NASH Phase II Results Expected in 4Q17; Transaction for NASH Therapy Indicate Rising Value for IMC

Phase II Trial in NASH is Fully Randomized; Interim Data Readout Expected in 3Q2017; Full Results Expected in 4Q17.IMC announced on April 6, 2017, that it had recruited and randomized all 134 patients for its IMM-124E Phase II clinical trial for the treatment of NASH. IMC is targeting an interim data readout in 3Q17 (@80 patients) and the reporting of final top line results in 4Q17 (All 134 patients).

We believe that a successful trial in NASH would lead to a significant gain in the stock price. Industry transactions in 2016 and early 2017 indicate that NASH is a strong area of interest for big pharma. The following table shows a list of relevant NASH transactions since 2015:

NASH is considered a multi-factorial disease, meaning that it will likely require multiple different drugs for effective treatment. We believe that strong phase II results could position IMC for either an acquisition or a large license/royalty agreement. Additionally, IMM-124E’s strong safety profile and likely lack of drug-to-drug interaction with other NASH therapies could position it as an initial/backbone therapy for NASH.

Multiple studies ongoing to add to data on IMM-124E’s unique mechanism of action. IMC is currently performing multiple studies with Sanyal Biotechnology and Duke University to add to the growing body of evidence on IMM-124E’s unique mechanism of action (MOA)

The studies with Sanyal Biotechnology will use their proprietary Diet Induced Animal Model of Non-Alcoholic Fatty Liver Disease (NAFLD) (DIAMONDTM ). In this model, the mice were shown to naturally develop NAFLD and NASH.

The studies at Duke will utilize another mouse model that has been shown to mimic the progression of NASH in humans, and will be performed by Dr. Diehl, one of the world’s leading experts in the field of chronic liver disease immunological research.

Results from these studies should be available by the end of the year (2017), and will add to the growing body of evidence supporting IMM-124E and will support Immuron’s business development efforts.

The NIH funds second IMC fatty-liver disease phase II trial (pediatric NAFLD); Company now has 3 phase II trials for fatty-liver diseases. The U.S. NIH has funded a second IMC fatty-liver disease phase II trial in pediatric NAFLD (the first phase II trial was for ASH). This grant funding further validates IMM-124E, and provides further upside potential at no current cost to the Company. The trial intends to enroll 40 patients who will be treated for 3 months. The 2 major objectives of the trial are to: 1) Determine if IMM-124E is safe in children, and if it results in improvements in hepatic inflammation, insulin sensitivity, blood lipids, and other secondary endpoints and 2) Define the mechanism of action related endpoints. Pediatric NASH has no approved treatments, is estimated to affect 5%-10% of the U.S. pediatric population, and represents a $1 billion+ market opportunity for IMC. First patient was approved for randomization in February 2017.

IMM-529 has the potential to be the top therapy for CDI. Immuron’s IMM-529 targeting CDI, a blockbuster orphan indication, and is set to move into a Phase 1/2 in 2Q17 with 60 patients. This is a true dark horse for the Company, as the pre-clinical data in mice showed remarkable efficacy. IMM-529 is a combination of three vaccines that neutralize the Toxin B, the spores and the bacteria, all while preserving the microbiome, which is key to controlling the recurrence of CDI. CDI kills 30,000 people each year in the U.S. and is an increasing problem worldwide.

Early Programs can provide tremendous long-term value. We have our eyes on the Company’s Colitis program, and on its unique vaccine development efforts with the US Navy and the US Army.

IMC files F-1 registration statement with SEC for U.S. IPO. On December 21, 2016, IMC filed a F-1 registration statement with the SEC for a U.S. IPO of American Depository Shares (ADS). The first amendment was filed on February 9, 2017 and the second amendment was filed on April 7, 2017. The Company intends to list on NASDAQ. We believe that this registration statement indicates the Company’s intent to access the larger pool of US capital and enhance its liquidity and visibility, especially ahead of the Company’s major milestones that should come in 2H17. IMC closed a $6.32 million rights issue in early July 2016 that was oversubscribed.

A$1.95 based on increased transaction activity in NASH. IPositive Phase II results for IMC, coupled with the additional MOA data being generated by the Company in 2017, would cause a significant spike in the stock price. Transactions in the NASH space indicate that the space is attracting high interest from big pharma, and the transaction sizes have been quite large. We believe that positive Phase II results will lead to a significant increase in the stock and position IMC for a licensing deal with a big pharma company. Most licensing deals were done with NASH assets in preclinical/Phase I trials, so we believe that a licensing deal for IMM-124E, assuming positive results, would be near the top end of transaction sizes ($300M+ in total deal size).

The Company’s IMM-529 can potentially double IMC’s valuation (assuming positive Phase I/II results) but is not yet factored in this valuation. A good benchmark for the value of a CDI indication can be found in the failure of Seres’ Phase II trial in CDI, which led to a $1B+ loss of shareholder value.

Additional Information

Auditor: William Buck
Legal: K&L Gates LLP
Transfer Agent: Security Transfer Registrars Pty Ltd.
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Immuron, Ltd.
Level 1, 18 Kavanagh Street, Southbank
Victoria 3006, Australia

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