Announcement PDF ASX Release RESULTS ANNOUNCEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2024 29 August 2024: Melbourne, Australia; Acrux Ltd (ASX:ACR) In accordance with ASX Listing Rule 4.3A, please find attached the following for immediate release to the market: • Appendix 4E; and • Annual Report for the financial year ended 30 June 2024, including; • Operating and Financial Review; • Directors’ Report including the Remuneration Report; • Financial Reports; and • Independent Auditor’s Report. Approved for release by the Board of Directors of Acrux Ltd. For more information, please contact: Michael Kotsanis Acrux Limited CEO & Managing Director P: + 61 3 8379 0100 E: michael.kotsanis@acrux.com.au About Acrux Acrux is a specialty pharma company with a successful track record of developing and commercialising a pipeline of topically applied pharmaceutical products. Drawing on 25 years of experience, Acrux has successfully marketed through licensees a number of products worldwide with emphasis on the United States. Acrux is formulating and developing a range of topical generic products by leveraging its highly skilled workforce, on-site laboratories, GMP manufacturing suite, technical, clinical and commercial experience to bring affordable products to market. Acrux encourages collaboration and is well positioned to discuss commercial partnering and product development opportunities. For further information on Acrux, visit www.acrux.com.au Appendix 4E -Preliminary Financial Report Results for announcement to the market Name of Entity ABN Financial Year Ended Previous Corresponding Reporting Period Acrux Limited 72 082 001 152 30 June 2024 30 June 2023 $A'000 Total Revenue Down 32% to 8,098 (Loss) from ordinary activities after tax attributable to members Up 92% to (5,800) Net (loss) for the period attributable to members Up 92% to (5,800) Acrux is a specialty pharma company with a successful track record of developing and commercialising a pipeline of topically applied pharmaceutical products. Drawing on 25 years of experience, Acrux has successfully marketed through licensees a number of products worldwide with emphasis on the United States. Acrux is formulating and developing a range of topical generic products by leveraging its skilled workforce, onsite laboratories, GMP manufacturing suite, technical, clinical and commercial experience to bring affordable products to market. Acrux continues to encourage collaboration, commercial partnering and product development opportunities. No dividends have been declared or paid for the year ending 30 June 2024 or the prior corresponding period. Current period Previous corresponding period $0.01 $0.03 NTA Backing Net tangible asset backing per ordinary security Other Information There are no associates or joint ventures or other entities over which control has been gained or lost over the period. Full financial details of the Group are reported in the attached audited financial report. Delivering on our promise ANNUAL REPORT 2024 CONTENTS 2 Operating and Financial Review 4 Product Development Pipeline 6 Report of the Chairman & CEO 10 Environment, Social and Governance 17 Directors' Report, including Remuneration Report 28 Auditor’s Independence Declaration 29 Consolidated Financial Statements 33 Notes to the Consolidated Financial Statements 51 Consolidated Entity Disclosure Statement 52 Directors’ Declaration 53 Independent Auditor’s Report 58 Shareholder Information 61 Glossary 64 Corporate Directory ABOUT THIS REPORT This Annual Report combines Acrux’s financial and non-financial performance into a single document which links strategic priorities to our operational results. Forward looking statements are subject to risks and uncertainties and have been made throughout this report. Such statements involve known and unknown risk and important factors that may cause future actual results, performance or achievements of Acrux to differ from statements made in this report. Download here: www.investors.acrux.com.au/investor-centre Cover – Analytical Development Scientist, Indravadan Inside cover – Formulation Scientist, Matthew Acrux is a specialty pharma company with a successful track record of developing and commercialising a pipeline of topically applied pharmaceutical products. Drawing on 25 years of experience, Acrux is formulating and developing a portfolio of generic topical products using its highly skilled workforce and on-site laboratories. Through appointing overseas licensees Acrux has successfully marketed a number of products globally with primary emphasis on the United States. Acrux Annual Report 2024 1 OPERATING AND FINANCIAL REVIEW OUR BUSINESS MODEL 2 OUR PEOPLE AND CULTURE OUR PORTFOLIO OUR INFRASTRUCTURE OUR PARTNERSHIPS Acrux values the diversity of its workforce and provides an equitable and safe workplace. The team has the skills necessary for the development of topically applied pharmaceutical products. We