Announcement PDF Annual Report 2023 Contents Who we are 1 Highlights 2 The Xanamem Pipeline 3 How Xanamem Targets Non-amyloid Disease Mechanisms via Cortisol in Alzheimer’s Disease 4 Clinical Trials Program Overview 5 Chair’s Letter 6 Chief Executive Officer’s Letter 8 Vision and Strategy 10 Operating & Financial Review 12 Board of Directors 18 Executive Leadership Team 20 Directors’ Report 22 Remuneration Report (Audited) 24 Auditor’s Independence Declaration 37 Financial Report 38 Notes to the Financial Statements 43 Directors’ Declaration 63 Independent Auditor’s Report 64 Shareholder Information 68 Corporate Directory 70 Disclaimer This Annual Report may contain certain "forward-looking statements" that are not historical facts; are based on subjective estimates, assumptions and qualifications; and relate to circumstances and events that have not taken place and may not take place. Such forward looking statements should be considered “at-risk statements” - not to be relied upon as they are subject to known and unknown risks, uncertainties and other factors (such as significant business, economic and competitive uncertainties / contingencies and regulatory and clinical development risks, future outcomes and uncertainties) that may lead to actual results being materially different from any forward looking statement or the performance expressed or implied by such forward looking statements. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Actinogen Medical does not undertake any obligation to revise such statements to reflect events or any change in circumstances arising after the date hereof, or to reflect the occurrence of or non-occurrence of any future events. Past performance is not a reliable indicator of future performance. Actinogen Medical does not make any guarantee, representation or warranty as to the likelihood of achievement or reasonableness of any forward-looking statements and there can be no assurance or guarantee that any forward-looking statements will be realised. Actinogen is a neurotherapeutics developer realizing a revolutionary therapy so neurology patients and their families can live their best lives Annual Financial Report 1 Highlights The highlight of FY2023 was the strongly positive clinical biomarker Phase 2a trial data in patients with mild Alzheimer’s disease Reported clinically significant effects of Xanamem® in biomarker-positive patients with mild AD Confirmed the utility of the blood biomarker pTau181 to select patients with progressive AD suitable for the Phase 2b trial Identified and started qualifying sites for the Phase 2b AD trial in Australia, US, UK, Singapore and South Korea Completed development and manufacturing of the to-be-marketed tablet formulation Commenced further scale up manufacturing activities for drug substance Successfully updated regulatory documentation with the FDA for the Phase 2b AD trial and new tablet formulation Commenced XanaCIDD trial in patients with cognitive impairment and depressive disorder Appointed esteemed neurologist Dana Hilt MD1 as Chief Medical Officer based in Boston, USA Appointed experienced drug developer Nicki Vasquez PhD as NonExecutive Director based in San Francisco, USA Filed a new manufacturing patent to protect a key step in the chemistry process Conducted the first two Clinical Trials Science Fora to share more detailed scientific information with shareholders Dr Hilt gave an oral presentation on Xanamem clinical effects and pTau at the ADPD conference in Sweden2 ® Xanamem is a registered trademark of Actinogen Medical Limited 1 Dr Hilt replaced Dr Rolan, who continues as the Company’s clinical pharmacologist and medical director for the XanaCIDD clinical trial 2 The International Conference on Alzheimer’s and Parkinson’s Diseases and related neurological disorders 2 Actinogen Medical Limited The Xanamem Pipeline Phase 2 placebo-controlled trials Outlook Cognitive impairment in early Alzheimer’s disease Phase 2b in patients with early AD and elevated blood pTau Pivotal trials examining cognitive enhancement and reduced disease progression Depression with cognitive impairment Phase 2a in patients with cognitive impairment and depression Pivotal trials assessing effects on both depression and cognition Anxiety, sleep & behavioural problems in Fragile X syndrome Proof-of-concept in adolescent and young adult males Pending alternative funding e.g. partnerships or grants Annual Financial Report 3 How Xanamem Targets Non-amyloid Disease Mechanisms via Cortisol in Alzheimer’s Disease Xanamem1 is a unique molecule that reaches its target in the brain The cortisol hypothesis targets ‘the amyloid gap’ Xanamem’s novel mechanism of action sets it apart from other therapies for neurological diseases. It works by blocking the excess production of intracellular cortisol – the stress hormone – through the inhibition of the 11β-HSD1 enzyme inside brain cells. The 11β-HSD1 enzyme is highly concentrated