Island Pharmaceuticals : Quarterly Activity Report & Appendix 4C

For personal use only

28 July 2022

ASX Announcement

June 2022 Quarterly Activity Report

and Appendix 4C

• Sofgen Pharmaceuticals (Sofgen) appointed for the supply of clinical trial study drug for Island's Phase 2a clinical trial of ISLA-101 In dengue fever
• Clinical material on track to be manufactured mid-August 2022
• Dr Amy Patick joined Island's Scientific Advisory Board (post quarter)
• Island closed the quarter with cash position in line with expectations, of A$4.8m

MELBOURNE Australia, 28 July 2022: Australian mid-clinical stage antiviral drug

development company, Island Pharmaceuticals Ltd (ASX: ILA; "Island"; "the Company") is pleased to release its Appendix 4C and quarterly business activities review for the three month period ended 30 June 2022 (Q4 FY22).

CEO of Island Pharmaceuticals, Dr David Foster said, "Undoubtedly the most significant news of the June quarter was our manufacturing update, key to underpinning our coming ISLA-101Phase 2a PEACH study in dengue fever.

We are very pleased to have engaged Sofgen as our manufacturing partner, and also with the progress that is being made in preparing to manufacture our clinical drug product in August. We expect the remainder of CY 2022 to be news-flow rich as we work toward filing our investigational new drug application for the PEACH study, leading to the study's start later this year."

ISLA-101 trial preparation

As has previously been announced, Island Pharmaceuticals listed on the ASX following an oversubscribed A$7.5m Initial Public Offer (IPO) on 13 April 2021. Funds raised under the IPO are enabling Island to conduct a Phase 2a study of its lead drug candidate ISLA-101 and provide working capital for research and development. ISLA-101 is a drug with a very well-known safety profile, being repurposed as a potential preventative for dengue fever.

Since listing, the Company has been focused on executing on the structured delivery of its ISLA-101 clinical trial. Island is able to leverage the significant pre-existing body of clinical data for ISLA-101 as well as data from previously filed INDs in the US to expedite its path into the clinic for its PEACH trial. The PEACH trial is a Phase 2a, randomized, double blind, placebo-controlled study for the Prophylactic Examination of an Antiviral in a Dengue Challenge Model.

As noted in our June manufacturing update, ISLA-101 clinical material is being manufactured in mid-August 2022 under a new proposal from Sofgen Pharmaceuticals. Once manufactured, the material will undergo 30-day stability studies and release testing after which the Investigational New Drug Application (IND) can be finalised and filed. This is an important step required before the PEACH clinical trial can commence.

Based on the new manufacturing agreement, it is expected that the Investigational New Drug application will be filed in October 2022, with the trial commencing in November 2022.

Is la n d P h a rm a c e u t ic a ls Lim it e d ACN 64 1 18 3 8 4 2 | Re g is t e re d o ffic e : Su it e 20 1, 697 Bu rke Rd , Ca m b e rw e ll VIC 3124 , Au st ra lia P a g e 1 o f 4

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While the manufacturing site for Island's drug product is in Florida, leading soft gel manufacturer, Sofgen Pharmaceuticals also has a strong presence In Latin America. Given the prevalence of dengue fever in the region, which is anticipated to be a significant market for ISLA-101, this is expected to be of further benefit to Island and potential future partners.

Corporate summary

Island's CEO, Dr David Foster attended an invitation only summit focusing on "Flaviviruses: Epidemiology, Pathogenesis, Immunology, and Countermeasure Development." Through the summit, leaders in the areas of mosquito borne diseases discussed recent scientific breakthroughs in Flavivirus research. Valuable conversations were had and connections made with key government, academic and industry experts.

Island also presented at the BIO International Conference in San Diego, CA, and attended over 40 meetings with potential partners and collaborators.

During May, Dr Foster participated in a virtual partnering conference, Pharma Meeting Brazil, where he conducted multiple meetings with potential Latin America partners as well as international pharmaceutical companies.

Executive Chairman, Dr Paul MacLeman presented at the Gold Coast Investment Showcase, also in June 2022.

Post quarter, it was announced that Dr Amy Patick had joined Island's Scientific Advisory Board (SAB), and that Dr Simon Tucker was stepping off the SAB.

Pipeline development

Island continues to explore pipeline development opportunities, with plans to capitalise on information from the previously commissioned third party analysis of viruses and antiviral needs (see March quarterly, dated 28 April 2022.) Island's newly configured Scientific Advisory Board will prioritise viruses identified in this analysis to nominate as targets in the two previously announced research collaborations with Monash and Griffith Universities. In addition, other opportunities are being explored following active participation in the recent partnering and investor meetings.

