Clinuvel Pharmaceuticals Annual Report 2015

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FY2015 Annual Report · Clinuvel Pharmaceuticals

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CONTENTS

CHAIR’S LETTER

MANAGING DIRECTOR’S LETTER

DIRECTORS’ REPORT

REMUNERATION REPORT

STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CASH FLOWS

STATEMENT OF CHANGES IN EQUITY

NOTES TO THE FINANCIAL STATEMENTS

DIRECTORS’ DECLARATION

INDEPENDENT AUDITOR’S REPORT

AUDITOR’S INDEPENDENCE DECLARATION

SHAREHOLDER INFORMATION

MARKET PERFORMANCE

GLOSSARY

LEADING THE FIELD OF MELANOCORTINS
One need only look at the volume of peer-reviewed journal
publications on SCENESSE® over the past 18 months to realise
there is significant interest in the potential of melanocortin
drugs. While SCENESSE® has been Clinuvel’s main
development focus, the team is acutely aware of our position
as leaders in melanocortins and how we can realise longer-
term value from our R&D program. Through our Singaporean
JV, VALLAURIX Pte Ltd, we have already made substantial
progress. Earlier this year the Company announced the
development of VLRX001, a novel melanocortin analogue
which is being evaluated as an addition to our portfolio.

A Paediatric Investigation Plan (PIP) was agreed with the EMA
as part of the marketing authorisation for SCENESSE®. We are
fiercely in favour of finding a solution for children with EPP,
and the PIP provides a clear pathway. Formulatory work is now
underway through VALLAURIX and, in the coming year, we
expect to be able to provide updates on this work.

The past year has seen the team make solid, if sometimes
frustrated, progress. This would not be possible without the
support of the patients who we serve, the network of expert
physicians who care for them and our investors and
shareholders. On behalf of the Clinuvel team I thank you..

Stan McLiesh

Chairman

CHAIR’S LETTER

Dear Shareholders,

SCENESSE® (AFAMELANOTIDE
16MG) APPROVAL
Following the longest review to date
by the European Medicines Agency’s
for Medicinal
(EMA’s) Committee
Products for Human Use (CHMP),
Clinuvel’s team achieved an historic
approval, opening the door for the
first ever treatment for erythropoietic protoporphyria (EPP)
patients. While the subsequent review process by EMA’s
Pharmacovigilance and Risk Assessment Committee (PRAC)
took longer than anyone could anticipate, there is now clarity
on what the Agency requires Clinuvel, and the expert centres
with whom we work, to implement.

Safety was always the first focus throughout our EPP
development program, and it remains so as we move into
a commercial phase. Those working in the industry will
understand the burden post-marketing programs place on
patients, physicians and product sponsors. For new drugs,
and in untreated diseases, these burdens are not unexpected,
but do require significant investment of time and resources to
ensure their precise implementation.

Plans are now underway to enable access for the first patients
by the coming spring and summer in the northern hemisphere.

EXECUTING THE COMMERCIAL ROLL-OUT
Over the past 12 months the Company has implemented a
number of changes to facilitate our shift from R&D into a
commercial entity. Operationally a number of key staff have
moved into new roles to ensure commercial success, while we
continue to increase our global head count. A UK office has
been established, along with the relocation of our Melbourne
headquarters to more suitable premises. We have also
welcomed a new non-executive director, Mr Willem Blijdorp,
whose extensive global commercial experience has proven
invaluable.

During the course of this year the team has gained a better
understanding of both the EPP landscape across Europe
and where the demand for SCENESSE® is greatest. Our
first physician training session
incorporated
representatives from 33 physicians across 15 countries, all
of whom expressed a desire to make the drug available to
their patients. More than a dozen other expert centres have
been identified. This strong level of commitment to patient
treatment means Clinuvel is well placed to facilitate a
comprehensive roll out across many of the 31 EMA countries.

in Paris

MANAGING DIRECTOR’S LETTER

Dear Stakeholders,

In recent months Clinuvel has had
the privilege of attracting new US
and European institutional investors.
These active investors, who have
taken sizable positions, have closely
followed the Company over a number
of years and share the long term
view of the Board and management
on Clinuvel’s strategic direction. On
behalf of the Clinuvel Board, along with acknowledging all
current shareholders of the Company, I wish to make a special
welcome to these recent shareholders.

from

in many ways

Clinuvel stands out
traditional
biopharmaceutical companies in that our business model
deviates from others in the industry. The historical legacy
of two decades of ill-positioning of a highly innovative
technology has resulted in the Company taking a different
clinical and regulatory path, necessary to minimise the
inherent risks of pharmaceutical development. In managing
Clinuvel we have cautiously balanced the uncertainty and
complexity of commercially developing a first-in-class drug
on multiple levels, and so far we feel we have been vindicated.

The European Medicines Agency’s
(EMA’s) three year
review of SCENESSE® (afamelanotide 16mg) has placed the
Company in a unique position. We are no longer asked to
explain the medical need or severity of ordeal in patients with
erythropoietic protoporphyria (EPP). Most significantly, we
are also no longer obliged to defend the safety of SCENESSE®
to leading regulatory bodies. During the EMA’s review we
witnessed a change in the regulatory environment: a timely
self-appraising publication in 2013 by the EMA’s leadership –
headed at the time by Guido Rasi and Hans Eichler – alerted
the pharmaceutical audience to the regulatory need to become
less risk averse in drug development by avoiding ‘regulatory
Type II errors’. The authors suggested a need to evaluate the
risk of not allowing patients to obtain certain drugs that may
actually prove to be clinically effective against the regulatory
peril of denying patients an effective therapy due to assumed
fear of future safety issues.

The corollary to the EMA approval is Clinuvel’s undertaking
to observe the strictest pharmacovigilance standards and
to implement a host of measures as part of the European
distribution of SCENESSE®. Under the umbrella of a rigid
risk management plan agreed with the EMA, the Company
is committed to long-term follow up of the EPP patient
population. All distribution and risk management processes
will be audited and closely monitored by national authorities,
the EMA and also by our peers in the sector. Clinuvel had
always anticipated additional post-authorisation measures
would come with the launch of a novel melanocortin. Whilst

it appears a high price to pay for being the first company to
distribute a novel therapy, overall we agree with the logic of
this approach. I congratulate the team on their tireless efforts
to establish this plan with EMA’s Pharmacovigilance Risk
Assessment Committee (PRAC).

I strongly believe that the voices of patients living with
severe disorders, life threatening or otherwise, are of the
utmost importance in pharmaceutical decision making,
equally so the views of those care for them. Clinuvel had
an early vision to engage the most senior experts including
physicians, researchers and heads of academia specialising
in rare metabolic disorders, melanogenesis, gastroenterology,
dermatology, photobiology, photodermatology, porphyria,
skin cancer and melanoma in the SCENESSE® development
program. This “joint” development program spanned five
continents and has taken a decade of focus on SCENESSE®
in EPP. Clinuvel’s Board endorsed the strategy to involve the
leading experts in the development program, whereby full
transparency of the program and the technology was made
available to them from the first day onwards. It carried the
risk that the most prominent experts in the relevant fields
might express potential safety concerns (real or perceived)
of the novel therapy which could result in recommendations
to terminate the program. I am pleased to say that uniform
support from the academic and clinical community grew over
the years as the safety of the drug became apparent.

throughout

It was an important decision at the time to actively grant
clinical experts and the academic community the opportunity
to contribute and actively participate
the
development of SCENESSE®. In some instances experts had
direct influence on developing new tools that were integral to
the development of SCENESSE®. Photoprovocation (light and
UV irradiation under controlled conditions) and new clinical
surveys to assess the impact of treatment on patient quality of
life are two such examples. The number of leading specialists
was not
inconsiderable, growing to approximately 120
senior academic experts by 2014. An important question the
Company often asked was whether it was clinically necessary
or meaningful for Clinuvel to further develop SCENESSE®.
Where an academic expert initially took a skeptical position,
a full reversal in viewpoint most often occurred. Today we
observe that the medical specialists who have been involved in
the program have taken much pride in their contribution and
share in the development of SCENESSE®, while all continue to
express a clinical demand from their patients. All involved in
the program owe these physicians a debt of gratitude.

Following the recent release of SCENESSE® by PRAC and with
the start of European distribution pending, the discussions
our teams are conducting with insurance agencies focus
on patient benefit and the subsequent clinical demand for
SCENESSE®. Clinical demand is along a continuum of what
we have witnessed over the past 10 years.

CORPORATE GOVERNANCE
Clinuvel Pharmaceuticals Ltd and its Board are committed
to establishing and achieving the highest standards of
corporate governance. The Company’s Corporate Governance
statement for the year ending 30 June 2015, based on the
Australian Securities Exchange Corporate Governance
Council’s (ASXCGC) Corporate Governance Principles and
Recommendations, 3rd Edition, can be found on our website at
http://www.clinuvel.com/en/investors/corporate-governance

Managing Director's Letter

I look forward to the day that SCENESSE® will be made
available to US adult and juvenile patients. Recently our
teams met with the US Food and Drug Administration (FDA)
to discuss the regulatory pathway to assess SCENESSE® as
the standard therapy in EPP. Whereas the Company had met
resistance from the FDA as early as 2003, we have now met
with a Division which acknowledges what has been required
to advance the program to date. Significantly we witnessed
an entirely different tone, with the Division for Dermatology
and Dental Products expressing that SCENESSE® would be a
valuable treatment for EPP patients. This regulatory attitude
was refreshing and has come a long way from the early days
when the Agency had raised concerns about the drug’s future
safety, and questioned whether a need to treat EPP patients
existed. The conversion witnessed from the FDA is remarkable
since data had not yet been reviewed, and is a direct result
of the perseverance of Clinuvel’s teams. Time has the ability
to change matters and viewpoints dramatically, and I am
hopeful Clinuvel will be able to launch SCENESSE® in the US.

Important steps were made in the development of VLRX001
and CUV9900 by our team in Singapore. Through the joint
venture VALLAURIX Pt Ltd we are now evaluating these two
additional molecules. We anticipate that these members of the
melanocortin family will be able to enter the clinic and made
available for commercial use. The first objective is to make
one of those products available as complementary treatment
to SCENESSE® in vitiligo (a depigmentation disorder).

At the time of writing we are awaiting a comprehensive
analysis from the second pilot study of SCENESSE® in vitiligo
evaluated in Asian patients in Singapore (CUV103). Following
the feedback from the National Skin Center and US clinical
experts we have a good grasp of how SCENESSE® will be used
in the future. All in all the clinical use of the lead product in
vitiligo is exciting and hailed by the academic leaders as a
scientific breakthrough.

Stakeholders understand that Clinuvel focused on the
development of SCENESSE® for the treatment of an adult,
orphan disease population, and that the returns on long- term
investment are expected to be realised. In executing a complex
program there is much work from the Company behind the
scenes and the daily activities are not always relevant to a
public market, the fruits of labour are often seen much later.
The past year we have been restructuring and rebuilding the
Company in preparation of European sales. The change in
positions and responsibilities is timed to achieve sustainable
success as a company transitioning to a commercial one. An
important criterion in Clinuvel’s considerations is to adhere
to uniform product pricing in Europe while ensuring a break-
even point against the forecast of required resources in the
short-term.

By providing a therapy for an invisible handicap and enabling
patients to lead a life they never had, we are innovating on
many fronts. We are well placed to roll out the distribution
processes, and excited and motivated for the year ahead.

I thank you for your ongoing support.

Philippe Wolgen

Managing Director

DIRECTORS’ REPORT

The Directors of the Board present their report on the Company and
its controlled entities for the financial year ended 30 June 2015 and
the Auditor’s Independence Declaration thereon.

DIRECTORS
The names of Directors in office during or since the end of the year
are set out below.

Mr. S.R. McLiesh (Non-Executive Chair)

Dr. P.J. Wolgen (Managing Director, Chief Executive Officer)

Mrs. B.M. Shanahan (Non-Executive)

Mr. L.J. Wood (Non-Executive – ceased Directorship 28 July 2014)

Mr E. Ishag (Non-Executive)

Mr. W. A. Blijdorp (Non-Executive – joined 21 January 2015)

Directors have been in office since the start of the financial year to the
date of this report unless otherwise stated.

INFORMATION ON DIRECTORS

Member of the Remuneration Committee (Chair since 28 July 2014),
MR. STANLEY R. MCLIESH (JOINED BOARD 2002)
Non-Executive Chair
Member of the Audit and Risk Committee
Qualifications: BEd
Shares in Clinuvel: 191,000
Conditional Performance Rights over shares in Clinuvel: 85,000

internationally. As

Mr McLiesh has vast experience in commercialising pharmaceutical
products
former General Manager,
Pharmaceuticals at CSL Limited, he was closely involved in the
transition of CSL from government ownership through corporatisation
to a highly successful listed company. While at CSL, Mr McLiesh
brokered numerous in-licensing agreements with international
companies enabling CSL to expand into new markets profitably.

the

He has also been closely involved in a number of M&A transactions,
the establishment of partnerships and collaborative relationships
while he was the key professional to negotiate supply agreements for
CSL’s export products to international markets.

Mr McLiesh was formerly a Non-Executive Director of Unilife Medical
Solutions Ltd. His considerable experience in the international
pharmaceutical industry benefits Clinuvel’s international strategies.
In the latter stages of the development program Mr McLiesh is
involved in formulating the commercial phase of Clinuvel.

DR. PHILIPPE J. WOLGEN (JOINED BOARD 2005)
Managing Director and Chief Executive
Non-voting member of the Audit and Risk Committee and the
Officer since December 2005
Remuneration Committee
Qualifications: MBA, MD
Shares in Clinuvel: 2,079,832
Conditional Performance Rights over shares in Clinuvel: 1,424,864

Having been recognised for his strategic mindset and meticulous
business execution, Dr Wolgen has brought to the Company his
international finance experience and professional contacts to
European, US and Asian capital markets. As a former equity analyst,
his in-depth analysis and expertise of the life science sector has been
an asset to Clinuvel. He has experience in the management of generic
pharmaceutical and medical device entities, was managing director
of two medical centres in the UK and Israel, and consulted medical
device companies. He has been instrumental in raising $87 million
since 2006 for the funding of the current development program of
SCENESSE®. Under his guidance, the Company obtained a historical
marketing authorisation for SCENESSE® from the European
Medicines Agency in December 2014.

Dr Wolgen holds an MBA from Columbia University NY and the London
Business School. Trained as a craniofacial surgeon, Dr Wolgen holds
an MD from the University of Utrecht, the Netherlands.

Chair of the Audit and Risk Committee (since September 1, 2010)
MRS. BRENDA M. SHANAHAN (JOINED BOARD 2007)
Non-Executive Director
Qualifications: BComm, FAICD, ASIA
Shares in Clinuvel: 133,969
Conditional Performance Rights over shares in Clinuvel: 70,000

Mrs Shanahan has a longstanding background in finance in
Australian and overseas’ economies and share markets and is
a Fellow of the Institute of Directors. She is currently Chair of St
Vincent’s Medical Research Institute in Melbourne, and is a serving
Non-Executive Director of Challenger Limited (ASX: CGF) since 2011
and Bell Financial Group (ASX: BFG) since 2012. Mrs Shanahan is also
a Non-Executive Director of DMP Asset Management and a Director of
the not-for-profit Kimberley Foundation Australia. Mrs Shanahan is
the former Chair of Challenger Listed Investments Ltd, the reporting
entity for Challenger Infrastructure Fund (ASX: CIF), Challenger
Diversified Property Group (ASX: CDI) and Challenger Wine Trust
(ASX: CWT).

She is a former member of the Australian Stock Exchange and
former executive director of a stockbroking firm, a fund management
company and an actuarial company. Mrs Shanahan is well known in
the business and financial community; her insights add significant
value to the current Board and the Company. Mrs Shanahan was Non-
Executive Chair of the Clinuvel Board from late 2007 until July 2010.

MR. LAWRENCE JOHN (JACK) WOOD (JOINED
Chair of the Remuneration Committee
BOARD 2008 – TO 27 JULY 2014)
Non-Executive Director
Qualifications: BComm
Shares in Clinuvel: 100,000

Mr Wood had an extensive background in international marketing
and manufacture of pharmaceutical products. He lived in Germany,
England, Australia, USA and Canada and oversaw pharmaceutical
operations throughout Europe, Asia and North America. He was
an active member of several civic boards and organisations in
Vancouver, Canada. Prior to joining the pharmaceutical industry, Mr

Directors' Report

Wood served in the Canadian Armed Forces retiring with the rank of
Lt. Col.

was recently made an Honorary Life Fellow of the UK Institute of
Directors (IoD) and has been a member of the IoD since 1964.

