Full Press Release Details
Annual report - 30 June 2020
| Corporate directory | 1 |
| Chairman's letter | 3 |
| Review of operations and activities | 6 |
| Directors' report | 10 |
| Directors and company secretary | 11 |
| Principal activities | 11 |
| Dividends - Immuron Limited | 11 |
| Review of operations | 11 |
| Significant changes in the state of affairs | 11 |
| Events since the end of the financial year | 12 |
| COVID-19 | 12 |
| Likely developments and expected results of operations | 12 |
| Environmental regulation | 12 |
| Information on directors | 13 |
| Company secretary | 16 |
| Meetings of directors | 17 |
| Remuneration report (audited) | 18 |
| Shares under option | 27 |
| Insurance of officers and indemnities | 28 |
| Proceedings on behalf of the company | 28 |
| Non-audit services | 28 |
| Auditor's independence declaration | 28 |
| Rounding of amounts | 29 |
| Corporate governance statement | 31 |
| Financial statements | 33 |
| Independent auditor's report to the members | 81 |
| Shareholder information | 85 |
| Directors | Dr Roger Aston |
| Independent Non-Executive Chairman | |
| Mr Peter Anastasiou | |
| Executive Vice Chairman | |
| Dr Gary Jacob (appointed 17 April 2019, resigned 25 | |
| March 2020) | |
| Executive Director and Chief Executive Officer | |
| Mr Daniel Pollock | |
| Independent Non-Executive Director | |
| Mr Stephen Anastasiou | |
| Independent Non-Executive Director | |
| Prof. Ravi Savarirayan | |
| Independent Non-Executive Director | |
| Mr Richard Berman (appointed 1 July 2018, resigned 17 | |
| October 2019) | |
| Independent Non-Executive Director | |
| Secretary | Mr Phillip Hains |
| Registered office | Level 3, 62 Lygon Street Carlton VIC 3053 Australia |
| Telephone: +61 (0)3 9824 5254 | |
| Facsimile: +61 (0)3 9822 7735 | |
| Principal place of business | Unit 10, 25-37 Chapman Street Blackburn North VIC 3130 Australia |
| Telephone: +61 (0)3 9824 5254 | |
| Facsimile: +61 (0)3 9822 7735 | |
| Share register | Automic Pty Ltd |
| Level 5, 126 Phillip Street | |
| Sydney Sydney 2000 Australia | |
| Telephone: +61 (0)2 9698 5414 | |
| Bank of New York 225 Liberty Street New York NY 102286 United States | |
| Telephone: +1 212 495 1784 | |
| Auditor | Grant Thornton Audit Pty Ltd |
| Collins Square | |
| Tower 5, 727 Collins Street | |
| Melbourne VIC 3008 Australia | |
| Telephone: +61 (0)3 8320 2222 |
| Solicitors | Francis Abourizk Lightowlers (FAL) |
| Level 14, 144 William Street | |
| Melbourne VIC 3000 Australia | |
| Telephone: +61 (0)3 9642 2252 | |
| Carter Ledyard & Milburn LLP 2 Wall Street | |
| New York NY 10005 United States | |
| Telephone: +1 212 238 8605 | |
| Sichenzia Ross Ference LLP 1185 Avenue of the America's New York NY 10036 | |
| United States | |
| Telephone: +1 212 930 9700 | |
| Bankers | National Australia Bank |
| 330 Collins Street | |
| Melbourne VIC 3000 Australia | |
| Stock exchange listings | Immuron Limited shares are listed on the Australian Securities Exchange (ASX: IMC) and NASDAQ (IMRN) |
| Website | www.immuron.com.au |
On behalf of the Immuron Board I am pleased to present the 2019-2020
Much of the planet has suffered at the
hands of the Covid-19 pandemic. I wish to thank our loyal staff, shareholders, and research partners for their support in these
extraordinary and difficult circumstances. We have not sat on our hands during the crisis.
