Immuron Limited Sponsored ADR Stock

Hello, and welcome to another edition of Kalkine Media's Invest Nest webinar series. Today's session is titled Immuron CEO Insights: The Commercial Progress and What's Next. My name is Monica, and I'm an anchor and reporter with Kalkine TV. I'll be your moderator for today's event. Before we begin, please note that the webinar is intended for informational purposes only and does not constitute financial advice, solicitation, or recommendation to engage in any investment activity we discuss. Kalkine Media is neither licensed nor qualified to provide you any investment advice through this platform.

Now, the key objective of this Invest Nest webinar is to present our audience with a panel of experts who share insights into their company's potential, growth strategies, and long-term vision. Additionally, we aim to highlight untold stories from leading business figures, revealing how they navigated their journey to success and innovation. The event is designed to deliver valuable insights, guidance on emerging themes, and highlight breakthrough trends shaping the Australian market. Today's session will feature a 15-minute business presentation followed by a 5-minute Q&A round. Attendees are encouraged to post their questions in the Q&A chat box throughout the presentation.

These questions will be addressed by the speaker after the presentation. And if due to time constraints, we are unable to address any of your questions live, you may e-mail us at [email protected]. We'll ensure that all your queries are answered by our esteemed speaker. Now let's dive into today's theme. Digestive health has become an increasingly important focus within the global health care industry. Rising international travel, changing dietary habits, growing awareness of gastrointestinal disorders, and an increased emphasis on preventive health have all contributed to expanding demand for products that support digestive well-being.

Millions of people worldwide experience digestive conditions ranging from travelers' diarrhea to irritable bowel syndrome, commonly known as IBS. And thesymptoms and can significantly affect the quality of life, creating demand for solutions that prevent illness, manage symptoms, and support overall gastrointestinal health. At the same time, consumers are becoming more proactive about maintaining digestive wellness, driving interest in evidence-based health products across both developed and emerging markets. The evolving landscape has created opportunities for companies developing targeted therapies and commercial products designed to address specific gastrointestinal conditions.

Innovation in immune-based technologies, coupled with expanding international distribution networks, is helping reshape the digestive health sector as business seeks to meet global demand. Our focus today is on Immuron Limited, which is listed in ASX as IMC and NASDAQ as IMRN. This is an Australian-based biopharmaceutical company specializing in orally delivered immune-based therapies for gastrointestinal health and infectious diseases. Immuron is building its business by combining commercial growth with product expansion. Its portfolio includes Travelan, which is designed to help reduce the likelihood of contracting travelers' diarrhea.

It also offers ProIBS, which is a product that supports people living with irritable bowel syndrome. Travelan is available in Australia, the United States, and Canada under different regulatory classifications. The product contains highly purified hyper-immune bovine antibodies. Now, these antibodies are designed to bind with the diarrhea-causing bacteria during travel. Now, today's discussion will provide an opportunity to learn more about Immuron's commercial strategy, its digestion health portfolio, recent sales performance, and the company's priorities as it continues building its presence across Australia, North America, and other international markets.

It's now my pleasure to introduce today's speaker, Steven Lydeamore, the Chief Executive Officer of Immuron Limited. Steven brings extensive leadership experience across the biotechnology and life sciences sector with expertise spanning commercialization, corporate strategy, capital markets, and business development. As the CEO of Immuron, he is leading the company's strategy to expand its global digestive health business through commercial growth, portfolio development, and international market expansion. Under his leadership, Immuron has continued advancing its commercial operations across Australia, North America, and other international markets while strengthening its position in the growing gastrointestinal health sector. We are delighted to have you here with us. Steven, thank you for joining us. The floor is all yours. Please go ahead and take us through your presentation.

Thank you very much. I just share my screen here. It might be a moment. Very good. So thank you for joining me today. It's a pleasure to present to you. I presume there will be a few investors that have seen some of this presentation before, but also some new ones. So I'll just quickly click through the safe harbor statement. So I will be mentioning financial year 2026 that runs from July 2025 through to June 2026 that yet to be audited. A quick overview of the company. So Kalkine kindly mentioned our platform technology. So yes, we do produce highly purified hyper-immune bovine colostrum, and we do that by developing proprietary vaccines for targeted pathogens.

And the Travelan product that was mentioned, which is reducing the risk of recurrence of travelers' diarrhea, was developed using this technology. It includes 2 different vaccines containing antibodies against 13 different strains of ETEC, that's enterotoxigenic E. coli, which is the primary cause of travelers' diarrhea. And we have a product that we launched recently in the financial year just completed, that's ProIBS for irritable bowel syndrome. And this is licensed in from Sweden. It's a European medical device. We're selling it in Australia as a listed medicine, specifically for the treatment of symptoms associated with medically diagnosed irritable bowel syndrome.