in the hippocampus and frontal cortex, the areas of the brain associated with cognitive impairment in neurological diseases, including Alzheimer’s disease (AD). Xanamem was developed in response to a large body of evidence from non-clinical and human studies implicating elevated brain cortisol in cognitive decline. Animal non-clinical studies show 11β-HSD1 inhibition protects against long term cognitive decline independent of continued amyloid formation. Recently, newer anti-amyloid intravenous infusions have been shown to rapidly remove amyloid protein from the brains of people with AD, resulting in a slowing of clinical progression by approximately 30% (refer Figure footnote 1 below). More is needed to halt progression completely and this almost certainly will come from other approaches such as that of Xanamem (Figure). The Company is undertaking a Phase 2b placebo-controlled trial evaluating Xanamem in the treatment of mild to moderate AD, where some functional impairment (difficulty completing activities of daily living) is also present and patients have an elevated level of pTau in the blood to indicate progressive disease. It is also conducting a Phase 2a placebo-controlled trial measuring the effects of Xanamem on safety, cognitive performance and depression in patients who are inadequately treated by their anti-depressant medication and have both depressive symptoms and cognitive impairment. Newer anti-amyloid antibodies shown to slow but not halt progression of AD1 % worsening CDR-SB2 over 18 months The Company’s recent XanaMIA Part A trial confirmed Xanamem’s ability to rapidly enhance attention and working memory (referred to as cognition – the ability to think and remember things). These findings replicated the pattern of improvement seen in the prior XanaHES trial in healthy older volunteers. In addition, large beneficial clinical effects were seen in patients with mild AD and elevated blood pTau protein (to indicate progressive AD). Recent human target engagement data for the drug in the brain suggests good activity of doses as low as 5mg daily. Clinical safety data have been collected from more than 300 individual patients or volunteers. 0 Ideally patients would not worsen on treatment -5 Large area of unmet need most likely treatable by non-amyloid therapies -10 -15 -20 -25 -30 -35 -40 lecanemab donanemab all donanemab subgroup Drugs targeting other mechanisms like Xanamem are needed 1 Lecanemab and donamemab are anti-amyloid antibodies given as an intravenous infusion every 2 or 4 weeks (van Dyck et al. 2022; DOI: 10.1056/NEJMoa242182 n9=1795 and Sims JR at al.JAMA. Published online July 17, 2023. doi:10.1001/jama.2023.13239 2 CDR-SB is an 18-point scale measuring functional status and was the primary endpoint for lecanemab and a secondary endpoint for donanemab 1 Xanamem is an investigational product and is not approved for use outside of a clinical trial by the FDA or by any other regulatory authority 4 Actinogen Medical Limited halt progression Clinical Trials Program Overview Phase 2 and 3 trials to achieve marketing approvals Current Phase 1 & 2 datasets Safety, cognition activity (n>300) Phase 2 Alzheimer’s Disease 2x Phase 3 Alzheimer’s Disease Phase 2 Cognitive Impairment in Depression 2x Phase 3 Cognitive Impairment in Depression Annual Financial Report 5 Chair’s Letter Dear Shareholder, I am pleased to present to you the Actinogen Medical Annual Report for the financial year ended 30 June 2023. The Company has again made significant progress in its clinical pipeline activity focused on the successful development of our novel, small molecule drug, Xanamem, to treat illnesses such as Alzheimer’s disease and cognitive impairment in depression. Reducing excess cortisol inside brain cells has the powerful potential for positive impact in the lives of patients and their families suffering from many neurological and neuropsychiatric conditions where there is substantial unmet medical need. In the face of challenging market headwinds this year in the small cap biotech sector and capital markets in general, we have delivered positive clinical data and commenced enrolment in our Phase 2a trial of cognitive impairment in depressive disorder (CIDD). We continue to be guided by our strategic objectives of accelerating clinical development in cognitive impairment, forward planning, and creating value from partnerships. In so doing we adhere to high quality trial design and conduct so that we optimize the chances of success and drive value for shareholders. Further details on the Company’s strategic priorities for FY2024 are shown in the Vision and Strategy sections of this annual report on pages 10 and 11. Executive leadership CEO Dr Steven Gourlay has once again provided excellent, proactive executive leadership of all aspects of the Actinogen business over the past year. The board was delighted when he announced positive results from the Phase 2a clinical