2015 Annual General Meeting: Chair and CEO address, results of meeting

Brisbane, Australia and Delaware, United States, 18 November 2015: Invion Limited (ASX: IVX) is pleased to provide the Chair’s Address and CEO presentation to the 2015 Annual General Meeting of Shareholders being held today at 2.00pm (AEST) at the offices of McCullough Robertson Lawyers,  Level 11, 66 Eagle Street Brisbane.

Address to Shareholders by Mr Brett Heading, Chair of the Board of Directors

As shareholders will know from recent announcements and other communications, 2015 has seen your company deliver against major strategic and clinical development milestones.

Managing Director and CEO, Dr Greg Collier, will shortly speak in detail about the status of the company’s pipeline, however I am pleased to stand before you today and report, that with three drug assets across four development programs, Invion has achieved major milestones this year including:

  1. confirming pre-IND status for inhaled INV102 (nadolol) as a potential therapy for asthma, COPD & cystic fibrosis and the commencement of toxicology studies for that strategy;
  2. the completion of the phase 2 clinical trial of INV103 (ala-Cpn10) in lupus patients;
  3. the selection of formulation and a device for inhaled INV104 (zafirlukast) and the commencement of manufacturing for toxicology and clinical supplies for that program;
  4. and most significantly, the completion of the 155-patient Phase 2 smoking cessation trial which reported positive safety and efficacy data in October.

In summary, the Phase 2 smoking cessation data demonstrated that treated patients receiving INV102 (nadolol) were more likely to stop smoking completely or dramatically reduce the number of cigarettes smoked than untreated patients.

We believe this is highly positive data for the company and validates management’s clinical development strategy. It also places the company in a good position for the achievement of another major milestone – which is an End of Phase 2 Meeting with the US FDA on this program.

These are not insignificant achievements for a company of Invion’s size and operating budget.

The overarching goal of activities in 2015 has been to enhance the value of the company’s assets by continuing to mitigate risk along each program’s development pathway, and to realise the potential of those assets.

To this end, the corporate and business strategy has been focused on identifying and developing potential partners, and Dr Collier will give an update on the status of these discussions.

In the coming 12 months therefore, we anticipate significant changes in the company’s structure, which may come in the form of a strategic cornerstone investment, or merger, sale or out-licence of Invion’s intellectual property.

To support this current stage, and to provide shareholders the opportunity to take advantage of current market conditions, on 10 November the company announced a Share Purchase Plan which enables eligible shareholders to purchase additional Invion shares with no transaction or brokerage fees, and at a discount to market price. If you have not done so already, I would encourage you to read the SPP documentation carefully before the offer closes on 30 November. We are also here today to answer any questions you may have on the offer.

In relation to the company’s recent placement, there have been some concerns raised on certain options to be issued pursuant to the placement which I would like to address.

The agreement to issue the options was undertaken pursuant to a capital raising which was on the most favorable terms available to the company at the time.

Because the company did not have available placement capacity at that time, it was necessary to make the issue of options subject to shareholder approval for the purposes of Listing Rule 7.1. However, to secure the investment, the placement agreement included a restriction on the company’s ability to issue further securities if shareholders did not approve the issue of the options. The specific provision is set out below:

“Second Tranche Options will be issued promptly following the EGM, and in any event within 1 business day from the date of the EGM.   If any of the Options Resolutions is not passed at the EGM, the Company will not issue securities in the Company other than Second Tranche Options until all the Second Tranche Options are placed as agreed.  The Company will not be in breach of this Agreement if any Option Resolution is not passed at the EGM.”

In the circumstances, then irrespective of the outcome of the resolutions at this meeting the board intends, in the best interests of the company, to proceed with the options issue in order to fulfill the obligation under the placement agreement and to enable the Share Purchase Plan and any other share placement that may be required to proceed.

Lastly, it is appropriate I note the recent decision of the High Court of Australia in relation to the litigation against former directors of the company.

In June 2014, the Supreme Court of Queensland determined that the defendants in the litigation be required to repay the sum of $1,071,482, plus interest and costs, to the company. In July 2014, the Company advised that the defendants had lodged a notice of appeal against the decision. The appeal was heard by the Queensland Court of Appeal on 23 February 2015, and was dismissed with costs on 12 June 2015. The defendants (appellants) subsequently sought leave to appeal the Appeal Court decision to the High Court.

Earlier this month, the High Court dismissed the process without the need for a hearing.

The Board has always, and continues to, stand firm in its commitment to bring the matter to resolution as swiftly as possible, and intends to use all avenues available to it to recover the judgment debt, which now exceeds $1.3 million.

Before closing, I take this opportunity to thank my colleagues on the Board, and the management and the staff of Invion.

I also thank you, our shareholders, for your continued interest and active participation in Invion.        

***

About Invion Limited

Invion is a life sciences company focussed on the development of treatments for major opportunities in respiratory and autoimmune disease. Invion has three drug assets in development across four development programs. INV102 (nadolol) is a beta adrenergic biased ligand targeted to reverse mucous metaplasia in the airway epithelium treat chronic inflammatory airway diseases. In Q4 2015, Invion reported that data from a 155 patient phase 2 study of oral INV102 in smoking cessation demonstrated good safety and that treated patients were more likely to stop smoking completely or dramatically reduce the number of cigarettes smoked. Feasibility for an inhaled version of the drug to potentially treat COPD and cystic fibrosis is well-progressed with 3M Drug Delivery Systems, and toxicological studies have commenced. In addition, a phase 2 study of oral INV102 in mild asthma patients funded by the US NIH is fully recruited and will complete dosing in 1H 2016. INV104 (zafirlukast) is a leukotriene receptor antagonist (LTRA) that reduces inflammation, constriction of the airways, and the build-up of mucus in the lungs. An FDA-approved oral therapy, Invion is, through a joint development and licensing agreement with Hovione Scientia Limited, developing a proprietary dry powder formulation of the drug for the development of INV104 (zafirlukast) as a potential inhaled therapy for asthma. INV103 (ala-Cpn10) is a modified, naturally occurring human protein which has been proposed as a founding member of the Resolution Associated Molecular Pattern (RAMPs) family hypothesised to maintain and restore immune homeostasis. Invion reported final data from its phase 2 clinical trial in lupus patients in Q3 2015. 30mg and 100mg iv twice weekly showed reduced response to stimulation by LPS after 1 month of dosing. These data, which reflect relevant activity at the target cell type in patients with a target (autoimmune) disease, has formed the foundation of partnering discussions for this program. Invion is an ASX listed company (ASX:IVX), with operations in Brisbane, Australia and Delaware, USA.

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