We have 2 pipeline assets and IMM-124E, which is the active ingredient in Travelan, is one of those. The other one is IMM-529, and I'll speak more about that. This is a product that's been developed in conjunction with the Monash University, targeting what's a serious both hospital-based and community-based problem, and that's Clostridioides difficile infection or C. diff or CDI for short. We sell our products, Travelan in Australia, U.S., and Canada. And for those that are interested, we do have corporate research covering us. You can click on the link in the presentation, which has been released to the ASX market this morning and will be released to the SEC for NASDAQ listing overnight, and it will provide you more information about valuation and prospects for our company.

I won't go through the financials and shareholders, so you can look at that yourselves. But I did want to give an update on the financial year 2026 full year sales results. So we're pleased to report that we grew sales to $7.7 million, up 6% on the prior year, largely driven by Australia, which was up 10%. The U.S. was up 7%, but would have been higher if not for the strong Australian dollar. In U.S. dollar terms, it was up 13%. Canada, we sold in a large amount of stock last financial year. So that's showing a negative growth there, but more recent growth in the quarter just finished, significant growth, which you'll see in the slide coming up.

The half-year results there relate to profitability. We're really targeting to get to breakeven of profit, excluding R&D associated income expense and foreign exchange there. And we've made significant improvements during the first half of the year and hope to show continued significant improvement on those measures in the full year results, which will be released at the end of August. We recently engaged a consulting firm, Pullan Consulting, to help us with the out-licensing and partnering IMM-529 for C. diff. And let me move on and tell you a little bit more about that. So look, we have a clear investment thesis here for Immuron. We have a product on the market, which is unusual for a small biotech company, generating significant contribution to cash.

So we're not in a position of needing to raise cash. You can see down the bottom there at end of December, we had $10 million in cash, which gave us approximately 2 years' worth of cash. And validated platform, we're selling a product on the market, and the same platform has been used to develop IMM-529. Typically, in a biotech company, people don't know whether it's going to work until they go through all of the clinical trials. The advantage here is you want to see how the product works, buy the product on the market and try it for yourself. Growth catalysts for the company. So I mentioned we have this broad platform technology. So we're not a one-trick pony.

There's a high barrier to entry through the hyper-immune bovine colostrum that we develop using proprietary vaccines. The active itself is very safe. It's been on the market for many years as well as in multiple clinical trials in multiple different versions of this use of this technology. I mentioned that we had 2 active clinical programs. So IMM-124E, we completed a Phase II study, and we're eligible for an end of Phase II meeting with the FDA. And IMM-529, during the financial year just completed, we had submitted and we got approval from the FDA for an IND. So that's an investigational new drug application that allows us to move ahead with Phase II clinical trials. And we are planning on partnering with somebody to progress those.

Double-digit growth, as I mentioned, in Australia and in the U.S. market when looking at that in U.S. dollars. And there's that growth rate for the most recent quarter of Canada, so up some 376% over the prior year same quarter. Profitability, focusing on EBITDX ex-R&D. So that's earnings before interest, tax, depreciation, foreign exchange, and also excluding R&D income and expense. We're looking to make a significant improvement on that for the full year results, which are due out at the end of August. And recent strategic decision to partner out these clinical assets gives us a clearer path to profitability.

So under a typical licensing arrangement, you would see that the licensee would be funding development, registration, and commercialization costs, and we would be eligible for an upfront licensing fee, milestone payments, and royalties on sales. This removes the uncertainty about how Immuron would fund these assets through to commercialization and potentially brings forward monetization of these assets, both in terms of the upfront licensing fees, milestone payments, and also royalties on sales. The R&D expenses net of R&D tax incentive will improve profitability and decrease cash burn of the reduction being funded by the partner.

And let's move on to the next slide here. So IMM-529, I wanted to, in the interest of time, spend a little bit more on this. So this is a big problem, and we have a product that can solve the issue. So we have a product that targets all 3 drivers of C. diff. So that's toxin B, vegetative cells, and spores. And we had exceptional preclinical efficacy results. Here, you can see that we were successful in prevention, treatment, and also in relapse. So, and the IMM-529 IND approved by the FDA allows us to go into a Phase II clinical trial at primary treatment in conjunction with standard of care versus standard of care, hopefully showing superiority.

