strong potential: targeting mainstream · delivery market. suda reformulates existing drugs into an...

05 February 2016| Initiation of coverage | Healthcare

Alpha Deal Group Intelligence

Strong Potential: Targeting mainstream markets with significant potential Alpha Deal Group considers SUDA Limited (ASX: SUD) as a unique opportunity to benefit from the rapidly evolving drug delivery market. SUDA reformulates existing drugs into an oral spray for delivery of the drug through the oral mucosa. It is targeting mainstream markets which have significant potential such as migraine, malaria, chemotherapy-induced nausea, pulmonary arterial hypertension and pre-procedural anxiety, and erectile dysfunction. Licensing deals for ZolpiMist®, an oral spray for insomnia, could be secured in CY2016 and act as a catalyst for the Company’s share price. We are initiating coverage of SUDA with a Buy rating and a $0.22 price target.

Delivery of Drugs through the Oral Mucosa SUDA reformulates pharmaceuticals into oral sprays for delivery of the drug through the oral mucosa. About 70% of drugs are administered orally, primarily in tablet or capsule form. However, there are a number of disadvantages associated with the solid-oral administration such as hepatic first-pass metabolism and enzymatic degradation within the gastrointestinal (GI) tract, which cause a relatively lengthy onset time and/or erratic absorption patterns. Furthermore, patients must be conscious and able to swallow (40% of US adults and 54%of children (6-11 years) report swallowing difficulties).The oral mucosa is the lining of the mouth. It has been shown that delivery through the oral mucosa provides more effective delivery of the drug with the drug being delivered faster, with reduced dosage of API required and it avoids the need to swallow or be taken with water.

Oral Sprays for Mainstream Markets The Company currently has five products in addition to ArtiMistTM and ZolpiMist® that it is developing for mainstream markets. The oral sprays are developed using oro-mucosal technology. SUDA is targeting markets with significant potential including: migraine which is expected to grow to US$5.8B in 2021 from US$3.2B currently; chemotherapy, radiotherapy and post-operative induced nausea and vomiting market is estimated to be in excess of US$2B; erectile dysfunction market which is estimated to be approx. US$4.1B; pulmonary arterial hypertension (PAH) market to reach $3.6B by the end of 2015; as well as pre-procedure anxiety market which is estimated to be US$150-170 million.

Key financials

Basic Financials (AUD, 000's) Jun-13 Jun-14 Jun-15

Revenues 4,066 8,753 5,728

Net Income (Loss) (1,668) (2,061) (3,378)

Cash 753 3,990 6,252

Total Assets 10,729 20,347 22,821

Share price AUD 0.03BidBookIQ Value© (Target Price) AUD 0.22Alpha Deal Sweet Spot© (Valuation Gap) 645%

Market cap (AUDm) 33Net cash (AUDm) 3.4Enterprise value (AUDm) 30

No. of shares (m) 1,140.6Average daily vol ('000, -3m) 975

Price/book 1.78

12 month high/low (AUD) 0.05/0.02

(%) 1m 3m 12mSUD (7.1) (13.3) (36.6)S&P 500 Index (5.0) (9.0) (7.0)

Price chart

Source: ReutersShare Price as at close:

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Business

www.sudaltd.com.au

Malvi Gupta

Senior Analyst+1 (212) [email protected]

Nitish Kapoor

Senior Analyst+1 (212) [email protected]

SUDA Limited (ASX: SUD)

BUY-SIDE PORTFOLIO SELECTION

February 5, 2016

- ArTiMist™ pre-referral trial plan presented to WHO

- Licensing deals for ZolpiMist® could be secured in

CY2016

- Expected to commence the pivotal study for SUD-001

in CY2016

- Submission of NDA in the US for SUD-001 in 2017

- Granted first US patent for SUD-003 and SUD-004

- $3.4 mill ion in cash on hand as of 12/31/15

- Raised $5.3 mill ion in gross proceeds in April 15

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SUDA Limited|05 February 2016 Table of contents

2 Alpha Deal Group Intelligence

Table of Contents

Investment Summary 3

Investment Risks 5

Oro-Mucosal Drug Delivery Overview 7

Company Overview 11

Product Portfolio 13

Investment Thesis 24

Valuation 28

Management 30

Board of Directors 32

Clinical Advisors 33

Financials 35

Share Price 36

Disclaimer and Notes 37

SUDA Limited|05 February 2016 Investment Summary


Investment Summary

SUDA is a drug delivery company focusing on reformulating existing drugs into an oral spray for delivery through the oral mucosa. The Company utilizes its proprietary OroMist® oro-mucosal drug delivery technology to develop low-risk, innovative pharmaceuticals that improve the health and lifestyle of patients. The potential benefits of administering drugs through the oral mucosa, which is the moist lining of the oral cavity (i.e.: cheeks, tongue, gums and palate), include ease of use, lower dosage, reduced side effects and faster response time.

SUDA’s product pipeline includes ZolpiMist®, a first-in-class oral spray of zolpidem (Ambien®) for insomnia. ZolpiMist® is marketed in the USA and the Company has recently amended its agreement with Amherst to expand territorial rights to the product to include South America, Central America, and South Africa, as a result, SUDA now has a global license, excluding North America. Expanded rights to the product are expected to open more opportunities for sub-licensing deals. Given that ZolpiMist® is approved for use in the US market, no further clinical development may be required for registration in most other countries.

The Company’s most advanced development-stage product is a first-in-class sub-lingual spray, ArTiMist™, for treatment of malaria in children. The active anti-malarial in ArTiMist™ is artemether, which is widely used in other formulations. ArTiMist™ has been shown to provide a more consistent dose response and avoids the first pass effect associated with oral artemisin in-based monotherapies. The Company has successfully completed a Phase III trial of ArTiMist™ in severe pediatric malaria across multiple African countries. The Company is preparing a regulatory submission and aims to commercialise the programme through a partnership or divestment.

SUDA has IP covering over 300 widely-used APIs formulated into oro-mucosal sprays. The Company’s development pipeline includes oral sprays of sumatriptan for migraine (SUD-001); ondansetron for chemotherapy-induced nausea and vomiting (SUD-002); sildenafil for erectile dysfunction (SUD-003) and PAH (SUD-004); and midazolam for pre-procedural anxiety (SUD-005).

SUDA has a fully owned subsidiary, Westcoast Surgical and Medical Supplies Pty Ltd (Westcoast), which provides medical supplies to Australian leading hospitals, aged care facilities, pharmacies, mining companies and other healthcare providers. Westcoast generated revenue of $5.7 million in FY2015.

On October 8, 2015, the US Patent and Trademark Office allowed SUDA’s first US patent application for its sildenafil based products, SUD-003 and SUD-004.The allowed claims cover the administration of



sildenafil, being the active pharmaceutical ingredient in SUD-003 and SUD-004, via oral spray formulations at a pH of between 1.5 and 2.4 for the treatment of sexual dysfunction induced by Selective Serotonin Reuptake Inhibitor (SSRI) anti- depressants and for the treatment of pulmonary arterial hypertension (PAH). The PAH market is forecast to grow at a CAGR of 5% and to reach $3.6bn in 2015 (source: Global Data Analysis).

We expect second half of FY2015/2016 to be much stronger period for SUDA due to its 2013 acquisitions made in the US and 2015 acquisition in the UK and also granting of more patent rights in the US and African countries and FDA approvals. Westcoast continues to be a strong player in the supply of medical consumables within the Aged Care, Allied Health, Mining and Hospital sectors in Western Australia. Further, we believe that the Company will achieve some value-adding milestones and licensing deals over the next few months that will add value to share price and a return for shareholders.