Positions held by Mr Wood during his career included Chairman
of EnGene Corporation, director of QLT Inc. (until 2011), and also
Executive Vice President CSL Limited Australia, where he coordinated
the company’s worldwide expansion in the plasma products industry.
President and CEO Exogene Corporation, Senior Vice President
BioResponse Corporation both biotechnology companies sold to
Baxter Healthcare Corporation. Mr Wood was also formerly Vice
President Bayer Corporation Pharmaceutical division responsible for
operations in Europe and Japan.

Mr Wood spent over seventeen years with Baxter Healthcare
Corporation holding a series of operating and general management
positions in North America, Europe, Asia and Australia.

Member of the Remuneration Committee
MR. ELIE ISHAG (JOINED BOARD 2011)
Non-Executive Director
Shares in Clinuvel: 148,195
Conditional Performance Rights over shares in Clinuvel: 56,500

Shares in Clinuvel: 383,145
MR. WILLEM A. BLIJDORP (JOINED BOARD 2015)
Non-Executive Director
Conditional Performance Rights over shares in Clinuvel: 0

Mr Blijdorp is the founding member, majority shareholder and a current
supervisory Director of B&S International NV, a privately owned Dutch
group focused on the wholesale and international trading of luxury
and fast moving consumer goods and pharmaceutical products. He
managed B&S International for 27 years as CEO and remains actively
involved in the company’s expansion strategy, helping it to become
one of the largest trading houses globally with a compounded annual
growth rate of 10% for the past decade. In 2014 Mr Blijdorp was awarded
the Ernst & Young Entrepreneur of the Year in the Netherlands and
was nominated for the European Ernst & Young Entrepreneur of the
Year in 2015.

INFORMATION ON COMPANY SECRETARY

Mr Ishag is a London based entrepreneur with 50 years of commercial
experience. With a background in pharmaceutical chemistry, Mr Ishag
is active in European asset management, real estate development
and IT. Mr Ishag is currently the Chairman of European Investments
& Developments Ltd, a privately held company with an investment
mandate in defined asset classes, property development and cross-
border commercial real estate. Mr Ishag has been extensively
involved in the commercial evolution and backing of various
successful ventures including IT company Espotting Media. Mr Ishag

Qualifications: BComm, CPA
MR. DARREN M. KEAMY
Company Secretary, Chief Financial Officer
Mr Keamy, a Certified Practicing Accountant,
joined Clinuvel
Pharmaceuticals Ltd in November 2005 and became Chief Financial
Officer of the Company in 2006. He has previously worked in key
management accounting and commercial roles in Amcor Limited
over a period of nine years and has experience working in Europe
in financial regulation and control within the banking and retail
pharmaceutical industries.

MEETING OF DIRECTORS
The following table summarises the number of and attendance at all meetings of Directors during the financial year.

DIRECTOR

BOARD

AUDIT & RISK COMMITTEE

REMUNERATION & NOMINATION
COMMITTEE

Mrs. B.M. Shanahan

Mr. S.R. McLiesh

Dr. P.J. Wolgen

Mr. L.J. Wood

Mr. E. Ishag

Mr. W. Blijdorp

Column A indicates the number of meetings held during the period the Director was a member of the Board
and/or Board Committee.

Column B indicates the number of meetings attended during the period the Director was a member of the Board
and/or Board Committee.

PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the financial
year were to develop its leading drug candidate SCENESSE®
(afamelanotide 16mg) for the treatment of a range of severe skin
disorders. Clinuvel’s pioneering work aims at preventing the
symptoms of skin diseases related to the exposure to harmful
UV radiation and at repigmentation of the skin due to a number of
depigmentation disorders. There was no significant change in the
nature of activities during the financial year.

DIVIDENDS PAID OR RECOMMENDED
No dividends were paid or declared during the financial year or after
reporting date.

REVIEW OF OPERATIONS
The consolidated entity’s main strategic focus throughout the
year was working through the European Medicine Agency (EMA)
regulatory review process on its submission to approve SCENESSE®

for marketing authorisation, resulting in a recommendation by the
EMA to grant marketing approval under exceptional circumstances
in October 2014. The focus of the consolidated entity progressed to
establishing post-marketing programs to monitor patient safety and
efficacy, including the establishment of a disease registry, along with
developing a distribution infrastructure and pricing agreements with
Competent Authorities and payors in key European countries. The
R&D program in vitiligo and further melanocortin development has
continued throughout the year. In July 2014, the consolidated entity
received an unsolicited bid proposal from Retrophin, Inc to acquire
all its issued outstanding shares via a scheme of arrangement. The
proposal was subject to numerous conditions and was eventually
declined.

A summary of Clinuvel’s financial result is presented in the following
table:

CONSOLIDATED ENTITY

2015

2014

CHANGE

Revenues

3,259,962

2,526,561

Net Loss before income tax
expense

(10,414,376)

(5,525,889)

Loss after income tax expense

(10,414,376)

(5,525,889)

29%

(89%)

Basic earnings per share -
cents per share

Net tangible assets backing
per ordinary share

Dividends

Note: Clinuvel does not operate individual segments.

(24.0)

(14.3)

(68%)

$0.25

Nil

$0.36

Nil

(31%)

Nil %

Monthly average cash spend was consistent with the previous year,
being $0.667 million for the 2014/15 year compared to $0.671 million
for the 2013/14 year. The group’s balance sheet has $11.205 million in
net assets at 30 June 2015 compared to $15.428 million at 30 June 2014.
Current liabilities increased 42% to $2.435 million. The group result
for the year ending 30 June 2015 was a $10.414 million loss, compared
to a $5.526 million loss for the prior financial year, an increase in the
loss of 89%. Non-cash items within the general operations result (see
following) was the key driver for the difference.

For the first time the group result included expenditures incurred
by Vallaurix Pte Ltd. Expenditures incurred by Vallaurix Pte Ltd are
consolidated in the group result and are associated with Company
set-up, legal and patent fees and non-clinical development work
totalling $90,797.

The distribution of SCENESSE® continued in Italy and Switzerland
where reimbursement is received for the supply of the drug to provide
a preventative treatment for erythropoietic protoporphyria (EPP)
patients. These revenues increased 32% to $2.912 million for the
2014/15 year compared to $2.200 million for the 2013/14 year. There
continues to be increasing numbers of patients seeking treatment
in Italy and Switzerland, aided by more treatment centres in Italy
submitting orders for SCENESSE® implants under the Law 648/96
scheme. The reimbursement price under the Special Access Schemes
has remained stable for the years ended 30 June 2015 and 30 June
2014. Other revenues from ordinary activities include interest received
from surplus funds held in bank accounts and term deposits, from
$0.326 million to $0.348 million, a 7% increase. The increase reflects
higher average interest-bearing working capital held year-on-year
as a result of the capital raising program from May 2014 which saw
$6.9 million raised. The gains from holding higher average working
capital were partially offset by lower average interest rate yields on
funds held year-on-year due to government monetary policy lowering
interest rates on deposits held.

Excluding the Australian government research and development
(R&D) refundable tax incentives, R&D accounted for 18% of the group’s
total expense result for 2014/15, compared to 38% for the 2013/14 year.
R&D expenditures, comprising clinical study costs, drug delivery
research and manufacture, toxicity studies, regulatory fees and
research and development-specific overheads such as personnel,
were $2.603 million in 2015 compared to $3.258 million in 2014. The
Australian government refundable tax incentive of $0.406 million is
a 12% decrease to the refundable tax incentive received for the 2013/14
year. The decrease reflects the reduction in the refundable tax rate
from 45% to 43.5% of qualifying expenditures, along with reduced
qualifying expenditures as a result of the shift in the Company’s
focus to developing its commercialisation infrastructure in Europe.
Clinical study costs decreased 67% from $0.708 million in 2014 to
$0.232 million in 2015. The continuing reduction in expenditures
on clinical development costs reflects the Company’s focus during
2014/15 on the vitiligo clinical trial program compared to the previous

Directors' Report

year which, in addition to the vitiligo program, included costs for
finalising the CUV039 and CUV011 clinical trial programs The
majority of clinical development expenses in 2014/15 relate to the
Phase IIb vitiligo study in Singapore (CUV103).

The expenses towards the drug delivery program further decreased
year-on-year, from $0.563 million in 2013/14 to $0.450 million in
2014/15, representing a 20% improvement. The costs of implant
manufacturing and development during 2014/15 to were less than the
prior year which had also included the expensing of prepaid supplies
which were not utilised in the manufacturing development process.

The average head count in 2014/15 of R&D personnel employed to
oversee and monitor the clinical, regulatory and manufacturing
programs was less than the head count over the course of 2013/14,
resulting in a 25% improvement in R&D overhead costs (from $1.673
million in 2013/14 to $1.259 million in 2014/15).

Toxicity study costs and regulatory affairs related fees increased
111%, from $0.313 million in 2013/14 to $0.662 million in 2014/15.
The Company commenced a non-clinical chronic toxicity study
towards the end of the financial year as part of its USA vitiligo
development program and completed the initial in-vitro development
of the VLRX001 melanocortin analogue. External regulatory affairs
fees to assist the Company in the final stages of the EMA’s review
of the marketing authorisation application and in meeting its post-
authorisation commitments with the EMA increased year-on-year.
Establishing the regulatory infrastructure to support the market
access of SCENESSE® into Europe, including the costs associated
with audits of manufacturing sites, were also a significant factor in
the 111% increase in toxicity and regulatory fees.

Marketing expenditures in the Company increased by $0.285 million
to $0.801 million in 2014/15 (55% increase). The increase was due to a
range of activities, including: a) investor engagement in responding to
the unsolicited bid proposal from Retrophin, Inc. b) the announcement
of the CHMP’s vote in favour of MA of SCENESSE® for adult patients
with EPP, c) external consultants engaged in SCENESSE® pricing and
reimbursement market projects, d) development of online tools to
meet EMA marketing authorisation requirements, and e) conference
sponsorships and attendances.

Patent fees increased 31%, from $0.178 million in 2013/14 to $0.232
million in 2014/15. The majority of the increase was related to the
advance payments to validate the European EPP patents after the
marketing authorisation was obtained.

The result from general operations was $10.508 million in 2014/15
compared to $4.541 million in 2013/14, a 131% increase. The major
contributor to the increase in general operations was the expensing
of the accounting valuation of share-based payments (performance
rights) of $5.676 million ($0.195 million for the same period last year).
Performance rights are valued at grant date and expensed over
their expected life, whether or not a benefit is received from these
amounts, either in the current or future reporting periods. Therefore,
$5.414 million of the increase results from the issuing of 2,789,810
performance rights to Directors as approved by shareholders at the
November 2014 Annual General Meeting.

General operations comprised 75% of the group’s total expense result
for 2014/15 compared to 53% in 2013/14 Other factors contributing to
the 131% increase in general operations year-on-year are the legal
and corporate advisory fees incurred by the Company in part due to
responding to the unsolicited bid proposal received from Retrophin
Inc to acquire all the issued ordinary shares in the Company.

For the 2014/15 year the group started with $14.626 million in cash
and financial assets and finished with $10.572 million. In the 2014
Annual General Meeting the Company received shareholder approval
for Directors to participate in the capital raising program from May
2014 resulting in a cash inflow of a further $0.25 million in additional
capital. For the reporting date of 30 June 2015, due to movements
in the Australian dollar compared to other currencies used to meet
working capital requirements, the consolidated entity reported a gain
of $0.064 million from holding foreign currencies and in holding trade

Directors' Report

creditors in non-Australian currencies (a $0.023 million loss for the
same period last year).

and brings to the Company commercial expertise to support
the commercialisation of SCENESSE® and follow-on products.

At 30 June 2015 basic earnings per share were -$0.24 on 44,554,787
issued ordinary shares. This is compared to basic earnings per share
of -$0.143 as at 30 June 2014 on 42,391,435 issued ordinary shares.

f) The presentation of Clinuvel’s vitiligo program and discussions
by experts involved in Clinuvel’s vitiligo clinical trials at
the American Academy of Dermatology (AAD) 73rd Annual
Meeting in San Francisco in March 2015.

Clinuvel Pharmaceuticals Ltd (ASX: CUV; XETRA-DAX: UR9; ADR:
CLVLY) is a global biopharmaceutical company focused on developing
drugs for the treatment of a range of severe skin disorders. With
its unique expertise in understanding the interaction of light and
human skin, the Company has identified patients with a clinical
need for photoprotection and another population with a need for
repigmentation. These various patient groups range in size from 5,000
to 45 million. Clinuvel’s lead compound, SCENESSE® (afamelanotide
16mg), a first-in-class drug targeting erythropoietic protoporphyria
(EPP), has completed Phase II and III trials in the US and Europe
and has been approved by the European Commission for treating
adults with EPP. Headquartered in Melbourne, Australia, Clinuvel
Pharmaceuticals Ltd has operations in Europe, the US and Singapore.

There were a number of significant events in 2014/15. These events
include:

a) On 28 July 2014, the Company announced the sudden and
untimely passing of
long-standing and respected Non-
Executive Director, Mr Jack Wood. On the same day, it was
announced the Company had received an unsolicited proposal
from NASDAQ-listed Retrophin, Inc. on 17 July 2014 to acquire all
of the outstanding shares of the Company, subject to numerous
conditions, valuing the Company at approximately $95 million.
The proposal was declined by the Company on 8 August 2014.
Retrophin Inc ceased to be a substantial shareholder of the
Company in July 2015.

b) Reaching agreement with Biotech Lab Singapore Pte Ltd
on the terms and conditions to establish Vallaurix Pte Ltd
for the final development of formulations for paediatric
use of afamelanotide (SCENESSE®) and CUV9900, a novel
melanocortin peptide for topical application for skin care.
Clinuvel holds a majority interest in the entity and will lead and
oversee the scientific development including the regulatory
pathways for the melanocortins.

(EMA) Committee

c) The announcement on 27 October 2014 that the European
Medicines Agency’s
for Medicinal
Products for Human Use (CHMP) voted in favour of marketing
authorisation (MA) of SCENESSE® for adult patients with EPP.
The recommendation for MA under exceptional circumstances
followed the CHMP’s plenary session on 23 September 2014.
At this session the Company made an oral presentation
to the CHMP and for the first time in its history the CHMP
incorporated patients’ and physicians’ clinical experiences
in its formal decision making process. On 23 December
2014 it was announced that the European Commission had
ratified the EMA’s recommendation for marketing approval for
SCENESSE®.

d) Announcing on 19 September 2014 the results from its US
Phase IIa study of SCENESSE® in vitiligo (CUV102) which
had been published in the respected peer-reviewed Journal of
the American Medical Association – Dermatology. This was
followed with an announcement on 15 December 2014 that long
term observational data from the use of SCENESSE® in EPP
has been e-published in the British Journal of Dermatology.
A release on 20 March 2015 announced SCENESSE® featuring
in the peer-reviewed Journal of Investigative Dermatology
in an editorial titled “An α-MSH analogue in erythropoietic
protoporphyria”.

e) Announcing the appointment on 21 January 2015 of Mr Willem
Blijdorp as a Non-Executive Director of the Company. Mr
Blijdorp has a successful background in international trading

g) The announcement on 5 May 2015 of the successful completion
of initial in-vitro development of a melanocortin analogue,
VLRX001, by Clinuvel’s majority-owned subsidiary, Vallaurix
Pte Ltd. The development of VLRX001 will focus on topical use
as an adjuvant maintenance therapy in vitiligo.

h) The publication of observations from the use of SCENESSE® in
EPP in Expert Review of Clinical Pharmacology, Der Deutsche
Dermatology, Der Hautarzt, Clinics and Research in Hepatology
and Gastroenterology and the Journal of
Investigative
Dermatology. The program was also featured at the XXII IPCC
(Singapore, September), the 23rd EADV Congress (Amsterdam,
October), the San Gallicano rare disease conference (Rome,
February), the World Orphan Drug Conference (Washington
DC, April), the FT Asia Pharma-Healthcare Summer (Singapore,
May), and the 23rd World Congress of Dermatology (Vancouver,
June).