currently have 15 products in our pipeline including 3 which are currently marketed in the United States and 2 which are under review by the FDA. Particularly for product formulation, Acrux utilises its onsite laboratories and GMP suite. Contract development and manufacturing organisations support the scale up of our products for commercial manufacture and to demonstrate bioequivalence with the brand name product. In-market specialists are contracted to launch and commercialise products after approval. Analytical Development Scientist, Przemek with Analytical Team Leader, Philippa HIGHLIGHTS Sustained growth in Client Revenue 52% 5 year CAGR 1 dossier approved: Dapsone 7.5%, Gel Supported by products launched in FY23 and FY24 2 dossiers under review: Nitroglycerin 0.4%, Ointment Acyclovir 5%, Cream Launched FY23: Prilocaine 2.5% and Lidocaine 2.5%, Cream Starting to realise vision – launches ARE driving sustainable revenue growth Launched FY24: Dapsone 5%, Gel Acrux Annual Report 2024 3 PRODUCT DEVELOPMENT PIPELINE Our key focus is progression of our product pipeline through the stages of formulation and development, to demonstrate bioequivalence. The dossiers are then submitted to regulatory agencies for review and the product is commercialised following approval. GENERIC DRUG A generic drug is identical to the brand name equivalent drug in dosage, safety, strength, how it is taken, quality, performance, and its intended use. Before approving a generic drug product, the FDA requires many rigorous tests and procedures to be conducted to assure it can be safely substituted for the brand name drug. The FDA bases their evaluations of substitutability, or “therapeutic equivalence,” on scientific evaluations. By law, a generic drug product must contain the identical amounts of the same active ingredient(s) as the brand name product. Drug products evaluated as “therapeutically equivalent” can be expected to have equal effect when substituted for the brand name product. PRODUCT DEVELOPMENT PHASE The timeline presented on this page is not strictly sequential and there is overlap between project phases, eg. some elements of Formulation Development and Process Development may be performed concurrently rather than sequentially. An average product development timeline is 4 to 5 years with 3 years being the ideal scenario for a simple formulation.  FY24 Progress at end June  TIMELINE FACTORS Complex generics such as topical, otic, and ophthalmic products which Acrux develops have a more challenging and typically longer pathway to demonstrate therapeutic equivalence compared to simple generics (eg tablets taken orally). 4 FY23 progress at end June 18 to 36 months 18 to 36 months FORMULATION DEVELOPMENT PROCESS DEVELOPMENT Activity Inhouse laboratory, determine characteristics of the formulation and interaction of ingredients Scale up to commercial manufacturing Outcome Determine the product formulation Making the formulation at commercial scale Typical Duration ON MARKET 10%, Topical Solution Dapsone 7.5%, Gel Acyclovir 5%, Cream 0.4%, Ointment APPROVED REGULATORY SUBMISSION BIOEQUIVALENCE PROCESS DEVELOPMENT FORMULATION DEVELOPMENT 4 to 12 months 12 to 24 months 3 to 6 months BIOEQUIVALENCE REGULATORY SUBMISSION APPROVAL/ LAUNCH ON MARKET Proof the product is therapeutically bioequivalent Submit dossier and data to support approval Review of dossier Launched by partner after approval Demonstrate equivalence to brand name product Review and approval by regulator (FDA) Approved Revenue Stream Acrux Annual Report 2024 5 REPORT OF THE CHAIRMAN & CEO Acrux is a specialty pharmaceutical company with a team of specialised scientists focussed on developing a range of topically applied generic prescription pharmaceutical products which will be predominantly commercialised in the United States. Acrux continues to execute our strategy of developing and commercialising topically applied pharmaceutical products with the launch of Dapsone 5%, Gel in April 2024 and approval of Dapsone 7.5%, Gel in August 2024 Analytical Development Scientist, Ebenezer 6 The Company has a successful track record of obtaining product approvals in the US which reflects our expertise in submitting dossiers that meet the US FDA’s complex Product Specific Guidance1 for ANDAs2 to support future product launches and revenue growth. Our in-house expertise is complemented by our network of contract manufacturing and development organisations and commercial licensees. This fundamental commercial strategy remains unchanged since Q4, 2017. The Company’s objective is to create a diversified on-market portfolio of topically applied products generating sustainable revenues and to concurrently establish a broad development pipeline which generates regular regulatory submissions, approvals and future product launches. The continuing execution of this strategy is reflected in the following milestones: — Acrux submitted and had accepted for FDA