Cellmid : Appendix 4D, Half Year Accounts and Strategy Update

ASX ANNOUNCEMENT

1H FY2019 RESULTS LAY FOUNDATION FOR 'PATH TO PROFITABILITY 2020' STRATEGY

• • The underlying performance of the Cellmid business was strong in the first half of FY2019 with revenue of $3.6 million (up 12% on pcp) and an increase in net assets to $8.2 million (up 89% on pcp)

• • Significant one-off costs incurred during the first half of FY2019, including the payment of the Ikon award and the Platinum Road facility

• • The Board has approved a strategic plan for the Company with the objectives of achieving profitability during FY2020 and partnering its midkine portfolio over the next two years

• • The Company is fully resourced to deliver on this plan to maximise value for shareholders on its consumer health and biotech assets

SYDNEY: Thursday, 21 February 2019, Cellmid Limited (ASX: CDY) is pleased to report the Company's 1H FY2019 results which show a strong operational performance for the business in both the consumer health and biotechnology divisions.

Revenue of $3.6 million was up 12% on pcp and reflects a diversified mix including sales from Japan, Australia and the US. The net loss after tax of $3.5 million in 1H FY2019 was largely the result of one-off expenses including the payment of the award in relation to the Ikon legal action, the expensing of employee incentive shares (non-cash) and the Platinum Road R&D loan facility.

The balance sheet improved significantly in the first half of 2019 through the $9.6 million capital raising. Net assets increased to $8.2 million (up 89% on pcp) and the cash balance strengthened to $5.4 million (up 54% on pcp). In addition, short term liabilities reduced to $266K in 1H FY2019, down from $2 million in the previous year as the Company repaid the Platinum Road R&D facility together with interest.

The reported $3.6 million revenue reflects the negative impact of the change in the Australian Accounting Standards (AASB 15) for revenue recognition. The estimated impact of the new AASB15 from 1 July 2018 was a reduction in revenue of $172K. The underlying like-for-like revenue growth in 1H FY2019, excluding the impact of Australian Accounting Standard changes, was 17%. However, the accounting change has limited impact on reported earnings.

The Company is fully resourced to execute on its strategic plan after accounting for all one-off costs relating to the Ikon litigation, repayment of its short-term loan and boosting its financial and human resources during the first half of FY2019.

CELLMID LIMITED ACN 111 304 119 ASX I CDY

Suite 204, Level 2, 55 Clarence Street,

Sydney NSW 2000 AUSTRALIA

TELEPHONE [phone] FACSIMILE [phone] WEBwww.cellmid.com.au

Cellmid CEO Maria Halasz says: "We enter 2019 in a strong position to drive revenue growth across different markets and different channels. Our 'Path to Profitability 2020' strategy lays the foundations for maximising shareholder value from both our consumer health and biotech assets."

With deliberate focus on pursuing only those sales channels that are profitable, the Company's most mature geographical segment, Japan, has been delivering growing after-tax profits since FY2016.

The same discipline has been applied in Australia, and the benefits of this program are expected to improve profitability from the second half of FY2019 as new products and more profitable distribution channels are progressively activated.

In the coming months Cellmid will focus on increasing high margin sales through an aggressive e-commerce campaign in the USA and Australia, expanding premium retail distribution in the USA and building on the QVC television shopping channel in Japan and China.

In the medium term, the Company's distribution agreement with its Chinese partner, Fukangren Pharma, is expected to produce transformational growth once regulatory approval for the Australian manufactured évolis® pharmacy range is received.

Efficiency measures identified in operations, manufacturing and logistics during the strategic review will be implemented progressively to maximise the bottom line, driving to profitability in FY2020.

Concurrently, and maintaining a low-cost collaboration model, Cellmid's midkine asset portfolio will be packaged for clinical development and partnership. The research recently published on the efficacy of the Company's midkine antibodies in autoimmune myocarditis (ASX announcement, 7 February 2019) is an important part of a credible partnering package.

"With both asset portfolios well on their way to achieving their targets, the Board is pleased to report a clean and strong balance sheet and to provide further details on its two-year strategic plan" concluded Chairman Dr David King.

Please refer to the 4D and Strategic Plan.

END

CONTACT

Company Maria Halasz, CEO Cellmid T [phone]

Investor Relations & Media Rebecca Wilson WE Buchan T + 61 417 382 [e-mail]

Cellmid Limited (ASX: CDY)

Cellmid is an Australian life sciences company with a consumer health business and biotech assets in development. Advangen is Cellmid's wholly owned subsidiary engaged in the development and sale of first in class, best in class, clinically validated anti-aging products for hair, skin and body. Advangen has a range of FGF5 inhibitor hair growth products which are sold in Australia, Japan, USA and China. Advangen has a rich portfolio of hair growth and anti-aging hair care assets which include formulations of products on market, trademarks, patents and patent applications, proprietary assays and manufacturing processes. For further information, please seewww.cellmid.com.au andwww.myevolis.com.au.