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
The Directors are not aware of any matter or circumstance not
otherwise dealt with in this report that has significantly or may
significantly affect the operations of the consolidated entity.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE
There has not been any matter, other than reference to the financial
statements that has arisen since the end of the financial year that
has affected or could significantly affect the operations of the
consolidated entity.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The consolidated entity’s strategy is to focus on developing and
commercialising SCENESSE® as a medicinal photoprotective
solution for patients with EPP and who are most severely affected
by exposure to ambient and UV light. Further, the consolidated
entity’s strategy is to develop and commercialise SCENESSE® as a
combination therapy with narrow-band ultraviolet B phototherapy for
patients with vitiligo in order to promote repigmentation of areas of
the skin affected by vitiligo.

During the year, the consolidated entity was successful in gaining
regulatory approval for SCENESSE® in EPP in the form of a historical
first marketing authorisation. Consequent to the granting of marketing
authorisation, the consolidated entity is committed to establishing a
number of significant post-authorisation commitments which have
been agreed with the EMA under a long-term risk management
plan for SCENESSE®. The consolidated entity will continue to work
with a number of commissioned third parties to build and support
a European EPP Disease Registry to monitor long-term safety and
it will continue to invest in existing and new personnel with the
necessary skills and expertise to execute the post-authorisation
program in Europe. The consolidated entity intends to increase its
sales-focussed workforce in Europe to promote initial revenues once
pricing agreements per country are established with payors.

Underpinned by the regulatory approval in Europe, along with the
information generated from its post-marketing commitments in
Europe, the consolidated entity is working towards gaining regulatory
approval for SCENESSE® in EPP in other important markets where
EPP is prevalent, including North America, in order to increase its
ability to commercialise SCENESSE®.

The consolidated entity continues to conduct clinical studies to
evaluate SCENESSE®’s ability to activate melanocytes within
vitiliginous lesions and achieve repigmentation in combination
with NB-UVB in patients with vitiligo. Data from the Phase IIa
study currently underway, along with further non-clinical data,
should result in the consolidated entity moving towards later stage
registration clinical studies.

The consolidated entity has also focused on its manufacturing
requirements by working with its contract manufacturer to meet
clinical and commercial product supply in line with its timing
expectations. The consolidated entity, through its recently established
joint venture entity, will also expand its research and development
programs into its follow-on portfolio technologies to SCENESSE®,
CUV9900 and VLRX001. These melanocortin analogues will be
evaluated as an adjuvant maintenance therapy in vitiligo, with the
intention of developing formulations to be administered topically.

• Funding – cash inflows from its operations may be higher
than cash outflows. Therefore the ability of the consolidated
entity to successfully bring its products to market and achieve
a state of positive cash flow is dependent on its ability to access
sources of funding while containing its expenditures.

• Management – the consolidated entity’s corporate strategy
could be impacted adversely if the consolidated entity was not
able to retain its key management, members of staff and Board.

Directors' Report

The consolidated entity is currently a loss-making enterprise
which has only recently reached the commercialisation phase of
drug development after 10 years since the start of this program.
The long-term financial success of the consolidated entity will be
measured ultimately on the basis of achieving a sustainable profit.
Key to becoming profitable is not only the successful research
and development of its portfolio of assets but also their successful
commercialisation, manufacturing and distribution, and the ability
to attract funding to support these activities. The following specific
risks are reviewed continually by the Board and management as they
have the potential to affect the consolidated entity’s achievement of
the business goals detailed above. This list is not exhaustive.

• Technology – there is a risk that despite obtaining marketing
approvals, those products may ultimately prove not to be safe
and of clinical benefit.

• Supply – there is a risk that the manufacturing process may
not result in product batches meeting minimum specification
levels, that raw material components could not be sourced
to specification, and of non-controllable disruptions to the
products’ contract manufacturers.

• Clinical & Regulatory – there is a risk that clinical trials will not
yield the expected and desired results for the investigational
medicinal product(s) to obtain further regulatory approvals.

• Intellectual Property (IP) and market entry – future sales could
be impacted to the extent that there is not sufficiently robust
patent protection across its product portfolio that will prevent
competitors from entering the marketplace to compete with
the consolidated entity’s approved products. Also, competitors
infringing the consolidated entity’s IP rights may adversely
impact the consolidated entity’s ability to maximise the value
to be made from product commercialisation.

ENVIRONMENTAL REGULATION
AND PERFORMANCE
The consolidated entity’s operations are not
regulated by
any significant environmental regulation under a law of the
Commonwealth, or of a State or Territory, or of any other jurisdiction.

INDEMNIFICATION AND INSURANCE
OF DIRECTORS AND OFFICERS
During or since the end of the financial year the Company has given
an indemnity or entered an agreement to indemnify, or paid or agreed
to pay insurance premiums as follows.

The Company has paid premiums to insure each of the Directors
against liabilities for costs and expenses incurred by them in
defending any legal proceedings arising of their conduct while
acting in the capacity of Director of the Company, other than conduct
involving wilful breach of duty in relation to the Company. The cost
of the aforementioned insurance premium for 12 months was $29,763
(2014: $27,980).

DIRECTORS’ BENEFITS AND
INTEREST IN CONTRACTS
Since the end of the previous financial year no Director has received
or become entitled to receive a benefit (other than a benefit included
in the total amount of emoluments received or due and receivable by
Directors shown in the financial statements and the remuneration
report), because of a contract that the Director or a firm of which
the Director is a member, or an entity in which the Director has a
substantial interest has made with a controlled entity.

Further information on these contracts is included in Note 19 to the
financial statements.

REMUNERATION REPORT

PRINCIPAL OBJECTIVE
The Board’s strategic objective that underpins its remuneration
policy is to retain the Company’s unique industry knowledge in
relation to the development of SCENESSE® at a critical stage of
the Company’s evolution. The Board is aware that any disruption
to the professional talent input would have a detrimental effect
to the Company’s ability to progress from an entirely research
and development-focused organisation to a commercial revenue-
generating enterprise. The Board has strived to secure staff and
management of the only pharmaceutical company active in
photoprotection and repigmentation and who are critical to the
development and commercialisation of an approved, first-in-class
medicinal photoprotective drug.

PRINCIPLES USED TO DETERMINE THE
NATURE AND AMOUNT OF REMUNERATION
This Remuneration Policy has been adopted by the Board of the
Company, to ensure that:

• The Company’s remuneration policies and systems comply
with the Corporations Act and ASX Listing Rules and support
the Company’s objectives as set by the Board from time to time.

• Remuneration of the Company’s key management personnel is
aligned with the interests of the Company and its shareholders
within an appropriate control framework.

• The relationship between performance and remuneration of

key management personnel is clear and transparent.

• The role of the Company’s Remuneration Committee in the

remuneration processes of the Company is clearly defined.

For the purpose of this Policy, “key management personnel” has
the meaning given in the Australian Corporations Act (which
adopts the definition in Accounting Standard AASB 124 Related
Party Disclosure). The definition captures those persons having
authority and responsibility for planning, directing and controlling
the activities of the Company, directly or indirectly, including any
Director (whether executive or otherwise) of the Company.

The policy has been adopted to cover the overall structure of
remuneration for:

• The Managing Director and other executive Directors (if any);

• Non-Executive Directors, including the Company Chair; and

• Senior management.

This Policy does not cover people employed through another company
such as third party contractors and secondees.

REMUNERATION POLICY
The objectives of the Company’s Remuneration Policy are to ensure
that:

a) Remuneration is structured to align with the Company’s
interests, taking account of the Company’s strategies and risks.

b) The level and composition of remuneration is reasonable,
sufficient and provides competitive rewards that attract, retain
and motivate people of high calibre to work towards the long-
term growth and success of the Company.

c) The role that total fixed remuneration and short and long-term

incentives play is clearly defined.

d) The levels and structure of remuneration are benchmarked

against relevant peers.

e) There is a clear relationship between Company and individual
performance and remuneration of key management personnel.

f) The principles underlying the Company’s remuneration

structure are openly communicated and understood.

g) The Company complies with applicable legal requirements and

appropriate standards of governance.

h) Remuneration policies and practices are evaluated over time,
taking account of pay outcomes and the relationship between
pay and performance, and the results of any evaluations or
review processes.

i) Remuneration is consistent regardless of gender.

The total remuneration for each executive is aimed to be market
competitive in which the executive is placed, and to reflect
performance and specific competencies.

The Company’s reward framework provides a mix of fixed and
variable pay, structured to incentivise both short-term and long-term:

• Short-term (generally cash payment in the form of performance-
based incentives at a fixed amount or as a percentage of base
salary).

• Long-term (generally based upon the issue of performance
rights to acquire shares in the Company, along with other fixed
amount cash incentives). Prior to the 2014/15 year, performance
rights were issued under the Company’s Conditional Rights
Plan, most recently approved by shareholders 12 November
2013. In 2014/15, a new performance rights plan, titled Clinuvel
Performance Rights Plan, was approved by shareholders at the
2014 Annual General Meeting (AGM). All performance rights
issued in 2014/15 were subject to this plan and future issues
of performance rights, if any, will be subject to this plan. The
vesting conditions can be either time and/or performance
milestone-based.

Remuneration Report

REMUNERATION COMMITTEE
The Board has provided a mandate to the Remuneration Committee
to provide advice on salaries and fees, short and long-term incentives
and employment terms and conditions for Directors, Executives and
key management. The Remuneration Committee obtains independent
data to assess the appropriateness of remuneration packages,
given trends in comparative companies, industry or related field of
expertise. The Remuneration Committee may consult with specialist
remuneration consultants with experience in the healthcare industry
as part of making and reviewing remuneration recommendations.
For the year ended 30 June 2015, no remuneration recommendations
were received from specialist remuneration consultants.

incentive components

The Managing Director has individual short-term and longer-
term
to his Executive remuneration.
Longer-term incentive components include business generation
incentives, discretionary payments and equity participation through
Clinuvel’s Conditional Rights Plan. Appropriate targets are set by
the Remuneration Committee. The targets can relate to either the
clinical, regulatory development program or to corporate, commercial
and associated activities and are generally, but not always, evaluated
for achievement, reviewed and reset (if required) annually. Generally,
but not always, the quantifying of achievement of the Managing
Director’s short-term incentives for payment is assessed and made in
the year following the year of achievement.

The Corporate Governance Statement provides further information
on the role of the Remuneration Committee.

NON-EXECUTIVE REMUNERATION
Under the Company’s Constitution, the maximum aggregate
remuneration available for division among the Non-Executive
Directors is to be determined by the shareholders in a General
Meeting. The maximum aggregate is currently fixed at $400,000. This
amount (or some part of it) is to be divided among the Non-Executive
Directors as determined by the Board.

As from 1 September 2014, Non-Executive Directors’ base fees are
presently $65,000 per annum inclusive of superannuation (previously
$50,000 per annum). The Chair receives $90,000 per annum inclusive
of superannuation (previously $80,000 per annum) when in a Non-
Executive capacity. The Chair’s role is for a 12 month term, whereby
the Company reserves the right to extend the term for another 12
month period. The Heads of the Audit and Risk and the Remuneration
Committees receive an additional $15,000 per annum inclusive of
superannuation when in a Non-Executive capacity , and members
of the Audit and Risk and the Remuneration Committees who are
not the Committee Chair receive an additional $5,000 inclusive of
superannuation . Directors’ fees were increased during the year
to a level considered appropriate given their skills, qualifications
and experience comparative to the external market. It was the first
increase to Non-Executive Director fees since 2001.

Subject to shareholder approval, Non-Executive Directors can be
issued performance rights under the Company’s Conditional Rights
Plan. Non-Executive Directors can be issued performance rights to
align their interests with those of shareholders and to reflect their
greater role in the management of the Company comparative to
peer companies (and reflected in a smaller management team). The
number of performance rights and nature of vesting is determined
after the Director’s appointment.

There are no further retirement benefits, other than statutory
superannuation entitlements, offered to Non-Executive Directors.

EXECUTIVE REMUNERATION
Remuneration packages for Executives may include:

• Base pay and benefits (including statutory benefits);

• Short-term incentive payments through the achievement of

pre-specified performance-based targets;

• Longer-term business generation incentive payments through
the achievement of pre-specified performance-based targets;

• Discretionary payments

for exceptional performance,

innovation and/or expansion; and

• Long-term equity participation in Clinuvel’s Conditional Rights

Plan.

Base pay, including superannuation, is reviewed annually by
the Remuneration Committee to ensure the Executive’s pay is
competitive in international markets, industry and related fields of
expertise. Some key managerial contracts contain guaranteed base
pay increases linked to CPI data. Health insurance, accommodation
benefits and living away from home allowances are offered to key
management and Executives under specific circumstances.

For the 2014/15 financial year the Remuneration Committee evaluated
the performance of the Managing Director and was awarded a short-
term incentive of 65% to base salary, compared to a short–term
incentive of 50% to base salary in the preceding year. However, for
2014/15 the Managing Director received 20.13% less in base salary
and short-term employment benefits in comparison to the 2013/14
financial year.

In the 2014/15 year, the Managing Director elected to have paid out 50
days unused and accrued annual leave in lieu of taking such leave in
the current and previous years, as permitted by law, totalling $146,801.

In the most recent Annual General Meeting (AGM), the Company
obtained 92.05% of the proxy votes (including votes at the Board’s
discretion) in favour of adopting the 2013/14 remuneration report,
and this resolution was passed on a show of hands at the meeting.
The Company did not receive any further feedback at the AGM on its
remuneration practices.

The methods used by the Remuneration Committee to assess Board
performance is disclosed in the Corporate Governance Protocol. The
remaining Executives receive discretionary short-term incentives,
generally evaluated annually against targets set at each performance
review.

The long-term equity remuneration is provided to Directors and
certain employees via the Clinuvel Conditional Rights Plan. See
below for further information.

COMPANY PERFORMANCE AND EXECUTIVE
DIRECTOR REMUNERATION
Due to the inherent and specific risk in pharmaceutical development
whereby the risks are exacerbated by the Company focusing on a
novel, first-in-class drug, the Board has adopted a business model
where most operational tasks are being retained in-house, where
possible, and most management responsibilities concentrated
between the Managing Director (acting in a dual capacity as Chief
Executive Officer and Chief Medical Officer) and the Acting Chief
Scientific Officer. The Managing Director has the responsibility of
guiding and overseeing the execution of the global corporate strategy
and has global responsibility for the safety aspects of the drug and
pharmacovigilance. The Acting Chief Scientific Officer is responsible
for pre-clinical programs and toxicology, the manufacturing of the
drug delivery program, clinical program and setting the regulatory
strategies in close coordination with the Board of Directors.
The Managing Director serves on the Commercial Management
Committee, set up to oversee the best commercial options for
SCENESSE®. As the business evolves and progresses through its
development path, it is expected this centralised management model
will also evolve and key management responsibilities will be shared
across new and existing senior management.

The current Managing Director Remuneration structure is designed
to maximise the motivation, retention and incentivisation of the
Managing Director to advance the Company’s program from its current
stage of development, taking into account the risk and complexity of
the current development and business model. It is also designed to
reflect the expertise, qualifications, seniority and achievements to
date of the Managing Director since joining the Company in 2005.

SERVICE AGREEMENTS
On appointment to the Board, all Non-Executive Directors enter
into a service agreement with the Company in the form of a letter

Remuneration Report

of appointment. The letter summarises the Board’s policies, the
Director’s responsibilities and compensation for holding office.

Remuneration and other terms of employment for the Managing
Director is formalised by a service agreement determined by the
Remuneration Committee. The agreement provides for base salary,
short and long-term incentives, other benefits and participation,
when eligible, in the Clinuvel Conditional Rights Plan. The Managing
Director, in consultation with the Remuneration Committee, oversees
the service agreements entered into with Company Executives,
providing for base salary, incentives, other benefits and participation,
when eligible, in the Clinuvel Conditional Rights Plan.

The details of the service agreements to the Managing Director and
key management personnel are:

• Dr. Wolgen’s (Managing Director and Chief Executive Officer)
term of employment is 3 years from 15 March 2013, his base
salary inclusive of retirement benefits for the year to 30 June
2015 is $767,577 and his service agreement is with the wholly-
owned Singaporean subsidiary entity. Termination payment is
set at 12 months of base salary provided the termination is not
for a material breach of the agreement. The base salary is CPI
indexed. Dr. Wolgen is required to provide 12 month’s notice.