Risks to the Investment

Like any research driven pharmaceutical company, SUDA Limited (ASX: SUD) will face a number of challenges. The Company has adopted risk management framework which sets out the processes for the identification and management of risks across the Company. The nature and potential impact of risks changes over time. Below are the key risk areas that could have a material impact on the Company and the investors and its ability to achieve the objectives:

Regulatory and Licensing Risk: The clinical development, manufacturing, sales and marketing of the Company’s products are subject to extensive regulation by regulatory authorities in the United States, the United Kingdom, the European Union, Australia and elsewhere.

If the Company does not obtain the necessary regulatory approvals it will be unable to commercialize its pharmaceutical products. Even if it receives regulatory approval for any product candidates, profitability will depend on its ability to generate revenues from the sale of its products or the licensing of its technology.

Despite the substantial time and expense invested in preparation and submission of a Marketing License Application or equivalents in other jurisdictions, regulatory approval is never guaranteed.

Success of future trials: Ongoing and future clinical trials of the Company’s product candidates may not show sufficient safety or efficacy to obtain requisite regulatory approvals for commercial sale.

The majority of SUDA’s products are being developed under 505 (b)(2) regulatory pathways

Less expensive

Less time

Less cost

Key personnel and contractor reliance risk: The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

To the extent the Company relies significantly on contractors, it will be exposed to risks related to the business conditions of its contractors.



Future funding requirements: The Company may require substantial additional financing in the future to sufficiently fund its operations and research. It has been incurring losses and will continue to do so as it expands its drug development programs. The Company’s actual cash requirements may vary from those now planned and will depend upon many factors, including:

the continued progress of its research and development programs

the timing, costs and results of clinical trials

the cost, timing and outcome of submissions for regulatory approval

the commercial potential of its product candidates

the status and timing of competitive developments

the timing of licensing deals, upfront payments, milestone payments and royalties

SUDA Limited|05 February 2016 Oro-Mucosal Drug Delivery


Oro-Mucosal Drug Delivery Overview

Oral Route

Among the various routes of drug delivery, the oral route is perhaps one of the most studied and preferred by patients and clinicians. About 70% of drugs are administered orally, primarily in tablet or capsule form. However, there are a number of disadvantages associated with the solid-oral administration such as hepatic first-pass metabolism and enzymatic degradation within the gastrointestinal (GI) tract, which cause a relatively lengthy onset time and/or erratic absorption patterns. Furthermore, patients must be conscious and able to swallow (40% of US adults and 54%of children (6-11 years) report swallowing difficulties) and in most cases need to have access to drinking water.

Oral Mucosa

The oral cavity is an attractive site for the delivery of drugs. Its attractiveness resides in the fact that the oro-mucosal membrane is readily accessible to patients and/or carers, the high vascularisation promote a fast onset of action, and avoids the hepatic and intestinal degradation mechanisms. There are numerous pharmacologically active compounds that could benefit from improved delivery attributes as they present poor oral bioavailability due to poor aqueous solubility, degradation within the GI contents, poor membrane permeability, or pre-systemic metabolism.

Pharmaceutical Industry & Drug Delivery: A Changing Landscape

Over the past decade, the pharmaceutical industry landscape has seen the gradual shift from one blockbuster drug to multiple niche treatments that offer better outcomes for patients. Emerging markets are expanding and are firmly included in the global pharmaceutical landscape. Originators are acquiring generic manufacturers and big pharmaceutical players are putting their house in order to adapt to the new norm, i.e. thinning pipelines, patent cliffs, increasing development costs and regulatory hurdles.

Small and large pharmaceutical companies are increasingly outsourcing significant portions of their R&D, manufacturing and corporate processes and rely extensively on partnerships and alliances. Over the next five years, the US market is expected to grow between 0% and 3% and an increasing number of generics firms are expected to enter the top 50 global pharmaceutical companies. In the US, 86% of dispensed prescriptions in 2013 were generics. Part of this changing landscape has been also the surge of interest in novel drug delivery technologies and systems. Until not long ago drug delivery was considered of lesser importance in the development process of a pharmaceutical, despite the fact that without an adequate delivery technology a drug is next to useless. In recent years the market has evolved with the development of



drugs and delivery systems being integrated at each step of the way from the pre-clinical to clinical stage, and in so doing optimizing both the commercial and therapeutic drivers. The North American drug delivery technologies market was valued at $66.7bn in 2012 and is poised to reach $102.2bn by 2017.

The pharmaceutical industry continues to take advantage of drug delivery technologies in its efforts to add years to product revenue streams. Although there are a number of approaches available to companies to manage the lifecycle of products, those who have pursued drug delivery approaches have proven to be more effective than most, particularly when patient/clinical benefits are apparent. New formulation strategies have been shown to deliver the best return on investment, proving significantly more effective than an OTC/branded generic route, repositioning, or a new indication.

Additionally, it is estimated that between 60 and 70% of New Molecular Entities (NMEs) potentially exhibit sub-optimal drug delivery characteristics. The balance between ‘perfection’ and ‘good enough’ in clinical development is allowing for less than ideal bioavailability or delivery properties, which are tolerated to reduce clinical complexity and increase speed to market. Perhaps it is not a coincidence that two thirds of product launches under-perform expectations.

Reformulations: a shortcut to market

Development timelines of reformulated drugs can be considerably shorter (3-7 years) when compared to the development of a New Chemical Entity (NCE) which can be over 13 years from discovery to approval, and the development risks are considerably lower than a NCE due to the extensive amount of pre-existing data.

In the USA, the regulatory pathway for approval of reformulations falls under the abbreviated FDA 505(b) (2) legislation. In Europe, there is an analogous legislation, which is based on a hybrid application under Article 10(3) of Directive 2001/83/EC and successive amendments. Applications through either the FDA 505(b)(2) pathway or the EMA hybrid process can leverage the safety and efficacy data generated for the formulations already approved and can rely solely on data showing comparable bio availability to the reference drug.

OroMist® Technology

SUDA’s OroMist® technology can deliver a broad range of drug classes in the form of a liquid micro-mist through the cheeks, gums, tongue or floor of the mouth.

The technology is compatible with, and patented for, use in either pump (air-activated) or aerosol (propellant-driven) spray systems, and can be



provided in either multi-dose or unit dose containers based on the medical need and marketing requirements for each product.

The technology and delivery route can provide meaningful benefits compared to other modes of drug administration, including:

provide faster onset of action;

reduce the dose level;

increase bioavailability of the drug by avoiding first pass metabolism in the liver;

minimize dose variation related to gastrointestinal tract motility;

enhance patient compliance and convenience;

avoid the need to swallow, a commonly encountered problem by many individuals;

allow for the medication to be taken without water;

facilitate self-medication; and

decrease the need of medical personnel.

Drug delivery via the oral mucosa can minimize dose variation related to gastrointestinal tract motility, stomach emptying time, food effects, tablet/capsule disintegration and dissolution and enzymatic or chemical degradation in the gut. Due to decreased degradation and higher absorption, oral sprays often permit the use of a lower dose of the active ingredient compared with tablet formulations of the same drug, potentially reducing the risk of adverse drug reactions.

In many cases, including treatments for patients with difficulty swallowing or nausea, oral spray administration provides enhanced convenience resulting in greater compliance. In fact, swallowing problems (known asdysphagia) are extremely common with an estimated prevalence as high as 22% in those over 50 years of age. Approximately, 10 million Americans are evaluated each year with swallowing difficulties. Furthermore, many children, whilst trained to take tablets, have difficulty swallowing them without water.



Bioavailability in excess of 90% via the oral mucosa

Source: SUDA, Alpha Deal Group

The graph above highlights the bioavailability, or measure of drug absorption, of SUDA’s OroMist® technology as compared to alternative routes of delivery.

