SYNTARA LIMITED — AGM Information 2015

Nov 18, 2015

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innovating for life

Annual General Meeting

19 November 2015

Chairman’s Address

Annual General Meeting November 2015

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innovating for life

Investor Presentation Annual General Meeting Sydney: 19[th] November 2015 Gary Phillips CEO

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Forward looking statement

This document contains forward-looking statements, including statements concerning Pharmaxis’ future financial position, plans, and the potential of its products and product candidates, which are based on information and assumptions available to Pharmaxis as of the date of this document. Actual results, performance or achievements could be significantly different from those expressed in, or implied by, these forward-looking statements. These forward-looking statements are not guarantees or predictions of future results, levels of performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this document. Except as required by law we undertake no obligation to update these forward-looking statements as a result of new information, future events or otherwise.

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Pharmaxis today

new business focus already creating value

Drug developer

• Leading position in amine oxidase chemistry and mechanism based inhibitors

• Proven capability in delivering quality programs to achieve phase 2 ready compounds

• Exciting pipeline of drug candidates for valuable targets

Management

• Management team and Board with global experience

• Extensive pharma industry network

• Proven capability of executing global BD transactions with major partners

• Preclinical, early and late phase clinical experience

Drug manufacturer

Financial strength

• $50m cash balance at September 2015

• Supplies Bronchitol to global markets via experienced commercial partners

• Significant value milestones from existing partner deals within reach

• Financial risks shared

• Financial upside  Growing institutional from accessing new presence on share markets – US, register - >45% Russia

• Possibility to further rationalise manufacturing infrastructure

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Pharmaxis product portfolio

Product	Indication	Status	amine oxidase chemistry platform
LOXL2 inhibitor	NASH (fatty liver disease), Liver & kidney fibrosis	Lead optimisation
LOXL2 inhibitor	Idiopathic pulmonary fibrosis	Lead optimisation; collaboration with Synairgen
LOX/LOXL2 inhibitor	Fibrosis, cancer	Exploratory
SSAO inhibitor	NASH	Successful phase 1 study reported; sold to Boehringer
SSAO/MAOB inhibitor	Neuro inflammation; Alzheimer's, MS, etc.	Lead candidate selected
SSAO/MPO inhibitor	Respiratory inflammation; Asthma, COPD	Exploratory
Orbital	Dry powder inhalation device	Phase 1 – seeking partner
ASM8	Asthma	Phase 2 - seeking partner
Bronchitol US	Cystic Fibrosis	Partner: Chiesi, funding phase 3 study - currently underway
Bronchitol EU	Cystic Fibrosis	Partner: Chiesi (UK & Germany) - marketed
Bronchitol rest of world	Cystic Fibrosis	Marketed: Australia, CEE Approval pending; Brazil, Russia
Aridol	Asthma diagnosis	Marketed: Australia, EU, Korea

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Our therapeutic focus

the inhibition of amine oxidase enzymes has broad potential application

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COPD
Alzheimer’s
Asthma
Parkinson’s
CF
Stroke
Pulmonary
Fibrosis
Cardio-myopathy
Heart failure
NASH
Atherosclerosis
Liver fibrosis
Liver cancer
Scarring
Kidney fibrosis
Pancreatic cancer
Gastric cancer
Type 2 diabetes
IBD
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Pharmaxis drug discovery strategy

Building a biotech powerhouse in fibrosis and inflammation

Strategy

Achievements to date

Drug discovery:

• Build a biotech powerhouse in fibrosis and inflammation

• Prioritise validated targets

• Multiple drugs from in-house amine oxidase chemistry platform

Drug discovery:

• First in class NASH drug taken to phase 1

• Two further candidates in lead optimisation phase

• One lead candidate moving to preclinical

• Develop to phase 1 or 2

Partnering:

• Create value via

• Licence out to Big Pharma with attractive

Partnering:

  - In house BD expertise achieves valuable deal with Boehringer Ingelheim - A$39m upfront, total potential > A$750m

• 1[st] in class drugs post phase 1 or 2

• Collaborate to de-risk and accelerate PXS programs

• Collaborate on in-licensing programs

• Collaboration with Synairgen Research plc for early stage fibrosis program to widen spread of indications, enhance time to value inflection and spread risk

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SSAO for NASH

SSAO inhibitor PXS4728A sold to Boehringer Ingelheim in May 2015

PXS 4728A

 Mechanism based inhibitor of SSAO

 Development status:

• Pharmaxis discovery – patent filed 2012

• Effective in pre clinical models of NASH and airway inflammation

• Phase 1 study reported

• orally bioavailable

• long lasting inhibition after single dose

• progressive dose response

 Competitors:

• Genefit – GF505 in Phase 2b NASH

• Intercept - OCA (FXR agonist) in Phase 2b NASH

• Gilead – FXR agonist in pre clinical

Boehringer Ingelheim

 Excellent partner:

• Boehringer leaders in metabolic disease

• Industry leading development times

• Boehringer responsible for all development, and commercialisation activities

• Competitive deal:

• Total potential payments to approval for 2 indications: €418.5m (~A$600m),

  • acquisition (May 2015): €27.5m (~A$39m)

  • commencement of phase 2 and 3: up to total €55m (~A$80m)

  • filing, regulatory & pricing approvals: up to total €140m(~A$200m)

  • second indication: additional total milestone payments (€195m)

• Earn-out payments on annual net sales

  • tiered percentages starting in high single digits

  • plus potential sales milestones

• External validation of PXS drug discovery and ability to negotiate valuable global deals

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LOXL2 inhibition for NASH & other fibrotic diseases

an attractive target and development program

Excessive production and linking of collagen fibres results in fibrosis

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Fibroblast cells in
human tissue
LOXL2
(from fibroblasts)
Collagen fibres Excessive ‘cross-linking’ of
collagen fibres, stiffens
tissue, causing fibrosis
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Gilead – LOXL2 antibody

 Potential indications:

• NASH / Liver Fibrosis

• Pulmonary fibrosis (IPF)

• Cancer

• Wound healing

 Development status:

• Pharmaxis discovery – patent filed 2014

• Lead compounds with differentiated PK / PD profile identified

• Effective in pre clinical models of fibrosis and cancer

 Competitive profile:

• Novel target and mechanism of action

• Once daily oral drug

• Complete inhibition of LOXL2 versus partial inhibition by antibody

• Low cost of goods

• Acquired Arresto program $225m pre phase 1

• Now in broad phase 2b trial program

• Liver fibrosis; Idiopathic pulmonary fibrosis; Metastatic pancreatic cancer; Myelofibrosis; Solid tumours; Metastatic colorectal cancer

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LOXL2 for pulmonary fibrosis

Collaboration with Synairgen

Idiopathic Pulmonary Fibrosis (IPF)

Synairgen collaboration

• IPF primarily affects people over the age of 50

• 5,000 patients have IPF in Australia

• 100,000 people with IPF in the US

• Prognosis is worse than that of many cancers

• Two drugs approved recently  Nintedanib (Boehringer Ingelheim)

• Pirfenidone (Roche)

• Need for new therapies

• Current products expected to produce global revenues > $1.1 billion by 2017

• Access to

• Synairgen’s strength in fibrosis biology and respiratory clinical development - BioBank human tissue models technology platform

• expertise at University of Southampton

• Faster time to value

• appreciation and partnering points of phase 1 or 2a

• Synairgen to fund pre clinical tox and phase 1

• Shares risk and reward based on investment in program

• Allows PXS to pursue further indications in parallel

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Bronchitol for cystic fibrosis

partnering for success

Median FEV1 % Predicted versus Age

Cystic fibrosis

• Patients

• US: 30,000;

• Europe: 37,000;

• Rest of world: 21,000

• Disease

• characterised by poorly hydrated, tenacious, thick mucus

• Rapid decline in lung function

• Frequent infections

Bronchitol

• Active ingredient mannitol delivered as an inhalable dry powder

• Restores airway surface liquid

• Mucus clearance enhanced

• Improves lung function

• Reduces incidence of lung infections

US

Rest of world

• Largest CF market by value

• Sold by Chiesi in UK & Germany

• Sold by PXS in Australia & Denmark

• 7 year post launch market exclusivity

• Tie-breaker phase 3 trial commenced Q1 2015, managed by PXS – to report 2016

  • Pending approval/distributors appointed – Ireland, Russia, Israel, Turkey, Brazil, Eastern Europe

• Chiesi (PXS

• partner) funding trial and responsible for  Additional EU regulatory filing & distributors to be commercialisation appointed 12

Pharmaxis opportunities

Building a biotech powerhouse in fibrosis and inflammation

SSAO program for LOXL2 program for NASH (fatty liver) pulmonary fibrosis

LOXL2 for NASH and other diseases

• NASH: US$3.5B  Pulmonary fibrosis: market by 2025 market >$1B

• Big pharma interest in NASH, LOXL2 and PXS approach

• PXS SSAO inhibitor  Collaborate to of NASH phase 1 or 2 then  Complimentary to successfully taken seek partner SSAO program to phase 1  Revenue share for acquired by BI

• Acquired by BI for phase 1 partnering  Next milestone – A$39m upfront, total deal: 50/50 commencement of >A$750m  Next milestone – formal preclinical

• BI to develop for commencement of program ~ NASH and other formal preclinical beginning CY 2016 inflammatory program ~ indications (eg. beginning CY 2016 kidney fibrosis, COPD)