• Dr. Wright’s term of employment is on-going and his base
salary inclusive of superannuation for the year to 30 June 2015
is $248,048. Termination payments are set at 3 months of base
salary provided the termination is not for a material breach
of the agreement. Dr. Wright is required to provide 3 month’s
notice.

• Mr. Keamy’s term of employment is on-going and his base
salary inclusive of superannuation for the year to 30 June 2015
is $219,300. Termination payments are set at 3 months of base
salary provided the termination is not for a material breach
of the agreement. Mr. Keamy is required to provide 3 month’s
notice.

shareholder approval in accordance with ASX Listing Rules. All
rights convert to one ordinary share of the consolidated entity and
are issued for nil consideration, have no voting rights, are not listed
on the ASX and are non-tradeable (other than with prior written Board
consent). They can be converted to ordinary shares at any time once
the vesting conditions attached to the rights have been achieved,
whereby, at the discretion of the Board, they will be held by a Scheme
Trustee on behalf of the eligible person.

The eligible person cannot trade the shares held by the Scheme Trust
without prior written Board consent until the earlier of 7 years from
grant date of performance rights, when the eligible person ceases
employment or when all transfer restrictions are satisfied or waived
by the Board in its discretion. Performance rights under this plan
lapses after 7 years from grant date.

Performance rights are valued for financial reporting purposes using
a binomial valuation model and are represented as accounting values
only in the financial statements. Holders of performance rights may
or may not receive a benefit from these amounts, either in the current
or future reporting periods. The value of all performance rights
granted, exercised and lapsed during the financial year is detailed in
the tables within the Remuneration Report.

In the 28 November 2014 Annual General Meeting, shareholders
approved the grant of performance rights to Directors under the
Performance Rights Plan (2014). Of the proxy votes received, between
87.4% to 89.1% (including votes at the Board’s discretion) were in favour
of granting performance rights to Directors.

DETAILS OF REMUNERATION
Key management personnel include all Directors (including Non-
Executive) and other key management personnel who together
have the authority and responsibility for planning, directing and
controlling the activities of the Group:

• Mr. S.R. McLiesh (Non-executive Chairman)

SHARE-BASED REMUNERATION
The consolidated entity has an ownership based scheme for Directors,
key management personnel and select consultants of the Company
and is designed to provide long-term incentives for Directors and
Executives to deliver long-term shareholder value.

• Dr. P.J. Wolgen (Managing Director & Chief Executive Officer)

• Mrs. B.M. Shanahan (Non-Executive Director)

• Mr. L. J. Wood (Non-Executive Director) (Ceased directorship 28

July 2014)

• Mr. E. Ishag (Non-Executive Director)

• Mr. W. Blijdorp (Non-Executive Director) (joined Board 21

January 2015)

• Dr. D.J. Wright (Acting Chief Scientific Officer)

• Mr. D.M. Keamy (Chief Financial Officer and Company

Secretary)

All key management personnel have been appointed to the positions
detailed above for the past two years unless specified otherwise.

All performance rights issued fall under two performance rights
plans:
PERFORMANCE RIGHTS:

a) the Clinuvel Conditional Performance Rights Plan (2009); and

b) the Clinuvel Performance Rights Plan (2014).

The Conditional Performance Rights Plan (2009) is available to eligible
a) Conditional Performance Rights Plan (2009)
employees of the Company. Any issue of rights to Executive Directors
requires shareholder approval in accordance with ASX Listing Rules.
All rights convert to one ordinary share of the consolidated entity
and are issued for nil consideration, have no voting rights, are non-
transferable and are not listed on the ASX. They can be converted to
ordinary shares at any time once the vesting conditions attached to
the rights have been achieved, whereby they will be held by a Scheme
Trustee on behalf of the eligible employee for up to 7 years.

The eligible employee can request for shares to be transferred from
the Scheme Trust after 7 years or at an earlier date if the eligible
employee is no longer employed by the Company or all transfer
restrictions are satisfied or waived by the Board in its discretion.

the Conditional Performance Rights Plan

(2009) was
Since
implemented, 872,985 (or 25.1%) of the performance rights issued
under this Plan have lapsed or have been forfeited.

The Performance Rights Plan (2014) is available to eligible persons
b) Performance Rights Plan (2014)
of the Company. Any issue of rights to Executive Directors requires

KEY MANAGEMENT PERSONNEL REMUNERATION OF THE COMPANY FOR THE YEARS ENDING 30 JUNE 2015 & 30 JUNE
2014

SHORT-TERM EMPLOYMENT BENEFITS

LONG-TERM
EMPLOYMENT
BENEFITS

SHARE-BASED PAYMENTS
(ACCOUNTING CHARGE
ONLY)²

GROSS
SALARY

SHORT TERM
INCENTIVE

LOYALTY
PAYMENT

ANNUAL
LEAVE
PAID OUT⁴

OTHER¹

SUPER-
ANNUATION /
PENSION FUND

PERFORM-
ANCE RIGHTS

OPTIONS

TOTAL

Remuneration Report

YEAR

765,506

462,056

781,626

358,380

574,000

DIRECTORS

Dr. P.J.
Wolgen

Mr. S.R.
McLiesh

Mrs. B.M.
Shanahan

Mr. L.J.
Wood

Mr. E. Ishag

Mr. W.A.
Blijdorp

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

95,946

73,395

70,822

59,633

5,417

65,000

66,667

50,000

29,083

OTHER KEY MANAGEMENT PERSONNEL

Dr. D.J.
Wright

Mr. D.M.
Keamy

TOTAL

2015

2014

2015

2014

229,265

228,981

200,784

183,529

11,463

13,355

10,500

11,404

2015

1,463,490

484,019

146,801

60,168

2,071

4,862,453 ³

82,105

16,516

8,396

9,115

6,789

6,728

5,516

18,783

17,775

18,516

17,082

42,537

245,445

193,605

135,523

29,154

47,464

67,778

43,273

146,801

60,168

55,213

5,533,958

6,299,055

1,847,044

350,506

80,184

271,155

65,149

5,417

1,300

66,300

202,190

50,000

29,083

288,665

324,091

297,578

255,288

7,743,649

2014

1,442,164

383,139

574,000

98,621

55,558

133,274

1,300

2,688,056

1 ‘Other’ includes health insurance, housing, relocation to Singapore and other allowances that may be subject to fringe benefits tax.

2 As these values are accounting values the key management personnel may or may not actually receive any benefit from these amounts, either in the current or future reporting periods. The value of all performance rights and
share options granted, exercised and lapsed during the financial year is detailed in the following tables within the Remuneration Report. Performance rights were priced using a binomial pricing model.

3 Of this value, $4,839,827 relates to the issue of 2,499,810 performance rights to Dr. Wolgen which was approved by shareholders of the consolidated entity at the 28 November 2014 Annual General Meeting. Performance
Rights are subject to milestones being achieved before they can be exercised.

4 Unused and accrued annual leave was paid out in lieu of taking such leave during the year, as permitted by law.

THE RELATIVE PROPORTIONS OF REMUNERATION BETWEEN FIXED AND BASED ON PERFORMANCE FOR THE YEARS
ENDING 30 JUNE 2015 AND 30 JUNE 2014

FIXED REMUNERATION

PERFORMANCE BASED

FIXED REMUNERATION

PERFORMANCE BASED

2015

2014

Dr. P.J. Wolgen

Dr. D.J. Wright

Mr. D.M. Keamy

15%

86%

74%

85%

14%

26%

47%

81%

79%

53%

19%

21%

Remuneration Report

TERMS AND CONDITIONS OF EACH GRANT OF RIGHTS AFFECTING REMUNERATION IN THE CURRENT OR FUTURE
REPORTING PERIODS

ENTITY

Clinuvel

NUMBER OF RIGHTS

VALUE PER RIGHT ON
GRANT DATE

CLASS

GRANT DATE

VESTING DATE FOR RETENTION IN
SCHEME TRUST

104,500

149,167

91,667

116,667

87,958

75,000

573,980

969,465

553,890

692,475

90,700

158,725

90,700

113,375

$2.00

$1.04

$0.64

$1.19

$2.59

$2.16

Ordinary

16/10/2009

25/11/2010

16/09/2011

14/01/2013

28/11/2014

17/03/2015

SHARES PROVIDED UPON EXERCISE OF RIGHTS

DETAILS OF SHARES ISSUED DURING THE FINANCIAL YEAR AS A RESULT OF EXERCISE OF RIGHTS

NUMBER OF SHARES TRANSFERRED TO DEPARTING
EMPLOYEES¹

NUMBER OF SHARES ISSUED TO DIRECTORS &
EMPLOYEES FOR RETENTION IN THE SCHEME
TRUST²

AMOUNT PAID FOR
SHARES

CLASS

2,103,542

Nil$

Ordinary

ENTITY

Clinuvel

1These shares were issued by the Scheme Trustee to departing employees who resigned from the consolidated entity during the year or had their transfer restrictions waived by the Board in their discretion.

2These shares were issued by the consolidated entity during the year for retention in the Scheme Trust after performance conditions attached to the rights were considered met.

FURTHER INFORMATION – SHARE-BASED COMPENSATION

Mr. S.R. McLiesh

Dr. P.J. Wolgen

Mrs. B.M. Shanahan

Mr. L.J. Wood

Mr. E. Ishag

Mr. W.A. Blijdorp

Dr. D.J. Wright

Mr. D.M. Keamy

Remuneration Report

VALUE AT GRANT DATE ($)

VALUE AT EXERCISE DATE ($)

311,040

6,479,508

259,200

181,440

86,400

280,800

194,400

3,563,857

142,560

99,792

The value at grant date calculated in accordance with AASB 2 Share-based Payments of rights granted during the year as part of remuneration.

The value at exercise date of options and/or rights that were granted as part of remuneration and were exercised during the year, being the intrinsic value of the options and/or rights at that date.

Performance Rights were priced using a binomial pricing model. There is a 7 year limitation on the life of the right. Expected volatility of each right is based on the historical share price for the approximate length of time for the
expected life of the rights. It is assumed that the consolidated entity will not pay any dividends during the life of the option, and the risk free rate used in the pricing model is assumed to be the yield on 10 year Government bond
rates. The exercise conditions are non-marketable and a discount for lack of marketability was applied to the pricing model.

ADDITIONAL INFORMATION ON RIGHTS ISSUED TO KEY MANAGEMENT PERSONNEL
* For Retention in the Scheme Trust - Transfer Restrictions Apply

REMUNERATION CONDITIONAL PERFORMANCE RIGHTS HOLDINGS OF KEY MANAGEMENT PERSONNEL – 2015

BALANCE AT
START OF YEAR

GRANTED AS
COMPENSATION

EXERCISED

LAPSED AND
EXPIRED

BALANCE AT
END OF YEAR

VESTED AND
EXERCISABLE

UNVESTED

DIRECTORS

Mr. E. Ishag

Mr. S.R. McLiesh

Mrs. B.M. Shanahan

Dr. P.J. Wolgen

Mr. L.J. Wood

Mr. W.A. Blijdorp

EXECUTIVES

Dr. D.J. Wright

Mr. D.M. Keamy

50,000

80,000

50,000

391,666

50,000

181,875

194,940

70,000

120,000

100,000

(63,500)

(115,000)

(80,000)

2,499,810

(1,466,612)

40,000

130,000

(93,750)

(86,180)

(50,000)

56,500

85,000

70,000

1,424,864

128,125

238,760

56,500

85,000

70,000

1,424,864

128,125

238,760

ADDITIONAL INFORMATION - REMUNERATION
For each cash bonus and right granted, the percentage of the available grant or bonus that was paid or vested in the financial year, and the
percentage forfeited due to unmet milestones (including service length), is set out below. Bonuses are paid in the year following the period of
performance.

Remuneration Report

REMUNERATION DETAILS OF CASH INCENTIVES AND RIGHTS

INCENTIVES

PAID

FORFEITED

YEAR
GRANTED

TYPE

VESTED

FORFEITED

PERFORMANCE RIGHTS

LATEST YEAR
FOR VESTING

MINIMUM
GRANT VALUE
YET TO VEST ($)

MAXIMUM
GRANT VALUE
YET TO VEST ($)

Dr. P.J.
Wolgen

Mr. S.R.
McLiesh

65%

35%

Mr. L.J. Wood

Mrs. B.M.
Shanahan

Mr. E. Ishag

Mr. W.A.
Blijdorp

Dr. D.J.
Wright

Mr. D.M.
Keamy

2010/11

Rights

2014/15

Rights

10%

55%

2011/12

Rights

2014/15

Rights

50%

62.5%

No limitation

2021/22

No limitation

2021/22

2011/12

Rights

100%

No limitation

2011/12

Rights

2014/15

Rights

2011/12

Rights

2014/15

Rights

2009/10

Rights

2011/12

Rights

50%

55%

50%

55%

50%

2012/13

Rights

66.6%

2014/15

Rights

2009/10

Rights

2011/12

Rights

50%

10%

2012/13

Rights

66.6%

2014/15

Rights

No limitation

2021/22

No limitation

2021/22

No limitation

2021/22

No limitation

2021/22

312,001

2,915,650

26,690

116,640

16,682

116,640

16,682

81,648

42,819

29,700

86,400

58,334

29,700

280,800

The exercise price for those rights granted between 2009/10 and 2014/15 was $Nil. Excluding the CEO Short Term Incentive, cash bonuses paid to Executives were discretionary.

Remuneration Report

PERFORMANCE OF CLINUVEL PHARMACEUTICALS LTD AND CONTROLLED ENTITIES
The consolidated entity is solely dedicated to the research, development and commercialisation of its unique and medically beneficial
technology. It is anticipated the consolidated entity will not derive profit and pay a dividend until commercialisation of the drug under research
and development has occurred and sales reach a level which exceeds the cost base of the consolidated entity. With very few peer competitors
developing drugs in the field of photo protection and repigmentation, shareholder interest is promoted through the Company successfully
completing clinical trials, achieving regulatory milestones and pursuing potential new and larger markets. The table below shows the progress
made in moving through the clinical pathway and into the commercialisation pathway, reflecting the performance of the Executive team.

The remuneration and incentive framework, which has been put in place by the Board, has ensured the Executives are focussed on both
maximising short-term operating performance and long-term strategic growth. This has been an important factor in the consolidated entity
moving into the commercialisation phase of its drug which has been subject to sustained research and development.

2010

2011

2012

2013

2014

2015

YEAR ENDING 30 JUNE

REGULATORY/CLINICAL MILESTONE

Phase II AK Study – Europe/Australia

II/III EPP Study – Europe/Australia – Trial 1

Phase III PLE Study – Europe/Australia

Phase II Solar Urticaria Study – Europe

Phase II PDT Study – Europe

Phase II EPP Study – USA

Ph III EPP Study – Europe Trial 2

Ph III PLE Study – Europe Trial 2

Ph III EPP Study – USA

Ph II Vitiligo Studies – Europe/USA

Ph II Vitiligo Study - Singapore

Orphan Drug Designation EPP – Australia

Ph II HHD Study – Italy

Orphan Drug Designation HHD– EUR&USA

Application for marketing authorisation submitted with EMA

Vallaurix Pte Ltd – formulation & melanocortin development

Post-marketing authorisation commitments

Remuneration Report

SHARES HELD BY KEY MANAGEMENT PERSONNEL
The number of ordinary shares in the Company during the 2015 reporting period held by each of the Group’s Key Management Personnel,
including their related parties, is set out below:

YEAR ENDING 30 JUNE 2015

PERSONNEL

Mr. E. Ishag

Mr. S.R. McLiesh

Mrs. B.M. Shanahan

Dr. P.J. Wolgen

Mr. L.J. Wood

Mr. W.A. Blijdorp

Dr. D.J. Wright

Mr. D.M. Keamy

BALANCE AT START
OF YEAR

GRANTED AS
REMUNERATION

RECEIVED ON
EXERCISE

OTHER CHANGES

HELD AT THE END OF
REPORTING PERIOD

72,733

76,000

42,007

577,334

100,000

143,124

80,220

63,500

115,000

80,000

1,466,612

93,750

86,180

11,962

35,886

383,145

148,195

191,000

133,969

2,079,832

100,000

383,145

236,874

166,400

SHARES UNDER OPTION

DETAILS OF UNISSUED SHARES OR INTERESTS UNDER OPTIONS OR RIGHTS

ENTITY

Clinuvel Pharmaceuticals
Ltd

NUMBER OF SHARES
UNDER OPTIONS

NUMBER OF SHARES
UNDER RIGHTS

EXERCISE
PRICE

CLASS

EXPIRY DATE

2,556,250

$Nil

Ordinary

Upon achievement of specific performance and time-
based milestones

LOANS TO DIRECTORS AND EXECUTIVES
No loans were granted to Directors or Executives for the years ending
30 June 2015 and 30 June 2014.

