Acrux (ASX: ACR)
Annual General Meeting
10 November, 2016
Acrux AGM 20161
Introduction: Ross DobinsonNon-Executive Chairman
2
Company review: Michael KotsanisCEO & Managing Director
3
Forward looking statements
This presentation includes forward-looking statements that are subject to risks and
uncertainties. Such statements involve known and unknown risks and important factors
that may cause the actual results, performance or achievements of Acrux to be materially
different from the statements in this presentation.
Actual results could differ materially depending on factors such as the availability of
resources, the results of clinical studies, the timing and effects of regulatory actions, the
strength of competition, the outcome of legal proceedings and the effectiveness of patent
protection.
Acrux AGM 20164
Axiron® IP outcome
• United States District Court for the Southern District of Indiana
judgment
• Formulation and axilla application patents granted by the US Patent Office for
Axiron® have been invalidated
• Patents therefore would not be infringed by the commercialisation of generic
versions of Axiron® by the generic companies that have challenged these patents
• The applicator patent is valid but not infringed by the majority of parties
• Acrux and Eli Lilly and Company have appealed the District Court
decision
Acrux AGM 20165
FY 2016 outcomes
Revenue 2016: $28.6 million2015: $25.4 million
Net Profit After Tax
2016: $13.0 million2015: $11.1 million
Cash 2016: $29.4 million2015: $23.1 million
Product approval Lenzetto approved in European Union in 1H FY16Milestones received 1H FY16Lenzetto launched in numerous European markets in 2H FY16
Pipeline progress Initiated and made solid progress on first three generic projectsEncouraging progress on onychomycosis project formulations
Acrux AGM 20166
Finance review: Tim BatemanCFO & Company Secretary
7
Full year earnings
Royalty revenue largely comprises Axiron revenue $25.5M
Milestone income reflects multiple marketing approvals of Lenzetto in the European Union by our licensee Gedeon Richter
R&D investment up $1.7M over prior year, reflecting investment in 3 generic and one speciality product
Operating costs have reduced 8%
Non-operating costs comprise non-cash costs and foreign exchange loss
Income tax expense represents 28.3% of profit before tax and is lower than the company tax rate of 30% due to utilisation of tax losses
Profit after tax up 16.6% or $1.9M over prior year
2015/16 2014/15 %
Royalty 25,469 24,639 3.4%
Milestone 2,540 - n/a
Other revenue 548 729 -24.8%
Revenue 28,557 25,368 12.6%
R&D investment (5,536) (3,780) 46.5%
Operating costs (2,390) (2,597) -8.0%
Non-operating costs (2,539) (2,185) 16.2%
Total Expenses (10,465) (8,562) 22.2%
Profit before income tax 18,092 16,806 7.7%
Income tax expense (5,111) (5,676) -10.0%
Pofit after income tax 12,981 11,130 16.6%
Earnings per share 7.8 cents 6.7 cents +1.1 cents
Cash reserves 29,360 23,068 27.3%
Acrux AGM 20168
Full year cash flow
Cash received from conduct of business activities $28.7M, up 11% over prior year due to milestones on Lenzetto
Increase in payments to suppliers & employees of 22.6% as investment in R&D is increased to drive pipeline program
Reduction in tax payments of $4.6M or 51.7% due to lower net profit in FY15 as compared to FY14 (note: - final tax instalment payment falls into next FY)
As a result cash reserves at year end were $29.4M up 27.3% or $6.3M over prior year
Acrux AGM 20169
2015/16 2014/15 %
Royalties received 25,668 25,203 1.8%
Milestones received 2,540 - n/a
Interest received 515 639 (19.4%)
Other income received - 23 (100.0%)
Total cash received 28,723 25,865 11.0%
Payments to suppliers & employees (7,923) (6,460) 22.6%
Purchase of capital (236) (66) 257.6%
Tax paid (4,294) (8,886) (51.7%)
Total cash payments (12,453) (15,412) (19.2%)
Dividends paid (9,992) (13,322) (25.0%)
Net increase/(decrease) in cash 6,278 (2,869) (318.8%)
Foreign exchange differences on cash holdings 14 162 (91.4%)
Cash at beginning of the year 23,068 25,775 (10.5%)
Cash at end of the year 29,360 23,068 27.3%
Company review: Michael KotsanisCEO & Managing Director
10
Axiron volume and market share• Axiron market share remains
consistent at approximately 14%
• US District Court decision allows
Watson (Teva) generic to launch
• A generic launch will impact Axiron
sales
• US District Court decision has been
appealed. Federal Circuit in
Washington will hear Appeal
Source: Axiron Net Sales, Eli Lilly; Axiron market share and prescription volumes, IMS
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Axiron Quarterly Net Sales
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Axiron Market Share
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Q3 Q4 Q1 Q2
FY15, FY16 TRx
Acrux AGM 2016
• AXIRON is used to treat adult males who have low or no testosterone due to certain
medical conditions
• Approved in the United States and selected other countries
• Testosterone replacement therapy market is $1 billion+ in United States
• Licensed globally to Eli Lilly and Company
• Acrux receives royalties and milestones on sales from Lilly 11
• Lenzetto® is a hormone replacement therapy for women
• Lenzetto® has been launched in a number of territories
since January 2016, through our licensee Gedeon Richter,
including Germany, Hungary and Romania
• Progressive European roll-out to new markets expected
through 2016 and 2017
• Additional four country launches planned following
European Summer
• Topical estrogen-only HRT market is valued at over EURO 85
million
Lenzetto® (estradiol) spray Launched in Europe
Acrux AGM 201612
Growth Strategy
Acrux is building a sustainable business model with a broader portfolio which
leverages its existing topical expertise incompelling market segments
Measures of success: Portfolio with multiple products
in various stages of development Valuable products licensed and
commercialised Profitable and sustainable
business
How: Core competency – utilise current
technology, skills and capabilities Highly experienced formulation
team Product development focused on
commercially compelling opportunities
Partner with strong and capable licensees
Acrux AGM 201613
Total US pharma market size
• Oral market exceeds $200 billion
• Injectable market exceeds $130
billion
• Both oral and injectable markets
are heavily competitive.