Oro-Mucosal Delivery Comparable Deals

Collaboration/trade sale deals are usually structured with multiple payments:

Upfront payment on signature

Milestone payments on clinical and regulatory events

Milestone payments on achieving sales targets and royalties on sales

Note 1: Trade sale deals do not include royalties


100% 95%

90% 90%

50% 45%

30% 20%

10%

>

SUDA Limited|05 February 2016 Company Overview


Company Overview

SUDA Limited(ASX: SUD) is a drug delivery company utilizing its proprietary OroMist® oro-mucosal drug delivery technology to develop low-risk oral sprays using novel formulations of existing off-patent pharmaceuticals. The Company’s lead products include Zolpimist® and ArTiMistTM. The Company’s development pipeline includes oral sprays of sumatriptan for migraine (SUD-001); ondansetron for chemotherapy-induced nausea and vomiting (SUD-002); sildenafil for erectile dysfunction (SUD-003) and PAH (SUD-004); and midazolam for pre-procedural anxiety (SUD-005). SUDA has IP covering over 300 widely-used APIs formulated into oro-mucosal sprays.

The Company is headquartered in Western Australia, Australia and employs c.27 people.

The Company operates through three segments including:

SUDA: Engages in research and development to create new human pharmaceutical products by combining proven drugs with innovated, patented, delivery technologies

Westcoast Surgical & Medical Supplies (Westcoast): Westcoast is a wholly owned subsidiary of SUDA, which provides medical supplies to Australian leading hospitals, aged care facilities, pharmacies, mining companies and other healthcare providers

Malaria Research Company (MRC): MRC is a subsidiary 100% owned by SUDA that holds the global rights to ArTiMist™

Business Model

The Company’s business model is to develop low-risk pharmaceuticals using novel formulations of existing drugs that are off patent. The Company re-formulates these drugs to provide patentable products or line extensions for existing franchises.

The Company has adopted a business model for its OroMist® technology, in which the Company is focused on its core competencies of formulating and developing its oral sprays. SUDA does not intend, at this stage of its evolution, to establish its own sales and marketing operations. The Company aims to partner or out-license its pipeline of oral sprays in all territories.

SUDA Limited|05 February 2016 Company Overview


Key Subsidiaries

Westcoast Surgical & Medical Supplies (Westcoast): Westcoast

operates as a wholly owned subsidiary of SUDA. The Company is

engaged in sales and logistics for medical devices and consumables to

hospitals, aged care centres, pharmacies, mining companies and other

health care providers.

The Company’s revenue in FY15 decreased to $5.7m from $8.8m in the

previous year, reflecting the loss of business from supplying medical

consumables to the detention centres, which generated exceptional

revenue in excess of $4m in FY2014. In FY2015, Westcoast has taken

further steps to enhance its profitability by reducing headcount and

inventory. This restructuring is expected to have a positive effect on the

net margin in FY2016.

Malaria Research Company (MRC): MRC is an Australian-incorporated

wholly owned subsidiary of SUDA, engaged in oro- mucosal drug

delivery. MRC owns the intellectual property and global rights to

ArTiMist™, the world’s first sublingual spray for the treatment of p.

falciparum malaria. MRC has successfully completed clinical

development of ArTiMist™ including a pivotal Phase III trial of ArTiMist™

in severe pediatric malaria.

SUDA Europe Limited: In August 2015, the Company formed a new

wholly owned subsidiary in the UK, primarily to access the grants

available within the European Union.

SUDA Limited|05 February 2016 Product Portfolio


Product Portfolio & Timeline

*SUDA has an exclusive global license to ZolpiMist® excluding North America


ZolpiMist®: Oral spray for insomnia

ZolpiMist® is a cherry-flavoured, oro-mucosal spray formulation of zolpidem tartrate (marketed under the brand name of Ambien or Stilnox), a non-benzodiazepine prescribed for the short-term treatment of insomnia characterised by difficulties with sleep initiation, as per Ambien’s approved indication. It is a first in class oral spray of zolpidem (Sanofi’s Ambien® or Stilnox® tablet) for treatment of insomnia. It has been approved by the FDA and licensed to SUDA for the world excluding North America in December 2015. The spray was successfully evaluated in >80 patients showing bioequivalence to tablets.

The spray offers quicker sleep onset latency, patient convenience, and ease of use compared to conventional tablets. Zolpidem tartrate is the most widely prescribed sleep aid on the market with a market share in excess of 70%.The global insomnia therapeutic market is forecast to reach US$2.1bn in 2017.

Collaboration with Amherst Pharmaceuticals

In December 2015, SUDA amended its previously existing cross-licence agreement with Amherst Pharmaceuticals (Amherst), a US specialty pharmaceutical company to commercialise Amherst’s ZolpiMist® and SUDA’s oral spray of ondansetron (SUD-002) for the treatment of nausea and vomiting induced by chemotherapy or radiotherapy. Under the terms of the agreement, SUDA received an exclusive licence to manufacture, develop and commercialise ZolpiMist® in all territories



excluding North America. As per the cross- licensing agreement signed in January 2015, SUDA will pay Amherst a 6 to 12% share of income form SUDA’s commercialization of ZolpiMist® in the original territories. In the countries newly added (South America, Central America and South Africa) to the licensing agreement with Amherst, the companies will share equally the proceeds from commercialization of ZolpiMist®. Business development discussions with prospective partners are progressing in several countries, including in the expanded territory.

ZolpiMist®: % of subjects achieving early detectable & sedation associated (≥ 20 ng/ml) plasma concentrations


The zolpidem active drug was absorbed significantly quicker when administered with the ZolpiMist® spray compared to the tablet.

ZolpiMist®: Plasma concentration within the first 30 minutes




ZolpiMist® achieved therapeutic plasma levels within 15 minutes post dosing suggesting a faster onset of sedation as compared to c.30 minutes for the tablet

ZolpiMist®: Plasma concentration over a 12 hour period


Faster absorption of ZolpiMist® suggesting faster onset of action vs. Ambien. ZolpiMist® has the same 7-8 hour duration of sedation, but with quicker onset compared to the tablet

ZolpiMist®: Sleep response


ZolpiMist® achieved a statistically significant reduction in ‘alertness’ as compared to the tablet at 13 minutes post dosing



ZolpiMist®: Business Development

ZolpiMist® is a first-in-class oral spray of zolpidem (Sanofi’s Ambien or Stilnox® tablet) for treatment of insomnia

Has been approved by the FDA and licensed to SUDA for the world excluding North America in December 2015

Rapidly absorbed with detectable plasma levels immediately following administration

Global sleeping tablet market is approx. $2.1bn

Requires no further development work for approval in most countries

Market applications may be filed within 12 months There is significant interest in ZolpiMist® from pharma companies due to its advantages versus tablets and the fact that the product is ready for registration in most countries

ArTiMist™: Anti- malarial sublingual spray

ArTiMist™ is a sublingual spray for the treatment of p. falciparum severe paediatric malaria. The active pharmaceutical ingredient in ArTiMist™ is artemether, which is a widely used anti-malarial and is currently administered by infusion or orally in a tablet form. The simple sublingual spray could be particularly valuable as a pre-referral treatment when children first show signs of a malaria-like fever, before being referred to hospital. ArTiMist™ is owned and managed by SUDA’s subsidiary company, Malaria Research Company Pty Ltd (MRC). ArTiMist™ has been successfully evaluated in four clinical studies

Completed Phase III trial vs. intravenous quinine for severe paediatric malaria

150 children from multiple sites in Africa

Conducted to highest standards for use in worldwide regulatory submissions

Primary endpoints were achieved showing superiority to quinine

>90% parasite reduction at 24hrs: 96% of ArTiMist™ patients vs. 41% of quinine patients