NON-AUDIT SERVICES
For the year ending 30 June 2015 Grant Thornton Australia only
provided audit services to the Company.

For the year ended 30 June 2014, Grant Thornton Australia provided
audit services to the Company. Grant Thornton Australia also
provided non-audit services, specifically a fraud gap assessment to
identify additional policies and procedures required, if any, in order to
strengthen and maintain the Company’s Fraud Control Framework.
Details of amounts paid or payable to the auditor for non-audit
services provided during the year by the auditor are outlined in Note
18 to the financial statements.

The Directors are satisfied that the provision of non-audit services,
during the year, by the auditor is compatible with the general standard
of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in
note 18 to the financial statements do not compromise the external
auditor’s independence, based on advice received from the Audit
Committee, for the following reasons:

AUDITORS’ INDEPENDENCE DECLARATION
The auditor’s independence declaration as required by s.307C of the
Corporations Act 2001 is included and forms part of this Directors’
Report.

PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on
behalf of the Company or intervene in any proceedings to which the
Company is party for the purpose of taking responsibility on behalf of
the Company for all or any part of those proceedings.

The Company was not party to any such proceedings during the year.

Signed in accordance with a resolution of the Board of Directors
pursuant to s.298(2) of The Corporations Act 2001.

• all non-audit services have been reviewed and approved to
ensure that they do not impact the integrity and objectivity of
the auditor; and

Dr. Philippe Wolgen, MBA MD

Director

• none of the services undermine the general principles relating
to auditor independence as set out in APES 110 ‘Code of Ethics
for Professional Accountants’ issued by the Accounting
Professional & Ethical Standards Board, including reviewing
or auditing the auditor’s own work, acting in a management or
decision-making capacity for the Company, acting as advocate
for the Company or jointly sharing economic risks and rewards.

Dated this 28th day of August, 2015

STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR
ENDED 30 JUNE 2015

Total revenues

Other income

Total expenses

Loss before income tax expense

Income tax expense/(benefit)

Loss after income tax expense

NET LOSS FOR THE YEAR

OTHER COMPREHENSIVE INCOME

Items that will be re-classified subsequently to profit or loss

Exchange differences of foreign exchange translation of foreign operations

Income tax (expense)/benefit on items of other comprehensive income

Other comprehensive loss for the period, net of income tax

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

NOTE

CONSOLIDATED ENTITY

2015

2014

3,259,962

2,526,561

406,126

463,018

(14,080,464)

(10,414,376)

(8,515,468)

(5,525,889)

(10,414,376)

(5,525,889)

(10,414,376)

(5,525,889)

(268,143)

(62,916)

(10,682,519)

(5,588,805)

Basic and diluted earnings per share - cents per share

(24.0)

(14.3)

The accompanying notes form part of these financial statements.

STATEMENT OF FINANCIAL
POSITION AS AT 30 JUNE 2015

NOTE

16(a)

CONSOLIDATED ENTITY

2014

14,625,583

1,585,377

828,147

17,039,107

114,461

2015

10,572,295

1,960,453

837,135

204,623

13,574,506

69,369

13,643,875

17,153,568

1,860,636

574,640

2,435,276

3,308

2,438,584

11,205,291

1,105,157

613,020

1,718,177

7,659

1,725,836

15,427,732

138,465,335

2,698,338

133,567,056

1,438,046

(129,958,382)

(119,577,370)

11,205,291

15,427,732

CURRENT ASSETS

Cash and cash equivalents

Trade and other receivables

Inventory

Other assets

TOTAL CURRENT ASSETS

NON-CURRENT ASSETS

Property, plant and equipment

TOTAL NON-CURRENT ASSETS

TOTAL ASSETS

CURRENT LIABILITIES

Trade and other payables

Provisions

TOTAL CURRENT LIABILITIES

NON-CURRENT LIABILITIES

Provisions

TOTAL NON-CURRENT LIABILITIES

TOTAL LIABILITIES

NET ASSETS

EQUITY

Contributed equity

Reserves

Accumulated losses

TOTAL EQUITY

The accompanying notes form part of these financial statements.

STATEMENT OF CASH FLOWS FOR
THE YEAR ENDED 30 JUNE 2015

CASH FLOWS FROM OPERATING ACTIVITIES

Refund from ATO & for GST and VAT

Receipts from Customers

Interest received

Payments to suppliers and employees

NOTE

CONSOLIDATED ENTITY

2015

2014

581,114

1,022,947

2,545,080

1,894,734

353,960

334,308

(8,009,966)

(8,060,674)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

16(B)

(4,529,812)

(4,808,685)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment

Proceeds received for property, plant and equipment

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of ordinary shares

Payment of share issue costs

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

NET INCREASE/(DECREASE) IN CASH HELD

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR

Effects of exchange rate changes on foreign currency held

(12,097)

1,400

(10,697)

250,000

(27,300)

222,700

(3,436)

6,921,098

(39,308)

6,881,790

(4,317,809)

2,069,669

14,625,583

12,568,839

264,521

(12,925)

CASH AND CASH EQUIVALENTS AT END OF THE YEAR

16(A)

10,572,295

14,625,583

The accompanying notes form part of these financial statements.

STATEMENT OF CHANGES
IN EQUITY FOR THE YEAR
ENDED 30 JUNE 2015

SHARE CAPITAL

SHARE
OPTION
RESERVE

PERFORMANCE
RIGHTS RESERVE

FOREIGN
CURRENCY
TRANSLATION
RESERVE

RETAINED
EARNINGS

TOTAL EQUITY

BALANCE AT 30 JUNE 2013

126,710,267

15,530

1,182,094

53,601

(114,122,202)

13,839,290

Issue of Share Capital under private
placement

Issue of Share Capital under share-based
payment

Employee share-based payment options

Capital raising costs

6,921,098

(64,309)

TRANSACTIONS WITH OWNERS

133,567,056

LOSS FOR THE YEAR

OTHER COMPREHENSIVE INCOME:

Exchange differences of foreign exchange
translation of foreign operations

BALANCE AT 30 JUNE 2014

133,567,056

Issue of Share Capital under private
placement

Issue of Share Capital under share-based
payment

Employee share-based payment options

Capital raising costs

250,000

4,650,579

(2,300)

TRANSACTIONS WITH OWNERS

138,465,335

LOSS FOR THE YEAR

OTHER COMPREHENSIVE INCOME:

Exchange differences of foreign exchange
translation of foreign operations

BALANCE AT 30 JUNE 2015

138,465,335

(15,530)

139,435

70,721

6,921,098

194,626

(64,309)

1,321,529

53,601

(114,051,481)

20,890,705

(5,525,889)

62,916

1,321,529

116,517

(119,577,370)

15,427,732

(4,650,579)

5,642,728

250,000

33,364

5,676,092

(2,300)

2,313,678

116,517

(119,544,006)

21,351,524

(10,414,376)

268,143

2,313,678

384,660

(129,958,382)

11,205,291

NOTES TO AND FORMING PART OF
THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2015

1. BASIS OF PREPARATION
The financial report is a general purpose financial report that has
been prepared in accordance with Australian Accounting Standards,
other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001. Compliance with
Australian Accounting Standards ensures the consolidated financial
statements and notes of the consolidated entity with International
Financial Reporting Standards (‘IFRS’). Clinuvel Pharmaceuticals Ltd
is a for-profit entity for the purposes of reporting under Australian
Accounting Standards.

The financial report has been prepared on an accruals basis and is
based on historical costs and does not take into account changing
money values or, except where stated, current valuations of financial
assets. Cost is based on the fair values of the consideration given in
exchange for assets. The accounting policies have been consistently
applied, unless otherwise stated.

Both the functional and presentation currency of the group and its
Australian controlled entities is Australian dollars. The functional
currency of certain non Australian controlled entities is not Australian
dollars. As a result, the results of these entities are translated to
Australian dollars for presentation in the Clinuvel Pharmaceuticals
Ltd financial report.

In applying Australian Accounting Standards management must
make judgment regarding carrying values of assets and liabilities
that are not readily apparent from other sources. Assumptions and
estimates are based on historical experience and any other factor
that are believed reasonable in light of the relevant circumstances.
These estimates are reviewed on an ongoing basis and revised in
those periods to which the revision directly affects.

All accounting policies are chosen to ensure the resulting financial
information satisfies the concepts of relevance and reliability.

The financial statements of the consolidated entity have been prepared
on a going concern basis. The consolidated entity’s operations
are subject to major risks due primarily to the nature of research
development and the commercialisation to be undertaken. The risk
factors set out may materially impact the financial performance and
position of the consolidated entity.

The going concern basis assumes that, if required, future capital
raisings will be available to enable the consolidated entity to
undertake the research, development and commercialisation of its
projects and that the subsequent commercialisation of products
will be successful. The financial statements take no account of the
consequences, if any, of the inability of the consolidated entity to
obtain adequate funding or of the effects of unsuccessful research,
development and commercialisation of the consolidated entity
projects. The consolidated entity has successfully raised additional
working capital in past years and as such the Directors do not
envisage the need to raise additional capital in the coming financial
year.

The consolidated financial statements are prepared by combining the
financial statements of all the entities that comprise the consolidated
A) PRINCIPLES OF CONSOLIDATION

entity, being the Company (the parent entity) and its subsidiaries
as defined in Accounting Standard AASB 10 Consolidated Financial
Statements. Consistent accounting policies are employed in the
preparation and presentation of the consolidated financial statements.

The consolidated financial statements include the information and
results of each subsidiary from the date on which the Company
obtains control and until such time as the Company ceases to control
such entity. In preparing the consolidated financial statements, all
intercompany balances and transactions, and unrealised profits
arising within the consolidated entity are eliminated in full.

A list of controlled entities is found in Note 8 of the Financial
Statements.

At present it is uncertain that tax losses can be utilised. Once a
position becomes known, tax losses will be brought to account.
B) INCOME TAX

Current tax is calculated by reference to the amount of income tax
Current Tax
payable or recoverable in respect of the taxable profit or loss for the
period. It is calculated using tax rates and tax laws that have been
enacted or substantially enacted by reporting date. Current tax for
current and prior periods is recognised as a liability (or asset) to the
extent it is unpaid (or refundable).

Deferred tax is accounted for using the comprehensive balance sheet
Deferred Tax
liability method in respect of temporary differences arising from
differences between the carrying amount of assets and liabilities in
the financial statements and corresponding tax base of those items.

In principle, deferred tax liabilities are recognised on all taxable
differences. Deferred tax assets are recognised for deductible
temporary differences and unused tax losses to the extent that it
is probable that sufficient unused tax losses and tax offsets can be
utilised by future taxable profits. However, deferred tax assets and
liabilities are not recognised if the temporary differences given rise
to them arise from the initial recognition of assets and liabilities
(other than as a result of a business combination) which affect neither
taxable income nor accounting profit. Furthermore, a deferred tax
liability is not recognised in relation to taxable temporary differences
arising from goodwill.

Deferred tax
liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, except where the
consolidated entity is able to control the reversal of the temporary
differences and it is probable that the temporary differences will not
reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with these investments
and interests are only recognised to the extent that it is probable
that there will be sufficient taxable profits against which to utilise
the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply to the period(s) when the asset and liability
giving rise to them are realised or settled, based on tax rates (and tax

Notes To The Financial Statements

laws) that have been enacted or substantially enacted by reporting
date. The measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in which
the consolidated entity expects, at the reporting date, to recover or
settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate
to income taxes levied by the same taxation authority and the
Company/consolidated entity intends to settle its current tax assets
and liabilities on a net basis.

selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the
sale.

Expenditure on research activities is recognised as an expense in
the period in which it is incurred. Where no internally-generated
G) RESEARCH AND DEVELOPMENT EXPENDITURE
intangible asset can be recognised, development expenditure is
recognised as an expense in the period as incurred. An intangible
asset arising from development (or from the development phase of
an internal project) is recognised if, and only if, all of the following is
demonstrated:

The Company and its wholly-owned Australian entities are part of
Tax Consolidation
a tax-consolidation group under Australian Taxation law. Clinuvel
Pharmaceuticals Ltd is the head entity of the tax-consolidation group.

• the technical feasibility of completing the intangible asset so

that it will be available for use or sale;

Current and deferred tax is recognised as an expense or income in the
Current And Deferred Tax For The Period
Statement of Profit or Loss and Other Comprehensive Income, except
when it relates to items credited or debited directly to equity, in which
case the deferred tax is also recognised directly in equity, or where
it arises from the initial accounting for a business combination, in
which case it is taken into account in the determination of goodwill
or discount on acquisition.

Cash and cash equivalents comprise of cash on hand, at call deposits
with banks or financial institutions, bank bills and investments in
C) CASH AND CASH EQUIVALENTS
money market instruments where it is easily convertible to a known
amount of cash and subject to an insignificant risk of change in value.

Plant and equipment are stated at cost less accumulated depreciation
and impairment. Cost includes expenditure that is directly attributable
D) PROPERTY, PLANT AND EQUIPMENT
to the acquisition of the item. In the event that settlement of all or
part of the purchase consideration is deferred, cost is determined by
discounting the amounts payable in the future to their present value
as at the date of acquisition.

Depreciation is calculated on diminishing value so as to write off the
net cost of each asset over its expected useful life to its estimated
residual value. The estimated useful lives, residual values and
depreciation method are reviewed at the end of each annual reporting
period and adjusted if appropriate. An asset’s carrying amount
is written off immediately to its recoverable amount if the assets
carrying amount is greater than its estimated recoverable amount.

The following diminishing value percentages are used in the
calculation of depreciation:

• Computers and software 40%

• All other assets 7.5% to 20%

• the intention to complete the intangible asset and use or sell it;

• the ability to use or sell the intangible asset;

• how the intangible asset will generate probably future

economic benefits;

• the availability of adequate technical, financial and other
resources to complete the development and to use or sell the
intangible asset; and

• the ability to measure reliably the expenditure attributable to

the intangible asset during its development.

The consolidated entity uses its critical judgment in continually
assessing whether development expenditures meet the recognition
criteria of an intangible asset.

At 30 June 2015 the consolidated entity has yet to demonstrate the
satisfaction of all the above criteria to recognise and generate an
intangible asset from its development activities. Whether or not it
is probable that the future economic benefits that are attributable to
the asset will flow to the enterprise is dependent upon the regulatory
agency accepting the commercialisation structures established by
the consolidated entity to meet its post-marketing commitments. As
at 30 June 2015, the post-marketing commitments of the consolidated
entity have not yet received the relevant approval from the European
regulatory agency.

Trademarks, patents and licences have a finite useful life and are
H) INTANGIBLE ASSETS - TRADEMARKS,
recorded at cost less accumulated amortisation and impairment
PATENTS AND SUB- LICENCE
losses. Amortisation is charged on a straight line basis over the
shorter of the relevant agreement or useful life. The estimated useful
life and amortisation method is reviewed at the end of each annual
reporting period.

Gains and losses on disposal of assets are determined by comparing
proceeds upon disposal with the asset’s carrying amount. These are
included in the Statement of Profit or Loss and Other Comprehensive
Income.

The sub-licences to develop and commercialise SCENESSE® have
Sub-licence
expired and the consolidated entity no longer holds the sub-licences.
The sub-licences have been fully amortised on a straight line basis
over 10 years.

The consolidated entity classifies its financial assets into financial
assets at fair value through profit and loss and loans and receivables.
E) INVESTMENTS AND OTHER FINANCIAL ASSETS
Financial assets at fair value through profit and loss are held for
trading if the entity does not have a positive intention to hold its
investment in the financial asset until maturity (if a fixed maturity)
or if it intends to hold the financial asset for an undefined period.
Loans and receivables are non-derivate financial assets with fixed
payments that are not quoted in an active market. They are included
in current assets, except those loans and receivables that are due
more than 12 months from reporting date.