review Nitroglycerin 0.4%, Ointment at the start of the financial year. This was the seventh regulatory dossier submitted by Acrux since 2017 and this product is now one of 2 which are progressing through the FDA’s review processes. The product, when approved, will be used to treat moderate to severe pain associated with anal fissure. — In April 2024 we launched Dapsone 5%, Gel into the United States market following its approval by the FDA. The product is approved for the treatment of acne vulgaris. — In August 2024 we received FDA approval for Dapsone 7.5%, Gel. This product is approved for the treatment of acne vulgaris. — We divested our Testosterone Topical Solution product in the United States because this ANDA no longer had any commercial value to Acrux due to a rapidly declining market characterised by low in-market pricing. The divestment was executed in the June quarter of 2024. Formulation Scientist, Kayla FINANCIAL PERFORMANCE Acrux’s reported revenue for FY24 totals $8.098 million. Whilst this is a decline of $3.830 million, the prior financial year included the onetime monetisation of the future Lenzetto® royalty stream of $6.337 million. FY24 Revenue from client contracts totalled $5.091 million and includes $3.957 million of pass through revenues relating to raw materials purchased for the manufacture of commercialised products, now ceased as the raw materials are being purchased by our commercial partner. The 5 year Compound Annual Growth Rate (‘CAGR’) of client derived revenue is 52% and for total revenue the 5 year CAGR is 9%. The outlook for product derived revenue growth in FY25 is encouraging as Dapsone 5%, Gel was launched in April 2024 and we have 2 further products planned for launch in FY25, dependent on the timely receipt of FDA approval. On a year on year basis, external research and development expenses were lower because we have 2 products under evaluation at the FDA and 7 others in relatively early stage development. These beginning phases are typically less costly because they are predominantly conducted on our premises by our own staff and whilst the ANDA is under evaluation our product activities are focussed on responding to FDA queries. As our earlier stage projects progress to stages where we partner with contract development and manufacturing organisations, these expenses, along with the related Research and Development Tax Incentive offset, will increase. Net loss before tax for the year was $5.800 million, an increase over the prior year by $5.036 million. However, excluding the impact of one time Lenzetto® monetisation and its associated asset impairment recorded in FY23, the underlying Net loss before tax was improved by $1.929 million relative to the prior period. Cash and cash equivalents on hand at year end totalled $2.945 million and was $3.287 million lower than the prior year end reflecting the value of FY24’s Net loss before tax and offset by receipt of $1.487 million of the FY24 research and development tax incentive rebate (‘RDTI’) claim which was financed and brought forward into FY24. With 1 product approved in August 2024 and 2 ANDAs currently under FDA review we plan to launch 2 products in FY25, subject to regulatory approval THE PRODUCT DEVELOPMENT PIPELINE Acrux is advancing our product pipeline through the varying stages of development, both at Acrux and in conjunction with our contracted manufacturing partners. Our main priority is the progression of later stage products that will achieve commercialisation in the nearer term, while also continuing our work on earlier stage products to ensure breadth of our product pipeline and a continuous stream of product launches over coming years. The Company has a portfolio of 15 products. The product development pipeline is illustrated in an infographic on pages 4 and 5. Currently 9 products are in active development, of which 2 are in late stages of review by the FDA. Four products are currently marketed with 2 products approved and not yet marketed. Over time, as ANDAs are approved, Acrux will add new projects in order to maintain a similar number of products in active development. Our corporate strategy is reflected in our operational structure and the processes in place to deal efficiently and effectively to meet our revenue generation objectives. 1. FDA publishes product-specific guidances describing the agency’s current thinking and expectations on how to develop generic drug products therapeutically equivalent to specific reference listed drugs. 