Total parasite clearance: 30 hours with ArTiMist™ vs. 86 hours with quinine

Indicators of parasite clearance were also significantly superior for children treated with ArTiMist™ than those treated with quinine In July 2015, the MRC’s intellectual property estate for ArTiMist™ was strengthened by the grant of a key patent in Africa. The patent was issued by the African Regional Intellectual Property Organisation (ARIPO), which is an intergovernmental organisation, comprising 19 African states, including the major countries in malaria-endemic Sub-Saharan Africa. The patent covers the pharmaceutical composition of



ArTiMist™, the route of delivery, the device and methods for the treatment of uncomplicated and complicated malaria. It expires in 2026. SUDA took full control of ArTiMist™ in August 2015 following the acquisition of the 20% minority shareholding in MRC, which was owned by UK-based ProtoPharma Ltd and its parent London Pharma Ltd. SUDA acquired the 20% shareholding for A$1.2m. As a result of this acquisition, SUDA now owns 100% of the ArTiMist™ asset with no further payment or royalty obligations to PPL and its parent organisation. Additionally, this acquisition represents an important step towards SUDA’s objective to commercialise ArTiMist™ through a commercialisation agreement or a trade sale. SUDA has continued its dialogue with Medicines for Malaria Venture (MMV). They are assisting the Company in securing support for ArTiMist™ from global funds and groups such as the World Health Organisation (WHO). SUDA and the MMV aim to expand the market of ArTiMist™ from the treatment of severe paediatric malaria to its use as an early interventional pre-referral treatment. With the support of the MMV, SUDA aims to present the clinical protocol to the WHO for review and as a first step towards securing funding for the trial from global philanthropic groups. WHO will be the key customer for ArTiMist™ through its large-scale procurement of antimalarial therapeutics for public health use. SUDA has engaged with the WHO to accelerate the inclusion of ArTiMist™ in the WHO Guidelines for the treatment of malaria. The WHO has recommended that SUDA firstly seek registration of ArTiMist™ with a stringent regulatory authority in the developed world. In addition, SUDA aims to pursue the WHO Prequalification of Medicines Programme (PQP). PQP helps to ensure that medicines supplied by procurement agencies – such as UNICEF, the Global Fund to Fight AIDS, Tuberculosis and Malaria, and UNITAID - meet acceptable standards of quality, safety and efficacy. ArTiMist™: Progressing to registration

Expanding the use of ArTiMist™ as an early interventional ‘pre-referral’ therapy o WHO recognizes the importance of treating children before

referral to hospital o SUDA is working with key opinion leaders in the treatment of

malaria to design a pre-referral trial o Support from Medicines for Malaria Venture to present trial

plan to WHO

Secure clinical funding from group such as WHO and philanthropic funds

WHO reports 640,000 deaths from malaria annually



SUD-001: Migraine headache

SUD-001 is a first-in-class mint-flavoured oral spray formulation of sumatriptan (marketed in tablet form and in a nasal spray by GlaxoSmithKline under the brand name Imitrex®). Sumatriptan is one of the most widely used drugs for the treatment of acute migraine in adults and works by narrowing the blood vessels in the brain. The migraine market is c.$3.2bn, Sumatriptan has 50% market share. Two clinical trials have been conducted to evaluate SUD-001. The objectives of the trials were:

To determine whether sumatriptan can be absorbed across the oral mucosa, and, if so; then

To describe its pharmacokinetics (PKs); and

To investigate whether there are pharmacodynamic (PD) correlates of such PKs in patients experiencing migraine attacks

First Clinical Trial The first clinical trial included 10 healthy male volunteers in a four-arm, crossover PK study comparing the performance of the SUD-001 (20mg and 30mg in fasting conditions, and 20mg in non-fasting conditions) with the 50mg sumatriptan tablet. The study demonstrated a statistically significantly faster rate of absorption with SUD-001 than tablets and up to a 50% increase in relative bioavailability of sumatriptan. The rate of drug absorption is believed to be predictive of the degree and speed of migraine relief. The initial PKs of SUD-001 approximate to those of a subcutaneous injection. Although Imitrex® nasal spray was not included in this clinical study, time to the first peak plasma concentration of sumatriptan was c.70% faster with the 20mg dose of SUD-001 than has been reported in the literature for the same dose of Imitrex® nasal spray. In addition, the mean concentration level achieved during this critical first phase of absorption was approximately 30% greater for SUD-001 than has been observed in published studies of the nasal spray.

Second Clinical Trial The second clinical trial evaluated efficacy and safety in migraineurs. This was a multi-centre, active control, open-label, dose-ranging study. All dosing was done on an outpatient basis and patients returned to the clinic between migraine attacks. Subjects received up to five treatments, comprising single doses of the following: sumatriptan 50mg and 100mg tablets, and SUD-001 20mg, 30mg and 40mg oral spray.



In the primary analysis of efficacy, the percentage of patients responding to treatment at or before 60 minutes post-dosing, the 30mg and 40mg dosages of SUD-001 provided a statistically significant greater reduction in headache pain compared to the 50mg tablet (42% and 46%, respectively, vs. 12%; P≤0.011), and were comparable to the higher (100mg) dose of the tablet formulation (42%). Significantly more patients responded to all three doses of SUD-001 than to 50mg sumatriptan tablet by 90 minutes post-dosing (57% to 70% vs. 32%; P≤0.028), and all three SUD-001 doses were comparable to the 100mg tablet. Overall, these results indicate that SUD-001 at doses of 30mg and 40mg may be significantly more effective than the 50mg sumatriptan tablet in reducing pain and other symptoms associated with migraine headaches and produce a degree of relief that is qualitatively similar to the 100mg sumatriptan tablet.

Achievements: FY15

Completed the development of a second generation formulation incorporating an improved taste

In April 15, the Company appointed two leading headache specialists to its Clinical Advisory Board to provide advice and guidance on the pivotal development plan and seek acceptance by the US Food and Drug Administration (FDA)

In June15, the Company submitted a Type C meeting briefing package to the FDA containing details of the proposed pivotal study of SUD-001 and other data required for a New Drug Application (NDA) in the USA

In August 15, the Company announced the receipt of the written response from the FDA regarding the development plan. The FDA acknowledged SUDA’s proposed development strategy and requested only minor justifications to the study design

SUDA’s development strategy is to accelerate the registration, under the 505(b) 2 legislation, of SUD-001 by utilising a PK approach, thus not requiring clinical efficacy studies in migraine patients. The trial is designed to support the submission of a NDA in the USA by the end of 2017. The FDA’s response keeps SUDA on track to commence the pivotal study in CY2016 and strengthens the Company’s negotiating position with prospective partners in the USA, Europe and elsewhere.



SUD-002: Chemotherapy-induced nausea and vomiting

SUD-002 is a first-in-class, mint-flavoured oral spray formulation of ondansetron (marketed in tablet form by GlaxoSmithKline under the brand name Zofran®), antiemetic to treat nausea and vomiting induced by chemotherapy or radiotherapy and also in post-operative settings. SUD-002 achieves therapeutic drug levels by delivering a micro-mist of concentrated ondansetron over the oral mucosa and may offer a desirable alternative to patients requiring antiemetic therapy who have difficulty in swallowing. The global anti-emetics market is estimated to reach US$4.6bn in 2018. The product has been evaluated in over 300 patients in multiple clinical trials. These included four randomized studies in which the PK profile of SUD-002 was compared with ondansetron tablet in about 100 subjects, including both men and women. The studies successfully demonstrated that SUD-002 at an 8mg dose was statistically bioequivalent to the current commercially available 8mg ondansetron tablet. In addition, SUD-002 delivered statistically faster absorption as defined by median time to detectible drug levels of ondansetron at 15 minutes versus 30 minutes for the tablet. SUDA aims to have a pre-NDA meeting with FDA in 2016 to discuss a proposed regulatory submission of SUD-002 in the US. The Company has also strengthened its intellectual property in North America with the allowance of a patent in Canada that provides protection over the novel anti-emetic oral spray until 2026. SUDA has had approaches from several US-based pharmaceutical companies that are interested in licensing SUD-002 for North America, subject to the outcome of pre-NDA meeting.

