Immuron Limited ABN 80 063 114 045 Annual report for the year ended 30 June 2017 Immuron Limited ABN 80 063 114 045 Annual report - 30 June 2017 Contents Page Corporate directory 1 Intellectual property report 7 Director

Limited ABN 80 063 114 045

report - 30 June 2017

Liver Portfolio - Three Ongoing Phase II Programs in Clinical Development (NASH, ASH and Pediatric NAFLD)

lead Principal Investigator for the Immuron non-alcoholic steatohepatitis (NASH) clinical study Dr Arun Sanyal, is the former

President of AASLD (American Association for the Study of Liver Diseases) and current Chair of the Liver Study Section at the

National Institute of Health (NIH).

study achieved its recruitment goal of at least 120 patients this year and successfully enrolled 133 patients with biopsy proven

NASH. The primary endpoint is changes in liver fat content confirmed by MRI and secondary endpoints being changes in ALT (liver

enzymes). The top-line results for the study are expected to be reported by Q4 2017.

is a severe form of non-alcoholic fatty liver disease (NAFLD). It affects about 16 million people annually in the United States

alone, making it a prime opportunity for the pharmaceutical and biotechnology industries.

17.3 percent of Americans aged 15 - 19 suffering NAFLD, Immuron's Phase I/II clinical trial with Emory University is timely.

Health authorities estimate paediatric NAFLD affects five to 10 percent of the US paediatric population, with no current approved

lead Principle Investigator for our Pediatric NAFLD study is Dr Miriam Vos, Emory University. Dr Vos specializes in the treatment

of gastrointestinal disease in children as well as fatty liver disease and obesity.

NIH funded Phase II double blind, placebo control, randomized clinical study of IMM-124E enrolled the first patient into the study

in February this year and has so far randomized over 10% of the targeted 40 patients into the study. The primary endpoint is changes

in ALT (liver enzymes) following 3 months of treatment with top-line results expected in Q4 2018.

Arun Sanyal is also the lead Principle Investigator of the Immuron alcoholic steatohepatitis (ASH) clinical study which is also

funded by the NIH. Over 50% of the targeted 66 patients have been randomized into the study. The primary endpoint is changes in

ALT (liver enzymes) with top-line results are expected in Q1 2019.

Securities and Exchange Commission Registration

successfully completed its Initial Public Offering (IPO) on 9 June 2017. The Company, through its lead broker Joseph Gunnar &

Co. LLC and Rodman & Renshaw placed 610,000 ADSs and 701,500 Warrants raising USD$6.1M before costs. The close of this raising

marked a significant milestone in Immuron's lifecycle as the Company not only secured additional funding to process its

clinical portfolio and current primary clinical trial to completion, but it also gained international exposure to the much large

listing process had been an ongoing process of audit, legal and regulatory reviews for a number of months to ensure Immuron's

compliance with SEC and NASDAQ regulations.

Clinical Trial Achieves Major Milestones and Receive New US Stimulus

Company reported the results of the planned interim analysis in July this year. The primary objective of the interim analysis

was to evaluate the safety of IMM-124E. The interim analysis was conducted by an Independent Committee to maintain blindness of

both company and investigators as required to maintain the study integrity.

Committee also explored the data for signals of efficacy from the primary, secondary and exploratory end points. The analysis

was not powered for efficacy due to the limited sample size.

report submitted to the Company by the Committee confirmed that there were no safety concerns or adverse events, serum biochemistry,

hematology, vital signs, or physical examination findings for both treatment groups. We were very pleased to be able to report

the efficacy signals on liver enzymes (ALT and AST) which demonstrated a dose related reduction in both treatment doses at 24

weeks, though not statistically different than placebo.

these parameters inherently fluctuate over time and are significantly affected by baseline values the interim analysis committee

also had scheduled to perform additional analyses on the data set to correct for these inherent variations. Comparing the Area

Under Curve for the ALT/AST data over time of IMM-124E to Placebo, accounts for all the available data.

analysis demonstrated a significant reduction of ALT and AST over time (AUC ANCOVA analysis) compared to placebo. A dose-related

effect was reported when the greatest decrease occurred in the highest dose group, with the low dose group decreasing by an intermediate

amount compared with the placebo group.

Company believes that this documented effect, together with a correlation between ALT and AST, is the proof of concept for a biological

effect demonstrating decrease in liver injury.

has also advanced its world-leading IMM-124E research in NASH with two new studies at Duke University and Sanyal Biotechnology.

