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1H’2016 Results Update July 2016

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Important Disclaimer

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This presentation is intended to provide a general outline only and is not intended to be a definitive statement on the subject matter. This presentation is not financial advice and has been prepared without taking into account the objectives, financial situation or needs of a particular person.
Neither the Company, nor its officers or advisors or any other person warrants the accuracy of the analysis herein or guarantees the investment performance of the Company. Investors must make their own independent assessment of the Company and undertake such additional enquiries as they deem necessary or appropriate for their own investment purposes.
The statements contained in this presentation that are not purely historical are forward-looking statements within the meaning of the United States Exchange Act. Forward-looking statements in this presentation include statements regarding our expectations, beliefs, hopes, intentions or strategies. All forward-looking statements included in this presentation are based upon information available to us as of the date hereof, and we assume no obligation to update any such forward-looking statement as a result of new information, future events or otherwise. Our actual results could differ materially from our current expectations.
The Company is subject to a number of risks. For a summary of key risks, refer to the Company’s most recent Form 10-K filed with the United States Securities and Exchange Commission and the Australian Securities Exchange.
Under applicable United States securities laws all of the shares of our common stock are “restricted securities” as that term is defined in Rule 144 under the Securities Act of 1933, as amended. Restricted securities may be resold in the public market to United States persons as defined in Regulation S only if registered for resale or if they qualify for an exemption from registration under the Securities Act. We have not agreed to register any of our common stock for resale by security holders.

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UBI : 1H’2016 Highlights

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Strong revenue performance with OneTouch® Verio continuing to gain market share Operating expense improvement of 20% vs pcp

Operating cash flow nearing breakeven (-$0.5m in 1H’2016) (positive $1.8m in 2Q’2016) Siemens milestone prepayment of US$2.5m received Re-focused product development pipeline to deliver return on investment for shareholders

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Positive cash flow and profitability achieved in Q2 2016

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	3 Months Ended 30 Jun 16	3 Months Ended 30 Jun 16	3 Months Ended 30 Jun 16
	2016 (A$’M)	2015 (A$’M)	Change	Comments
Quarterly Service Fees	5.4	3.6	Up 50%	OneTouch® Verio continues to gain market share
Total Revenue	5.4	4.4	Up 24%	Smaller growth in revenue from Siemens in Q2 2016
Contribution from Products and Services	5.3	3.9	Up 37%	QSF revenue drops through to bottom line
R&D Expenses	2.9	5.0	Improved 42%	Re-focused product development pipeline & strict R&D criteria
G&A Expenses	1.0	1.5	Improved 31%	Operating cost efficiencies
Profit/(Loss) from Operations	1.4	(2.6)	Improved $4.0m	Revenue growth & expense improvements
Other Income/(Expense)	(1.0)	1.3	Down $2.3m	R&D tax incentive income not recorded in 2016
Net Profit/(Loss)	0.5	(1.3)	Improved 137%	Profit in quarter
Operating Cash Flow	1.8	(3.4)	Improved $5.2m	Higher revenue reducing cash burn, trending towards cash flow positive. Includes Siemens milestone payment of US$2.5m
Period End Cash Balance	13.2	10.7	Improved $2.5m	Note:US$15m in long term debt ~$9.2m R&D tax incentive during 3Q 2016

Strong financial performance: 1H 2016

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	6 Months Ended 30 Jun 16	6 Months Ended 30 Jun 16	6 Months Ended 30 Jun 16
	2016 (A$’M)	2015 (A$’M)	Change	Comments
Quarterly Service Fees	10.3	6.5	Up 58%	OneTouch® Verio continues to gain market share
Total Revenue	10.5	7.5	Up 41%	Smaller growth in revenue from Siemens in 1H 2016
Contribution from Products and Services	10.3	6.9	Up 48%	QSF revenue drops through to bottom line
R&D Expenses	7.9	9.9	Improved 20%	Re-focused product development pipeline & strict R&D criteria
G&A Expenses	2.5	3.1	Improved 19%	Operating cost efficiencies
Loss from Operations	(0.2)	(6.1)	Improved $5.9m	Revenue growth & expense improvements
Other Income/(Expense)	(1.0)	2.0	Down $3.0m	R&D tax incentive income not recorded in 2016
Net Loss	(1.2)	(4.1)	Improved 71%	Trending towards breakeven
Operating Cash Flow	(0.5)	(4.4)	Improved $3.9m	Higher revenue reducing cash burn, trending towards cash flow positive. Includes Siemens milestone payment of US$2.5m
Period End Cash Balance	13.2	10.7	Improved $2.5m	Note:US$15m in long term debt ~$9.2m R&D tax incentive during 3Q 2016

Re-forecasted P&L for 1H 2016

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The Company would be eligible to recognise $3.5 million as a Re-Forecasted 6 Months refundable research and Ended 30 Jun 16 development tax incentive income 2016 in respect of 1H 2016 should there (A$’M) be reasonable assurance that the Reported net loss aggregate turnover for the year is (1.2) for 1H 2016 less than $20 million. *R&D tax incentive 3.5 income *** The Company reviews its forecasted aggregate turnover on a Revised net profit 2.3 quarterly basis to determine if the for 1H 2016 R&D tax incentive income should be captured.