biomarker trial in October 2022, which validated Xanamem’s cortisol mechanism of action and the design of the Xanamem AD program. Following the release of those new results, we were able to recruit renowned neurologist Dr Dana C. Hilt MD to our executive leadership team in February as the Company’s Chief Medical Officer (CMO) reporting to Dr Gourlay. USbased Dr Hilt brings world-leading expertise and experience to the role as an eminent neurologist and a clinical trial specialist in Alzheimer’s disease, depression, and other neurologic and neuropsychiatric diseases. Dr Gourlay and Dr Hilt now form a powerful senior management team for presentations and conferences. They have attended all the important international AD conferences and key partnering meetings over the past year. I am confident that Dr Gourlay and Dr Hilt will lead the Company in ’following the science’ with distinction in the coming year with the help of our other highly experienced staff. We are 6 Actinogen Actinogen Medical Limited Medical Limited pleased that former CMO, Professor Paul Rolan continues to provide valuable expert supervision for our clinical pharmacology and depression programs. The Company continues to fill vital organisational and consultant roles to ensure the success of the clinical development program. Key appointments included a Global Program Lead based in the USA, along with several clinical operations team members in Australia. Board and corporate governance In March, the Board was pleased to announce the appointment of US-based Dr Nicki Vasquez PhD as an independent non-executive director. Dr Vasquez is an immunologist and biopharmaceutical executive with more than 25 years of biopharmaceutical discovery research and development experience. She strengthens the Actinogen Board with her skills and experience in strategic licensing, partnering and alliance management as well as a strong depth of knowledge in clinical development. Dr Vasquez is currently Chief Portfolio Strategy & Alliance Officer at Sutro Biopharma, a clinical stage oncology company in San Francisco where she is responsible for program management, portfolio strategy, and alliance management. We welcome Dr Vasquez to the Actinogen board. The board seeks continuous improvement in its governance and management oversight capability. During the past year we conducted a review of all activities and responsibilities, including the Board skills matrix to identify gaps and opportunities for improvement. We updated our diversity policy to reflect a greater emphasis on inclusion. These and other corporate governance materials are posted on our website. We will continue to assess the skills suitable for the Board and, where appropriate, make changes and/or additions. Depression & cognition advisory board appointment The Company welcomed esteemed Singapore-based clinical expert in dementia, Associate Professor Christopher Chen BMBCh, MRCP, FAMS (neurology), FRCPE to the Company’s Depression & cognition Advisory Board during the year. Associate Professor Chen is a Senior Clinician-Scientist at the Departments of Pharmacology and Psychological Medicine, Yong Loo Lin School of Medicine, National University of Singapore, and Director of the Memory Aging and Cognition Centre, National University Healthcare System. Actinogen represents a unique opportunity with near-term Phase 2a data for the XanaCIDD trial less than 12 months away We continue to utilise world-leading advisors to drive our strategic initiatives and ensure the success of our clinical development programs. Further details on all Actinogen board, advisory board and senior executive personnel can be found on the Company’s website: https://actinogen.com.au/our-team/ I would like to thank all our dedicated staff, the executive team, our esteemed advisory boards, and my fellow corporate board members for their strong contributions to the success of the Company in FY2023. Capital raising On 2 August 2023 the Company announced a post balance date non-renounceable pro-rata rights issue offer (also known as an entitlement offer) to existing shareholders to raise a maximum of approximately $10 million before costs. 1 We are pleased to offer this opportunity to our existing shareholders as we believe that this rights offer, which is still current as at the date of this annual report, is a highly attractive investment. In summary, it offers shareholders the ability to: • • • Acquire 1 new share for every 4.54 Shares held at an issue price of 2.5 cents per new share Receive for no additional payment 1 new unlisted option (with an exercise price of 3.75 cents and an expiry date 36 months from the date of issue) for every 2 new shares issued Apply for any number of additional shares (and corresponding new options) if shareholders subscribe for their full pro rata entitlement initially (known as a top up offer). A prospectus was released to the ASX and ASIC on 8 August and letters were distributed