And let's just look at how big the market potential is here. So the total CDI market here is $3.52 billion in target. And if you bring that down to the peak revenue estimate for the product, it's $635.5 million (sic) [ $653.5 million ]. And we did some validation of that with a company called Lumanity that valued the market potential for IMM-529 in the U.S. market alone at some $400 million. In terms of the deals that we'll be seeking for this product, you can see here other transactions for assets in the space of CDI that range through from marketed to preclinical. They sit somewhere in the middle there at Phase II ready stage. Upfront milestones range from some $1 million at the low end, up to $50 million at the high end, and significant multimillions of dollars on the milestone payments.

Let's have a look at some of the operational highlights. So I've mentioned these numbers already. So global sales up 6% to $7.7 million, 10% growth in Australia up to $5.8 million, North America, $1.9 million. You can see on the graph here comparing last financial year to the current financial year, the steady continued growth quarter-on-quarter, showing improvement in each quarter. So that's 4 consecutive quarters of growth above the prior year. And you can see down the bottom there, which is quite impressive coming out of the pandemic where people weren't traveling and weren't using Travelan, sales were negligible and that increased significantly through that 5-year period there to the current year to $7.7 million.

Looking at the current year and some of the drivers there, Australia could have been even better than the 10% that we showed there. During the year, we had Sigma buying in the prior year. And in the current year, there's the opposite occurred with the merger of Sigma and Chemist Warehouse, who was 1 month of sales that we essentially lost through their initiatives to reduce working capital, which is a good thing for them, but not so much for us in the current year. But that's a one-off. So we wouldn't expect that to impact the following year.

During the year, we secured increased distribution for Travelan in Canada, securing Jean Coutu in the Quebec province. It gives us Canada-wide distribution now. So we're looking forward to significant growth during FY '27 there. And a bit of projection here, the sales we've already reported increased on prior year. We're also projecting both net profit and the EBITDX ex-R&D number I mentioned before to also exceed comfortably the prior year results. And I'm going to stop there and open up for any questions which I'm sure you have.

Thank you, Steven, for that insightful and comprehensive presentation. We'll now open the floor for our Q&A session. Viewers are encouraged to continue submitting all their questions in the chat box. We'll go ahead with the first one. Steven, what are the key factors driving the continued growth of Travelan across the major markets that you just spoke about?

Just go back to the slide on Travelan, so you can see where we've come from. So we currently sell it in Australia, in the U.S., and Canada. So during FY '27, we do intend to expand geographically. So in the fourth quarter of the financial year FY '27, we'll be looking to enter into one of the European markets, this geographic expansion. We expect there to be a rebound in travel as well and also increased penetration through increased promotion of the products. And some of those factors that held back sales in FY '26, namely the merger activity of Chemist Warehouse and Sigma in Australia. We've got the pull-through from Jean Coutu and other banner groups within the Canadian market to increase growth there, and increased sales through Amazon primarily in the U.S. market should see significant growth potential in all markets next year as well as that new market in Europe that we move into.

That's a helpful overview of what's driving the business today. Looking ahead geographically, Steven, which international markets do you see as the most significant growth opportunity for Immuron and why?

Okay. As you can see, Australia dominates here. So $5.8 million of the $7.7 million, and Australia's population is maybe 1/10 of what the U.S. market is. So the U.S. has got a lot of potential as does Europe. So we'll seek a beachhead in Europe by launching in one country during the FY '27 year. And with the success of that, we'll expand that to additional European countries. Similarly, Europe's population is much larger than Australia. And if we can increase penetration into those larger markets, we should see significant growth. Each of these regions all travel to regions which are high risk for travelers' diarrhea, different countries, but similar risks. So Australians travel to places like Bali, for example, be the #1. And in the U.S., it's primarily Mexico and Caribbean markets. But in Europe, they travel to some of those same markets, but also other markets like in Middle East and Africa, for example.

Beyond your commercial expansion strategy, I would like to turn to the development pipeline, which is another area of interest for investors, right? So if IMM-529 delivers positive Phase II results, how do you assess its commercial potential and target market opportunity?

I'll spend a little bit of time talking about it, and this is IMM-529 here. So if we can repeat the exceptional preclinical efficacy that you can see here, so prevention, 80%, treatment, 80%, and relapse 90% in a Phase II study. So this will be a head-to-head study against the current standard of care. The market potential is significant. So we showed the total market there of $3.52 billion. We would be looking at a peak revenue potential there of some $650 million, and that would be accruing to the partner that we're seeking. So we're seeking a partner that would take the product through clinical trials, through registration, into commercialization. So that revenue would be there. We would get likely a double-digit royalty from that, but also upfront fees and milestone payments along the lines of what you can see here in this table.

Staying with the topic of future growth, let's focus on what investors can expect in the near future. Steven, what are the key milestones investors should watch over the next 12 months?