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Other progress during 1H 2016

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Focused development pipeline to drive growth
Implemented rigorous product development criteria focussed on shareholder ROI
Put on-hold in-house patient self-testing device for warfarin monitoring following indications from FDA of increased regulatory requirements for future submissions
Use learnings from Siemens product to advance our own patient self-test product
Modifications to Siemens collaboration agreement
Shift in focus of joint product development activities to focus resources on an alternative product that offers the potential for greater ROI
Prepayment of milestones to UBI totalling US$3.75m (of which US$2.5m was receipted during 2Q’2016)
Improved Xprecia Stride™ strip pricing to support Siemens’ entry into the point-of-care PT-INR testing market
Board renewal continues
Mr. David Hoey appointed as a US based Non Executive Director in March 2016
Mr. Craig Coleman appointed as Non Executive Director in June 2016

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OneTouch® Verio’s revenues increased 58% in 1H’2016

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Market share gains driving strong sales growth in blood glucose market

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Quarterly Service Fees (QSF)

UBI receives a service fee for each OneTouch Verio® strip sold by LifeScan
The first 0.5B strips per year: US1.25c per strip
Each strip >0.5B per year: US 0.75c per strip
QSF for Q2FY16 up 50% on pcp
Cumulative QSF (30 Jun 16) of US$29.1m

Lump Sum Service Fee (LSSF)*

Cumulative QSF of US$45M gives LifeScan the option, at the end of the year in which they give notice, to pay a lump sum fee in lieu of future QSFs, calculated as 2-2.2x the QSFs earned for the full year in which notice is given

Quarterly Service Fees (A$000’s)

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

6,000
5,402
4,914
5,000
Avg. quarterly growth rate = 17%
4,000
3,594
3,358
2,930 2,946
3,000
2,286
2,000
1,580
1,213 [1,370]
1,000 840 760 833 [972]
0
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*Refer to Form 10-K and 10-Q for a more detailed description, Source: UBI Financial Statements, SEC Filings.

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OneTouch® Verio… A key product for Johnson & Johnson

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J&J’s strategic review

J&J’s product rationalisation One Touch® Verio delivering results

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•J&J has recently conducted a business review of its consumer and medical devices

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•OneTouch® Verio identified as one of J&J’s most competitive product platforms

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•Reduced strip platforms from 5 to 2
•Simplified meters from 14 to 3
•Moving from Ultra to Verio

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•Verio was fastest growing blood glucose monitoring (BGM) product in 2015 (by volume)
•J&J’s BGM products gained volume market share globally and beat volume market growth 2x

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9 Source : Johnson & Johnson strategic update presentation, Consumer & Medical Devices Business Review, New Jersey, May 2016

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Xprecia Stride™ growth opportunity

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What is a PT-INR test?

Global POC PT-INR Testing Market Projection (US$M)

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1200
Patient
1000
Self
Testing
800
600 Alternate
Site Testing
400
200
Hospitals
0
2014 2015 2016 2017 2018 2019 2020
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Market Opportunities

Market Risks

New competitors and alternatives to Warfarin
• Changes to reimbursement
Growing patient population, ongoing warfarin use and increased testing frequency
Changes to regulations
Generous reimbursement
10

Source: UBI Estimates; Industry Experts; Various Industry Reports; Primary Research

Prothrombin Time (PT) measures the clotting tendency of blood
PT is reported as an International Normalised Ratio (INR)
Frequent INR testing ensures patients on the anticoagulation therapy warfarin, remain in the Target Therapeutic Range

POC PT-INR Testing Market Shares

(2014 Estimates)

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Abbott Market Share
5%
ITC 10%
Alere 18%
Roche 65%
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Trending to cash flow generation (on a rolling basis)

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UBI’s cash balance at 31 March 2016 was $11.3 million Rolling Net Cash Flow over previous 12 months (A$ Millions)

