Clinuvel Pharmaceuticals : Annual Report to shareholders

FRONT COVER: GROWTH AND EXPANSION

CLINUVEL is well positioned to build on its established commercial and research and development operations. The Company is expanding access to its drug SCENESSE® (afamelanotide 16mg) for patients with erythropoietic protoporphyria in Europe and the USA, as well as new jurisdictions, subject to regulatory approval and agreement on reimbursement. Drawing on expertise developed in the role of melanocortin drugs - including afamelanotide - in the body, CLINUVEL has expanded its research and development program focussed on SCENESSE® and new molecules to treat multiple patient groups with severe genetic, skin, and systemic disorders. CLINUVEL is on a growth and expansion path to build a diversified and integrated biopharmaceutical business.

CONTENTS

2	4	6	8
Performance	Mission, Vision	Chair's Letter	Media, Events &
Overview	& Values		Peer Reviews

9	13	17	22
Managing	CLINUVEL	Innovation in	Singapore
Director's	in the New	DNA Repair	RDI Centre
Letter	World Order

24	36	49	50
Directors'	Remuneration	Statement of	Statement
Report	Report	Comprehensive	of Financial
		Income	Position

51	52	53	71
Statement of	Statement	Notes to the	Directors'
Cash Flows	of Changes	Financial	Declaration
	in Equity	Statements

72	77	80	81
Independent	Shareholder	Market	Glossary
Auditor's	Performance
Information
Report

1

FIFTEEN YEAR PERFORMANCE OVERVIEW

CLINUVEL completed its fourth full year of commercial operations in the financial year ending 30 June 2020, recording a fourth consecutive annual profit and declaring a third consecutive annual dividend.

A STORY OF STRATEGIC FOCUS

Over the last fifteen years, CLINUVEL has implemented a deliberate and focused strategy to develop and commercialise one lead drug embodying a novel technology, for an unmet need. CLINUVEL has delivered on the strategic objective set in 2005 to develop and commercialise SCENESSE® (afamelanotide 16mg), which has been approved and launched for adult patients with erythropoietic protoporphyria (EPP) in Europe and the USA.

Over the financial years 2005 to 2016, CLINUVEL's operations were research and development (R&D) focussed. During this R&D phase, expenses exceeded revenues as SCENESSE® was developed; clinical studies undertaken and completed; and regulatory approvals, sought and obtained. To finance the business during this time, over A$94m was raised from capital markets in several installments. CLINUVEL's last capital raising was in March 2016.

COMMERCIALISATION HAS DRIVEN REVENUES, PROFITS AND CASH RESERVES

Commercial operations commenced in Europe in June 2016 following the granting of marketing authorisation by the European Commission in 2014. In the first full year of commercial operations, FY2017, the Company's first net profit after tax of A$7.1 million was recorded. This outcome was achieved at a higher level in FY2018 (A$13.2 million) and in FY2019 (A$18.1 million), which was a record annual profit. Revenues from operations rose by 5% in FY2020 and there was a deliberate and controlled rise of 44% in expenditure to support the expansion of the Group's activities, including establishing commercial infrastructure in the USA following the approval of SCENESSE® by the US Food and Drug Administration (FDA). The Group delivered its fourth consecutive annual profit in FY2020 of A$16.6 million. This is a positive outcome, achieved as the world has been adversely impacted by the coronavirus pandemic and resulting significant economic contraction in the second half of the year.

Financial Performance, 2005 to 2020, $Am

70.0

R&D, Pre-Commercial Phase

Commercial Phase

60.0

50.0

40.0

30.0

20.0

10.0

0.0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

-10.0-20.0-30.0

Expenses Revenues Net Profit Cash Reserves

Financial years ending 30 June, revenues include all other income, cash reserves are cash & cash equivalents, net profit after tax

The Company has maintained a disciplined and conservative approach to resource management throughout its development cycle and over the last four years of commercial operations, ensuring that it is capable of withstanding global downturns, removing the need to raise capital in adverse markets and allowing

the Group to self-finance its planned expansion and growth. The rise in cash reserves to A$66.7 million as of 30 June 2020 represents a 44% annual compound growth rate since the last capital raising in March 2016. This level of cash reserves covers more than three years of the Group's FY2020 expenses.

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