Acrux (ASX: ACR) Annual General Meeting. 10 November, 2016

Transcription

1 Acrux (ASX: ACR) Annual General Meeting 10 November,

2 Introduction: Ross Dobinson Non-Executive Chairman 2

3 Company review: Michael Kotsanis CEO & Managing Director 3

4 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. 4

5 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 5

6 FY 2016 outcomes Revenue Net Profit After Tax Cash Product approval Pipeline progress 2016: $28.6 million 2015: $25.4 million 2016: $13.0 million 2015: $11.1 million 2016: $29.4 million 2015: $23.1 million Lenzetto approved in European Union in 1H FY16 Milestones received 1H FY16 Lenzetto launched in numerous European markets in 2H FY16 Initiated and made solid progress on first three generic projects Encouraging progress on onychomycosis project formulations 6

7 Finance review: Tim Bateman CFO & Company Secretary 7

8 Full year earnings 2015/ /15 % Royalty 25,469 24, % Milestone 2,540 - n/a Other revenue % Revenue 28,557 25, % 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, % Income tax expense (5,111) (5,676) -10.0% Pofit after income tax 12,981 11, % Earnings per share 7.8 cents 6.7 cents +1.1 cents Cash reserves 29,360 23, % 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 8

9 Full year cash flow 2015/ /15 % Royalties received 25,668 25, % Milestones received 2,540 - n/a Interest received (19.4%) Other income received - 23 (100.0%) Total cash received 28,723 25, % 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 (91.4%) Cash at beginning of the year 23,068 25,775 (10.5%) 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 Cash at end of the year 29,360 23, % 9

10 Company review: Michael Kotsanis CEO & Managing Director 10

11 March-11 June-11 Septemb Decembe March-12 June-12 Septemb Decembe March-13 June-13 Septemb Decembe March-14 June-14 Septemb Decembe March-15 June-15 Septemb Decembe March-16 June-16 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 USD $M Axiron volume and market share Axiron Quarterly Net Sales 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 20% Axiron Market Share 150,000 FY15, FY16 TRx 15% 100,000 10% 5% 50,000 0% 0 Q3 Q4 Q1 Q2 Source: Axiron Net Sales, Eli Lilly; Axiron market share and prescription volumes, IMS 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

12 Lenzetto (estradiol) spray Launched in Europe 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 12

13 Growth Strategy Acrux is building a sustainable business model with a broader portfolio which leverages its existing topical expertise in compelling market segments 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 Measures of success: Portfolio with multiple products in various stages of development Valuable products licensed and commercialised Profitable and sustainable business 13

14 Total US pharma market size Aerosol Powders Other Topical Liquids Injectable Oral 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 $20 billion Source: Acrux analysis. IMS June 2015 MAT. US market sales. US$ Topically applied drugs generated sales of over $18 billion in Oral and injectable markets account for 84% of total market. 14

15 Topical Generic Portfolio US$9.6 billion US Transdermal and Topical market size Generic market sector Branded market sector US$8.5 billion US$440 million Initial Acrux portfolio ACR068 ACR071 ACR072 Source: IMS June 2015 MAT. US Transdermal and Topical generic and branded market segments 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 15

16 Acrux antifungal development Onychomycosis 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 is targeting best in class efficacy in an attractive growing market 16

17 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 17

18 Formal Business: Ross Dobinson Non-Executive Chairman 18

19 Resolution 1 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 19

20 Resolution 2 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 20

21 Resolution 3 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 21

22 Resolution 4 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 22

23 Resolution 5 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 23

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