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6
Cash flow outlook:
• Strong focus on operating costs to 2.50
4
be maintained
• R&D expenditure to continue to
2 moderate over 2016/2017
•
An additional ~$9.2m R&D tax
-3.48
0 incentive for FY15 is expected in
Q3’FY16
-1.98
• Additional Siemens milestone -2.48
-2
prepayment Positive after a strong
Q2’FY16 result
-4 -4.65
-5.15
-7.41
-6
-8
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11 Note: calculated based on average net cash flow (operating + investing + financing + exchange rate effects) over past 4 quarters

New product development

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A focussed development pipeline to drive growth

Strong track record of innovation in the Point-of-Care Diagnostics space
Rigorous product development criteria:
Deliver ROI for shareholders
Ability to sustain positive cash flow
UBI announced in March it has put on hold some product development work
Exciting new products are in the development pipeline with Siemens
Clinical trials targeted to commence in 2017. Regulatory approval will be sought after completion of these trials
• Proven track record of collaboration with two of the world’s leading healthcare companies to bring products to market

Concept Feasibility Development In Market Blood Glucose Test (LifeScan) Coagulation PT-INR Test (Siemens ) Coagulation Test 2 (Siemens ) Coagulation Test 3 (Siemens) Immunoassay Platform Molecular

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Anticipated news flow: next 12 months

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OneTouch® Verio Quarterly Service Fees
Receipt of ~A$9.2M from R&D Tax rebate relating to FY2015 spend
US$1.25M Siemens milestone prepayments
Feasibility demonstrated for POC immunoassay platform
FDA approval of Xprecia Stride™ strip product

Upcoming market communications:

Investor newsletter : September 2016
Appendix 4C quarterly : October 2016

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UBI: Investment Highlights

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Targeting the large and growing Point-of-Care Diagnostics market

Fast growth in revenues based on the manufacture and sale of disposable test strips

Validating the technology through partnering deals with LifeScan (Johnson & Johnson) and Siemens

Unique patent-protected technology with low cost manufacturing

Driving growth beyond the existing product platform via new product development

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AI assistant

UNIVERSAL BIOSENSORS INC. Interim / Quarterly Report 2016

65977_rns_2016-07-20_095f24e1-5b92-459f-9c4d-77c61dc13f2c.pdf

1H’2016 Results Update July 2016

Important Disclaimer

UBI : 1H’2016 Highlights

Positive cash flow and profitability achieved in Q2 2016

Strong financial performance: 1H 2016

Re-forecasted P&L for 1H 2016

Other progress during 1H 2016

OneTouch® Verio’s revenues increased 58% in 1H’2016

Quarterly Service Fees (QSF)

Lump Sum Service Fee (LSSF)*

OneTouch® Verio… A key product for Johnson & Johnson

Xprecia Stride™ growth opportunity

What is a PT-INR test?

Global POC PT-INR Testing Market Projection (US$M)

Market Opportunities

Market Risks

POC PT-INR Testing Market Shares

Trending to cash flow generation (on a rolling basis)

UBI’s cash balance at 31 March 2016 was $11.3 million Rolling Net Cash Flow over previous 12 months (A$ Millions)

New product development

A focussed development pipeline to drive growth

Anticipated news flow: next 12 months

Upcoming market communications:

UBI: Investment Highlights

AI assistant

UNIVERSAL BIOSENSORS INC. — Interim / Quarterly Report 2016

65977_rns_2016-07-20_095f24e1-5b92-459f-9c4d-77c61dc13f2c.pdf

1H’2016 Results Update July 2016

Important Disclaimer

UBI : 1H’2016 Highlights

Positive cash flow and profitability achieved in Q2 2016

Strong financial performance: 1H 2016

Re-forecasted P&L for 1H 2016

Other progress during 1H 2016

OneTouch® Verio’s revenues increased 58% in 1H’2016

Quarterly Service Fees (QSF)

Lump Sum Service Fee (LSSF)*

OneTouch® Verio… A key product for Johnson & Johnson

Xprecia Stride™ growth opportunity

What is a PT-INR test?

Global POC PT-INR Testing Market Projection (US$M)

Market Opportunities

Market Risks

POC PT-INR Testing Market Shares

Trending to cash flow generation (on a rolling basis)

UBI’s cash balance at 31 March 2016 was $11.3 million Rolling Net Cash Flow over previous 12 months (A$ Millions)

New product development

A focussed development pipeline to drive growth

Anticipated news flow: next 12 months

Upcoming market communications:

UBI: Investment Highlights

More from UNIVERSAL BIOSENSORS INC.

UNIVERSAL BIOSENSORS INC. Interim / Quarterly Report 2016