Trade payables and other accounts payable are recognised when
the consolidated entity becomes obliged to make future payments
I) PAYABLES
resulting from the purchase of goods and services, incurred prior to
the end of the financial year.

Provision is made for benefits accruing to employees in respect of
wages and salaries, annual leave and long service leave when it is
J) EMPLOYEE BENEFITS
probable that settlement will be required and they are capable of
being measured reliably.

Raw, materials, work in progress and finished goods are stated at the
lower of cost or net realisable value. Cost comprises, direct material
F) INVENTORY
and labour. Costs are assigned to individual items of inventory on the
basis of weighted average costs. Net realisable value is the estimated

Provisions made in respect of employee benefits expected to be
settled within 12 months, are measured at their nominal values using
the remuneration rate expected to apply at the time of settlement.

Notes To The Financial Statements

Provisions made in respect of employee benefits which are not
expected to be settled within 12 months are measured as the present
value of the estimated future cash outflows to be made by the
consolidated entity in respect of services provided by employees up
to reporting date. The discount rate used to estimate future cash flows
is per the Australian corporate bond rates as commissioned by the
Group of 100 and published by Milliman Australia at reporting date.

The net amount of GST recoverable from, or payable to, the taxation
authority is included as part of receivables or payables. Cash flows
are included in the Statement of Cash Flow on a gross basis. The
GST component of cash flows arising from investing and financing
activities which is recoverable from, or payable to, the taxation
authority is classified as operating cash flows.

Under AASB 2 Share-based Payments, the consolidated entity must
K) DIRECTORS’ REMUNERATION –
determine the fair value of options and conditional performance
SHARE-BASED PAYMENTS
rights issued to employees as remuneration and recognise an
expense in the Statement of Profit or Loss and Other Comprehensive
Income. This standard is not limited to options and to conditional
performance rights. It also extends to other forms of equity based
remuneration. The fair value of options is measured by the use of
the binominal options pricing model. The fair value of conditional
performance rights is measured by either a binomial or a trinomial
model. It is determined at grant date and expensed on a straight- line
basis over the vesting period. The fair value of options and conditional
performance rights is shown as an expense in profit or loss.

Interest revenue is recognised on a proportional basis that takes into
L) REVENUE AND OTHER INCOME
Interest
account the effective yield on the financial asset.

At each reporting date, the consolidated entity reviews the carrying
amounts of its tangible and intangible assets to determine whether
P) IMPAIRMENT OF ASSETS
there is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment
loss (if any). Where the asset does not generate cash flows that are
independent from other assets, the consolidated entity estimates the
recoverable amount of the cash-generating unit to which the asset
belongs.

Intangible assets with indefinite useful lives and intangible assets not
yet available for use are tested for impairment annually and whenever
there is an indication that the asset may be impaired. Recoverable
amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and
the risk specified to the asset for which the estimates of future cash
flows have not been adjusted.

Revenue from reimbursement of implant sales from insurance
Sale Reimbursements
companies is recognised when the consolidated entity has transferred
to the buyer the significant risks and rewards of ownership of the
goods.

If the recoverable amount of an asset (or cash-generating unit) is
estimated to be less than its carrying amount, the carrying amount of
the asset (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised in the Statement of Profit or Loss
and Other Comprehensive Income immediately.

Other income from the government R&D tax incentive program is
Government R&D tax incentive
recognised when it has been established that the conditions of the
tax incentive have been met and that the expected amount of tax
incentive can be reliably measured.

Ordinary share capital is recognised at the fair value of the
consideration received by the Company.
M) SHARE CAPITAL

Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only to the extent
that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss
been recognised for the asset (cash-generating unit) in prior years.
A reversal of an impairment loss is recognised in the Statement of
Profit or Loss and Other Comprehensive Income immediately.

Any transaction costs arising on the issue of ordinary shares are
recognised directly in equity as a reduction of the shares proceeds
received.

Lease payments for operating leases, where substantially all the risks
and benefits remain with the lessors, are charged as expenses in the
Q) LEASES
periods in which they are incurred.

Basic earnings per share is determined by dividing net profit after
N) EARNINGS PER SHARE
Basic Earnings Per Share
income tax attributable to members of the Company, excluding any
costs of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the financial
year, adjusted for bonus elements in ordinary shares issued during
the year.

Diluted earnings per share adjusts the figures used in the
Diluted Earnings Per Share
determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated
with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares

Revenues, expenses and assets are recognised net of the amount of
‘goods and services tax’ or ‘valued added tax‘ as it is known in certain
O) GOODS AND SERVICES TAX/VALUE ADDED TAX (GST)
jurisdictions (GST), except:

Where necessary, comparatives have been reclassified and
repositioned for consistency with current year disclosure.
R) COMPARATIVES

Provisions are recognised when a present obligation to the future
sacrifice of economic benefits becomes probable, and the amount of
S) PROVISIONS
the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at reporting
date, taking into account the risks and uncertainties surrounding
the obligation. Where a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the
present value of those cash flows.

When some or all of the economic benefits required to settle a provision
are expected to be recovered from a third party, the receivable is
recognised as an asset if it is virtually certain that recovery will be
received and the amount of the receivable can be measured reliably.

• where the amount of GST incurred is not recoverable from
the taxation authority, it is recognised as part of the costs of
acquisition of an asset or as part of an item of expense; or

• for receivables and payables which are recognised inclusive of

GST.

All foreign currency transactions during the financial year are
brought to account using the exchange rate in effect at the date of
T) FOREIGN CURRENCY TRANSACTIONS AND BALANCES
the transaction. Foreign currency monetary items at reporting
date are translated at the exchange rate existing at reporting date.
Non- monetary assets and liabilities carried at fair value that
are denominated in foreign currencies are translated at the rates

Notes To The Financial Statements

prevailing at the date when the fair value was determined. Exchange
differences are recognised in profit or loss in the period in which
they arise as defined in AASB 121: The Effects of Changes in Foreign
Exchange Rates.

Foreign subsidiaries that have a functional currency different from
the presentation currency are translated into the presentation
currency as follows:

• At the spot rate at reporting date for assets and liabilities; and

• At average monthly exchange rates for income and expenses.

Resulting differences are recognised within equity in a foreign
currency translation reserve.

Other current assets comprise prepayments of drug peptide yet to be
used in Clinuvel Pharmaceuticals Ltd trial program and prepayments
U) OTHER CURRENT ASSETS
for certain insurances yet to expire, along with other general
prepayments. The expenditures represent an unused expense and
therefore a decrease in future economic benefit has yet to be incurred.

Benefits are provided to employees of the Group in the form of
share-based payment transactions, whereby employees render
V) SHARE-BASED PAYMENT TRANSACTIONS
services in exchange for shares or rights over shares (‘equity-settled
transactions’).

The cost of these equity-settled transactions with employees is
measured by reference to the fair value at the date at which they
are granted. The fair value is determined using either a binomial
or a trinomial options pricing model. In valuing equity-settled
transactions, no account is taken of any performance conditions,
other than conditions linked to the price of the shares of Clinuvel
Pharmaceuticals Ltd (‘market conditions’).

The cost of equity-settled transactions is recognised, together with
a corresponding increase in equity, over the period in which the
performance conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (‘vesting date’).

The cumulative expense recognised for equity-settled transactions
at each reporting date until vesting date reflects (i) the extent to
which the vesting period has expired and (ii) the number of awards
that, in the opinion of the Directors of the group, will ultimately
vest. This opinion is formed based on the best available information
at reporting date. No adjustment is made for the likelihood of market
performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date.

No expense is recognised for awards that do not ultimately vest,
except for awards where vesting is conditional upon a market
condition.

Where the terms of an equity-settled award are modified, as a
minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any increase in the
value of the transaction as a result of the modification, as measured at
the date of modification. Where an equity-settled award is cancelled,
it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately.
However, if a new award is substituted for the cancelled award, and
designated as a replacement award on the date that it is granted, the
cancelled and new award are treated as if they were a modification of
the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as
additional share dilution in the computation of earnings per share.

The Directors evaluate estimates and judgments incorporated into
the financial report based on historical knowledge and best available
W) CRITICAL ACCOUNTING ESTIMATES AND JUDGMENT
current information. Estimates assume a reasonable expectation of
future events and are based on current trends and economic data,
obtained both externally and within the Group.

The Group measures the cost of equity-settled transactions with
Key estimates – share-based payments transactions
employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined
using either a Black-Scholes, a binomial or a trinomial model, using
the assumptions detailed in Note 22.

Given the Company’s and each individual entities’ history of recent
Key judgements – tax losses
losses, the Group has not recognised a deferred tax asset with regard
to unused tax losses and other temporary differences, as it has not
been determined whether the Company or its subsidiaries will
generate sufficient taxable income against which the unused tax
losses and other temporary differences can be utilised. The value of
tax losses not recognised is included in Note 3.

In the current year, the Group has adopted all of the new and revised
X) NEW ACCOUNTING STANDARDS
Standards and Interpretations issued by the Australian Accounting
AND INTERPRETATIONS
Standards Board that are relevant to its operations and effective for
the current annual reporting period. The adoption of the new and
revised standards had minimum or no impact to the Group’s financial
statements.

Certain new accounting standards and interpretations have been
Y) NEW AUSTRALIAN ACCOUNTING STANDARDS
published that are not mandatory for 30 June 2015 reporting periods,
ISSUED BUT NOT YET EFFECTIVE
and have not yet been adopted by the group. The group’s assessment
of the impact of these new standards and interpretations is set out
below:

AASB 15:
AASB 15 Revenue from Contracts with Customers

• replaces AASB 15 Revenue and some revenue-related

Interpretations;

• establishes a new control-based revenue recognition model;

• changes the basis for deciding whether revenue is to be

recognised over time or at a point in time;

• provides new and more detailed guidance on specific topics
(e.g., multiple element arrangements, variable pricing, rights of
return, warranties and licensing); and

• expands and improves disclosures about revenue.

The entity is yet to undertake a detailed assessment of the impact
of AASB 15. However, based on the entity’s preliminary assessment,
the Standard is not expected to have a material impact on the
transactions and balances recognised in the financial statements
when it is first adopted for the year ending 30 June 2019.

AASB 9 introduces new requirements for the classification and
AASB 9 Financial Instruments (December 2014)
measurement of financial assets and liabilities. These requirements
improve and simplify the approach for classification and measurement
of financial assets compared with the requirements of AASB 139.

The main changes are:

• Financial assets that are debt instruments will be classified
based on: (i) the objective of the entity’s business model for
managing the financial assets; and (ii) the characteristics of
the contractual cash flows.

• Allows an irrevocable election on initial recognition to present
gains and losses on investments in equity instruments that are
not held for trading in other comprehensive income (instead
of in profit or loss). Dividends in respect of these investments
that are a return on investment can be recognised in profit or
loss and there is no impairment or recycling on disposal of the
instrument.

Notes To The Financial Statements

• Introduces a ‘fair value through other comprehensive income’
measurement category for particular simple debt instruments.

information is prepared. The consolidated entity has no operating
segments within the definition of AASB 8 Operating Segments.

• Financial assets can be designated and measured at fair
value through profit or loss at initial recognition if doing
so eliminates or significantly reduces a measurement or
recognition inconsistency that would arise from measuring
assets or liabilities, or recognising the gains and losses on
them, on different bases.

• Where the fair value option is used for financial liabilities the

change in fair value is to be accounted for as follows:

It has established entities in more than one geographical area.
Revenues from reimbursement revenue are 100% earned from entities
within Europe, which is consistent with the comparative period. The
non-current assets that are not held within Australia are immaterial
to the group.

100% of the revenue from sales reimbursements is generated from six
reimbursers (2014: three reimbursers).

◦ the change attributable to changes in credit risk are

presented in Other Comprehensive Income (‘OCI’);

◦ the remaining change is presented in profit or loss;

◦ if this approach creates or enlarges an accounting
mismatch in the profit or loss, the effect of the changes in
credit risk are also presented in profit or loss. Otherwise,
the following requirements have generally been carried
forward unchanged from AASB 139 into AASB 9;

◦ classification and measurement of financial liabilities; and

◦ derecognition requirements

for financial assets and

liabilities.

AASB 9 requirements regarding hedge accounting represent a
substantial overhaul of hedge accounting that enable entities to better
reflect their risk management activities in the financial statements.
Furthermore, AASB 9 introduces a new impairment model based
on expected credit losses. This model makes use of more forward-
looking information and applies to all financial instruments that are
subject to impairment accounting.

The entity is yet to undertake a detailed assessment of the impact
of AASB 9. However, based on the entity’s preliminary assessment,
the Standard is not expected to have a material impact on the
transactions and balances recognised in the financial statements
when it is first adopted for the year ending 30 June 2019.

AASB 2014-4 Amendments to Australian Accounting
Standards – Clarification of Acceptable Methods
The amendments to AASB 116 prohibit the use of a revenue-based
of Depreciation and Amortisation
depreciation method for property, plant and equipment. Additionally,
the amendments provide guidance in the application of the
diminishing balance method for property, plant and equipment.

The amendments to AASB 116 present a rebuttable presumption
that a revenue-based amortisation method for intangible assets is
inappropriate. This rebuttable presumption can be overcome (i.e. a
revenue-based amortisation method might be appropriate) only in
two limited circumstances:

• the intangible asset is expressed as a measure of revenue, for
example when the predominant limiting factor inherent in an
intangible asset is the achievement of a revenue threshold (for
instance, the right to operate a toll road could be based on a
fixed total amount of revenue to be generated from cumulative
tolls charged); or

• when it can be demonstrated that revenue and the consumption
of the economic benefits of the intangible asset are highly
correlated.

When these amendments are first adopted for the year ending 30
June 2017, there will be no material impact on the transactions and
balances recognised in the financial statements.

A segment is a component of the consolidated entity that earns
revenues or incurs expenses whose results are regularly reviewed by
Z) SEGMENT REPORTING
the chief operating decision makers and for which discrete financial

Notes To The Financial Statements

2. PROFIT/(LOSS) FROM CONTINUING OPERATIONS

(A)

REVENUES

Interest revenue – other persons

Sales reimbursements

TOTAL REVENUES

(B)

OTHER INCOME

Government R&D tax incentive

TOTAL OTHER INCOME

(C)

EXPENSES

Clinical development costs

Drug delivery research costs

Regulatory and toxicity studies

R&D overheads

Business marketing & listing

Licenses patents and trademarks

General operations (incl Board)

Gain on restating foreign currency creditors and currencies held

Loss on restating foreign currency creditors and currencies held

TOTAL EXPENSES

(D)

PROFIT/(LOSS) BEFORE INCOME TAX INCLUDES THE FOLLOWING SPECIFIC EXPENSES

Employee benefits expense

Depreciation

Loss on sale of property, plant and equipment

Share-based payments

Operating lease expense – minimum lease payments

CONSOLIDATED ENTITY

2015

348,409

2,911,553

3,259,962

406,126

231,963

450,090

662,069

2014

326,469

2,200,092

2,526,561

463,018

708,430

563,307

313,404

1,258,823

1,672,698

801,556

232,150

516,139

177,510

10,507,960

4,541,370

(64,147)

22,610

14,080,464

8,515,468

3,900,848

5,029,112

26,539

29,875

5,676,092

339,744

37,471

2,851

194,626

315,216

3. INCOME TAX EXPENSE

Notes To The Financial Statements

CONSOLIDATED ENTITY

2015

2014

(A)

THE PRIMA FACIE TAX ON PROFIT (LOSS) IS RECONCILED TO THE INCOME TAX EXPENSE (BENEFIT) AS FOLLOWS:

Prima facie tax payable on profit (loss) from ordinary activities before income tax at 30% (2013: 30%):

(3,124,313)

(1,657,767)

Add:

Tax effect of

(B)

Tax losses

Non deductible entertainment

Share-based payments

Research and development deduction

(Over)/under provision of income tax in previous years

Refundable tax offset

Other

1,928

1,702,828

280,087

(424,901)

(121,838)

683

58,388

309,082

(192,510)

Total deferred tax assets not brought to account

(1,686,186)

(1,482,124)

DEFERRED TAX ASSETS ARISING FROM UNCONFIRMED TAX LOSSES AND NET TIMING DIFFERENCES NOT BROUGHT TO ACCOUNT AT BALANCE DATE
AS REALISATION OF THE BENEFIT IS NOT REGARDED AS PROBABLE. THE BENEFITS WILL ONLY BE OBTAINED IF THE CONDITIONS SET OUT IN NOTE
1(B) OCCUR:

Net temporary differences

TOTAL

The tax rate used in this report is the corporate tax rate of 30%. There has been no change in the corporate tax rate when compared with the previous reporting period.