Is la n d P h a rm a c e u t ic a ls Lim it e d ACN 64 1 18 3 8 4 2 | Re g is t e re d o ffic e : Su it e 20 1, 697 Bu rke Rd , Ca m b e rw e ll VIC 3124 , Au st ra lia P a g e 2 o f 4

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Financial Summary

Island's cash position was A$4.79million as at 30 June 2022 (A$5.31million as at 31 March 2022). During the June 2022 quarter, total cash operating outflows were approximately A$716,000 (A$442,000 in the prior quarter). The increase in cash outflows was largely due to R&D in relation to the challenge study and the preparation for the Phase II clinical study.

A summary of the operating cashflows for three months ending 30 June 2022 compared with the proposed use of funds in Year 2 (twelve months) of Island's Prospectus dated 26 February 2021 is outlined below:

	Y2 First 3 Months (A$)	Y2 Per Prospectus (A$)
Clinical, regulatory and	302,000	1,451,000
implementation
IP research and	6,000	560,390
development
Formulation	-	55,000
development
Working capital and	407,000	1,222,610
administration costs
	715,000	3,689,000

During the three-month period ending 30 June 2022, overall spend was lower than estimated in the use of funds as set out in the Prospectus as a result of the delay in clinical material being manufactured (as announced on 15 June 2022). The Company expects R&D expenditure to significantly increase in the coming quarters as the Company prepares for the ISLA-101 Phase II clinical study. The Company believes the working capital outflows are consistent with the requirements for an ASX listed biotech company of its size.

In accordance with Listing Rule 4.7C, payments made to related parties and their associates included in items 6.1 of the Appendix 4C was A$143,000 and included Director fees, salary and superannuation for the CEO/Managing Director, Executive Chair and Non- Executive directors.

Approved for release to the ASX by:

Dr Paul MacLeman

Executive Chairman

Island

Pharmaceuticals Ltd

[e-mail]

Investors and media, for further information, please contact:

Jane Lowe

IR Department Mobile: [phone]

[e-mail]

Is la n d P h a rm a c e u t ic a ls Lim it e d ACN 64 1 18 3 8 4 2 | Re g is t e re d o ffic e : Su it e 20 1, 697 Bu rke Rd , Ca m b e rw e ll VIC 3124 , Au st ra lia P a g e 3 o f 4

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About Island Pharmaceuticals

Island (ASX: ILA) is a mid-clinical-stage drug repurposing company, focused on the topical area of antiviraltherapeutics for infectious diseases. Our lead asset is ISLA-101, a drug with a well- established safety profile, being repurposed for the prevention and treatment of dengue2 fever and other mosquito (or vector) borne diseases. The Company is close to commencing a Phase 2a clinical trial in dengue-infected subjects.

If ISLA-101 achieves FDA approval, and certain other criteria are met, Island may be eligible toobtain a "Priority Review Voucher" at the time of FDA approval. This means that as well as getting approval to manufacture and sell ISLA-101, the Priority Review Voucher (PRV) could permit Island to expedite the FDA approval process for a new drug or sell the PRV in a secondary market.

Island encourages all current investors to go paperless by registering their details with the Company's share registry, Automic Registry Services, whose contact info is housed on the Shareholder Services page of the Company's website.

Visitwww.islandpharmaceuticals.comfor more on Island.

Is la n d P h a rm a c e u t ic a ls Lim it e d ACN 64 1 18 3 8 4 2 | Re g is t e re d o ffic e : Su it e 20 1, 697 Bu rke Rd , Ca m b e rw e ll VIC 3124 , Au st ra lia P a g e 4 o f 4

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Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

ISLAND PHARMACEUTICALS LIMITED

ABN	Quarter ended ("current quarter")
48 641 183 842	30 June 2022

Consolidated statement of cash flows	Current quarter	Year to date
		$A'000	(12 months)
			$A'000
1.	Cash flows from operating activities
1.1	Receipts from customers	-	-
1.2	Payments for

For personal

(a) research and development

1. product manufacturing and operating costs

(c) advertising and marketing

(d) leased assets

(e) staff costs

(f) administration and corporate costs

1.3 Dividends received (see note 3)

1.4 Interest received

1.5 Interest and other costs of finance paid

1.6 Income taxes paid

1.7 Government grants and tax incentives

1.8 Other (provide details if material)

1.9 Net cash from / (used in) operating activities

(302)	(694)
-	-
-	-
-	-
(64)	(255)
(350)	(928)
-	-
-	-
-	-
-	-
-	-
-	-
(716)	(1,877)

2.	Cash flows from investing activities
2.1	Payments to acquire:
	(a)	entities	-	-
	(b)	businesses	-	-
	(c) property, plant and equipment	-	-
	(d)	investments	-	-
	(e)	intellectual property	-	-

ASX Listing Rules Appendix 4C (17/07/20)	Page 1
+ See chapter 19 of the ASX Listing Rules for defined terms.