SUD-003: Erectile Dysfunction

SUD-003 (DuroMist™) is a first-in-class oral spray formulation of sildenafil (marketed in tablet form by Pfizer under the brand name Viagra®), sprayed directly in the mouth over the tongue for the treatment of erectile dysfunction (ED). The DuroMist™ dosage form is a metered spray that offers the potential for increased patient convenience, reduced food effect and lower dose. Sildenafil is the largest selling drug globally for ED and is also approved to treat pulmonary arterial hypertension (PAH). The Company’s first-generation formulation of SUD-003 has been evaluated in a pilot PK clinical trial comparing the oral spray to the Viagra® tablet. The results from the trial successfully demonstrated that SUD-003 had superior bioavailability compared to the tablet with respect to systemic exposure.



SUDA’s scientists have developed a second-generation formulation with enhanced permeation characteristics and mint flavouring, thus providing a pleasant taste. The data from in-vitro studies show that the second-generation oral spray is absorbed more rapidly and efficiently than the original formulation. This suggests that the new formulation has the potential for a quicker onset of action, which would greatly enhance the market opportunity for SUD-003. Achievements: FY15

In January 15, the Company was granted its first patent for SUD-003 in Australia and then in New Zealand. The patent provides broad protection of SUDA’s first-in-class sildenafil spray until 2031 and is pending in other major jurisdictions

In June 15, the Company appointed three leading erectile dysfunction specialists to its Clinical Advisory Board (CAB). These experts are providing advice and guidance on the pivotal development plan, which will be submitted to the FDA for review at a Type C meeting

In October 15, the Company has been granted its first patent in the US for the treatment of SSRI- induced erectile dysfunction and PAH

SUD-004: Pulmonary Arterial Hypertension (PAH)

SUD-004 is based on the DuroMist™ oral spray formulation of sildenafil and is designed to treat pulmonary arterial hypertension (PAH) in adults. With PAH, the blood pressure in the lungs is too high and the heart has to work hard to pump blood into the lungs. Sildenafil is marketed in tablet form as Revatio® by Pfizer. SUD-004 is formulated such that each actuation delivers 10mg of sildenafil, which is sprayed directly in the mouth over the tongue. The recommended dose of Revatio® for treatment of PAH is 20mg (one tablet) taken three times a day.

The PK data generated with DuroMist™ successfully demonstrated that the 20mg dose (two sprays) of sildenafil was effectively absorbed through the oral mucosa. Also, DuroMist™, and thus also SUD-004, demonstrated an excellent safety profile and was well tolerated in the PK study at all dose levels.

Sales of therapies to treat PAH, a rare but life threatening disorder, reached $4.5bn in 2013.In October 15, the Company has been granted its first patent in the US for the treatment of pulmonary arterial hypertension.



SUD-005: Pre-procedural anxiety and epileptic seizures

SUD-005 is a first-in-class strawberry and mint-flavoured oral spray formulation of midazolam (available as an injection and as a syrup under the brand name Versed or Buccolam for the treatment of pre-procedure anxiety in imaging and dental procedures and also in the treatment of epileptic seizures. Initial formulation work of SUD-005 has been completed and stability studies have been successful.

Midazolam is one of the most frequently used agents for sedation in paediatric dentistry, imaging and pre medication in adults due to its potent anxiolytic, amnestic, and sedative properties. The market size for treatments of pre-procedure anxiety is estimated to be US$150-170mn. The epilepsy therapeutics market value in the top eight countries is expected to increase from US$3.4bnin 2012 to US$4.5bn by 2019.

Initial formulation work of SUD-005 has been completed and stability studies have been successful

One major advantage of the SUD-005 oral spray compared to an oral syrup or a tablet is the possible avoidance of first pass metabolism. This offers advantages such as an increase in the bioavailability of the drug, a reduction in dose variability; and more predictable pharmacological effects.

Guidance: Key anticipated events Anticipated Event Guidance

ArTiMist™ pre- referral trial plan presented to WHO Q3 FY2016

SUD-003 development plan presented to FDA Q3 FY2016

Pre- NDA meeting for SUD-002 with FDA Q4 FY2016

Commence manufacturing of SUD-001 clinical batches Q3 FY2016

Initiate SUD-001 pivotal PK study Q4 FY2016

Initiate SUD-003 proof of concept PK study Q4 FY2016

Interim clinical results from SUD-001 pivotal PK study End FY2016

Clinical results from SUD-003 proof of concept PK study End FY2016

Out licensing deals for in- house pipeline of oral sprays FY2016




ArTiMistTM SUDA is finalising the design of a pivotal clinical trial of the Company’s antimalarial sublingual spray, ArTiMist™, as an early interventional treatment in the pre- referral setting of paediatric malaria. The trial protocol will be presented to WHO as a first step towards securing funding for the trial from global philanthropic groups. Negotiations with a number of pharmaceutical companies regarding ArTiMist™ are progressing. However the board remains confident in securing a deal that provides a significant return on the Company’s investment in the programme. ZolpiMist® The Company’s discussions are rapidly advancing with speciality pharmaceutical companies in Asia, Europe and Latin America who are interested in licensing this novel US – approved oral spray for the treatment of insomnia. SUD-002 SUDA aims to have a pre-NDA meeting with FDA in 2016 to discuss a proposed regulatory submission of SUD-002 in the US. The Company has also strengthened its intellectual property in North America with the allowance of a patent in Canada that provides protection over the novel anti-emetic oral spray until 2026. SUDA has had approaches from several US-based pharmaceutical companies that are interested in licensing SUD-002 for North America, subject to the outcome of pre-NDA meeting. SUD-001 The FDA reviewed SUDA’s pivotal development plan in CY2015. The Company has responded to the FDA’s comments. In CY2016, SUDA aims to secure a US partner to support the ongoing development and registration of SUD-001. SUD-003 At the request of SUDA’s prospective pharmaceutical partners, the Company is designing a development plan for the second generation formulation, which will presented to the FDA in CY2016 at a Type C meeting. This again will add value to the product and assist SUDA’s partnering discussion

SUDA Limited|05 February 2016 Investment Thesis


Investment Thesis

Strategy

SUDA has established a world leading oro-mucosal drug delivery platform with its OroMist® technology and a broad pipeline of novel

first-in-class oral sprays. SUDA has adopted a classic business model for its OroMist® technology, in which the Company is focused on its core competencies of formulating and developing its oral sprays. SUDA does not intend, at this stage of its evolution, to establish its own sales and marketing operations. The Company aims to partner or out-licence its pipeline of oral sprays in all territories.

The Company is also working towards a partnership or divesture of its anti-malarial spray, ArTiMist™, to a major pharmaceutical company. ArTiMist™ is primarily positioned for public markets, where it will be available for large-scale procurement of anti-malarial drugs by groups such as the World Health Organisation.

SUDA aims to strengthen its capital resources from the divestiture of projects and/or partnering activities and non-dilutive financing by applying for grants. In addition, SUDA is pursuing collaborations to reformulate partner companies’ current or developmental drugs, or to extend their life cycle by developing novel OroMist® formulations with new intellectual property.