4. TRADE AND OTHER RECEIVABLES

CURRENT

Trade debtors

Accrued income

Sundry debtors

TOTAL

40,540,810

37,373,387

(1,772,380)

(291,143)

38,768,430

37,082,244

CONSOLIDATED ENTITY

2014

1,059,223

38,281

487,873

1,585,377

2015

1,478,310

32,731

449,412

1,960,453

The carrying amount of receivables is a reasonable approximation of fair value. All of the Group’s trade and other receivables have been reviewed for indicators of impairment. All receivables are non-interest bearing.

5. INVENTORY

CURRENT INVENTORY

Raw materials – at cost

Finished goods – at cost

TOTAL

CONSOLIDATED ENTITY

2015

2014

391,156

445,979

837,135

Notes To The Financial Statements

6. OTHER ASSETS

CURRENT PREPAYMENTS

Prepaid peptide

Other

TOTAL

7. PROPERTY, PLANT AND EQUIPMENT

CONSOLIDATED ENTITY

PLANT AND EQUIPMENT

At cost

Less: accumulated depreciation

SUB-TOTAL

FURNITURE AND FITTINGS

At cost

Less: accumulated depreciation

SUB-TOTAL

TOTAL PROPERTY, PLANT AND EQUIPMENT

CONSOLIDATED ENTITY

2015

2014

134,722

69,901

204,623

727,145

101,002

828,147

2015

2014

364,171

(299,015)

65,156

17,182

(12,969)

4,213

69,369

457,402

(369,788)

87,614

79,653

(52,806)

26,847

114,461

MOVEMENTS IN CARRYING AMOUNTS - PROPERTY, PLANT AND EQUIPMENT

Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the financial year.

PLANT AND EQUIPMENT

FURNITURE AND FITTINGS

TOTAL

112,539

3,436

(25,448)

22,598

(30,461)

4,950

87,614

12,096

(105,327)

96,257

(23,328)

(2,156)

65,156

33,858

146,397

3,436

(25,448)

22,598

(7,011)

(37,472)

4,950

26,847

114,461

12,096

(62,472)

(167,799)

43,735

(3,211)

(686)

4,213

139,992

(26,539)

(2,842)

69,369

CARRYING AMOUNT AT 30 JUNE 2013

Additions

Disposals

Depreciation written back on disposal

Depreciations expense

Exchange differences

CARRYING AMOUNT AT 30 JUNE 2014

Additions

Disposals

Depreciation written back on disposal

Depreciations expense

Exchange differences

CARRYING AMOUNT AT 30 JUNE 2015

8. INTERESTS IN SUBSIDIARIES

NAME OF ENTITY

COUNTRY OF INCORPORATION

Notes To The Financial Statements

OWNERSHIP INTEREST

2015

2014

PARENT ENTITY

Clinuvel Pharmaceuticals Ltd

Australia

United Kingdom

United States

Switzerland

Singapore

CONTROLLED ENTITIES

A.C.N. 108 768 896 Pty Ltd

Clinuvel (UK) Ltd

Clinuvel, Inc

Clinuvel AG

Clinuvel Singapore Pte Ltd

Vallaurix Pte Ltd

9. TRADE AND OTHER PAYABLES

CURRENT

TOTAL

Unsecured trade creditors

Sundry creditors and accrued expenses

(A)

AGGREGATE AMOUNTS PAYABLE TO:

Directors and Director-related entities

100%

82%

100%

CONSOLIDATED ENTITY

2015

260,600

1,600,036

1,860,636

2014

178,450

926,707

1,105,157

476,516

485,851

(B)

AUSTRALIAN DOLLAR EQUIVALENTS OF AMOUNTS PAYABLE IN FOREIGN CURRENCIES NOT EFFECTIVELY HEDGED AND INCLUDED IN TRADE AND
SUNDRY CREDITORS:

US Dollars

British Pounds

Swiss Franc

Singapore Dollars

Other

TOTAL

For an analysis of the sensitivity of trade and other payables to foreign currency risk refer to Note 21.

(C)

TERMS AND CONDITIONS:

Trade and sundry creditors are non-interest bearing and normally settled on 30 day terms.

108,683

204,287

389,607

702,577

12,330

637,069

649,399

Notes To The Financial Statements

10. PROVISIONS

CURRENT

Employee benefits

NON-CURRENT

Employee benefits

11. CONTRIBUTED EQUITY

(A) ISSUED AND PAID UP CAPITAL

CONSOLIDATED ENTITY

2015

2014

574,640

613,020

3,308

7,659

CONSOLIDATED ENTITY

2015

2014

44,554,787 fully paid ordinary shares (2014: 42,391,435)

138,465,335

133,567,056

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up
on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. The Company does not have a limited amount of authorised capital and issued shares do not have a par
value.

(B) MOVEMENTS IN ORDINARY SHARE CAPITAL

NO.

2015

CONSOLIDATED ENTITY

NO.

2014

AT THE BEGINNING OF THE FINANCIAL YEAR

42,391,435

133,567,056

38,217,038

126,710,267

Issued during the year

Private placement

59,810

250,000

4,174,397

6,921,098

Conditional rights issues and transferred from conditional rights
reserve

Less: transaction costs

2,103,542

4,650,579

(2,300)

(64,309)

BALANCE AT THE END OF THE FINANCIAL YEAR

44,554,787

138,465,335

42,391,435

133,567,056

During the year the following conditional performance rights were issued which if exercised, would result in the issue of fully paid ordinary shares:

EXPIRY DATE

EXERCISE PRICE

NUMBER OF CONDITIONAL RIGHTS

Upon achievement of various performance milestones

Nil$

3,243,310

During the year the following conditional performance rights were exercised, resulting in the issue of fully paid ordinary shares:

EXPIRY DATE

EXERCISE PRICE

NUMBER OF CONDITIONAL RIGHTS

Upon achievement of various performance milestones

Nil$

2,103,542

As at 30 June 2015 the following conditional performance rights existed which if exercised, would result in the issue of fully paid ordinary shares:

EXPIRY DATE

EXERCISE PRICE

NUMBER OF CONDITIONAL RIGHTS

Upon achievement of various performance milestones

Nil$

2,556,250

No share options issued in prior years were exercised, nor were share options issued during the year, resulting in the issue of fully paid shares.

12. RESERVES

SHARE OPTION RESERVE:

BALANCE AT THE BEGINNING OF PERIOD

Share-based payment

Lapsed, forfeited options

BALANCE AT THE END OF PERIOD

Notes To The Financial Statements

CONSOLIDATED ENTITY

2015

2014

15,530

1,300

(16,830)

The Executive share option reserve arises on the grant of share options to Executive and Directors under the Executive share option scheme. Amounts are transferred out of the reserve and into issued capital when the options
are exercised and to retained earnings when options lapse.

CONDITIONAL PERFORMANCE RIGHTS RESERVE:

BALANCE AT THE BEGINNING OF PERIOD

Share-based payment

Transfer to share capital

Lapsed, forfeited rights

BALANCE AT THE END OF PERIOD

1,321,529

5,676,092

(4,650,579)

1,182,094

193,326

(33,364)

(53,891)

2,313,678

1,321,529

The Conditional Performance Rights reserve arises on the grant of conditional performance rights to eligible employees under the Conditional Performance Rights Plan. Amounts are transferred out of the reserve and into
issued capital when the rights are exercised and to retained earnings when rights lapse.

FOREIGN CURRENCY TRANSLATION RESERVE:

BALANCE AT THE BEGINNING OF PERIOD

Translating foreign subsidiary to current rate at balance date

BALANCE AT THE END OF PERIOD

TOTAL RESERVES

13. ACCUMULATED LOSSES

Accumulated losses at the beginning of the year

Transfer from Share Option reserve of lapsed & expired Options

Transfer from Performance Rights reserve of lapsed & expired Rights

Net loss attributable to the members of Clinuvel Pharmaceuticals Ltd

ACCUMULATED LOSSES AT THE END OF THE FINANCIAL YEAR

116,517

268,143

384,660

53,601

62,916

116,517

2,698,338

1,438,046

CONSOLIDATED ENTITY

2015

2014

(119,577,370)

(114,122,202)

33,364

16,830

53,891

(10,414,376)

(5,525,889)

(129,958,382)

(119,577,370)

Notes To The Financial Statements

14. LEASE COMMITMENTS

OPERATING LEASE COMMITMENTS

Non-cancellable operating leases contracted for but not capitalised in the accounts

Payable:

TOTAL

not later than 1 year

later than 1 year but not later than 5 years

CONSOLIDATED ENTITY

2015

2014

172,795

33,355

206,150

155,090

Operating leases comprises commitments for office premises, accommodation for relocated employees and miscellaneous equipment.

No contingent rental clauses exist in lease agreements. Lease agreements range from 3 months to 16 months as from the reporting date and contain renewal options. Fixed increases are factored into some of the agreements.

15. EARNINGS PER SHARE (EPS)

(a) Basic earnings per share (cents per share)

CONSOLIDATED ENTITY

2015

(24.0)

2014

(14.3)

(b) The Weighted Average Number of Ordinary Shares (WANOS) used in the calculation of basic earnings per share

43,373,683

38,697,380

(10,414,376)

(5,525,889)

As at 30 June 2015 the Company had on issue unlisted performance rights over unissued capital. These rights are not considered dilutive as they do not increase the net loss per share.

There have been no other transactions involving ordinary shares or potential ordinary shares that would significantly change the number of ordinary shares outstanding between the reporting date and the date of the completion
of this financial report.

As the group is in a loss situation all rights are considered anti dilutive and have been excluded from the calculation of diluted earnings per share. Therefore basic and diluted earnings per share are the same. The number of
performance rights that could potentially dilute earnings per share in the future, as at the date of this report, is 2,556,250 (2014: 1,391,482).

16. CASH FLOW INFORMATION

Notes To The Financial Statements

CONSOLIDATED ENTITY

(A) RECONCILIATION OF CASH

Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the balance sheet as follows:

2015

Cash at bank

Cash on hand

Deposits on call

Term deposits

Security bonds

TOTAL CASH

2,840,536

618

344,469

7,300,000

86,672

10,572,295

2014

2,024,641

978

316,842

12,200,000

83,122

14,625,583

(B) RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES WITH OPERATING PROFIT (LOSS)

OPERATING PROFIT (LOSS) AFTER INCOME TAX

(10,414,376)

(5,525,889)

Non cash flows in operating (loss):

Depreciation expense

Exchange rate effect on foreign currencies held

Executive share option expense

Loss on sale of non-current assets

Unrealised loss on foreign exchange translation

Changes in assets and liabilities:

(Increase)/decrease in receivables

(Increase)/decrease in inventories

(Increase)/decrease in prepayments

Increase/(decrease) in payables

Increase/(decrease) in provisions

26,539

(264,521)

5,676,092

29,251

268,143

(356,822)

(837,135)

623,446

762,304

(42,733)

37,472

12,925

194,626

2,851

57,965

159,024

529,023

(374,594)

97,912

NET CASH USED IN OPERATING ACTIVITIES

(4,529,812)

(4,808,685)

Cash at bank earns floating rates based on daily bank deposit rates. The carrying amounts of cash and cash equivalents represent fair value.

The effective interest rate on short-term deposits was 3.48% (2014: 3.83%). These deposits have an average maturity date of 115 days (2014: 125 days).

Notes To The Financial Statements

17. KEY MANAGEMENT PERSONNEL DISCLOSURES

THE DIRECTORS OF CLINUVEL PHARMACEUTICALS LTD DURING THE YEAR WERE:

Mr. S.R. McLiesh (Non-Executive Chair)

Mrs. B.M. Shanahan (Non-Executive Director)

Dr. P.J. Wolgen (Managing Director)

Mr. L.J. Wood (Non-Executive Director, ceased Directorship 28 July 2014)

Mr. E. Ishag (Non-Executive Director)

Mr. W.A. Blijdorp (Non-Executive Director, joined 21 January 2015)

THE OTHER KEY MANAGEMENT PERSONNEL OF CLINUVEL PHARMACEUTICALS LTD DURING THE YEAR WERE:

Dr. D. J. Wright (Acting Chief Scientific Officer)

Mr. D. M. Keamy (Chief Financial Officer, Company Secretary)

Please see the Remuneration Report from page 10 for further information.

KEY MANAGEMENT PERSONNEL COMPENSATION

SHORT-TERM EMPLOYEE BENEFITS:

Post-employment benefits

LONG-TERM BENEFITS:

Termination benefits

Share-based payments

TOTAL

No loans or other transactions existed with key management personnel.

18. AUDITORS’ REMUNERATION

Amounts received or due and receivable by Grant Thornton for:

audit services and review

non-audit services

TOTAL

CONSOLIDATED ENTITY

2015

2014

2,154,478

2,497,924

55,213

55,558

5,533,958

7,743,649

134,574

2,688,056

CONSOLIDATED ENTITY

2015

66,500

2014

63,024

6,000

69,024

19. RELATED PARTY DISCLOSURES

The Directors of Clinuvel Pharmaceuticals Ltd during the financial
year were:
DIRECTORS

S.R. McLiesh, P.J. Wolgen, B.M. Shanahan, L.J. Wood, E. Ishag, W.A.
Blijdorp.

Notes To The Financial Statements

within Europe, which is consistent with the comparative period. The
non-current assets that are not held within Australia are immaterial
to the group.

100% of the revenue from sales reimbursements is generated from six
reimbursers (2014: three reimbursers).

21. FINANCIAL INSTRUMENTS
Clinuvel Pharmaceuticals Ltd and consolidated entities have
exposure to the following risks from its use in financial instruments:

The loan receivable by Clinuvel Pharmaceuticals Ltd from A.C.N. 108
WHOLLY-OWNED GROUP TRANSACTIONS
Loans
768 896 Pty Ltd is non-interest bearing. A provision for non-recovery
has been raised in the accounts of Clinuvel Pharmaceuticals Ltd to
the extent that a deficiency in net assets exists in A.C.N. 108 768 896
Pty Ltd. The loan to A.C.N. 108 768 896 Pty Ltd as at 30 June 2015 is
$4,370,640 (2014: $4,370,640).

a) Market Risk

b) Credit Risk

c) Liquidity Risk

The loan receivable by Clinuvel Pharmaceuticals Ltd from Clinuvel
Inc is interest bearing. Repayment of the loan will commence upon
commercialisation of the Company’s drug candidate. A provision
for non-recovery has been raised in the accounts of Clinuvel
Pharmaceuticals Ltd to the extent that a deficiency in net assets
exists in Clinuvel, Inc. The loan to Clinuvel, Inc as at 30 June 2015 is
$10,338,331 (2014: $7,532,904).

The loan receivable by Clinuvel Pharmaceuticals Ltd from Clinuvel
AG is interest bearing. Repayment of the loan will commence upon
commercialisation of the Company’s drug candidate. A provision
for non-recovery has been raised in the accounts of Clinuvel
Pharmaceuticals Ltd to the extent that a deficiency in net assets
exists in Clinuvel AG. The loan to Clinuvel AG as at 30 June 2015 is
$19,042,355 (2014: $13,785,105).

The loan receivable by Clinuvel Pharmaceuticals Ltd from Clinuvel
Singapore Pte Ltd is interest bearing. Repayment of the loan will
commence upon commercialisation of the Company’s drug candidate.
A provision for non- recovery has been raised in the accounts of
Clinuvel Pharmaceuticals Ltd to the extent that a deficiency in net
assets exists in Clinuvel Singapore Pte Ltd. The loan to Clinuvel
Singapore Pte Ltd as at 30 June 2015 is $63,026 (2014: $223,722).

Director related and key management personnel transactions and
entities:

There are no transactions and relationships in existence as at 30 June
2015 between Directors and the Company and its related entities.

