Vectus Biosystems : Chairman & CEO Address to Shareholders

For personal use only

ABN 54 117 526 137

Vectus Biosystems Limited

Chairman's Address to the 25 January 2022 Annual General Meeting

The 2021 year was very productive for Vectus as it continued with progress in its the Phase I human trial of its proprietary VB0004 that addresses a significant unmet need for anti-fibrotic agents for patients with cardiovascular and/or kidney disease. We are pleased that the toxicology work done to-date gives every indication that there will be a good result from the Phase I trial. Whilst there have challenges recruiting patients for the phase I trial due to COVID, we have made significant progression.

Vectus continues to advance work on its library of over 1,000 compounds, derived from the platform underpinning VB0004. These emerging lead compounds address some of the most significant unmet needs in medicine today and include:

• VB4-A32(liver fibrosis, including NASH and ASH);
• VB4-A79(pulmonary fibrosis, including idiopathic fibrosis, asbestosis and coal dust pneumoconiosis (Black Lung Disease)); and
• VB4-P5(renal tubular cell death consequent on cytotoxic therapy).

As a Radiologist and Clinical Physician, I emphasise the real need for this new class of drugs, providing significant social, patient and health economic outcomes. Fibrosis, or scar tissue, is the end point of a whole host of diseases including high blood pressure, injury, post infections (such as COVID-19), radiotherapy and silicosis. To have potential drugs, like those in the Company's stable, that can not only stop the growth of scar tissue, but also reverse the fibrosis, is a major development in medicine. To take the drug orally, in tablet form, also decreases the cost of production and, more importantly, increases the ease of use by patients. The use of Vectus' compounds to reduce blood pressure is also very significant.

Finance

The $7 million raised in the December 2020 placement of 7.78 million shares at $0.90 per share are being used to fund the human Phase I clinical trials for VB0004, and to fast-track work on the Company's additional compounds towards lead status and human trials, for the commercialisation of the Accugen technology, and for working capital.

It was pleasing to note that the shareholder value has progressed during the last year marked by Vectus' increased market capitalisation. The strong share price has encouraged several convertible note holders to convert at the conversion share price of $0.50.

Commercialisation Process

Vectus continues its dialogue with a cross-section of some of the world's leading pharmaceutical companies and regional mid-sized firms and feedback from these industry leaders remains very positive. The Company's objective is to partner with one or more companies via a licencing programme focusing initially on VB0004 as it completes its current trials. The additional compounds also present an attractive commercial opportunity for Vectus, and clinical success in any one of the Company's compounds is likely to generate increased interest by pharmaceutical companies with particular interest in the franchises and disease states that Vectus addresses.

Accugen

During the year Vectus has worked to enhance its technology aimed at improving the speed and accuracy of measuring the amount of DNA and RNA in samples tested in laboratories. The technology, consisting of AccuCal™ and RealCount™ software, offers a time, cost and accuracy benefit compared

VECTUS BIOSYSTEMS LIMITED ABN 54 117 526 137

3-11 Primrose Avenue, Rosebery, NSW 2018 Telephone: [phone] Facsimile: [phone]

Website: www.vectusbiosystems.com.au

For personal use only

ABN 54 117 526 137

with currently available systems. Recent activities in the commercialisation programme, which comprises a combination of direct sales, distribution partnerships and licensing opportunities, have broadened the potential market for the Accugen product. Opportunities are being worked on for applications related to food safety, which is a large and growing market. The Accugen reagent (AccuCal-D™) and software evaluation continue by internationally renowned research groups for possible utility in diagnostic tests.

The Vectus Team

I thank the Vectus team, led by Dr Karen Duggan, for the success in getting VB0004 well into the important Phase I stage during a time of unprecedented challenges. I appreciate the very relevant expertise of the Company's Board, with the experience of Susan Pond in medical research and in large pharmaceutical companies being critical and the strong commercial skills in the medical field of my fellow Directors Maurie Stang, the Deputy Chairman, and Peter Bush.

I thank Vectus' shareholders for their very active support during this exciting phase of the Company's development. We look forward to progressing our activities and growth with the objective of contributing in a meaningful way to society, patients, our stakeholders, and the delivery of improved healthcare worldwide.

Vectus Biosystems Limited

Ron Shnier

Chairman

ersonal use only

Annual

General

Meeting

onlyVIP AGONISTS -

useThe benchmark for Anti-fibrotics

ersonal

only

A SIGNIFICANT MARKET

Fibrosis is the thickening and scarring of connective tissue, usually as a result of injury, and is the pathology which underlies:

Fibrosis Reversal,

1. MAJOR

unmet need

ersonal use

HEART FAILURE

(largest single item on US health care budget $US32b in 2013)

KIDNEY FAILURE

(Dialysis and renal transplant costs in the US reached $49.2b in 2011)

LIVER FAILURE

(40% of population of China, India and South East Asia are affected)

RESPIRATORY FAILURE

(pulmonary fibrosis)

Fibrotic disease contributes to more than

40%

of all deaths worldwide

3