2. Abbreviated New Drug Application (ANDA). Acrux Annual Report 2024 7 CHAIRMAN & CEO REPORT (CONTINUED) Acrux continues to progress its strategy of developing and commercialising a pipeline of topically applied pharmaceutical products. Dapsone 5%, Gel was launched in April 2024 and we are planning 2 further launches for FY25, including Dapsone 7.5%, Gel which was approved in August 2024 and one other product, subject to regulatory approval. Formulation Scientist, Chioma 8 STRATEGY BOARD AND CORPORATE GOVERNANCE Acrux’s strategy focuses on the development and commercialisation of topically applied pharmaceutical products During the year, the Board has reviewed and updated all Corporate Governance policies as part of the routine review cycle. Corporate Governance policies can be viewed on the Acrux website under the Corporate Governance tab. Ross Dobinson Chairman (L) The Board has also reviewed the qualities that each Director brings to the Board to ensure the Board has the appropriate skills and experience to lead the company both now and in the future and to identify potential or emerging gaps in skill sets, any areas for improvement and to support succession planning. Michael Kotsanis Chief Executive Officer and Managing Director (R) Within our strategy there are three key priorities: 1. Revenue realisation 2. Operational effectiveness 3. Optimal portfolio management Revenue realisation is the transformation driver for the Company as we strive to be financially self-sustaining and consistently profitable. The number of commercialised products will continue to expand following the recent launches of Prilocaine 2.5% and Lidocaine 2.5%, Cream and Dapsone 5%, Gel, approval of Dapsone 7.5%, Gel and 2 products which are under late stage review by the FDA of which we are hopeful that 1 will be approved in the near future. We plan to launch 2 products in FY25.. Operational effectiveness is supported by project management, resource and cost management to enable Acrux to continue to submit ANDAs for FDA review and commercialise our diversified portfolio of topically applied pharmaceutical products. Portfolio management to maximise commercial returns based on strategic project selection of commercially attractive products which we have the technical capability to develop. A key component of successful portfolio management is the ongoing market intelligence gathering and assessment in a rapidly changing product and market landscape. The Company has invested to secure and maintain the necessary blend of skills, knowledge and experience to deliver on our strategic priorities. Acrux Annual Report 2024 The Directors consider that Acrux has complied with all applicable laws and regulations throughout the year ended 30 June 2024 and no issues have arisen between the end of the financial year and the date of this report. Acrux is committed to sustainability and conducting business in a socially responsible manner. As we move towards mandatory climate related disclosure standards in Australia, we are actively contemplating how our business activities impact the environment and society to ensure we are prepared for changes in reporting standards to identify and implement initiatives to improve our performance and to ensure we are prepared for new and emerging stakeholder expectations. Our Environment, Social and Governance (ESG) Report can be found on page 10. We would like to personally thank the Acrux team of employees and the Board for their valuable contributions, their sustained efforts to progress ANDAs through the FDA review process and the focus on the company’s revenue growth objectives. Finally, we would like to thank you, our shareholders, for maintaining faith in Acrux which will be warranted as we progress into the revenue growth phase. 9 ENVIRONMENT, SOCIAL AND GOVERNANCE As we move towards mandatory climate related disclosure standards in Australia, Acrux is closely evaluating the way our business activities impact the environment and society, the associated risks and opportunities and seeks to put in place strategies to not only ensure we are well prepared for changes in mandatory reporting standards and frameworks but to also identify and implement initiatives which can improve our performance and fulfill new and emerging stakeholder expectations. At the heart of Acrux’s Environment, Social and Governance (ESG) framework is our commitment to economic and environmental sustainability and conducting business in a responsible and ethical manner. We consider this commitment to be fundamental to how we interact with our stakeholders and the manner in which we develop and commercialise our range of topically applied generic medicines which are both affordable and meet the highest possible product safety and regulatory standards. Our purpose and strategy are clear and consistent and are closely aligned with our culture, values and behaviours. Acrux’s commitment to conducting business in a socially responsible manner is considered through three key operational tenets: 1.  Environmental Tenet – includes the implementation of sustainability initiatives to measure and reduce Acrux’s greenhouse gas emissions, to lower our carbon footprint and to preserve our natural environment, 2.  