• Topical transdermal market is
relatively small at under $20 billion
Topically applied drugs generated sales of over $18 billion in 2015.
Oral and injectable markets account for 84% of total market.
Source: Acrux analysis. IMS June 2015 MAT. US market sales. US$
Acrux AGM 2016
Oral
Injectable
Liquids
Topical
Aerosol Powders Other
14
Topical Generic Portfolio
• First three generic formulations
completed. CMO selection underway
• Topically applied generic products in
commercially attractive market segments
• Reduced development timeframes
compared to topical speciality portfolio
• Building portfolio of topical generic
programs with sustainable returns
• By end FY17 development activities
would have been initiated on 7 topical
generics
• Targeting US market
• Generic market sector grew by 17% year
on year. Branded market sector declined
by 2%
Our topical generic pipeline is commercially compelling
US Transdermal and Topical market size
US$9.6 billion
US$8.5 billion
US$440 million
InitialAcrux
portfolioACR068ACR071ACR072
Generic market sector
Branded market sector
Source: IMS June 2015 MAT. US Transdermal and Topical generic and branded market segments
Acrux AGM 201615
Indication
For treatment of fungal infection (onychomycosis) of toenails and fingernails
Formulation and intellectual property
• Solution for topical administration
• Improved formulation of efinaconazole selected
• New patent has been filed
• IPR Petition for review of existing Jublia patent filed
Market
• An oral anti-fungal has been the subject of recent FDA Drug Safety Communications
• New topical products growing market volume
• Over 30 million Americans with onychomycosis
• Efficacy of currently marketed topicals is low
Acrux antifungal development Onychomycosis
Acrux is targeting best in class efficacy in an attractive growing market
Acrux AGM 201616
Future milestones
• Draft and submit patent application for ACR065 for onychomycosis
• Gedeon Richter to continue country specific launches of Lenzetto in the European Union
• Scale up activities to manufacture exhibit batches for initial generic products
• Contract manufacturing organisation to be engaged to manufacture multiple generic products
• Commence first bioequivalence study
• Portfolio of 7 topical generics in development by end FY17
• Axiron Appeal outcome
Acrux AGM 201617
Formal Business: Ross DobinsonNon-Executive Chairman
18
Resolution 1
Acrux AGM 201619
Adoption of Remuneration Report
Proxy votes received prior to the meeting are as follows:
For 33,645,905 votes 90.2 % of available votes
Open 805,886 votes 2.2 % of available votes
Against 2,845,171 votes 7.6 % of available votes
Resolution 2
Acrux AGM 201620
Re-election of Ross Dobinson as Director
Proxy votes received prior to the meeting are as follows:
For 35,304,738 votes 93.8 % of available votes
Open 892,921 votes 2.4 % of available votes
Against 1,447,959 votes 3.8 % of available votes
Resolution 3
Acrux AGM 201621
Re-election of Timothy Oldham as Director
Proxy votes received prior to the meeting are as follows:
For 34,529,037 votes 91.7 % of available votes
Open 1,863,046 votes 5.0 % of available votes
Against 1,253,535 votes 3.3 % of available votes
Resolution 4
Acrux AGM 201622
Election of Simon Green as Director
Proxy votes received prior to the meeting are as follows:
For 34,609,474 votes 91.9 % of available votes
Open 1,863,046 votes 5.0 % of available votes
Against 1,168,598 votes 3.1 % of available votes
Resolution 5
Acrux AGM 201623
Election of Geoffrey Brooke as Director
Proxy votes received prior to the meeting are as follows:
For 34,175,026 votes 90.8 % of available votes
Open 2,041,446 votes 5.4 % of available votes
Against 1,413,596 votes 3.8 % of available votes
Acrux AGM 201624