to shareholders on the the day day the the strongly encourage encourage offer opened, 17 August 2023. II strongly shareholders to accept the offer prior to the closing time of 7pm AEST on 4 September 2023. If shareholders have not yet received a letter via email or mail, please contact the Company’s share registrar, Automic, to register your email address for urgent delivery of your personalized offer document and instructions on how to participate in the offer. Automic’s contact details are shown in the box below. If you have any questions in relation to the current rights issue or your shareholding in Actinogen, please contact Automic at hello@automicgroup.com.au or on 1300 288 664 (within Australia) or +61 2 9698 5414 (outside Australia). Visit the Automic website https://investor.automic.com.au/#/home to register as an ACW shareholder or log in to your existing account. 1 On 15 August 2023 the Company announced a substantial and binding commitment from Defender Asset Management Pty Ltd and McFarlane Cameron Pty Ltd for $4.56 million in aggregate if there is a shortfall in funds raised under the offer. Directors also reserve the right to place any shortfall in subscriptions for new shares (and corresponding new options) to qualifying investors for 3 months after the offer closes on 4 September 2023. Actinogen remains in a solid financial position with $8.5 million in cash as at 30 June 2023, prior to the addition of net cash raised in the rights issue. Additional funds of at least $3.8 million are expected from the R&D tax incentive cash refund in the coming months. Annual General Meeting This year’s Annual General Meeting will return to its traditional in-person format. It will be held in Sydney on Friday 17 November 2023, and we invite shareholders to attend. Details of the meeting time and location will be announced in due course. Outlook Actinogen has completed another year of achievement and progression of our clinical development pipeline, particularly with the announcement of the results of the Phase 2a clinical biomarker trial which validated Xanamem’s cortisol mechanism of action and allowed us to simulate the next phase 2b trial in AD. The board is confident in the Company’s prospects in FY2024 and beyond with two major clinical readouts in the next 18 months reflecting the hard work and dedication of the Actinogen team. The XanaCIDD depression trial that is expected to report results in the first half of calendar 2024, followed by the interim analysis of the XanaMIA Phase 2b trial in patients with AD, expected in early 2025. The board and management team remain committed to proactive management of all aspects of our business and the successful execution of our strategic priorities to ensure the best possible outcomes for shareholders. On behalf of the Board, I would like to thank you for your ongoing support, and we look forward to updating you on our progress during the coming year. Dr Geoff Brooke Chair 30 August 2023 Unless stated otherwise, all financial data is in Australian dollars Annual Financial Report Annual Financial Report 7 Chief Executive Officer’s Letter Dear Shareholder, Continuing to ‘follow the science’ Our strategy is to complete our XanaCIDD trial by June 2024 and repeat and extend our positive clinical data in a larger and longer Alzheimer’s disease trial As we outlined in our Clinical Trials Science Forum held in early August 2022, Actinogen’s clinical trials in Alzheimer’s disease and cognitive impairment in major depressive disorder are predicated on ensuring that we hit the ‘right’ criteria for successful, precision drug development: 2 • • • • • • • Hitting the right target Having a drug with the right properties Using the right biomarkers and assessments to guide development Selecting the right trial participants Using the right trial design Targeting the right dose Ensuring the right safety profile. Alzheimer’s disease (AD) The new clinical data generated during the year was a critical and important confirmation of the clinical benefit of Xanamem at the right 10 mg dose level. The primary finding of the trial, conducted under a prespecified double-blind analysis, was that Xanamem 10 mg produced clinical and cognitive benefit in patients with elevated blood pTau-181.3 Levels above the median value of 6.74 pg/mL (n=34) or 10.2 pg/mL (n=9) identified patients who had a clinically significant therapeutic benefit from Xanamem compared with placebo. The average effect size was approximately 0.6 to 0.8 points on the CDR-SB scale 4, measuring cognition and function, which is widely used in modern trials of early-stage AD. While the trial was not designed to be large enough or long enough to achieve statistical significance, the clinical effect size, measured by the Cohen’s d statistic of 0.41, was very large for the AD field and supports the effectiveness of Xanamem in this patient population (p = 0.09). In drug development, clinical safety