Cellmid also has two wholly owned subsidiaries, Lyramid and Kinera, which develop innovative novel therapies and diagnostic tests for fibrotic diseases, cancer and ischemic diseases of the heart. Cellmid holds the largest and most comprehensive portfolio of intellectual property relating to the novel targets midkine (MK) globally.

Forward looking statements

This announcement may have forward-looking statements that are subject to risks and uncertainties. Such statements involve known and unknown risks that may cause the actual results, performance or achievements of Cellmid to be materially different from the statements in this announcement. Actual results could differ materially depending on factors such as the availability of resources, regulatory environment, the results of marketing and sales activities and competition.

CELLMID LIMITED ACN 111 304 119 ASX I CDY

Suite 204, Level 2, 55 Clarence Street,

Sydney NSW 2000 AUSTRALIA

TELEPHONE [phone] FACSIMILE [phone] WEBwww.cellmid.com.au

CELLMID LIMITED

ABN 69 111 304 119

ASX APPENDIX 4D

RESULTS FOR ANNOUNCEMENT TO THE MARKET FOR THE HALF YEAR ENDED 31 DECEMBER 2018

Name of Entity	Cellmid Limited
ABN	69 111 304 119
Half year ended	31 December 2018
Previous corresponding period	31 December 2017

The following information should be read in conjunction with both the Financial Report for the year ended 30 June 2018 and the Interim Financial Report for the half year ended 31 December 2018 and the attached auditors' review report.

This Appendix 4D is prepared in accordance with ASX Listing Rule 4.2A.3.

Financial Results

31 Dec 2018 $
Revenue from ordinary activities for the period	Up	12%	to	$3,577,048
Loss from ordinary activities after tax for the period attributable to members	Up	221%	to	($3,504,477)
Net Loss after tax for the period attributable to members	Up	221%	to	($3,504,477)

No interim dividend was paid and it is not proposed to pay any dividends.

Net Tangible Assets

Current Period 31 Dec 2018	Previous Period 31 Dec 2017
Net tangible assets per ordinary share	7.6 cents	4.6 cents

The company did not gain or lose control over any entities during the half year period.

CELLMID LIMITED

ABN 69 111 304 119

ASX APPENDIX 4D

RESULTS FOR ANNOUNCEMENT TO THE MARKET

FOR THE HALF YEAR ENDED 31 DECEMBER 2018 (CONTINUED)

OPERATING RESULTS AND REVIEW OF OPERATIONS

Revenue for the Group was $3,577,048 for the six months ending 31 December 2018, the highest ever recorded half year result (31 December 2017: revenue of $3,205,540). The adoption of AASB 15 reduced reported revenue by $172,942 (4.6%) compared with the same period in FY2018, as outlined in Note 1 of this report, however it has not significantly impacted the overall profit and loss of the Group.

The Group received $807,972 under the Federal Government's R&D Tax Credit program during the reporting period (31 December 2017: $946,963) recorded as part of other income.

The Group incurred an after-tax loss attributed to members of $3,504,477 for the half year ending 31 December 2018 (31 December 2017: loss of $1,091,134). The increase in loss was partially due to the one-off, and now concluded, litigation with Ikon, including payment of the adverse judgement of $939,055 plus interest and legal fees. The Group has also incurred additional employee compensation expenditure as part of its strategy to strengthen the leadership team and expand the consumer health business across all markets.

Net assets of the Group increased to $8,180,607 (31 December 2017: $4,338,581), with cash reserves up at $5,412,207 (31 December 2017: $3,509,134) and short-term loan balance down to $266,804 (31 December 2017: $2,044,880) with the repayment of the $2,000,000 loan facility issued by Platinum Road including accrued interest.

The Group continued to make progress and is on track to deliver on internal operational targets in its consumer health (Advangen) and midkine businesses (Lyramid and Kinera) as outlined in the following operational report.

ADVANGEN LIMITED

During the half-year ended 31 December 2018 Advangen Limited sold products primarily through television shopping channel QVC in Japan, pharmacies and e-commerce in Australia and premium retailers in the USA. Advangen generated total revenue of $3,468,240, up 14% compared with the same period last year (31 December 2017: $3,044,942). The effect of AASB 15 was a reduction in recorded revenue of $172,942 as outlined in Note 1 to the financial statements. The net effect on overall profitability of this change was not significant.

Sales in Japan remained strong during the first half of FY2019 with direct-to-consumer television shopping channel QVC accounting for more than 50% of the total revenue for the Jo-Ju® branded hair growth products. Further campaigns and new product launches are planned at QVC throughout the year, with another major Jo-Ju® sales event expected in June 2019. The barber shop channel remained a significant source of sales in Japan during the first half of FY2019, with increasing revenue from the Hair Biology concept store in Ginza, the first bulk product shipping to China and e-commerce during the period.