OroMist® Technology

SUDA’s OroMist® technology can deliver a broad range of drug classes in the form of a liquid micro-mist through either the cheeks, gums, tongue or floor of the mouth. The technology is compatible with, and patented for, use in either pump (air-activated) or aerosol (propellant-driven) spray systems, and can be provided in either multi-dose or unit containers based on the medical need and marketing requirements for each product. The technology and delivery route can provide meaningful

benefits compared to other modes of drug administration, including: provide faster onset of action; reduce the dose level; increase bioavailability of the drug by avoiding first pass metabolism in the liver; and others.

Delivery of Drugs through the Oral Mucosa

SUDA reformulates pharmaceuticals into oral sprays for delivery of the drug through the oral mucosa. About 70% of drugs are administered orally, primarily in tablet or capsule form. However, there are a number of disadvantages associated with the solid-oral administration such as hepatic first-pass metabolism and enzymatic degradation within the gastrointestinal (GI) tract, which cause a relatively lengthy onset time and/or erratic absorption patterns. Furthermore, patients must be conscious and able to swallow (40% of US adults and 54% of children (6-



11 years) report swallowing difficulties). The oral mucosa is the lining of the mouth. It has been shown that delivery through the oral mucosa provides more effective delivery of the drug with the drug being delivered faster, reduced dosage of API required and it avoids the need to swallow or be taken with water. The oral spray formula provides pharmaceutical companies with a treatment that avoids the need for patients to swallow tablets.

Oral Sprays for Mainstream Markets

The Company currently has five products in addition to ArtiMistTM and ZolpiMist® that it is developing for the US and RoW markets. The oral sprays are developed using oro-mucosal technology. SUDA is targeting markets with significant potential including: migraine which is expected to grow to US$5.8bn in 2021 from US$3.2bn currently; chemotherapy, radiotherapy and post-operative induced nausea and vomiting market is estimated to be in excess of US$2B; erectile dysfunction market which is estimated to be approx. US$4.1bn; pulmonary arterial hypertension (PAH) market which is forecasted to reach $3.6bn by the end of 2015; as well as pre-procedure anxiety market which is estimated to be US$150-170mn.

Licensing and collaboration agreement with Amherst

In December 2015, SUDA amended its previously existing cross-licence agreement with Amherst to commercialise ZolpiMist® and SUDA’s oral spray of ondansetron (SUD-002). Under the terms of the agreement, SUDA received an exclusive licence to manufacture, develop and commercialise ZolpiMist® in all territories excluding North America. Expanded rights to the product are expected to open more opportunities for sub-licensing deals. Business development discussions with prospective partners are progressing in several countries, including in the expanded territory.

We believe ZolpiMist® is a significant value proposition because no further development work is required for approval in most countries. Market applications may be filed within 12 months. In a comparable deal - Orexo AB received USD20m upfront for a sublingual tablet of zolpidem and an anti-histamine nasal spray. This global deal indicates the potential value of the Company’s oral spray of ZolpiMist®.

SUDA takes full control of Malaria Research Company

SUDA acquired the remaining 20% stake in Malaria Research Company (MRC) from the UK based ProtoPharma Ltd (PPL) and its parent London Pharma Ltd (LPL) for A$1.2m. The payment is in full and final settlement of all outstanding liabilities between the two companies. Also PPL and LPL have agreed not to compete with MRC’s ArTiMist™ spray. MRC owns the rights to SUDA’s novel sublingual anti-malarial spray, ArTiMist™. This acquisition is an important step towards SUDA’s objective to commercialize ArTiMist™ through a collaboration or trade sale. SUDA



now owns 100% stake in ArtiMist™ with no further payment or royalty obligations to PPL.

Received Positive Response from FDA Regarding SUD-001 Development Plan

The Company has received a written response from the US FDA regarding the development plan for the Company’s SUD-001 sumatriptan oral spray the treatment of migraine. The FDA’s constructive responses will keep the Company on track to secure a US partner to support the ongoing development and registration of SUD-001 in the US.

Granting of more patents in the US and African Markets

In October 2015, the US Patent and Trademark Office allowed SUDA’s first patent application for its sildenafil based products, SUD-003 and SUD-004, in the US. The allowed claims cover the administration of sildenafil, being the API in SUD-003 and SUD-004, via oral spray formulations at a pH of between 1.5 and 2.4 for the treatment of sexual dysfunction induced by SSRI anti- depressants and for the treatment of pulmonary arterial hypertension (PAH). The PAH market is forecast to grow at a CAGR of 5% and to reach $3.6bn in 2015 (source: Global Data).

In July 2015, the MRC’s intellectual property estate for ArTiMist™ was strengthened by the grant of a key patent in Africa. The patent was issued by the African Regional Intellectual Property Organisation (ARIPO), which is an intergovernmental organisation, comprising 19 African states, including the major countries in malaria-endemic Sub-Saharan Africa. The patent covers the pharmaceutical composition of ArTiMist™, the route of delivery, the device and methods for the treatment of uncomplicated and complicated malaria. It expires in 2026.

We expect second half of FY 2015/16 to be much stronger period for SUDA due to its recent acquisitions made in the US and UK and also granting of more patent rights in the US and African countries and FDA approvals. Westcoast continues to be a strong player in the supply of medical consumables within the Aged Care, Allied Health, Mining and Hospital sectors in Western Australia. Further, we believe that the Company will achieve some value-adding milestones over the next few months that will act as a catalyst to share price and a return for shareholders.

Peer Comparison

There are a number of biotech companies listed on the ASX, all undertaking research and development of drugs with the aim of commercialising the product, however, there are two companies which are directly comparable to SUDA - Imugene Limited (ASX: IMU) and Phosphagenics Limited (ASX: POH). Both IMU and POH have delivery technologies with which they are seeking to reformulate existing drugs.



IMU’s drug delivery platform “Linguet”, reformulates drugs into a tight pressed powder for delivery through the oral mucosa, while POH has developed a technology for the delivery of drugs through the skin. IMU and SUD are both reformulating drugs for delivery through the oral musoca, however the method of delivery is quite different. IMU’s Linguet platform delivers the drug through a melt-in-mouth tablet, compared to the oral spray delivery of SUD. We believe that SUD’s technology is superior given IMU’s tablet takes 45 seconds to dissolve. Further, the Board of Imugene Limited (ASX:IMU) has resolved to divest its interest in its delivery platform, Linguet™.

There are a number of international companies that have oral mucosal drug delivery technologies that compete with SUDA’s oro-mucosal technology. We believe that SUDA is extremely under-valued at its current market cap of $33 million relative to other companies given that the Company’s leading oro-mucosal drug delivery platform with its OroMist® technology and a broad pipeline of first-in-class oral sprays.

Source: Capital IQ, Alpha Deal Group

Company Headquarter Technology Delivery MethodMarket Cap

(AUDm)

Tesa Labtech Germany Rapidfilm Oral dissolvable film Private

CIMA Labs US OraVescent Oral disintegrating tablet Private

Monosol Rx US PharmFilm Oral soluble film Private

Corden Germany Sterile emulstion Oral film coated tablets, capsules Private

Catalent US Zydis Oral dissolvable tablet 4,791

BioDelivery Sciences

InternationalUS BioErodible MucoAdhesive Oral soluble film 424.5

Durect Corporation US Oradur Oral gel-cap 413.3

IX Biopharma Ltd. Singapore Waferix Oral dissolvable wafer 218.9

Oxford Pharmascience

Group Plc UK OXP chew, OXP zero Oral dissolvable tablet 139.2

IntelliPharmaCeutics

International Inc. Canada Hypermatrix Oral capsules 71.6

Alexza Pharmaceuticals Inc US Staccato Oral inhalation powder 26.5

Phosphagenics Limited Australia Targeted Penetration Matrix Oral Spray 17.7

Imugene Limited Australia Linguet Melt-in-mouth tablet 17.3

SUDA Limited|05 February 2016 Valuation


Valuation

We at Alpha Deal Group consider an investment in SUDA Limited (ASX: SUD) as a long-term wealth creation opportunity. We valued SUDA using revenue multiple analysis. We also compared SUDA with publicly traded peers operating in the Company’s core markets and found that the Company is extremely undervalued. We considered Australian competitors such as Phosphagenics, Imugene as well as international peers such as Catalent, Durect, BioDelivery Sciences International, IX Biopharma Ltd and others.