Social Tenet – considers Acrux’s relationships with its employees, investors and the broader community including the way we conduct business, employee diversity, equity and inclusion programs as well as the safety and wellbeing of our employees and other stakeholders, and 3. Governance Tenet – practising good corporate governance and conducting business ethical and socially accountable manner. Through our Code of Conduct, corporate values and policies we prioritise activities and initiatives to achieve high standards in each of these tenets. Environmental Tenet Acrux is committed to conducting operations in an environmentally responsible manner, to manage its climate related risks and opportunities and to adopt practices to achieve sustainable outcomes through minimising waste, energy usage and emissions which are associated with our building operations, laboratory and office equipment. 10 Acrux occupies leased premises located at 103–113 Stanley Street, West Melbourne. These premises are 1,735 square meters, plus 365 square metres of open air car parking comprising spaces which are used as a laboratory, offices and warehousing. The building owner has not installed infrastructure to harness solar energy or to divert and recover rainwater. Our environmental strategies are focussed on the minimisation of energy usage and effective waste management through minimisation, recycling, and safe disposal. We have identified and implemented a number of sustainability initiatives in order to reduce greenhouse gas emissions, including: — Expanded company policies and standard operating procedures to include sustainability objectives; — Introduced energy savings measures to reduce energy consumption and accelerate waste reduction; — Considered climate-related risks and opportunities within in our broader risk management processes with each identified risk assessed for its impact, likelihood, detectability and the existence of mitigating factors; — Identified and evaluated waste reduction initiatives in our laboratory and office following on site audits and workshops; and — Digitised financial and operational records to minimise the use of paper records. Strategies applied to minimise waste include avoiding single use products, purchasing more recycled, recyclable and biodegradeable materials, reusing office supplies and adopting digital document management and shareholder communication strategies to reduce our reliance on paper based products. We have successfully implemented digitisation projects including contract management and transactional finance processes, such as Accounts Payable and Payroll. We are progressively digitising our employee training records and are exploring enhancements which can be made in our Quality systems. This includes electronically signed documents and our Vendor Assurance program to ensure our suppliers also adopt sustainable practices in their manufacturing and sourcing cycles. Across our laboratory, office and staff kitchen recycling bins facilitate the recycling of waste which could otherwise become landfill. TENETS Environmental includes preservation of our natural environment Acrux’s employees are trained in standard operating procedures to practice safe handling and manage the types of materials which are utilised in our laboratory. Documented procedures ensure waste, including hazardous, controlled and non-hazardous waste, is handled safely and disposed of in accordance with environmental regulations, standards and codes. Acrux is licenced to store and use hazardous and controlled substances and an agreement is in place with City West Water under the Water Industry Act 1994 and Water Industry Regulations 2006 to ensure trade water waste is managed effectively and responsibly. All waste, including laboratory waste, is recycled where possible and where is needs to be disposed of it is safely collected and transported. To ensure compliance with the Environment Protection Act 1970 we use an external waste management consultant with ISO 14001:2015 Certification for Environmental Management and an EPA Transport Certificate is issued for each hazardous or controlled waste collection. The Directors consider Acrux has complied with all applicable environmental laws and regulations throughout the year ended 30 June 2024 and no issues have arisen since the end of the financial year to the date of this report. Social Tenet Acrux deeply values its highly skilled and specialised team and is committed to providing a stimulating, healthy and safe work environment for all employees, contractors and visitors. Our Code of Conduct documents our expected behaviours and ethical standards and guides and empowers our employees to make good decisions and act responsibly. Health, safety and wellbeing is a key priority as is ensuring our employees have the skills and resources required to perform their roles to a high standard. Practicing safe systems of work is ingrained into Acrux’s company culture and we have proactive and well developed processes to capture occupational health and safety data, including near