MAYNE PHARMA GROUP LIMITED — AGM Information 2013

Nov 25, 2013

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ASX Announcement

ANNUAL GENERAL MEETING

MINTER ELLISON LEVEL 23, 525 COLLINS ST, MELBOURNE VIC 3000 AT 10.30 AM ON 26 NOVEMBER, 2013

CHAIRMAN’S ADDRESS

Good morning ladies and gentlemen, I'm Roger Corbett, the Chairman of your company.

I would like to welcome you to the Mayne Pharma Annual General Meeting for 2013.

I have confirmed that we have a quorum with the company secretary.

Let me start by introducing the Board members, senior executives, and the company’s auditor.

Joining me at the front are my fellow non-executive directors: Bruce Mathieson, Ian Scholes and Ron Best; our Chief Executive Officer, Scott Richards and our Group CFO and Company Secretary, Mark Cansdale. Phil Hodges sends his apologies as he is overseas.

Welcome also to Mr Ashley Butler, the Company’s auditor and other representatives of Ernst and Young.

I’ll now outline the procedure for today’s meeting. There are three items of business on today’s agenda:

1. My Chairman’s Report: then

1. Scott Richards will provide an update on the business and how the various segments are performing; and

2. Then we will go into the formal part of the meeting where we will vote on the resolutions outlined in the notice of meeting. We will then conclude the meeting.

I will now move to the Chairman’s report.

The past year has been truly transformational for our Company. We have made a number of acquisitions, which have materially increased the scale, reach, and diversity of the organisation. We have materially expanded our product portfolio both here and in the US, gained our first marketing approval for SUBACAP® and appointed distributors for this product in Europe.

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We are now a much larger business with sales revenue of more than $100m on a full 12 month run rate basis. We have more products, more technologies, more customers and distribution channels and a radically expanded pipeline.

Our market capitalisation has increased more than 6-fold since we announced the acquisition of Metrics in October 2012. We have strengthened our management team across many functional areas and have substantially mitigated the product concentration risk that was a feature of our business prior to the Metrics acquisition in November 2012.

It’s worth remembering that this time last year our major product, Doryx®, was under challenge following the launch of a competing generic product. I am very pleased to be able to say that we are now in a much stronger position with our doxycyline franchise which now includes both branded Doryx® products sold through Warner Chilcott and a generic franchise, which is sold through our US distribution platform that was acquired as part of Metrics. These generic doxycycline products were the first revenue synergies to materialise from the Metrics acquisition. We have also now launched via Warner Chilcott a new 200mg dose strength which has 3 years of exclusivity protection.

It is also pleasing to report that we received our first approval for SUBACAP® in Europe in FY13 and have partnered with ISDIN, a leading dermatology company who will market and distribute the product in Spain, Portugal and Italy and we have also partnered with Glenmark, who will market the product in the UK. Launch remains on track for this financial year in the UK and Spain and in FY15 in Italy and Portugal following completion of the repeat use procedure.

We have also filed SUBACAP® with the TGA here in Australia and are on track for launch in 2014.

In the United States we remain optimistic that we will submit a new drug application filing for SUBACAP in 2014. We are also in discussions with partners in the major Japan and Korean markets and hope to announce more on this front in the coming year.

The company’s research and development pipeline has been transformed since the Metrics acquisition and now includes more than 20 products under development targeting US markets with annual sales of more than US$3billion. 7 of these products were pending approval at the FDA at the end of the FY13 year.

At the beginning of 2012, when Scott Richards, our CEO joined the business, the company had only 1 product under development – SUBACAP®. The expansion of the pipeline over the past 18 months to 20 products is a key driver of future value. Your Board believes that continued investment in R&D to expand and progress this pipeline to commercialisation will deliver improved returns to shareholders. We may not be successful commercially with every single product we have under development, but our strategy is to have a diversified portfolio that targets products, which are niche and difficult to formulate as they might be highly potent, unstable compounds or involve controlled substances that cannot be imported into the United States. By targeting products with these characteristics, we expect the level of competitive intensity to be lower and this should lead to above average returns.