Apart from continued sales growth of Travelan, entry into new markets, we're also looking at adding additional products into the portfolio, both in Australia and the U.S. market. Probably the biggest one is the slide that I'm showing here. So I mentioned before, we partnered with Pullan Consulting. We're looking to partner this asset with a global or large multiple deals with large regional players to develop and commercialize IMM-529 globally. The milestone payments in and of themselves would be valuable income for the company. But not just that, it would also demonstrate confidence of the partner in this product reaching market where you can look at obtaining the benefits of this market here.

And now looking beyond the next year, we would like to understand the long-term perspective. Where do you see Immuron's biggest growth opportunities over the coming years?

Yes. So look, if this particular model works for development and licensing out IMM-529, I would imagine that we would start looking at other programs and potentially other partners would be looking to partner with us to do that. So it's a technology platform. It involves finding a, developing a vaccine that targets pathogens, and it can work for any gut-mediated enteric disease. And there's many markets that this would apply to. And if this licensing out goes ahead, I would imagine that we're going to do more of that or potentially, we could split the company into a consumer arm selling Travelan over the counter and a development arm. Developing products with this technology platform could potentially become a vehicle for someone else to take that on or partner with us to do more of that.

Building on that vision for growth, let's talk about how the company's product portfolio fits into that strategy. So how are you thinking about expanding the product portfolio? And are there opportunities to introduce additional products or indications?

Absolutely. So let me go back to the first slide. So we've done, one example of that is the ProIBS. So ProIBS fits into that gut health range within consumer health care. We're not looking at expanding into areas beyond our capability and also our brand recognition. So we're known within pharmacy channels as a gut health company, specifically for Travelan and other related gut health diseases. So Travelan itself is a very strong brand. It's been around in Australia since 2004. It was launched in the U.S. market around 2015 and then a little bit after that in Canada. We'll be looking to expand the Travelan brand into adjacent categories. So this is focusing on travelers' diarrhea. There are other travel-related gut-mediated problems that we could target as well. So expect us to introduce some products along those lines, but also some product line extensions in the mix as well. Currently, this is in a tablet form. We don't have a children-specific version, for example, that we're working on at the moment and things like that.

Finally, I would like to touch on an important aspect of maintaining long-term success in this industry. So Steven, what protects your technology from the competitors?

Yes. So Travelan itself has been around a while. So patent-wise, it's protected in the U.S. market only, but patents are only one form of protection. So I mentioned in developing the technology, we start with a proprietary vaccine from which we produce hyper-immune bovine colostrum. So there's 2 things there that protect our product from others. This is essentially a biological medicine. We're using a proprietary vaccine using strains that are not available publicly. So the vaccine itself is protected by trade secrets. And the method by which we use those vaccines in producing the hyper-immune bovine colostrum is also a trade secret. So trade secrets protect this product well beyond patent lifetime. For the IMM-529, that is also protected by patents, which go out into the 2030s.

Before we conclude, I would like to ask Steven to share a final takeaway message with our audience.

So, in terms of your interest in investing in Immuron, please do have a look at it. We've got a number of things going for us. So relatively small cap, but both listed in Australia and also the U.S. market. We have significant cash on hand. We're not looking to raise capital, relatively low risk from that point of view. We have recurring revenue, which is increasing, and we have a technology platform and with 2 clinical assets, one of which, in particular, IMM-529, we're at the stage of looking for partners for that. So there's the potential for significant milestone payments and also in the future, royalties on sales from doing that. All of these events are near-term milestones that we should be looking at achieving during the FY '27 year. So please do have another look. And if you do have any questions, my contact details are on the presentation there today. Thank you.

Thank you. Once again, Steven, thank you for sharing your valuable insights into Immuron's business, commercial strategy, and growth initiatives, and for addressing our audience's questions so thoughtfully. On behalf of Kalkine Media, I would like to extend our sincere appreciation to you and to everyone who joined us for today's webinar. We also thank our wonderful audience for being a part of this session. We hope today's discussion has provided a deeper understanding of the evolving digestive health sector and Immuron's strategy as it continues expanding its commercial presence and product portfolio across global markets.

To explore more equity insights and market updates, please visit our website, which is www.kalkinemedia.com/au. And for detailed research, you can visit www.kalkine.com.au. Stay tuned to Kalkine Media for upcoming sessions in the Invest Nest webinar series. We look forward to welcoming you once again. We are also very active on our social media platforms. So please stay connected with us on Facebook, Instagram, LinkedIn, and YouTube. If you have any questions and inquiries, our e-mail address is [email protected]. Stay apprised, invest wise. Thank you once again, and have a wonderful day.