data is equally important as efficacy data. Notably, the clinical safety profile of Xanamem continues to look promising, with no Serious 2 Based on The ‘rights’ of precision drug development for Alzheimer’s disease. Cummings et al. Alzheimer’s Research & Therapy (2019) 11:76 https://doi.org/10.1186/s13195-019-0529-5 3 P-Tau181 is elevated in patients with AD. 8 Actinogen Actinogen Medical Limited Medical Limited Adverse Events attributed to the drug in more than 300 people treated for up to 12 weeks. With the new clinical data in hand to intelligently simulate and design the next Phase 2b trial, a design was chosen that enables assessment of Xanamem’s effects on both cognition, via a series of mental exercises, as well as clinical function, measured with endpoints like the CDR-SB and activities of daily living scores. Thirty-six weeks duration was chosen to enable a long enough time for Xanamem treatment effects to become evident in AD patients, especially those effects of improving clinical function (slowing progression). The trial is further enhanced by using our new, to-be-marketed tablet formulation. Results are anticipated by the end of 2025, with an interim analysis expected in early 2025. In my view, this trial has a relatively high probability of success given the independent efficacy observations from three separate trials to date and our ability to simulate it with prior Phase 2a data.5 Cognitive impairment in depression (CIDD) There is an extensive database of clinical literature to suggest that reducing brain cortisol levels is a promising strategy for the treatment of depression.6 Because Xanamem achieves good target inhibition in the brain with doses of 10 mg, our placebo-controlled XanaCIDD Phase 2a trial should definitively answer the question on whether or not the cortisol hypothesis is relevant in depression. Previously, the computerized cognitive testing system used as the primary endpoint in XanaCIDD showed a Xanamem treatment benefit in two independent placebo-controlled trials of older volunteers. 4 CDR-SB is the Clinical Dementia Rating - Sum of Boxes, an FDA approved rating scale 5 6 See the biomarker trial data announced 10 October 2022 Meta-analysis of prior trials aimed at reducing cortisol, Ding et. al 2021 The key highlight of the year was demonstrating a clinical cognitive benefit of Xanamem in patients The keyand highlight of the year was demonstrating a The key highlight of the year was demonstrating a with biomarker-positive, mild Alzheimer’s disease clinical and cognitive benefit of Xanamem in patients clinical and cognitive benefit of Xanamem in patients with biomarker-positive, mild Alzheimer’s disease with biomarker-positive, mild Alzheimer’s disease By the end of July 2023 approximately 25% of the target 160 participants had been enrolled in Australia in the 6-week treatment protocol and results are expected in Q2 CY 2024. By the end of July 2023 approximately 25% of the target 160 Unheralded industry-wide delays by the UK regulatory participants been enrolled in Australia By the end ofhad July 2023 approximately 25%inofthe the6-week target 160 authorities slowed our trial expansion. This is being actively treatment protocol andenrolled results are expected Q26-week CY 2024. participants had been in Australia in in the mitigated by opening clinical sites in the US. We have now Unheralded industry-wide delays the UK regulatory treatment protocol and results areby expected in Q2 CY 2024. finally received approval from the UK and will open a number authorities slowed our trial delays expansion. This being actively Unheralded industry-wide by the UKisregulatory of preferred sites there next month. mitigated opening sites in the US.isWe have now authoritiesby slowed ourclinical trial expansion. This being actively Business development &from partnering finally received approval the UK andUS. willWe open a number mitigated by opening clinical sites in the have now of preferred sites there next finally received approval frommonth. the UK and will open a number Business development and partnering remains an ongoing of preferred sites there next month. focus for the Company and we continue to see a high level Business development & partnering of interestdevelopment in our programs despite the challenging Business & partnering Business development and partnering remains an ongoing biopharma market conditions with markedly reduced merger focus for development the Company and and partnering we continue to see an a high level Business remains ongoing and funding activity in the sector. of interest in our programs the challenging focus for the Company anddespite we continue to see a high level We attended an increased number of international biopharma market conditions with markedly reduced merger of interest in our programs despite theimportant challenging conferences duringconditions the year inwith person to enhance and fundingmarket activity in the