Revenue increased 40% to A$1.4 million in FY17, up from A$1.0 million in FY16; listed on NASDAQ in June 2017; reported positive interim NASH phase II results in July 2017

Revenue increased 40% to A$1.4 million in FY17, up from A$1.0 million in FY16. IMRN currently generates revenue from Travelan, an all-natural over-the-counter (OTC) product for the prevention of traveler's diarrhea (TD). Travelan reduces the risk of TD, along with the symptoms of minor gastrointestinal disorders. IMRN reported record monthly sales of Travelan in May 2017 in the US. The growth in sales was driven by a partnership with Passport Health, as well as direct to wholesale distribution and the company's education program at over 3,000 pharmacies, which was further boosted by point-of-sale advertising and better shelf positioning. Travelan is currently licensed in the US, Australia, and Canada.

Listed on NASDAQ: In June 2017, the Company successfully completed its Initial Public Offering on NASDAQ. IMRN raised $6.1 million and placed 610,000 American depository shares (ADS) and 701,500 warrants. The listing is a significant milestone as the Company not only secured additional funding to move its clinical portfolio forward, but also gained international exposure.

Positive interim NASH phase II results; top line results expected by 4Q17. In July 2017, the Company reported the interim phase II results for IMM-124E, the Company's program for Non-Alcoholic Fatty Liver (NASH) disease. The report confirmed that there were no safety concerns or adverse events for IMM-124E. The Company reported a significant reduction in liver enzymes (ALT & AST) compared to placebo in a dose related response, proof of concept for a biological effect demonstrating decrease in liver injury.


Immuron's IMM-124E is in three Phase II clinical trials


NASH is considered a multi-factorial disease, meaning that it will likely require multiple drugs for effective treatment. We believe that strong phase II results could position IMRN 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. Ultimately, IMM-124E is designed to block and reduce bacteria growth without negatively impacting essential microbiota.

Significantly undervalued compared to similar companies that have NASH therapies in Phase II clinical trials. NASH therapies are estimated at a $40 billion global market by 2025 and significant valuations have been awarded to companies in phase II clinical trials for NASH. Intercept Pharmaceuticals had positive phase II results for its NASH therapy, leading to an increase in market cap from $1.5 billion to $6.6 billion. Immuron's phase II study is on track to report similar results for its NASH therapy. Also, Enanta Pharmaceuticals (market cap: $906 million) is currently in phase I clinical development for the treatment of NASH. We believe that a successful trial in NASH would lead to a significant gain in stock price for IMRN. The following peer chart shows the market caps of similar companies that have NASH therapies in phase 2 (Intercept Pharmaceuticals is in Phase 3)



Multi-million-dollar M&A activity is taking place in NASH.Similar companies operating in NASH space are being bought at high-multiples. Based on industry transactions in 2016 and early 2017, big pharma has demonstrated a high level of interest in acquiring companies such as IMRN that operating in NASH space. Industry The following table shows a list of relevant NASH transactions since 2015.


IMRN's IMM-529 program has the potential to be the top therapy for Clostridium Difficile infection (CDI). A potential blockbuster for the Company, pre-clinical data in mice showed remarkable efficacy. IMM-529 is a combination of three vaccines that neutralize 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.

The Company has received approval from Israeli Minister of Health and Hadassah Medical center to enroll patients in 2H17. The first 60 patients are scheduled for a phase I/II randomized, double-blind, placebo-clinical study designed to evaluate the safety and efficacy of IMM-529. Top-line results are expected in 4Q18. The following peer chart shows market caps for companies that have CDI therapies.


Based on NPV analysis of the Company's Travelan product, along with its phase II clinical trials (IMM-124E) in NASH, ASH and Pediatric NAFLD, and its phase I/II clinical trial (IMM-529) in CDI, we are valuing the company at $17.00. We believe that positive phase II results will lead to a significant increase in valuation. Additionally, successful results could lead to a potential licensing deal with a big pharma company. Also, the strong M&A activity in NASH space indicate high interest from big pharma, and the transaction sizes have been quite large.


Table: Income Statement

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Company Overview

Immuron Ltd is an Australian biopharmaceutical company focused on immunotherapy using bovine-derived antibody products for humans. Immuron has a unique and versatile technology platform that is capable of generating a wide range of products, all with a high safety profile. The versatility of Immuron's platform technology enables the development of medicines that target a large range of unmet medical needs, including infectious diseases and immune mediated disorders. The versatility of the technology enables Immuron to commercialize its platform derived products through a range of regulatory pathways, including prescription (Rx), medical foods, over-the-counter (OTC) medicines, and dietary supplements. The Company had received clearance from the FDA to commence a Phase II clinical trial for its NASH product (IMM-124E), a potential blockbuster, which is expected to be completed by the end of 2017. Additionally, Immuron has one marketed product (Travelan, for the prevention of travelers' diarrhea) and a pipeline of products at various stages of clinical and earlier development.

