Melanie Farris

Appendix 4 C Page 4