Acrux Limited · ASX:ACR
Acrux — Investor Presentation (February 2014)
33 slides from Acrux's investor presentation, Feb 20, 2014
Slide 1: Acrux (ASX: ACR) 20 February 2014
For personal use only Acrux (ASX: ACR) 20 February 2014
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS For personal use only 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 ma
Slide 3: Acrux (ASX: ACR) at a Glance
3 ACRUX (ASX: ACR) AT A GLANCE • Market cap ~$334m; joined S&P/ASX 200 in September 2011 For personal use only • Profitable for the last 4 years – Dividends paid annually since 2011: total of 76 cents per share – Further 12 cent per share special dividend declared 20 February 2014 • Pooled Developme
Slide 4: Advances Made in 2013
4 ADVANCES MADE IN 2013 Axiron® For personal use only • Significant progress in US market share and international rollout of Axiron – 2013 sales milestone met; USD$25 million receivable Q1 2014 – Net sales for CY 2013 increased by 142% over CY 2012 (US$178.7m vs US$73.9m) and H2 CY 2013 net sales in
Slide 5: Current Expectations for 2014
5 CURRENT EXPECTATIONS FOR 2014 Axiron For personal use only • Continued growth in Axiron net sales for calendar 2014 – Based on current knowledge, it is a reasonable expectation that the next sales milestone payment of US$50 million will be earned • Axiron launched in Germany Q1 2014 • Further regu
Slide 6: Axiron
For personal use only Axiron
Slide 7: US Testosterone Market 2013
7 US TESTOSTERONE MARKET 2013 • Total TRT $ sales increased ~9% for 2013 versus 2012 For personal use only • Total transdermal testosterone replacement therapy (TRT) $ sales increased 5.8% (year on year December); • Transdermal market remains a substantially larger market in the US compared to other
Slide 8: US Transdermal Product Pricing
8 US TRANSDERMAL PRODUCT PRICING • Consistent price increases in major US transdermal TRT products occurred For personal use only throughout 2013, partially offsetting the slower market growth • Several manufacturers increased the price of their products by a further 9- 10% in December 2013/January
Slide 9: US Market Share Since Axiron Launch
9 US MARKET SHARE SINCE AXIRON LAUNCH For personal use only Share of Total Prescriptions (TRx) for transdermal products1 in United States 30 Jun 13 31 Jan 14 Change Androgel® 1% 21.1% 18.7% -2.4 Androgel® 1.62% 42.9% 47.6% +4.7 Total Androgel® 64.0% 66.3% +2.3 Axiron® 14.3% 14.3% +0.0 Testim® 13.8%
Slide 10: Global Net Sales Since Launch
10 GLOBAL NET SALES SINCE LAUNCH • Net sales = invoiced sales less rebates, 60 Net sales since launch For personal use only discounts, returns Reported Net Sales Linear (Net Sales) 50 • Trajectory of quarterly net sales 40 remains very positive 30 20 • Based on current knowledge, sales in 2014 expec
Slide 11: Commercial Managed Care
11 COMMERCIAL MANAGED CARE* For personal use only • Competitors indicated Q4 2013 rebates were at the lowest level experienced in 2013 – e.g. 20.5% for Androgel in Q4 2013 reported • Q1 2014: Axiron is the only transdermal TRT to register as a preferred product on both ESI and CVS Caremark National
Slide 12: Co-Pay Card/Voucher
12 CO-PAY CARD/VOUCHER • New Savings Card system initiated 1 January 2014 For personal use only • Savings Card can only be used by patients that have commercial insurance coverage – i.e. not eligible for use with Medicare, Medicaid, Tricare or any government (state or federal) healthcare plan
Slide 13: 2014 Axiron US Market Share Drivers
13 2014 AXIRON US MARKET SHARE DRIVERS • Direct to Consumer marketing; optimised marketing message initiated 01 January For personal use only 2014 • Impact of a committed men’s health sales force - operational from August 2013 • Marketing initiatives: including Savings Card • Increased presence with
Slide 14: Future US 1% Generic Introduction
14 FUTURE US 1% GENERIC INTRODUCTION For personal use only • First 1% generic product expected in 2015 • Not expected to have a significant impact on the market – Branded 1% products have been losing market share to the higher strength products (Axiron and 1.62% Androgel) – Volume of 1% strength gel
Slide 15: Future US High Strength Generic Introduction
15 FUTURE US HIGH STRENGTH GENERIC INTRODUCTION For personal use only • No analogue for the impact of generics in this market – Each product has different dosing requirements and the topical gels require titration, which could make switching between treatment regimens complex • Consumer and physicia
Slide 16: Potential Beyond the US Market
16 POTENTIAL BEYOND THE US MARKET For personal use only • Ex-US markets for testosterone therapy underdeveloped – Axiron already launched in Canada, Australia and Brazil – Germany launch anticipated end of February 2014 – Canada, Australia, Germany and Brazil comprise more than half the ex- US $ mar
Slide 17: Expanding Knowledge of Testosterone
17 EXPANDING KNOWLEDGE OF TESTOSTERONE Lilly is conducting clinical studies to evaluate other benefits of Axiron treatment For personal use only • studying sex drive/energy levels, ejaculatory dysfunction and suboptimal responders to other testosterone gels Studies conducted by other medical institu
Slide 18: Patent Protection in United States
18 PATENT PROTECTION IN UNITED STATES Underarm administration For personal use only Formulation and delivery system 1 granted patent, expiry 2027 4 granted patents, expiry 2017 1 allowed patent, expiry 2026 1 patent application pending Applicator 2 granted patents, expiry 2026 and 2030 1 patent appl
Slide 19: FDA Drug Safety Communication
19 FDA DRUG SAFETY COMMUNICATION For personal use only • US FDA issued a Drug Safety Communication (DSC) on 31 January 2014, prompted by two recent publications1,2, which stated: – FDA is investigating the risk of stroke, heart attack and death in men taking FDA-approved testosterone products • At t
Slide 20: FDA Drug Safety Communication Cont.