Risks

There is no guarantee that the Company's Phase II trials for NASH and ASH will show statistically significant efficacy. There is no guarantee that the Company will achieve its primary endpoint in its current clinical trials. However, the Company has shown very promising efficacy data in previous trials for IMM-124E.

IMRN's future capital needs are uncertain. IMRN is currently in human clinical trials for IMM-124E, along with human clinical trials for C difficile. While near-term capital needs are fairly certain, longer-term capital needs are uncertain, and will be driven by such factors as clinical trial results, potential partnering with other pharma or biotech companies, profits earned from retail product lines such as Travelan and Protectyn (and potentially other products), and initiating clinical trials in new diseases. Depending on how multiple factors occur, the Company may only need to raise additional minimal capital or more significant amounts of capital.

Revenues will ultimately depend heavily on reimbursements from Medicare and other third-party insurance companies. Sales of IMRN's pharmaceuticals will rely heavily on third-party reimbursement, which is not certain. However, reimbursement momentum should be helped by the need for therapies to treat diseases such as NASH, which are already being treated using off-label pharmaceuticals. Additionally, the high safety profile and natural origin of the Company's therapies means that IMRN can also generate revenue through areas such as dietary supplements and functional foods, which carry lower regulatory requirements and don't require insurance company reimbursement approval.


Management

Jerry Kanellos, Chief Executive officer

Dr Jerry Kanellos has over twenty years' experience in the pharmaceutical and biotechnology industry, and has held leadership roles in business development, project management, intellectual property portfolio management research and development and senior management, and holds a PhD in medicine from the University of Melbourne.

His former roles include; Chief Executive Office, Avipep Pty Ltd, Global Program Director - Research and Development, CSL Limited, Vice President- Manufacturing, STB Lifesaving Technologies;, Chief Operating Officer TransBio Limited and Director Biotherapeutics, General Dynamics Information Technology.

Dr Kanellos worked for five years as a consultant to the biotech industry and has provided development and commercialization strategies for various bodies including academic institutes, private and publicly listed companies and government departments. He has also been involved in the establishment and management of several startup biotechnology companies. During his ten years tenure in research and development at CSL Limited, Dr Kanellos gained considerable experience in the drug development process, formulation development through to pharmaceutical scale up and cGMP manufacture successfully leading the Chemistry Manufacturing and Controls (CMC) programs for the approval, manufacture and launch of several products


Dan Peres, Medical Director

Dr Peres has served in various clinical and medical managerial roles in pharmaceutical and medical device companies such as Exalenz Bioscience, CarboFix Orthopedics Ltd, NMB Medical Applications Ltd, ByPass Makafim Ltd, IOPtima Ltd and NovoNordisk Israel. In addition, Dr Peres has been responsible for operational, marketing and business development activities throughout his career in the life sciences industry. Dr Peres began his career as a physician and medical director in various roles in the Israel army.

Dr Peres' expertise lies with medical strategy, research and development, and the management of clinical studies and other laboratory processors. He has extensive knowledge of the leading International Centers for Liver Disease and established relationships with key Opinion leaders, including those currently participating in Immuron's NASH and ASH trials. Dr Peres has been a certified physician since 2002 when he graduated from the Sackler School of Medicine at Tel-Aviv University

Peter Vaughan, Joint-Company Secretary & Chief Financial Officer (CFO)

Peter Vaughan is a Chartered Accountant who has worked in the listed company environment across a range of industries for more than 13 years. He has served on, and provided accounting, administration, compliance and general management services to, a number of private, not-for-profit and public company boards of directors and related committees. Peter is currently completing his Senior Executive MBA from Melbourne University


Immuron Limited (NASDA: IMRN): Price History



Legal: Francis Abourizk Lightowelrs & Carter Ledyard and Milburn LLP

Auditor: William Buck & Marcum LLP

Share Registry: Security Transfer Registrars Pty Ltd & Bank of New York.

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Company Contact Info:

Immuron, Ltd.

Level 3, 62 Lygon Street, Carlton South,

Victoria, 3053, Australia

www.immuron.com

info@immuron.com


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