Cellmid 2017 Annual Report 17

USA brand development and launch of evolis® Professional

The Group signed a distribution partnership agreement with Colour Collective, a specialist in premium hair product launches

in the US, in July 2016. The partnership resulted in the development and branding of the Group’s global FGF5 inhibitor

product ranges, evolis® Professional. The Group completed a US business plan, which targets revenue from three main sales

channels; traditional premium retail, hair salons and e-commerce.

A comprehensive public relations campaign was executed by the Group in preparation for the premium retail launch of

evolis® Professional resulting in exposure in major trade, beauty and fashion publications and reviews by social inﬂuencers.

The Group has also designed and enrolled a consumer experience study. This was the ﬁrst study ever to assess the

performance of the evolis® Professional range, where subjects used the shampoo, conditioner and activator together.

Following the development of the evolis® Professional global ranges the Group completed manufacture and shipped the

products to the US. The ﬁrst range, REVERSE, was shipped and launched in December 2016 with e-commerce sales. Manufacturing

of the two other ranges, PROMOTE and PREVENT, was completed and the products were shipped to the US in June 2017.

The Group commenced its outreach to top tier retailers during the period and secured placement with Neiman Marcus after

the close of the 2017 ﬁnancial year.

Japanese sales increased with record television shopping results

In Japan the Group’s sales increased signiﬁcantly as a result of several television shopping campaigns and broadening retail

channels. Preparations continued during FY2017 for the opening of the ﬁrst Advangen concept store with expected ofﬁcial

open on track for the second quarter of FY2018.

Australian distribution and sales increased during FY2017

The Group’s focus in Australia remained the growing of the pharmacy distribution and e-commerce sales. Both of these have

been achieved with around 1,200 pharmacy doors core ranging the evolis® products, including the Active Packs. Just under

2,000 pharmacies are stocking some or all of the evolis® products in Australia. The Group has also grown its e-commerce

sales which account for around 20% of total Australian sales for the period.

Advangen continued to be involved in selective negotiations with groups outside the core markets of Australia, Japan and

the USA during FY2017 with focus on maintaining gross margins across all regions.

ii. Midkine Business (Lyramid Limited and Kinera Limited)

Progress in preclinical product development

The Group runs its midkine product development programs in two wholly owned subsidiary companies, Lyramid Limited

(Lyramid) and Kinera Limited (Kinera). Lyramid is responsible for the commercialisation of the Group’s anti-MK antibody

portfolio with a focus on inﬂammatory conditions, ﬁbrosis and cancer. Kinera is focused on developing therapeutics for

ischemic conditions of the heart and brain.

Lyramid Limited (Lyramid)

The Group’s collaboration with Complutense University continued during the reporting period showing that Lyramid’s anti-

midkine antibodies were effective in improving THC (tetrahydrocannabinol, a cannabis derived drug) treatment response

in animal models of resistant glioblastoma multiforme. Lyramid’s cancer portfolio was further boosted with a publication in

Nature, the highest ranking scientiﬁc journal, demonstrating the crucial role of midkine in metastatic melanoma.

Lyramid was awarded an Innovation Connections Grant for $100,000 in January 2017 from the Australian Government for

the further assessment of the midkine-antibodies in the treatment of chronic kidney disease. These studies will build on the

results of the previous experiments conducted at the Westmead Institute and are expected to be delivered over two years.

The Group’s diagnostic licensee, Paciﬁc Edge Limited, continued to make signiﬁcant progress towards commercialisation

of their CxBladder® bladder cancer tests during the reporting period. They have broadened reimbursement for the tests

through the US Veteran’s Administration and Tricare Healthplan Networks and expanded utility of the tests for monitoring

recurrence of bladder cancer.

Kinera Limited (Kinera)

The Group secured $2 million in research and development funding for its ischemia program with a two-year loan facility on

1 March 2016. The facility allowed the cardiac and brain ischemia programs to progress towards the clinic. In preparation for

the large animal validation studies the Group secured new GMP manufactured midkine during the 2017 ﬁnancial year.