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We also have 13 products pending approval in Australia at the TGA, which are targeting markets valued at US$70 million.

This is a remarkable change from the middle of last year when we had no products filed with either the FDA or TGA. We have materially increased our investment in R&D over the year, which rose 170% from $4m in FY12 to $11m in FY13, a trend that will continue in the coming year.

In terms of the financials, I am pleased to report that the business met the guidance that was announced to the market in October 2012 at the time of the Metrics acquisition:

• Sales revenue to 30 June 2013 was up 61% to $83 million.

• Gross margin was up 73% to $39 million.

• Reported EBITDA was $9 million.

• Underlying EBITDA excluding acquisition costs and certain other specified expenses was $18 million, up 61%.

• The reported net loss after tax was driven by a number of items including acquisition related costs and a non-cash change in the fair value of the earn-out liability associated with the MPI acquisition as a result of a reassessment of the expected future revenues used in the calculation.

• Total cash at the end of the period was $20m up 74% and our interest bearing debt was $47 million.

In terms of the Metrics acquisition I would like to make a few comments:

• We are very pleased with the performance of the Metrics business over the past year. I would like to thank Phil Hodges and his management team for their commitment to developing and building the Metrics business over the past two decades.

• Phil was the founder of Metrics and has served on the Mayne Pharma board since the AGM last year. Phil has made a significant contribution over the past year and while he will be stepping down from his executive role at the end of this year as planned, he will remain a non-executive director.

• The acquisition of Metrics has strengthened our Company and outlook in so many ways.

• One of the key selling points of the Metrics acquisition was gaining direct access to the world’s largest single pharmaceutical market. The generics industry in the US is valued at over US$50bn (according to IMS Health) and grew 7% in the last year. We believe one of the key growth drivers of our business going forward is maximising our US retail generics portfolio which will be driven by both organic development and further bolt on acquisitions. Generics are likely to increase in demand in the US for a number of reasons including an ageing population, increase in life expectancy and chronic disease and a steady pipeline of branded products going off patent.

• At the time of the Metrics acquisition we identified a number of revenue synergies from bringing these two businesses together. Following the acquisition we set up a number of cross border teams to focus on the key revenue generating projects. It is pleasing to

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report the launch in July and August of this year, 3 Mayne Pharma products that are manufactured here in Australia which are now on the market in the US.

• We announced the launch of two strengths of a generic to Doryx® 75mg and 100mg tablets in July and launched a 250mg erythromycin capsule in August. These products are tracking ahead of our expectations and will make a strong contribution to earnings in FY14.

• In addition to these synergies we are also working to bring Metrics’ products to Australia and are on track to file an opioid pain product that Metrics currently sells in the USA with the TGA in 2014.

• The combination of the two businesses has also accelerated the development and commercialisation processes for our key products under development. Scott will give a more detailed update on the status of our R&D pipeline shortly.

During the year there were many other highlights that I have not yet mentioned:

• In February this year we acquired the Kapanol® marketing and distribution rights from GSK and recruited a national sales force, which began promotion of Kapanol® in May.

• We in-licensed a range of injectable molecules from Intas Pharmaceuticals and are in the process of registering these products with the TGA. In the FY13 year, we filed 8 injectable products with the TGA.

• We also expanded our over the counter ‘OTC’ portfolio by launching Percutane® – a pain relief cream in pharmacy, launched Astrix® capsules in grocery and in-licensed Licener® a natural plant based head lice treatment.

So, in summary I am very pleased with the changes that have been made to our organisation in the last year and believe we have a sound strategy and the necessary resources to grow this company.

Before handing over to Scott I would like to take a moment to acknowledge and thank Scott, Mark, the management and staff in Australia and the US for their exceptional hard work and dedication over the past year. I would also like to thank my fellow directors for their guidance and valuable input as well. Finally, I wanted to thank you, our shareholders for your continued support and interest in the Group.

I will now invite Scott to provide an update on the business, following which I will return to complete the more formal part of the meeting.

For further information contact: Scott Richards +61 8 8209 2410 Lisa Pendlebury +61 419 548 434, lisa.pendlebury@maynepharma.com

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