Our sales model for SUDA is primarily driven by assumptions regarding: 1) market size and penetration of the products, 2) royalty payment for each of the products in the event they are launched to market 3) actual compensation for the products if a licensing agreement is secured.

Source: Alpha Deal Group

Source: Capital IQ, Alpha Deal Group

We have used revenue multiple analysis due to the fact that SUDA has not yet reached profitability. Therefore, based on the average historical valuation multiples for the past four years, we applied 5.5x multiple to our 2017F revenues for EV/ Revenue multiple and 6.0x multiple to our 2017F revenues for P/ Sales multiple, we arrived at a fair value range of $0.238 to $0.258 per share. We then applied a 10% discount rate to lower end of the fair value to arrive at a price target of $0.22.

Revenue Forecast

AUDm

12 months

Jun-30-2014A

12 months

Jun-30-2015A

12 months

Jun-30-2016F

12 months

Jun-30-2017F

12 months

Jun-30-2018F

Revenue 8.8 5.9 6.6 49.0 64.3

Growth Over Prior Year 115.3% (33.1%) 12.6% 642.4% 31.2%

Valuation Multiples based on Current Capitalization

12 months

Jun-30-2012A

12 months

Jun-30-2013A

12 months

Jun-30-2014A

12 months

Jun-30-2015A

TEV/Total Revenue 7.1x 7.0x 3.2x 4.8x

TEV/EBITDA NM NM NM NM

TEV/EBIT NM NM NM NM

P/Sales 7.7x 7.6x 3.5x 5.3x

P/Diluted EPS NM NM NM NM

P/BV 2.3x 2.6x 1.8x 1.8x

Price/Tang BV 2.3x 2.6x 1.8x 1.8x

SUDA Limited|05 February 2016 Valuation


Forecasted Revenue Analysis

Estimated 2017 Revenues (AUD million) 49.0

Year 2017

Fair Value Range (AUD) 0.238-0.258

Discount Rate 10%

Price Target (AUD) 0.22

Valuation Gap

Current market price (AUD) 0.03

Target price (AUD) 0.22

Potential Upside (Downside) 645%

We consider SUDA Limited (ASX: SUD) as a unique opportunity to benefit from the rapidly evolving drug delivery market. SUDA reformulates existing drugs into an oral spray for delivery of the drug through the oral mucosa. It is targeting mainstream markets which have significant potential such as migraine, malaria, chemotherapy-induced nausea, pulmonary arterial hypertension and pre-procedural anxiety, and erectile dysfunction. Further, licensing deals for ZolpiMist®, an oral spray for insomnia, could be secured in CY2016 and act as a catalyst for the Company’s share price. We are giving a Buy recommendation on the Company with a target price of $0.22.

SUDA Limited|05 February 2016 Management


Management Team

Stephen Carter (Managing Director & Chief Executive Officer)

Stephen Carter joined the Board of SUDA Ltd on 26 October 2010. He has extensive pharmaceutical industry experience and has held a variety of senior positions with listed public companies including roles as both Chairman and Director. Amongst his previous roles, Stephen was Chairman of ASX listed Hollista Colltech Ltd and DelMedica Ltd and he was MD of ASX-listed Solbec Pharmaceuticals Ltd. He has extensive contacts and experience in the financial markets and the pharmaceutical industry and is well equipped to lead executive management through the Company’s product commercialization phase. He is a member of the Risk & Audit Committee, Nomination Committee and HR & Remuneration Committee.

Joseph Ohayon (Chief Financial Officer, Company Secretary &

Director)

Joseph joined the Company in July 2010 as the CFO and in March 2011 he took over the role of Company Secretary and then became an Executive Director and member of the Board on 1 December 2012. He has over 20 years’ experience in financial roles including 12 years within health- related industries. He is a member of the Risk & Audit Committee, Nomination Committee and HR & Remuneration Committee. Joseph qualified as a Chartered Accountant in the UK and graduated with a Masters of Business Administration in International Business from Murdoch University in 2007.

Nick Woolf (Chief Business Officer)

Nick Woolf joined the Company in September 2013. He has over 20 years of experience in the biotechnology and pharmaceutical industry. He has a strong track record in structuring, negotiating and executing successful alliances, licensing agreements and M&A transactions as well as providing business development, management and strategic leadership to organisations. Nick was most recently CFO and VP, Corporate Development of Phylogica Limited based in Western Australia. Prior to Phylogica, Nick was Chief Business Officer of a leading UK-based biopharmaceutical company, Oxford BioMedica Plc. He began his career as a healthcare investment banker and was formerly head of European biotech equity research at ABN Amro. Mr. Woolf holds a MA in Chemistry from Oxford University and is a qualified accountant.

Carol Worth (Technical Manager)

Carol has been working in the area of drug delivery systems for over 25 years at various international companies. As a development chemist, she liaised between companies in USA, UK and Asia to develop oral

SUDA Limited|05 February 2016 Management


formulations of injectable peptide hormones. She has since been involved in the development of novel anticancer drugs and, most recently, topical pain relief formulations. She has extensive experience in the setting up and running of GMP accredited laboratories and development of robust products suitable for GMP manufacturing. Dr. Worth has a PhD in Natural Product Chemistry from the University of Western Australia.

SUDA Limited|05 February 2016 Board of Directors


Board of Directors

Michael Stewart(Chairman)

Michael Stewart joined the Board of SUDA Ltd on 11 June 2009 and was

appointed to the position of Chairman in January 2014. He has a broad

corporate and management background and has been extensively

involved in both the securities industry and in bilateral donor funded

and World Bank co-financed Aid Projects in under-developed countries.

He is a member of the Group’s Risk & Audit Committee, Nomination

Committee and HR & Remuneration Committee.

Stephen Carter (Managing Director & Chief Executive Officer)

Stephen Carter joined the Board of SUDA Ltd on 26 October 2010. He has extensive pharmaceutical industry experience and has held a variety of senior positions with listed public companies including roles as both Chairman and Director. Amongst his previous roles, Stephen was Chairman of ASX listed Hollista Colltech Ltd and DelMedica Ltd and he was MD of ASX-listed Solbec Pharmaceuticals Ltd. He has extensive contacts and experience in the financial markets and the pharmaceutical industry and is well equipped to lead executive management through the Company’s product commercialisation phase. He is a member of the Risk & Audit Committee, Nomination Committee and HR & Remuneration Committee.

Joseph Ohayon (Chief Financial Officer, Company Secretary &

Director)

Joseph joined the Company in July 2010 as the CFO and in March 2011 he took over the role of Company Secretary and then became an Executive Director and member of the Board on 1 December 2012. He has over 20 years’ experience in financial roles including 12 years within health- related industries. He is a member of the Risk & Audit Committee, Nomination Committee and HR & Remuneration Committee. Joseph qualified as a Chartered Accountant in the UK and graduated with a Masters of Business Administration in International Business from Murdoch University in 2007.

