Acrux : Annual General Meeting Presentation and Addresses

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Acrux Ltd

Annual General Meeting Presentation and Addresses

23 November 2021

Good morning ladies and gentlemen. My name is Ross Dobinson, and I am the Chairman of Acrux Limited. It is my pleasure to welcome shareholders to Acrux's 2021 Annual General Meeting. We are unable to welcome shareholders in person but we appreciate you joining us virtually today.

Firstly I would like to introduce my fellow Board members

• Our Chief Executive Officer and Managing Director, Michael Kotsanis
• Non-executiveDirectors: Geoff Brooke, Tim Oldham and Don Brumley
• and our CFO & Company Secretary - Joanna Johnson.

Also in attendance today are

• Mr Nick Bull from our auditors - Pitcher Partners and
• Representatives of our Share Registry - Link Market Services.

Chairman's Address

At last year's Annual General Meeting I provided an update on the corporate strategy we have been implementing since 2015. This strategy has been validated by the FDA approvals received and our recent product launch. Further product launches will be facilitated by this year's FDA approvals and Michael will refer to these in more detail in his CEO and Managing Director's Report.

We maintain our view that the knowhow which has been developed by the Company over the last twenty years of operations provides sustainable competitive advantages.

The Company has made solid progress towards achieving our FY 22 targets of further revenue growth from existing products, becoming cashflow positive by the close of calendar year 2022, the growth of new products in development and having additional products submitted for FDA review.

Commercial discussions with other prospective licensees will continue as we progress the development of our product pipeline. The pipeline will also be covered in more detail in Michael's Report. We remain confident that we have the capacity to maintain a consistent number of products under development as earlier projects are completed and licensed out. As noted previously, our pipeline will be expanded gradually after the initial product launches provide further validation of our business model.

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As part of our product development strategy, we will continue to monitor topical drug market data for the products we are developing. Factors impacting market share and regulatory developments are key issues which could impact the commercial prospects of our new products. Items such as changes to the FDA Product Specific Guidelines (PSG) could present both opportunities and risks. As noted previously, a key commercial objective in generics development is the introduction of products early to market in order to gain commercial advantages over competitors. For some products which are first to market, exclusivity is received from the regulators for the first six months of those products' commercial lives under the FDA's Competitive Generic Therapies ('CGT') Guidance which was published in final form by the FDA in March 2020.

I would like to again thank my Board colleagues for their productive input over the last year. I would also like to extend the Board's appreciation to Michael and his team for their continued efforts and focus on moving our pipeline forward and in securing licensing partners for a significant proportion of the company's pipeline. The Company has made substantial progress in the development of this pipeline which should generate commercial outcomes in the next year.

CEO's Address

Michael Kotsanis - Chief Executive Officer and Managing Director

Good morning and thank you for attending this year's virtual Annual General Meeting and for your interest in Acrux. We welcome your attendance today and your participation. I trust that in future we will be able to hold hybrid meetings with face to face attendance as well as an online opportunity to attend for interstate or international shareholders.

Before I start, I refer you to our Disclaimer Statement.

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Overview

We can summarise Acrux in these three bullet points:

1. Acrux has a demonstrated track record of both successful development and commercialisation of topical prescription pharmaceuticals.
2. Acrux has a growing revenue stream from its product portfolio from milestones and revenue share agreements
3. Acrux has three products that are on market, 2 that are pending launch and a pipeline of 11 products in development with a number of commercial agreements in place

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Business Overview - Commercialised products

Our future success can be illustrated by our history. Our track record of development, registration and commercialisation of products is shown on this slide.

Our Testosterone solution product was sold in 6 countries by Eli Lilly, our licensee at the time, between 2011 and 2017. Returns to shareholders at the time were substantial.

Our Estradiol spray was our first product that was commercialised. The product has been marketed since 2016 by Gedeon Richter as Lenzetto in over 30 countries in Europe and other countries, including a number in Latin America. Our revenue from Lenzetto grew by 18% last year and exceeded $1 million as forecast at last year's AGM. Our product is also marketed by Padagis in the United States, which recently re-branded from the company formerly called Perrigo. Acrux receives a share of revenue on sales of estradiol in all markets.

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Business Overview - Product pipeline

In addition to the three products that we have commercialised and the 2 products which were approved in mid-2021 but are not yet launched, our product development pipeline features an additional 11 products under development including 2 that are under review by the FDA. The two products that we have under review by the FDA include dapsone gel 7.5% which was accepted for review by the FDA in April this year. That product targets a market of over US$165 million in annual sales based on IQVIA data. We also have another dapsone product, the 5% gel that was accepted for review by the FDA in September this year. That product targets a market with US$30 million in annual sales. For these products, the FDA recommends a combination of in vitro and in vivo studies with pharmacokinetic endpoints. Importantly, for both products we have successfully completed in-vitro permeation testing, also known as IVPT, to demonstrate bioequivalence. This is known in the pharmaceutical industry to be a very challenging technique and we are very pleased with the bioequivalence outcomes we have achieved for both products.

Our products in development exclusively target the United States market for topically applied prescription pharmaceuticals.

Our Testosterone Solution product was launched by our licensee Dash Pharmaceuticals in August this year and most of our later stage development products have already been licensed to generic companies for marketing in the United States.

Our development and commercialisation strategy is to repeatably bring products to market. We have 25 extremely capable scientific staff who have continued to work hard to bring our products through the development process to regulatory approval.

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