sector. biopharma markedly reduced merger Actinogen’s as a Phase 2 clinical-stage company and funding credentials activity in the sector. We attended an increased number of important international and facilitate potential partner engagement and relationship conferences the year in person to enhance We attended during an increased number of important international building. Actinogen’s credentials a Phase 2 clinical-stage conferences during the as year in person to enhance company The highlightcredentials presentation the year was by ourrelationship CMO, Dr and facilitate potential partner engagement and Actinogen’s as aofPhase 2 clinical-stage company Dana Hilt MD,potential who gavepartner an oralengagement presentationand on our new data building. and facilitate relationship on Xanamem clinical effects and blood pTau levels at the building. The highlight presentation of the year was by our CMO, Dr March ADPD academic conference in Sweden.7 There is Dana Hilt MD,presentation who gave anof oral our newDr data The highlight thepresentation year was byon our CMO, significant activity and interest in blood biomarkers for the on Xanamem effects andpresentation blood pTau levels thedata Dana Hilt MD,clinical who gave an oral on ourat new diagnosis of AD as they may potentially avoid expensive and 7 March ADPD academic conference in Sweden. There is on Xanamem clinical effects and blood pTau levels at the hard-to-access Positron Emission Tomography7 (PET) scans significant activity and interest in blood biomarkers foristhe March ADPD academic conference in Sweden. There of the brain. It is likely that several blood tests for pTau will diagnosis AD as and theyinterest may potentially avoid expensive and significantof activity in blood biomarkers for the support the diagnosis of AD in the future, making diagnostic hard-to-access Emission Tomography (PET) scans diagnosis of AD Positron as they may potentially avoid expensive and testing widely available to general practitioners. Actinogen of the brain. It isPositron likely that severalTomography blood tests for pTau will hard-to-access Emission (PET) scans will partner with a leading diagnostics company for the support the diagnosis ADseveral in the future, making of the brain. It is likely of that blood tests for diagnostic pTau will upcoming Phase 2b trial. testing widely available general practitioners. support the diagnosis ofto AD in the future, makingActinogen diagnostic Other meetings included CEO presentation at the Sach’s will partner with a leading company for the testing widely available toadiagnostics general practitioners. Actinogen Neuroscience meeting anddiagnostics Biopartnering @JPM for associated upcoming trial. will partnerPhase with a2b leading company the with the 41st annual JP Morgan HealthCare Conference in upcoming Phase 2b trial. Other meetings included a CEO presentation at the Sach’s San Francisco in January, and the annual BIO International Neuroscience meeting and Biopartnering @JPM associated Other meetings included a CEO presentation at the Sach’s Convention in Boston, USA in June, where Dr Hilt and I with the 41st annual JPand Morgan HealthCare Conference in Neuroscience meeting Biopartnering @JPM associated conducted more than 30 partnering meetings. San Francisco in January, and the annual BIO International with the 41st annual JP Morgan HealthCare Conference in We continue relationships andBIO explore potential Convention intoBoston, USA in June, where Dr International Hilt and I San Francisco indevelop January, and the annual business development partnerships in regional areas conducted more than 30 partnering meetings. Convention in Boston, USA in June, where Dr Hilt and and I globally. more than 30 partnering meetings. conducted We continue to develop relationships and explore potential business development regional areas and We continue to developpartnerships relationshipsinand explore potential globally. development partnerships in regional areas and business globally. 7 ADPD™ 2023: The International Conference on Alzheimer’s and Parkinson’s Diseases and related neurological disorders. Data also presented at the Alzheimer’s Association International Conference (AAIC) in Amsterdam in July 7 ADPD™ 2023: The International Conference on Alzheimer’s and Parkinson’s Diseases and related neurological disorders. Data also presented at the Alzheimer’s 7 ADPD™ 2023: The International Conference on Alzheimer’s and Parkinson’s Association International Conference (AAIC) in Amsterdam in Julyat the Alzheimer’s Diseases and related neurological disorders. Data also presented Association International Conference (AAIC) in Amsterdam in July Good Manufacturing Practice (GMP) manufacturing The successful manufacturing of Xanamem drug substance and a Manufacturing to-be-marketedPractice formulation of tablets was a major Good (GMP) manufacturing milestone for the Company during the manufacturing year. Good Manufactu