20 FDA DRUG SAFETY COMMUNICATION Cont. • FDA will continue to evaluate, and communicate conclusions once their For personal use only evaluation is complete – Could take some time to reach a conclusion • Axiron product label and medication guide already includes warnings and precautions relating to c
Slide 21: Competitive Landscape in United States
21 COMPETITIVE LANDSCAPE IN UNITED STATES For personal use only • Existing transdermal products – Patent expiries - Androgel 2020(1%)/2026(1.62%), Testim 2023/25, Fortesta 2018 – Androgel, Testim and Fortesta patents challenged by substitutable (ANDA) and non-substitutable (NDA) products – multiple
Slide 22: Competitor Awareness
22 COMPETITOR AWARENESS For personal use only • Other testosterone delivery systems in development – nasal gel, capsules, depot injection – Clinical, regulatory and commercial hurdles to be overcome by prospective entrants, particularly those without distribution networks • Acrux confident of Axiron
Slide 23: Other Products and Outlook
For personal use only Other products and outlook
Slide 24: Other Products
24 OTHER PRODUCTS • Estradiol spray For personal use only – Gedeon Richter contracted for ex-US distribution • US$1m upfront • US$600K received for first regulatory filing • Up to US$2m in further regulatory milestones for the EU • Royalties on sales expected to commence in 2015 – Marketing applicat
Slide 25: Pipeline Products
25 PIPELINE PRODUCTS New products For personal use only • – Low cost proof of concept development progressing for two new topical products: – Non-melanoma skin cancer (NMSC) therapeutic – Anti-fungal therapeutic – Both products address unmet need in large (billion dollar+) markets – New intellectual
Slide 26: Cancer Therapeutics
26 CANCER THERAPEUTICS Aim: For personal use only • To develop novel therapeutics for non-melanoma skin cancers (NMSC) using proprietary anti-cancer molecules developed by Hexima Limited NMSC Market: • The total number of NMSC treatments in Australia increased from 412,000 in 1997 to 767,000 in 2010
Slide 27: Cancer Therapeutics Progress
27 CANCER THERAPEUTICS Progress: For personal use only • A collaboration agreement is in place with Hexima Limited – combine Hexima’s lead molecules with Acrux’s transdermal delivery technology • Collaborative relationships established with leading Melbourne based medical and research institutions –
Slide 28: Human Antifungal Therapeutics
28 HUMAN ANTIFUNGAL THERAPEUTICS Aim: For personal use only To develop novel therapeutics for fungal infections using proprietary fungicidal molecules developed by Hexima Limited Antifungal Market: • The market for human antifungal therapies was valued at US$10.2 billion in 2008 • US$7.8 billion wer
Slide 29: Human Antifungal Therapeutics Progress
29 HUMAN ANTIFUNGAL THERAPEUTICS Progress: For personal use only • A collaboration agreement is in place with Hexima Limited – combine Hexima’s lead molecules with Acrux’s transdermal delivery technology • Lead compounds are active against the pathogens that cause fungal skin and nail infections • S
Slide 30: Half Year Financials
30 HALF YEAR FINANCIALS • Revenue $43.7 million (2012: $5.1 million) For personal use only • Profit before tax $38.4 million (2012: $2.0 million) • Operating cash inflow $7.7 million (2012: inflow $2.3 million) • Cash reserves $17.5 million (30 June 2013: $22.8 million) • Declared unfranked special
Slide 31: Financial Outlook - Revenue
31 FINANCIAL OUTLOOK - REVENUE For personal use only Royalty = (US market size x US market share – Rebates + Ex-US sales) x average royalty % • Axiron royalties: • Percentages of worldwide net sales • Tiered structure with average rate increasing as sales increase • Multiple factors combining to dri
Slide 32: Financial Outlook - Expenditure
32 FINANCIAL OUTLOOK - EXPENDITURE For personal use only • Expenditure maintained at ~$5m in 2013/14 (2012/13: $4.8m) excluding: • Monash royalty (3.5% of product revenues until February 2017) • Non-cash amortisation of capitalised R&D costs - $1.2m per annum • One-off non-cash expense for issue of
Slide 33: For personal use only
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