Bronchitol FOR CF in US

• US is largest CF market

• Partnered - Chiesi

• Chiesi funding CF303 to a cap of US$22m

• $25m milestone payments on launch and sales thresholds

• High mid teens royalty% on inmarket sales

• Mid teens % uplift on COGs

• Next milestone: start of phase 2 ~end CY 2016

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Major upcoming milestones

Cash funds ($50m at 30 Sept) sufficient to reach near term valuable milestones

Calendar years 2015 2016 2017

 PXS4728A Phase 2 commences

• CF204 (paediatric)  CF303 fully  FDA decision on reports recruited Bronchitol approval  CF303 – last patient in US completes trial  Bronchitol US

• CF303 – reports launch

• ad  Lead candidate for  Complete pre  Commence phase 1 IPF identified clinical program  Partner asset

• Drug discovery  Lead LOXL2  Complete pre  Commence phase 1 candidate identified clinical program  Partner Asset for NASH / Liver fibrosis

• SSAO/MAOB  Complete pre  Commence phase 1

• disease indication clinical program  Partner Asset

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Financial Overview

Annual General Meeting November 2015

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Financials – income statements

30 June 2015

A$'000	2015	2014	2013
Revenue
Sales revenue	5,999	5,036	3,237
Other revenue	53,248	5,450	8,370
Total revenue	59,247	10,486	11,607
Expenses	(40,739)	(62,201)	(55,142)
Profit/(loss)before tax	18,508	(51,715)	(43,535)
Income tax expense	(42)	(103)	(2)
Profit/(loss)after tax	18,466	(51,818)	(43,537)

Highlights of 2015:

• The company generated a profit in 2015

• Significance of other revenue – generated by the business

• Reduction in expenses – see subsequent slides

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Financials – income statement revenue

30 June 2015

A$'000	2015	2014
Revenue
Sales revenue
Bronchitol	4,243	3,275
Aridol	1,715	1,752
Otherproducts	41	9
	5,999	5,036
Other revenue
Sale of drugcandidate	40,603	‐
Clinical trial cost reimbursements	11,139	‐
Interest	721	1,735
R&D tax incentive	164	3,539
Other income	621	176
	59,247	10,486

Highlights of 2015:

• Bronchitol sales growth in challenging environment, plus Chiesi building inventory in EU

• Aridol sales maintained without any sales/marketing investment

• Boehringer Ingelheim acquires PXS4728A for $41 million including $1.8 million option fee (which derisked funding of phase 1 trial)

• Clinical trial cost reimbursement (by Chiesi) includes costs incurred by PXS in 2014 ($4.7M)

• R&D tax incentive not available as PXS revenue too high (>$20m)

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Financials – income statement expenses 30 June 2015

A$'000	2015	2014
Expenses
Employee costs	(14,111)	(19,376)
Administration & corporate	(3,316)	(3,379)
Rent,occupancy& utilities	(1,593)	(1,767)
Clinical trials	(11,315)	(6,221)
Drugdevelopment	(1,695)	(1,256)
Sales,marketing& distribution	(1,962)	(3,376)
Safety,medical and regulatoryaffairs	(1,723)	(1,852)
Manufacturing purchases	(1,736)	(2,142)
Other	(2,300)	(1,772)
Depreciation & amortisation	(3,406)	(5,131)
Finance expenses	2,696	(7,146)
Impairment expenses	(277)	(8,783)
	(40,739)	(62,201)
Netprofit(loss)before tax	18,508	(51,715)
Income tax expense	(42)	(103)
Netprofit(loss) after tax	$18,466	($51,818)

Highlights of 2015:

• Significant cost reductions from changes to business

• Note Chiesi reimbursed $7.5m of clinical trial costs

• Employee costs; sales, marketing and distribution; occupancy costs subsequent to closure of US office (Sept 14) and EU commercial infrastructure (May 15) and other initiatives

• FY 2015 only includes one month of completed EU cost reductions

• Clinical trials expense also includes phase 1 for PXS4728A (FY 2015: $1.8m) and EU paediatric trial CF2024 (FY 2015: $1.9m) – completes FY 2016

• Finance expense for FY 2015 includes capitalised finance lease on 20 Rodborough Road ($0.7m) and a credit upon restatement of the NovaQuest financing agreement ($3.4m)

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Segment expenses: 2014, 2015 & annualised Q1 2016

excludes foreign exchange gains/losses and reimbursed clinical trial costs

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30,000
25,000
20,000
15,000
10,000
5,000
‐
2014 2015 2016 2014 2015 2016 2014 2015 2016
Bronchitol & Aridol New Drug Discovery Corporate
Employee costs Clinical trials ‐ net Drug development
Other segment expenses Administration & corporate Rent, occupancy & utilities
A$'000
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Balance sheet – 30 June 2015