SUDA Limited|05 February 2016 Clinical Advisors


Clinical Advisors

SUD-001 Clinical Advisors: Migraine

Professor Fox: He is a physician with over 25 years’ experience in the

pharmaceutical industry with both large and small companies. His

industrial positions with large pharma included Glaxo Inc. in North

Carolina, where he led the US clinical development of oral, intranasal

and subcutaneous sumatriptan (Imitrex®; Imigran®) for migraine and

cluster headache. He is now a Visiting Professor at King’s College

London. He is a chartered biologist and a Fellow of the Royal College of

Physicians as well as its Faculty of Pharmaceutical Medicine; he is also

an Adjunct Associate Clinical Professor at the University of California,

San Diego. He is on the editorial boards of several journals, and co-edits

Principles and Practice of Pharmaceutical Medicine. Professor Fox has

published many research papers concerning migraine therapies,

pharmacokinetics, and other relevant topics.

Dr Roger Cady: He is a graduate of the Mayo Medical School and holds

board certification in Headache Medicine by the United Council for

Neurologic Subspecialties. Dr Cady founded the US-based Headache

Care Centre, which comprises a team of specialists in the integrated

treatment and care of patients with headache. In particular, Dr Cady has

been instrumental in developing the early intervention paradigm for the

treatment of acute migraine. He has authored/co-authored over 250

peer-reviewed articles, and in particular, he was the leading author on

the paper in JAMA that was the first to describe the therapeutic

properties of sumatriptan in a sound, large-scale clinical trial. Dr Cady

has written and contributed to numerous books, and co-edited Treating

the Headache Patient. He is a member of the Board of Directors for the

US National Headache Foundation.

SUD-003 Clinical Advisors: Erectile Dysfunction

Dr Pullman: He is a physician with over 25 years’ global experience

matured in both large and small pharmaceutical companies, handling

small molecules and biotechnology products across all phases of drug

development. His industrial positions included Pfizer, Eli Lilly and Sanofi-

Aventis where he set strategies and executed operational plans;

managed drug discovery and development; supported regulatory

approval and commercialisation of many drugs. He has co-authored

several scientific papers and contributed to numerous abstracts and

SUDA Limited|05 February 2016 Clinical Advisors


presentations for several International Societies. He is a Fellow of the

Royal Australian College of Physicians and a speaker in many R&D

forums on topics ranging from biomarker development and validation

through to clinical development strategies.

Associate Professor Eric Chung: He is a consultant urological surgeon

working in Brisbane Australia and a certified Fellow of the Royal

Australasian College of Surgeons (RACS) and Urological Society of

Australia and New Zealand (USANZ). He is the current Chair of the

Andrology Group in USANZ and serves on many national advisory

committees and international organisations. His main areas of interest

are urinary dysfunction and reconstructive prosthesis, as well as male

sexual and reproductive surgery. He actively runs several Phase 2 and 3

clinical trials, publishes extensively in peer-reviewed journals and book

chapters, and has been invited to speak at many national and

international meetings.

Dr Ralph: He is an internationally recognized urological micro surgeon

and an Honorary Senior Lecturer at the Institute of Urology and

Nephrology, University College London. He also teaches at the Royal

College of Surgeons Microsurgery for Anthologists. His main areas of

expertise are penile implants, total genital reconstruction, Peyronies

disease and male infertility. He is the chairman of the Steering Group,

Erectile Dysfunction Alliance, part of the Board of Trustees of the Sexual

Dysfunction Association and part of the Nominating Committee of the

European Society for Impotence Research. Dr Ralph has published

extensively, contributing to book chapters and scientific papers, and

regularly speaks at international events.

SUDA Limited|05 February 2016 Financials


SUDA Limited (ASX: SUD) Financials

All numbers are in (AUD 000's)

Income Statement Jun-13 Jun-14 Jun-15Revenues 4,066 8,753 5,728 Other income 4 - 136 Raw materials and consumables used (3,260) (6,113) (5,023) Employee benefits expense (1,259) (2,111) (2,470) Depreciation and amortisation expense (34) (67) (181) Finance costs (68) (159) (156) Other expenses (1,291) (2,545) (2,070)

Loss before income tax expense (1,842) (2,241) (4,036) Benefit from income taxes 174 180 658

Net Loss (1,668) (2,061) (3,378)

Balance SheetCurrent assets

Cash and cash equivalents 753 3,990 6,252 Other current assets 1,679 3,495 3,092

Total Current Assets 2,432 7,485 9,344 Property and Equipment, Net 117 312 389 Intangible assets, net 8,180 12,549 13,088

Total Assets 10,729 20,347 22,821

LiabilitiesTrade and other payables 2,877 2,480 1,795 Borrowings (Current) 562 - 1,725 Borrowings (Non Current) 600 1,875 -

Total Liabilities 4,039 4,355 3,520

EquityIssued capital 40,129 48,945 55,574 Reserves 75 570 628 Accumulated losses (33,513) (35,565) (38,932)

Shareholders equity 6,690 13,949 17,269 Non-controlling interests - 2,042 2,031

Liabilities and Shareholders equity 10,729 20,347 22,821

Cash flow statementOperating activities

Receipts from customers 4,242 8,849 6,298 Receipts for R&D tax incentive 304 174 188 Payments to suppliers and employees (6,114) (11,555) (9,630) Interest received 21 49 103 Finance costs (62) (132) (114)

Cash flow from operating activities (1,609) (2,615) (3,154) Investing activities

Payments for property, plant and equipment (78) (288) (282) Payments for intangible assets (833) (1,716) (996) Proceeds from sale or PPE 4 - 5

Cash flow from investing activities (907) (2,004) (1,273) Financing activities

Proceeds from issue of shares 1,001 6,394 6,986 Payments for share issue costs (13) (449) (296) Proceeds from borrowings 968 1,900 - Receipt of funds for future issue of shares 100 - - Repayments of borrowings (392) - -

Cash flow from financing activities 1,664 7,845 6,690 Cash flow for the period (853) 3,226 2,263

Cash at the beginning of the period 1,590 753 3,990 Effect of exchange rate fluctuations 16 12 (1)

Cash and cash equivalents at end of period 753 3,990 6,252

Annual

SUDA Limited|05 February 2016 Financials

36 Copyright © Alpha Deal Group, LLC 2014 All rights reserved

Share Price History

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0.25SUDA Limited 1-Year Stock Perfomance

Target Price: $0.22

SUDA Limited|05 February 2016 Disclaimer


Disclaimer

This material has been prepared by Alpha Deal Group, L.L.C. This document is for information and illustrative purposes only and does not purport to show actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action. Opinions expressed herein are current opinions as of the date appearing in this material only and are subject to change without notice. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not prove to be true, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No representation is being made that any account, product, or strategy will or is likely to achieve profits, losses, or results similar to those discussed, if any. No part of this document may be reproduced in any manner, in whole or in part, without the prior written permission of Alpha Deal Group, L.L.C, other than to your employees. This information is provided with the understanding that with respect to the material provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. Alpha Deal Group, L.L.C does not purport to and does not, in any fashion, provide broker/dealer, consulting or any related services. You may not rely on the statements contained herein. Alpha Deal Group, L.L.C shall not have any liability for any damages of any kind whatsoever relating to this material. You should consult your advisors with respect to these areas. By accepting this material, you acknowledge, understand and accept the foregoing.

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SUDA Limited|05 February 2016 Disclaimer


Analyst Certification

All of the views expressed in this report accurately reflect the personal views of the responsible analyst(s) about any and all of the subject securities or issuers. No part of the compensation of the responsible analyst(s) named herein is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the responsible analyst(s) in this report.

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