ACRUX IS ONE OF THE FEW AUSTRALIAN BIOTECH COMPANIES TO HAVE COMMERCIALISED HUMAN PRESCRIPTION PHARMACEUTICAL PRODUCTS. THIS GIVES US THE CONFIDENCE TO DEVELOP ADDITIONAL PRODUCTS UTILISING OUR PROVEN CAPABILITIES TO DRIVE FURTHER SHAREHOLDER VALUE FOR THE COMPANY.
It is my pleasure to summarise the status of our key activities through my Chief Executive Officer’s Review for the first time since joining Acrux in November 2014. Since my appointment to Acrux the senior management team has invested significant time reviewing the Company’s corporate strategy and related activities, our development pipeline and organisational structure.
We have implemented significant changes throughout the Company, including in our pipeline focus, our organisational structure and our strategy. We have been mindful of the need to balance our development spend on commercially attractive development projects with a return to shareholders through the payment of a fully-franked dividend of 6 cents for the 2015 financial year.
Product development pipeline
It is incumbent upon us to diversify our business and offset our reliance on Axiron as a key value driver within the Company. Our strategy has been refined and will continue to evolve. A key element has been to re-focus our development efforts. We have evaluated the use of our transdermal technology on a substantial number of development opportunities and to date have identified a commercially attractive portfolio of projects.
We continue to focus on key pipeline assets including the development of a product for onychomycosis, for which we are leveraging our existing internal skills, technology and laboratory facilities. Our focus on this project has been to develop formulations that have enhanced nail penetration and we have assessed a number of different antifungals for that purpose, with successful nail permeation seen with several of these antifungals. However, our goal is not just improved permeation of the antifungal to the site of the nail infection, but a superior delivery profile, which will allow us to predict clinical success with a greater order of precision. Our work here continues. We have also commenced work on a number of generic transdermal and topical product development opportunities. These opportunities represent exciting additions to the pipeline, with lower development risks that have shorter development timelines and lower development costs than those needed for novel drugs.
The development progress we made throughout the year on our two NSAID projects has yielded very encouraging skin permeation results, with superior permeation profiles to the leading products that are commercially available in major markets. This is another demonstration of our capabilities in the transdermal drug delivery field.
Transdermal capabilities
Acrux is one of the few Australian biotech companies to have commercialised human prescription pharmaceutical products. This gives us the confidence to develop additional products utilising our proven capabilities to drive further shareholder value for the Company.
We continue to evaluate additional projects for our transdermal technology. The quality of these opportunities and the due diligence we conduct in understanding and evaluating the technical and commercial feasibility is paramount prior to embarking on any development work. We will continue to evaluate new product concepts carefully.
Axiron
Our attention within our commercialised portfolio is naturally focused on Axiron (our testosterone replacement therapy), which currently provides the bulk of our royalty income. Whilst there have been regulatory assessments in a number of markets where Axiron is sold, the most impactful assessment has been by the FDA in the United States, which is where over 90% of our sales occur. The FDA published a Drug Safety Communication in March 2015.
Safety concerns over the testosterone drug class impacted sales volumes of the testosterone replacement therapy market (including Axiron) in 2014. However, Axiron volume trends to date in calendar year 2015 appear to have stabilised. We have been pleased with the continued growth of Axiron sales in Canada, Brazil, Germany, Australia and South Korea. Our royalty stream for Axiron is paid in US dollars and the Australian dollar exchange rate has helped our year on year royalties to remain relatively stable.
Estradiol Spray European Launch
We look forward to the launch of our estradiol product in Europe later in the 2016 financial year and were excited to achieve the first of the country regulatory approvals in Europe in recent weeks. This generated an important financial milestone and we believe our partner (Gedeon Richter, which has a strong women’s health franchise) is well positioned to execute its sales and marketing strategy. Subsequent sales will generate royalties for Acrux.
We look forward to communicating news of the various country launches of our estradiol product over coming months, as well as reporting on meaningful progress with our development projects.
Changes to the Management Team
We have made some important additions and changes in our management team during the year:
- Sharon Papworth commenced with Acrux as CFO and Company Secretary in September 2014. Having previously held senior finance roles at ASX and US listed organisations, Sharon's experience spans industries including pharmaceuticals, media, fast-moving consumer goods and professional services.
- Felicia Colagrande was promoted to Product Development and Technical Affairs Director in February 2015. Felicia has a broad background in pharmaceutical operations, dermal drug development, quality control, analytical development and production. She has 25 years’ experience in the pharmaceutical/ biotech industry and joined Acrux in 2001.
- Charles O’Sullivan was appointed as Portfolio Director in July 2015. He is an experienced healthcare executive, with a strong background in the pharmaceutical industry, gained over 20 years in both senior executive and clinical roles with large multinational pharma businesses.
In summary, I am excited by the opportunities we are pursuing and see significant upside for the Company in the coming years.
Michael Kotsanis
CEO and Managing Director