It is worth noting that the first three
quarters of this financial year were exceptionally productive for sales of Travelan, our frontline OTC treatment for travellers'
diarrhoea. Gross worldwide sales to March 31 2020 were up 60 per cent with gross sales of AU$2.67 million compared to AU $1.41
million for the same period the year before. However, the unforeseeable spread of Covid-19 caused a substantial reduction in air
travel and grounded all major airlines. As a result, we have seen a dramatic decline in sales, as forecast in our announcement
on March 25. It is likely this global public health emergency will continue during 2020. We cannot expect a recovery of Travelan
sales until carriers restore normal travel schedules.
We responded quickly to these testing global
challenges and the restrictive measures governments have enforced. We refocused our resources into developing our R&D partnerships,
in particular the US Department of Defence. The Naval Medical Research Centre has recently received written guidance from the US
Food and Drug Administration (FDA) on the clinical development of a new, investigational drug we are developing to treat moderate
to severe campylobacteriosis and enterotoxigenic escherichia coli (ETEC) infections.
Our manufacturing campaign proceeds as
planned, the immunisation program is now complete, and we are on schedule to harvest the hyper-immune colostrum in September. We
will use the colostrum to manufacture the drug for the proposed clinical studies behind treating moderate to severe campylobacteriosis
and ETEC infections.
We reported the testing results of our
commercial hyper-immune bovine colostrum against SARS- CoV-2 in July. Gratifyingly, Immuron's hyper-immune colostrum, used
to manufacture Travelan and Protectyn , showed antiviral activity against the Covid-19 virus in preliminary laboratory
studies. This technology platform now offers a potential new oral therapeutic approach to target SARS-CoV-2 in the gastrointestinal
tract, where Covid-19 causes inflammation and collateral damage.
Our own preliminary data potentially offer
a new oral therapeutic approach to target and directly inhibit the virus and inflammatory mediators in the gastrointestinal tract.
This research now warrants more evaluation to identify the inhibitory active substances our products. We have filed a provisional
patent application to extend our intellectual property over the findings.
With favourable share price movement in
July and August 2020, we have strengthened our financial position by raising approximately US$20 million in additional capital.
On behalf of the Board I would like to
thank our Chief Executive Officer, Dr Jerry Kanellos, and my fellow Board members. They have worked tirelessly in recent months
to protect Immuron's position in a threatening health and economic climate and maintained the development of our pipeline.
We look forward to building on our recent
momentum and again thank you shareholders for your continued support.
Non-Executive Chairman
Review of operations and activities
Immuron Limited has reported a loss for
the financial year ended 30 June 2020 of AUD $2,927,206 (30 June 2019: AUD $4,656,421). The group's net assets decreased to AUD
$5,643,913 compared with AUD $7,351,136 at 30 June 2019, including cash reserves of AUD $3,250,468 (30 June 2019: AUD $5,119,887).
American depository shares (ADS) capital raise completed
In July 2020, the company successfully
completed a US$20 million register direct offering of American Depository Shares (ADS). Immuron issued 1,006,668 ADSs, equivalent
to 40,266,720 fully paid ordinary shares at a purchase price of US$18.75 per ADS (equivalent to US$0.469 per share) for gross proceeds
of ~US$20 million. Each ADS represents forty (40) of the company's ordinary shares. The proceeds will go towards the pre-clinical
and clinical development of our therapeutic drug candidates, as well as for working capital. H.C. Wainwright and Co. acted as the
exclusive placement agent for the offering.