misses. Should a near miss be reported it is thoroughly investigated and, if necessary, corrective measures are implemented. Our internal audit programme helps us assess health and safety standards in our laboratory, warehouse and offices at our West Melbourne site, including potential risks and hazards. Safety audits are conducted at regular intervals throughout the year by occupational health and safety team members who report their findings, including corrective action for any issues identified, to the Leadership Team. We have not recorded a Lost Time Injury since 2016. Acrux Annual Report 2024 Social consideration of the safety and wellbeing of patients and our employees Governance practising good corporate governance Diversity and Inclusion supports our employees to be valued, respected and to experience fair treatment and merit based access to remuneration and employment opportunities. We prioritise our inclusive culture to ensure our workplace is safe for and attractive to a diverse range of people. Diversity is valued across gender, ethnicity, sexual orientation, disability, religious beliefs, family status and age. Diversity is embraced and celebrated as we believe this not only promotes wellbeing, productivity and safety but also enhances our ability to attract and retain skilled employees. We seek to attract and retain a workforce which is representative of our broader community and to remove unconscious biases from our behaviours, policies and processes. Acrux is proud of its diverse workforce. Our team is comprised of more than 30 employees having family backgrounds from more than 20 different countries and we regularly share important cultural celebrations. In our workplace Acrux achieves gender equality of participation and remuneration with slightly more female staff members than male and the average hourly remuneration of female employees is almost 1% higher than that of male employees. Our Leadership Team comprises five members, three of whom are female whilst our Board comprises five members, all of whom are male. Acrux’s Diversity and Inclusion Policy is integral to our talent management and recruitment strategies and can be viewed in the Investor Relations section of our website, https://investors.acrux.com.au/investor-centre and this policy. Within our corporate and governance policy training programs regular online and compulsory training events are conducted for all staff to reinforce our policies and expectations on topics such as harassment, bullying, bribery, corruption, diversity, inclusion, whistleblowing and Code of Conduct. 11 ENVIRONMENT, SOCIAL AND GOVERNANCE (CONTINUED) Stakeholders Understanding the needs and expectations of our stakeholders is fundamental to the achievement of our Goals. We are committed to engaging with our stakeholders in Australia and internationally to improve our performance and to understand their priorities and objectives. — Patients: With an increasing number of marketed products, the number of patients using our products has grown and will continue to do so with future product launches. — Customers: Our licensees sell our products into more than 40 countries. We expect our licensees to uphold behaviours which are consistent with our Code of Conduct. — People: Our employees are at the heart of Acrux. We engage regularly with our team, holding bi-monthly ‘All Staff’ meetings and frequent social activities embracing our diversity. We review employee performance at least a twice a year including written feedback and quantifiable performance measurement. — Suppliers: We source materials from a large number of qualified global suppliers for the 15 products in our portfolio. We have eight contracted Contract Manufacturing Organisations (‘CMO’), each of which is qualified to manufacture commercial products for the US market. We audit our CMOs to ensure they meet both our standards and the standards set by regulators for the country the product they manufacture is intended to be sold. — Investors: We engage with current and potential investors in a number of ways. We regularly communicate through ASX announcements. We convene public webinars after each half year result is announced and attendees have the opportunity to ask questions. Webinar details are published in advance on the ASX platform and may be attended by any shareholder or interested party. We regularly meet individual shareholders outside closed reporting periods and presented at numerous investor forums including the MST Financial Hidden Gems in Life Sciences Forum, the 18th Bioshares Biotech Summit, Proactive Investors webinar, 3AW Money Talks program and others. New investor presentation decks are released around the time of results announcement and are updated for specific presentations at conferences or industry forums to keep shareholders abreast of our progress. We maintain an active LinkedIn account featuring occasional job openings and to highlight various events