The studies should augment the evidence of IMM-124E's unique mechanism of action (MOA) and expected effect on NASH. The

results from these studies will supplement our pre-clinical and clinical studies to date, including the anti-fibrotic effect seen

in the CCl4 model and the metabolic and immunological improvements seen in both the Ob-Ob mice as well as the Company's

phase I clinical study.

studies will attempt to generate comparable results in the two leading NASH mouse models which mimic the full clinical spectrum

of human NASH, from simple steatosis to substantial fibrosis and cirrhosis. The additional preclinical studies will proceed under

the leadership of two internationally renowned NASH researchers, Dr Arun Sanyal, founder of Sanyal Biotechnology, and Dr Anna-Mae

Diehl, Director at the Duke University Liver Centre.

studies are ongoing and are expected to be completed by Q4 2017.

Difficile Infection (CDI) Trial Drug Completes Manufacturing Phase

is pursuing the biopharmaceutical research and development for an effective and safe non-antibiotic treatment of CDI which accounts

for more than 450,000 patients and over 29,000 deaths per year in the United States alone. The IMM-529 drug product for the study

has been manufactured and is a first-in class oral immunotherapeutic targeting the treatment of Clostridium difficile infection.

IMM-529 has been shown in pre-clinical tests to be an effective treatment in all phases of the disease and success in this trial

will provide encouragement to the Board and Management that the IMM-529 drug product has significant potential for continued clinical

Company received approval from the Israeli Ministry of Health (MoH) and the Hadassah Medical Center Ethics Committee in August

of this year to perform Immuron's IMM-529 clinical study. Immuron has completed the site initiation and the site is open

for enrolment. The first of 60 patients is scheduled to be randomized by end of September 2017. The Phase I/II randomized, double-blind,

placebo-control clinical study is designed to evaluate the safety and preliminary efficacy of Immuron's IMM-529 drug product

for the treatment of CDI.

Difficile Infection (CDI) Trial Drug Completes Manufacturing Phase (continued)

patients will be randomized, in addition to their standard of care treatment, to receive either IMM-529 or placebo three times

daily for a total of 28 days which will then be followed by two months of monitoring for any recurrence of disease. The primary

objective of the study is to assess IMM-529's patient safety and tolerability, while secondary endpoints will evaluate the

preliminary efficacy of the product evaluated by duration and severity of symptoms, and the rate of recurrence. Top-line results

are anticipated in the fourth quarter of 2018.

clinical study will be conducted under the leadership of Professor Yoseph Caraco, who is the head of the Clinical Pharmacology

Unit at Hadassah Medical Center in Jerusalem, which specializes in early stage clinical studies. The protocol for the study was

jointly developed by Immuron with Professor Caraco, Professor Allon Moses, Chairman of the Department of Clinical Microbiology

and Infectious Diseases, and Professor Jacob Strahilevitz of the Department of Clinical Microbiology and Infectious Diseases at

Marketing Strategy Drives Sales Growth

of Immuron's flagship OTC travellers' diarrhea treatment Travelan, enjoyed a strong 38 percent increase in sales compared

to the same period last year.

2017 saw Travelan's highest ever monthly sales in the US, reinforcing month-on-month revenue hikes. Much of the growth has

come through our excellent partnership in the travel industry with Passport Health.

marketing strategy includes staff education in over 3,000 pharmacies, boosted point-of-sale advertising, closer relations with

distributors and brokers, and better shelf positions.

also sponsored a satellite symposium at the 15th Conference of the International Society of Travel Medicine (CISTM15). The symposium,

on the overuse of antibiotics in travellers' diarrhea, featured three renowned gastrointestinal experts and helped gain

us exposure to more than 1,500 health professionals from 60 countries.

with the US Department of Defence Expands

this year announced that it will expand the current scope of the cooperative research and development agreement executed in June

2016 with the Walter Reed Army Institute of Research (WRAIR), Silver Spring MD, USA. The Company also executed a cooperative research

and development agreement with the Navel Medical Research Centre in August 2016. The current agreement will be expanded to include

the development of three fluoroquinolone-resistant Shigella specific anti-microbial therapeutics for pre-clinical evaluation.

will fund the evaluation of the anti-Shigella specific activity of our new antibodies, including assessing their protective capacity

in established mouse and guinea pig small animal models. Joining the development program and expanding the scope of the program

even further, will be the Armed Forces Research Institute of Medical Sciences (AFRIMS), headquartered in Bangkok, Thailand. AFRIMS

will fund and perform the evaluation of these 3 Shigella specific therapeutics in Non-Human primate (NHP) clinical studies which

results in the full clinical spectrum of the disease as seen in humans. The proposed work will be initiated once efficacy is proven