Immuron's IMM-124E used to manufacture
Travelan and Protectyn demonstrates antiviral activity against the COVID-19 virus in laboratory studies
Part of the proceeds of the July 2020 capital
raise will be used to further develop the antiviral activity reported against the severe acute respiratory syndrome coronavirus-2
(SARS-CoV-2), the virus that causes COVID-19. The company has been engaging with local, national, and international potential research
collaborators to advance this work and assist in the further characterization of the neutralization activity of SARS-CoV-2 observed
with our commercial hyper-immune colostrum. In July 2020 we announced the findings of 360 biolabs, a Melbourne based Contract Research
Organization using the SARS-CoV-2 hCoV-19/Australia/VIC01/2020 virus obtained from Melbourne's Peter Doherty Institute for
Infection and Immunity. The in-vitro assessment of the neutralization of SARS-CoV-2 was performed on four production lots of product
used to manufacture Travelan and Protectyn . The In-vitro susceptibility of the virus to IMM-124E was determined using
the quantitative assay which measures virus replication in the presence of increasing concentrations of the product compared to
replication in the absence of the product. The effective concentration of IMM-124E was reported as the concentration of the product
at which virus replication is inhibited by 50 percent (EC50) or 90 percent (EC90).
All four production lots produced mean
EC50 values of 40.5 to 91.9 ug/mL and inhibited viral replication at concentrations which
there was no observed cell toxicity. The concentration of IMM-124E at which virus replication was inhibited by 90 percent (EC90)
produced mean EC90 values ranging from 48.7 to 155.4 ug/mL for all four lots tested again
at concentrations at which there was no observed cell toxicity. A commercially available high protein milk powder product was
used as a placebo in the studies and produced EC50 values greater than the observed cellular
cytotoxicity concentration of >4800 ug/mL. The control milk powder inhibited viral replication at doses >25,000 ug/mL and
more importantly did not inhibit viral replication at doses which it was cytotoxic to cells. Another major finding made during
the study was that cell viability in the presence of IMM-124E was greatly enhanced when compared to placebo. IMM-124E improved
cell viability by 180 to 260% relative to controls. These results indicate that IMM-124E at concentrations which inhibited SARS-CoV-2
replication improved cell viability.
US Department of Defence relationships
For all the disruption caused by the COVID-19
pandemic, our partnerships with components of the US Department of Defence remain strong, close, and strategically vital. We will
continue the clinical development of a new oral therapeutic for traveller's diarrhoea in conjunction with the US Naval Medical
Research Centre. The initiative is in line with the more pressing demands the COVID-19 crisis has thrust upon international therapeutic
research. Strong progress has been made since the easing of COVID-19 restrictions in NSW. We have now completed the vaccination
campaign and will begin to harvest the colostrum in September this year. We are currently on track to manufacture the drug substance
and drug product by the end of this year as planned. The Naval Medical Research Center (NMRC) has received written guidance from
the U.S. Food and Drug administration (FDA) in relation to the clinical development pathway of the new drug which the company is
developing to treat moderate to severe campylobacteriosis and Enterotoxigenic Escherichia coli (ETEC) infections. The Type B meeting
with the FDA discussed the Chemistry, Manufacturing and Controls including the proposed release testing specifications of the product
as well as the planned clinical studies evaluating the safety and efficacy of the product. Work on the Investigational New Drug
application has been initiated.
COVID-19 pandemic impacts travel in
all Travelan territories
The COVID-19 pandemic caused massive international travel restrictions
in mid to late March 2020, affecting every Travelan market which had a flow-on effect to Q4 FY20 Travelan
sales due to the product's positioning as a Travellers' Diarrhoea preventative. Gross worldwide sales of Travelan
increased by 4% in the 2020 fiscal year with gross sales of A$2.7 million (net: A$2.5 million). This decline in global sales followed
on from a strong period of ~60% growth in the first 3 quarters of 2020. In April we re-focussed our marketing to promote Travelan
and its sister product, Protectyn , for their gut and digestive health benefits. When travel stops and lockdown
requirements see people isolated at home, dietary habits change, with an increasing prevalence of home food preparation and deliveries
of take-away meals. With these adjustments comes the increased risk of variable personal and commercial food hygiene standards.
FDA registration for clinical development