Acrux Limited · ASX:ACR
Acrux — Shareholder Meeting (November 2015)
51 slides from Acrux's shareholder meeting presentation, Nov 17, 2015
Slide 1: Annual General Meeting 17 November 2015
For personal use only Acrux Annual General Meeting 17 November 2015
Slide 2: Introduction: Ross Dobinson, Non-Executive Chairman
Introduction: Ross Dobinson Non-Executive Chairman For personal use only
Slide 3: Company review: Michael Kotsanis, CEO & Managing Director
Company review: Michael Kotsanis CEO & Managing Director For personal use only
Slide 4: Forward looking statements
For personal use only 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 mate
Slide 5: Business milestones
Business milestones For personal use only $11.1 million – Acrux records its sixth consecutive profitable year $23.1 million – cash reserves at end June, 2015 Estradiol – approved in Europe. Milestones of US$2 million triggered FY16 Topical generic pipeline – portfolio identified NSAIDs – superior fo
Slide 6: Financial review: Sharon Papworth, CFO & Company Secretary
Financial review: Sharon Papworth CFO & Company Secretary For personal use only
Slide 7: Financial Summary
Financial Summary For personal use only FY15 FY14 • Strong financial position $ Million $ Million • Cash flow positive – generate solid cash inflows from existing product portfolio • Profitable business – Net Profit After Tax Cash 23.1 25.8 (NPAT) $11.1 million • Strong balance sheet - $23.1 million
Slide 8: Income and Cash flow analysis
Income and Cash flow analysis Income & Cash flow anlaysis $ Million % Net Income For personal use only Royalty received 25.2 Royalty payments (0.9) Net product income 24.3 Interest received 0.6 Other 0.2 Other income received 0.8 Net income received 25.1 100% Tax paid (8.9) (35%) Cash operating cost
Slide 9: Operating Outlook
Operating Outlook For personal use only Cash received from Operating Activities: • Income continues to be generated from commercialised products • Axiron volumes have stabilised • Milestone triggered, US$2 million on marketing authorisation of Lenzetto® by Gedeon Richter in Europe. No further milest
Slide 10: Company review: Michael Kotsanis, CEO & Managing Director
Company review: Michael Kotsanis CEO & Managing Director For personal use only
Slide 11: Growth Strategy
For personal use only Growth Strategy
Slide 12: Growth Strategy
Growth Strategy For personal use only Acrux is building a sustainable business model with a broader portfolio which leverages its existing topical expertise in compelling market segments How: Measures of success: Core competency – utilise current Portfolio with multiple products in technology, s
Slide 13: Framework for continued growth: existing topical portfolio
Growth Strategy Framework for continued growth For personal use only • Includes Axiron®, Lenzetto®, Evamist® Existing topical portfolio • Strong cash inflow – facilitating our growth strategy • Territory expansion being executed $ 13
Slide 14: Existing Topical Portfolio: Axiron
Existing Topical Portfolio For personal use only Axiron
Slide 15: Axiron volume and market share
Existing Topical Portfolio Axiron volume and market share For personal use only Axiron Net Sales • Most recent testosterone FDA Drug Safety 60.0 Communication in March 2015 50.0 • FDA and sponsors working towards 40.0 USD $M 30.0 collaborative long term safety trial 20.0 • Testosterone replacement t
Slide 16: Axiron IP litigation
Existing Topical Portfolio Axiron IP litigation For personal use only • Axiron patents – Axiron is protected by multiple patent families, which expire in 2017, 2027 and 2030 • Axiron litigation – Lilly and Acrux have filed lawsuits against generic companies attempting to market an infringing Testost
Slide 17: Existing Topical Portfolio: Estradiol
Existing Topical Portfolio For personal use only Estradiol Lenzetto® is trademarked by Gedeon Richter
Slide 18: Estradiol spray approved in Europe
Existing Topical Portfolio Estradiol spray approved in Europe For personal use only • Initial European regulatory approvals granted • US$2 million milestones received • First product launches scheduled from Q1, 2016 • Topical estrogen-only HRT market is valued at over EURO 85 million 18
Slide 19: Framework for continued growth: topical generic portfolio
Growth Strategy Framework for continued growth For personal use only • New portfolio opportunities Topical generic portfolio • Leverage existing topical and transdermal capabilities • Lower development costs, lower return however quicker time to market than topical specialty portfolio $ 19
Slide 20: Topical Generic Portfolio
Topical Generic Portfolio For personal use only • New portfolio being built, developing topical generic products in commercially attractive markets Reduced development • Reduced development timeframes timeframe compared to topical speciality portfolio Existing • Generic development opportunities top
Slide 21: Framework for continued growth: topical specialty portfolio