Assets ($83m)

Liabilities ($46m)

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Intangibles
$0.4 Other $4.4
PP&E $19.6
Accounts
receivable
$4.0
Cash $54.1
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Finance lease
Other $4.9
Accounts $13.0
payable $2.7
NovaQuest
financing
$25.7
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• Finance lease over 20 Rodborough Rd (to 2024, break possible in 2019)

• NovaQuest financing – amount received plus accrued charge. Not repayable other than as % of Bronchitol revenue

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PXS share trading for past 12 months

ASX code: PXS

Shareholders

• Shares on issue: 317m (20 Aug 2015)

• Employee options: 5.9m (20 Aug 2015)

• Institutional shareholders (~48%):

• Australia - Orbis (17%)

• Australia – other (5%)

• US - BVF Partners (12%)

• US – other (5%)

• UK - Montoya Investments (6%)

18 Nov 14 5.5cents

• UK – other (3%)

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Market capitalisation
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• $70m

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Shares Total: 343m
53m shares 44m shares 75m shares
traded: shares
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Shareholder Questions

Annual General Meeting November 2015

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Formal Business

Annual General Meeting November 2015

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Resolution 1

Financial Report, Directors’ Report and the Auditor’s Report

No shareholder vote is required

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Resolution 2

Adoption of the Remuneration Report

Ordinary resolution:

“That the remuneration report of the Company for the year ended 30 June 2015 is adopted.”

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Resolution 2

Adoption of the Remuneration Report

The Company has received:

• 73,759,088 proxy votes in favour of the resolution;

• 3,313,023 proxy votes against the resolution;

• 276,029 proxy votes abstaining from the resolution;

• 1,286,793 proxy votes excluded from voting;

• 511,430 proxies able to be voted by the chair/board which the chair/board intend to vote in favour of the resolution.

• Voting exclusions apply

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Resolution 3

Re-election of Dr Simon Buckingham as a Non Executive Director

Ordinary resolution:

“That Dr Simon Buckingham, who retires and offers himself for re-election as a director of the Company, is re-elected as a non executive director of the Company.”

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Resolution 3

Re-election of Dr Simon Buckingham as a Non Executive Director

The Company has received:

• 77,641,416 proxy votes in favour of the resolution;

• 751,219 proxy votes against the resolution;

• 242,298 proxy votes abstaining from the resolution;

• 511,430 proxies able to be voted by the chair/board which the chair/board intend to vote in favour of the resolution.

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Resolution 4 Grant of Performance Rights to Mr Gary Phillips Ordinary resolution:

“That for the purposes of the ASX Listing Rules and for all other purposes, approval is given for the grant of 1,626,000 zero grant price and zero exercise price employee options (Performance Rights) to Mr Gary Phillips under the Company’s performance rights plan, resolved to be granted by the Board in July 2015 and, upon exercise of those Performance Rights, the acquisition of 1,626,000 ordinary shares underlying those Performance Rights, in accordance with the terms of the performance rights plan and the explanatory statement accompanying the notice of meeting.”

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Resolution 4

Grant of Performance Rights to Mr Gary Phillips

The Company has received:

• 71,607,213 proxy votes in favour of the resolution;

• 6,956,858 proxy votes against the resolution;

• 14,502 proxy votes abstaining from the resolution;

• 60,000 proxy votes excluded from voting;

• 507,790 proxies able to be voted by the chair/board which the chair/board intend to vote in favour of the resolution.

• Voting exclusions apply

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Resolution 5 Renewal of Proportional Takeover Provision Special resolution:

“That approval is given for the proportional takeover provision contained in article 45 of the current constitution of the Company to be renewed for a further three years from the date of the 2015 annual general meeting, as detailed in the explanatory statement accompanying the notice of meeting.”

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Resolution 5

Renewal of Proportional Takeover Provision

The Company has received:

• 76,935,756 proxy votes in favour of the resolution;

• 1,406,379 proxy votes against the resolution;

• 261,798 proxy votes abstaining from the resolution;

• 542,430 proxies able to be voted by the chair/board which the chair/board intend to vote in favour of the resolution.

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Resolution 6

Amendments to Constitution

Special resolution:

“That approval is given for the proportional takeover provision contained in article 45 of the current constitution of the Company to be renewed for a further three years from the date of the 2015 annual general meeting, as detailed in the explanatory statement accompanying the notice of meeting.”

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Resolution 6

Amendments to Constitution

The Company has received:

• 77,149,113 proxy votes in favour of the resolution;

• 1,393,760 proxy votes against the resolution;

• 95,700 proxy votes abstaining from the resolution;

• 507,790 proxies able to be voted by the chair/board which the chair/board intend to vote in favour of the resolution.

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Thank you for your participation

Annual General Meeting November 2015

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