Growth Strategy Framework for continued growth • Patent protected development For personal use only • Leverage existing topical capabilities Topical specialty portfolio • Higher development costs & greater return however longer time to market than generics, shorter than new chemical entities $ 21
Slide 22: Acrux Antifungal Proposition
Topical Specialty Portfolio Acrux Antifungal Proposition For personal use only Acrux antifungal development Indication For treatment of onychomycosis in toenails and Prevalence in fingernails major markets from 2 – 12% of population Formulation 37 million Solution for topical administration cases in
Slide 23: Acrux diclofenac and ibuprofen (NSAID) formulations
Topical Specialty Portfolio Acrux diclofenac and ibuprofen (NSAID) formulations For personal use only Acrux non steroidal anti-inflammatory Long development Intellectual Property protection Indication For fast local relief of acute joint pain caused by sprains, strains and sports injuries Formulatio
Slide 24: Product Pipeline
Growth Strategy Product Pipeline For personal use only Indication Product Name Formulation Pre-clinical design development Phase 1 Phase 2 Phase 3 Registration Commercial Partner Hypogonadism Axiron® Eli Lilly Existing Topical Portfolio Menopausal Estradiol MDTS® Perrigo symptoms USA – Evamist® Post
Slide 25: Summary
Summary For personal use only 1. Acrux is investing to support future growth, leveraging our current capabilities 2. Acrux has increased its focus on internally developed product candidates utilising Acrux technology and know how 3. After considering its near term development expenditure, Acrux decl
Slide 26: Formal Business: Ross Dobinson, Non-Executive Chairman
Formal Business: Ross Dobinson Non-Executive Chairman For personal use only
Slide 27: Resolution: Adoption of Remuneration Report
For personal use only RESOLUTION 1 Adoption of Remuneration Report Proxy votes received prior to the meeting are as follows: For 41.9 m votes 85.4% of available votes Open 6.3 m votes 12.9% of available votes Against 0.8 m votes 1.7% of available votes
Slide 28: Resolution: Re-election of Bruce Parncutt as Director
For personal use only RESOLUTION 2 Re-election of Bruce Parncutt as Director Proxy votes received prior to the meeting are as follows: For 38.9 m votes 79.2% of available votes Open 6.4 m votes 13.1% of available votes Against 3.8 m votes 7.7% of available votes
Slide 29: Resolution: Employee Share Option Plan
For personal use only RESOLUTION 3 Employee Share Option Plan Proxy votes received prior to the meeting are as follows: For 29.1 m votes 59.3% of available votes Open 6.4 m votes 13.1% of available votes Against 13.5 m votes 27.6% of available votes
Slide 30: For personal use only
For personal use only
Slide 31: AGM Script – Ross Dobinson, Welcome
AGM Script – 17 November, 2015 Ross Dobinson – Non-Executive Chairman Welcome For personal use only Good afternoon ladies and gentlemen. My name is Ross Dobinson, and I’m the Non-Executive Chairman of Acrux Limited. Before we commence proceedings could I ask that you turn off your mobile phones for
Slide 32: AGM Script – FDA testosterone changes
been curtailed, with testing of blood testosterone levels recommended prior to prescription of the products. The effect of the FDA’s recommendations is that prescription patterns of the relevant products have altered. One of the consequences of these changes is that endocrinologists and urologists a
Slide 33: AGM Script – development opportunities
project development mechanism that was described to shareholders at the last AGM has generated a number of product opportunities which are now in development phase. Several of these opportunities will be covered in some detail in Michael’s presentation. For personal use only These development opport
Slide 34: AGM Script – development costs
development costs, but both initiatives are far removed from the development profile of new chemical entities and we are able to leverage our technology platform efficiently. For personal use only Material expenditure on these development initiatives will only be incurred when there is a high level
Slide 35: AGM Script – forward-looking statements and business milestones
…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 For
Slide 36: AGM Script – R&D pipeline and Gedeon Richter approvals
As the current R&D pipeline generates candidates for further development, the company expects to have the option of funding this from either cash reserves or cash flow. Such future funding decisions will depend on the scale and merits of the opportunities the current R&D might generate and the Board
Slide 37: AGM Script – Sharon Papworth financial results
Sharon Papworth - CFO & Company Secretary Thanks, Michael. Slide 7 For personal use only I would like to add my welcome to our 2015 Annual General Meeting. Today I will provide a summary of our financial results for the year ended 30 June 2015 and will also provide an update on the Company’s outlook
Slide 38: AGM Script – tax rate and profit comparison
Finally, the effective tax rate for accounting purposes for the 2015 year is 33.8%, which is clearly higher than the standard company tax rate of 30%. This is largely due to expenses incurred which are non-deductible for tax purposes and the fact that we are a Pooled Development Fund (‘PDF’) and as
Slide 39: AGM Script – cash disbursements
The company has allocated its cash disbursements into 3 main segments. Firstly, payment of tax on net income. Tax payments of $8.9 million were made during the 2015 financial year. For personal use only Secondly, cash operating costs including research and development were $5.5 million last year. Th
Slide 40: AGM Script – outlook and financial summary
At this stage there is no anticipated increase in preclinical costs over the next 12 months and we expect 2016 cash operating costs to be broadly consistent with the 2015 financial year. It is highly likely that our cash needs will change when we progress to clinical development of our targeted prod
Slide 41: AGM Script – development focus
Slide 12 With volumes of Axiron having plateaued recently after last year’s decline in sales, we are focussed on moving new development opportunities through our pipeline ultimately towards commercialisation in order to further grow our For personal use only Company. Our focus to-date has been on lo
Slide 42: AGM Script – Axiron sales
The cash generated from our existing topical portfolio of products is selectively used to fund projects in our topical generic and topical specialty pipelines. Excess cash over the needs of our pipelines contributes to our cash reserves. For personal use only Slide 14 Turning to our most important p
Slide 43: AGM Script – Axiron patents and Lenzetto
As a reminder, Axiron is protected by a number of granted patents, including for the formulation of testosterone, for the underarm site of application (axilla), and for the applicator by which Axiron is applied to the skin. There are now 4 parties that have been sued – Actavis, Perrigo, Amneal and L
Slide 44: AGM Script – topical generic portfolio
Slide 19 The second group of products depicted in our portfolio incorporates our topical generic portfolio. For personal use only Slide 20 We are enthusiastic about the prospects for this new group of projects which generally have a shorter development horizon resulting in a faster filing of a regul
Slide 45: AGM Script – antifungal project
Slide 22 The most important project in the topical specialty portfolio is our antifungal project. We have continued to move forward on this project which is targeting fungal infection of the nail bed in toes and fingers. This is also known medically For personal use only as onychomycosis. Our develo
Slide 46: AGM Script – NSAIDs and pipeline
Both ibuprofen and diclofenac are well known drugs. For both we have shown we are able to develop efficient formulations. Importantly, the formulations we have developed fall within our more recent IP developed by Acrux. For both products we have decided to assess the attractiveness of early For per
Slide 47: AGM Script – summary and handover
business, meet with partners and assess clear strategies to diversify and grow our business. First, we are investing to support future organic growth. As we've detailed in For personal use only today's presentation, we have a profitable and cash-flow positive underlying business within Acrux and we
Slide 48: AGM Script – formal business, items 1 and 2
The Notice of Meeting was mailed to all registered members on the 14th of October. I will take the Notice of Meeting, including Explanatory Notes and the Financial Report, the Directors’ Report and the Auditors’ Report as read. For personal use only Item 1 - To receive and consider the Financial Rep
Slide 49: AGM Script – remuneration report and director re-election
any votes in respect of this resolution that arise from any undirected proxy in accordance with the direction contained in the proxy. Accordingly I move: For personal use only That the Company’s Remuneration Report for the year ended 30 June 2015 be adopted. Are there any questions or comments in re
Slide 50: AGM Script – grant of options to employees
If there are no (further) questions or comments, you will now see on the screen the proxy votes in relation to this resolution. I also wish to inform the meeting that I intend to vote any undirected proxies in favour of this resolution. I now put the resolution. For personal use only All those in fa
Slide 51: AGM Script – close of formal business
I note that a vote must not be cast on this resolution by or on behalf of a member of the Company’s key management personnel, details of whose remuneration are included in the Remuneration Report of the Company, and their closely related parties, unless the vote is cast as a proxy in accordance with