20. SEGMENT INFORMATION
A segment is a component of the consolidated entity that earns
revenues or incurs expenses whose results are regularly reviewed by
the chief operating decision makers and for which discrete financial
information is prepared. The consolidated entity has no operating
segments within the definition of AASB 8 Operating Segments.

It has established entities in more than one geographical area.
Revenues from reimbursement revenue are 100% earned from entities

The Board of Directors oversees and reviews the effectiveness of
the risk management systems implemented by management. The
Board has assigned responsibility to the Audit and Risk committee to
review and report back to the Board in relation to the Company’s risk
management systems.

Market risk is the risk of changes to market prices of foreign
exchange purchases, interest rates and/or equity prices resulting in a
A) MARKET RISK
change in value of the financial instruments held by the consolidated
entity. The objective to manage market risk is to ensure exposures
are contained within acceptable parameters, to minimise costs and
to stabilise existing assets.

The consolidated entity is exposed to foreign currency risk on future
Foreign Currency Risk
commercial transactions and recognised assets and liabilities that
are denominated in a currency other than the functional currency of
each of the group’s entities, primarily US dollars (USD), Euros (EUR),
Swiss francs (CHF), Singapore dollars (SGD) and Great British pounds
(GBP). The parent entity is exposed to the risk of its cash flows being
adversely affected by movements in exchange rates that will increase
the Australian dollar value of foreign currency payables.

The consolidated entity’s policy of managing foreign currency risk
is to purchase foreign currencies equivalent to the cash outflow
projected over minimum 30 days by the placement of market orders
or forward exchange contracts to achieve a target rate of exchange,
with protection floors in the event of a depreciating Australian dollar
exchange rate, to run for the time between recognising the exposure
and the time of payment. In the event of an appreciating Australian
dollar, the amount of foreign currency held is minimised at a level
to only meet short term obligations in order to maximie gains in
an appreciating Australian currency. Clinuvel does not engage in
speculative transactions in its management of foreign currency risk.
No forward exchange contracts had been entered into as at 30 June
2015 and as at 30 June 2014.

THE CONSOLIDATED ENTITIES EXPOSURE TO FOREIGN CURRENCY RISK AT 30 JUNE 2015

CONSOLIDATED ENTITY

CASH & CASH
EQUIVALENTS

TRADE
DEBTORS &
OTHER ASSETS

TRADE, OTHER
PAYABLES &
PROVISIONS

2015

TOTAL

CASH & CASH
EQUIVALENTS

TRADE
DEBTORS &
OTHER ASSETS

TRADE, OTHER
PAYABLES &
PROVISIONS

2014

TOTAL

USD

EUR

CHF

GBP

SGD

451,661

497,192

477,211

12,875

335,961

(535,129)

(83,468)

(35,108)

1,393,084

(130,332)

566,398

(112,669)

(96,340)

931,000

219,519

3,454

2,730

624,258

492,416

250,827

(738,815)

(400,124)

169,306

(55,802)

568,456

694,500

157,440

(86,543)

1,100,373

(785,710)

(377,443)

(6,820)

(40,844)

128,462

The fair value of financial assets and financial liabilities must be
Fair Value Estimation
estimated for recognition and measurement for disclosure purposes.

The fair value of financial instruments traded in active markets is
based on quoted market prices at reporting date. The quoted market
price for the consolidated entity is the bid price. For longer term debt
instruments held by the consolidated entity, dealer quotes are used to
determine fair value.

The carrying value of trade payables is assumed to approximate their
fair values due to their short-term nature.

The consolidated entity manages its liquidity needs by carefully
identifying expected operational expenses by month and ensuring
sufficient cash is on hand, across appropriate currencies, in the day-
to-day bank accounts for a minimum 30 day period. When further
liquidity is required the consolidated entity draws down on its cash
under management to service future liquidity needs.

limited

to shareholder
The consolidated entity’s equity
Capital Risk Management
contributions, supported by the cash inflows received from the full
cost reimbursement programs in Italy and Switzerland for providing
SCENESSE® to EPP patients. Its capital management objectives is
limited to ensuring the equity available to the Company will allow it
to continue as a going concern and to realise adequate shareholder
return by progressing in its developmental research of SCENESSE ®
and achieving eventual commercialisation whereby revenues will
exceed expenditures.

Notes To The Financial Statements

During the financial year the Company had a principal foreign
Sensitivity Analysis of Foreign Currency Risk
currency transaction risk exposure to the Singapore dollar. Assuming
all other variables remain constant, an appreciation in the Australian
dollar is advantageous to the consolidated entity as foreign currencies
are required to be purchased from Australian dollars to pay for a key
component of the clinical program.

For the consolidated entity, a 15% appreciation of the Australian
dollar against the Singapore currency would have increased profit
and loss and equity by $165,898 for the year ended 30 June 2015 (2014:
$31,155), on the basis that all other variables remain constant. 15% is
considered representative of the market volatility in the Australian/
Singapore dollar rate for the period.

For the consolidated entity, a depreciation of the Australian dollar
against the Singapore currency would have an equal but opposite
effect to the above, on the basis that all other variables remain
constant.

The Group’s exposure to other foreign currency movements is not
considered material.

The consolidated entity holds floating interest bearing assets
Interest Rate Risk
therefore exposure to interest rate risk exists. It does not hold interest
bearing liabilities.

The consolidated entity currently finances its operations through
reserves of cash and liquid resources and does not have a borrowing
requirement. In order to be protected from, and to take advantage of,
interest rate movements it is the consolidated entity’s policy to place
cash into deposits and other financial assets at both fixed and variable
(floating) rates. The Board monitors the movements in interest rates
in combination with current cash requirements to ensure the mix
and level of fixed and floating returns is in the best interests of the
consolidated entity.

For the consolidated entity, at 30 June 2015, if interest rates had
Sensitivity Analysis of Interest Rate Risk
changed by +/- 50 basis points from the year-end rates (a movement
considered reflective of the level of interest rate movements
throughout the course of the financial year), with effect from the
beginning of the year, profit and equity would be $59,612 higher/
lower (2014: $50,861 higher/ lower). This analysis assumes all other
variables are held constant.

Clinuvel Pharmaceuticals Ltd and its consolidated entities was
Price Risk
formerly exposed to price risk in its investments in income securities
classified in the Statement of Financial Position as held for trading.
The consolidated entity no longer holds income securities. Neither
the consolidated entity nor the parent is exposed to commodity price
risk.

Credit risk arises from the potential failure of counterparties to meet
their contractual obligations, resulting in a loss to the consolidated
B) CREDIT RISK
entity.

Credit risk in relation to the consolidated entity is the cash and
cash equivalents deposited with banks, trade and other receivables.
Exposure to credit risk in trade debtors is limited to six counterparties,
being five Italian government funded medical institutions and a
Swiss government funded medical institution.

The maximum credit exposure is the carrying value of the cash and
cash equivalents deposited with banks, trade and other debtors and
foreign, wholly-owned subsidiaries.

Liquidity risk is the risk the consolidated entity will not be able to
meets its financial obligations when they fall due. It is the policy of
C) LIQUIDITY RISK
the consolidated entity to ensure there is sufficient liquidity to meet
is liabilities when due without incurring unnecessary loss or damage.
The consolidated entity holds cash and cash equivalents in liquid
markets. It does not hold financing facilities, overdrafts or borrowings.

CONTRACTUAL MATURITIES OF FINANCIAL ASSETS AS AT 30 JUNE 2015

CASH AND CASH EQUIVALENTS

Carrying amount

6 months or less

Greater than 6 months

TOTAL

OTHER FINANCIAL ASSETS (INCLUDES TRADE AND OTHER RECEIVABLES)

Carrying amount

6 months or less

Greater than 6 months

TOTAL

CONTRACTUAL MATURITIES OF FINANCIAL LIABILITIES AS AT 30 JUNE 2015

TRADE AND OTHER PAYABLES

Carrying amount

6 months or less

Greater than 6 months

TOTAL

22. EMPLOYEE BENEFITS

THE AGGREGATE EMPLOYEE BENEFIT LIABILITY IS COMPRISED OF :

Provision for annual leave

Provision for long service leave

Accrued FBT, payroll, superannuation, pension funds, employee insurances

Notes To The Financial Statements

CONSOLIDATED ENTITY

2015

10,572,295

2014

14,625,583

10,572,295

14,625,583

1,960,453

1,803,884

156,569

1,960,453

2015

1,860,636

1,798,917

61,719

1,860,636

2015

316,271

261,676

660,624

1,585,377

1,507,546

77,831

1,585,377

CONSOLIDATED ENTITY

2014

1,105,157

CONSOLIDATED ENTITY

2014

383,277

237,402

640,403

TOTAL

1,238,571

1,261,082

The consolidated entity has two conditional performance rights
scheme which is ownership based for key management personnel
SHARE-BASED PAYMENTS
and select consultants (including Directors) of the Company.

The number of rights granted is subject to approval by the
Remuneration Committee. Rights currently have specific terms and
conditions, being the achievement of performance milestones set by
the Directors of the consolidated entity.

The Conditional Performance Rights Plan (2009) is available to eligible
a) Conditional Performance Rights Plan (2009)
employees of the Company. Any issue of rights to executive Directors
requires shareholder approval in accordance with ASX Listing Rules.
All rights converts to one ordinary share of the consolidated entity
are issued for nil consideration, have no voting rights, are non-
transferable and are not listed on the ASX. They can be converted to
ordinary shares at any time once the vesting conditions attached to
the rights have been achieved, whereby they will be held by a Scheme
Trustee on behalf of the eligible employee for up to 7 years. The eligible
employee can request for shares to be transferred from the Scheme

Notes To The Financial Statements

Trust after 7 years or at an earlier date if the eligible employee is
no longer employed by the Company or all transfer restrictions are
satisfied or waived by the Board in its discretion.

The Performance Rights Plan (2014) is available to eligible persons
b) Performance Rights Plan (2014)
of the Company. Any issue of rights to executive Directors requires
shareholder approval in accordance with ASX Listing Rules. All rights
converts to one ordinary share of the consolidated entity are issued
for nil consideration, have no voting rights, are not listed on the ASX

and are non-tradeable (other thanwith prior written Board consent).
They can be converted to ordinary shares at any time once the vesting
conditions attached to the rights have been achieved, whereby, at the
discretion of the Board, they will be held by a Scheme Trustee on behalf
of the eligible person. The eligible person cannot trade in the shares
held by the Scheme Trust without prior written Board consent until
the earlier of 7 years from grant date of performance right, when the
eligible person ceases employment or when all transfer restrictions
are satisfied or waived by the Board in its discretion. Performance
Rights under this plan lapses after 7 years from grant date.

THE FOLLOWING SHARE-BASED PAYMENT ARRANGEMENTS WERE IN EXISTENCE AT 30 JUNE 2015

PERFORMANCE
RIGHTS SERIES

NUMBER

GRANT DATE

EXPIRY DATE

EXERCISE PRICE

FAIR VALUE AT GRANT
DATE

Issued 07/01/2010

10,000

07/01/2010

Issued 25/11/2010

299,999

25/11/2010

Issued 16/09/2011

381,386

16/09/2011

Issued 16/11/2011

90,000

16/11/2011

Issued 14/01/2013

75,000

14/01/2013

Issued 04/12/2014

1,246,365

28/11/2014

Issued 17/03/2015

453,500

17/03/2015

Upon achievement of specific performance
milestones

$ Nil

$1.70

$1.04

$ Nil

Between $0.55 and $0.72

$ Nil

$0.67

$1.19

$2.60

$2.16

HOLDINGS OF ALL ISSUED CONDITIONAL PERFORMANCE RIGHTS – 2015

BALANCE AT
START OF
YEAR

GRANTED AS
COMPENSATION

PERFORMANCE
RIGHTS SERIES

Issued 16/10/2009

Issued 07/01/2010

Issued 25/11/2010

Issued 16/09/2011

Issued 16/11/2011

Issued 14/01/2013

Issued 04/12/2014

Issued 17/03/2015

104,500

10,000

449,166

447,816

230,000

225,000

EXERCISED

(104,500)

(149,167)

(66,430)

(90,000)

(150,000)

2,789,810

(1,543,445)

453,500

EXPIRED &
LAPSED

BALANCE AT END
OF YEAR

VESTED AND
EXERCISABLE

UNVESTED

(50,000)

10,000

299,999

381,386

90,000

75,000

1,246,365

453,500

10,000

299,999

381,386

90,000

75,000

1,246,365

453,500

TOTAL

1,466,482

3,243,310

(2,103,542)

(50,000)

2,556,250

10,000

2,546,250

Weighted average
exercise price

$Nil

Performance Rights were priced using either a binomial or trinomial pricing model. There is no limitation on the life of the right. Expected volatility of each right is based on the historical share price for the approximate length of
time for the expected life of the rights. It is assumed that the consolidated entity will not pay any dividends during the life of the option, and the risk free rate used in the pricing model is assumed to be the yield on ranging from 1
year to 10 year Government bonds. The exercise conditions are non-marketable and a discount for lack of marketability was applied to the pricing model.

Notes To The Financial Statements

OPTION HOLDINGS OF ALL ISSUED OPTIONS – 2014 (NONE FOR 2015)

OPTIONS SERIES

Issued 18/11/2008

TOTAL

Weighted average exercise
price

BALANCE AT
START OF
YEAR

35,000

$2.75

GRANTED AS
COMPENSATION

EXERCISED

EXPIRED &
LAPSED

BALANCE AT
END OF YEAR

VESTED AND
EXERCISABLE

UNVESTED

35,000

$2.75

There were no share options outstanding for the financial year ending 30 June 2015.

Options were priced using the Black Scholes Binominal option pricing model. The expected life used in the model is assumed to be the midpoint between the vesting date and exercise date. Expected volatility of each share
option is based on the historical share price for the same length of time for the expected life of the options. It is assumed that the consolidated entity will not pay any dividends during the life of the option, and the risk free rate
used in the option pricing model is assumed to be the zero coupon interest rate on valuation date.

HOLDINGS OF ALL ISSUED CONDITIONAL PERFORMANCE RIGHTS – 2014

PERFORMANCE
RIGHTS SERIES

BALANCE AT
START OF YEAR

GRANTED AS
COMPENSATION

EXERCISED

EXPIRED &
LAPSED

BALANCE AT
END OF YEAR

VESTED AND
EXERCISABLE

UNVESTED

Issued 16/10/2009

Issued 07/01/2010

Issued 25/11/2010

Issued 16/09/2011

Issued 16/11/2011

Issued 14/01/2013

114,500

10,000

449,166

499,950

230,000

225,000

TOTAL

1,528,616

(10,000)

104,500

(52,134)

10,000

449,166

447,816

230,000

225,000

10,000

449,166

447,816

230,000

225,000

(62,134)

1,466,482

10,000

1,456,482

Weighted average
exercise price

$Nil

Performance Rights were priced using either a binomial or trinomial pricing model. There is no limitation on the life of the right. Expected volatility of each right is based on the historical share price for the approximate length
of time for the expected life of the rights. It is assumed that the consolidated entity will not pay any dividends during the life of the option, and the risk free rate used in the pricing model is assumed to be the yield on 10 year
Government bonds. The exercise conditions are non-marketable and a discount for lack of marketability was applied to the pricing model.

PERFORMANCE RIGHTS – BINOMIAL PRICING MODEL

INPUTS

Grant Date Share Price

Exercise Price

Grant Date

Expiry Date

Historical Volatility (weighted average)

Expected Life (weighted average)

Hurdle Rate

Risk Free Interest Rate

$4.32

$Nil

28 November 2014

28 November 2021

89.76%

2 years

$Nil

3.03%

$3.60

$Nil

17 March 2015

17 March 2022

78.40%

3 years

$Nil

2.47%

Notes To The Financial Statements

23. CLINUVEL PHARMACEUTICALS LTD PARENT COMPANY INFORMATION

CLINUVEL PHARMACEUTICALS LTD

2015

9,361,829

4,238,324

13,600,153

1,745,213

3,308

1,748,521

138,465,335

2,313,694

(128,927,397)

11,851,632

(9,552,573)

2014

14,606,906

1,591,697

16,198,603

643,805

7,659

651,464

133,567,056

1,321,544

(119,341,461)

15,547,139

(5,316,657)

ASSETS

Current assets

Non-current assets

TOTAL ASSETS

LIABILITIES

Current liabilities

Non-current liabilities

TOTAL LIABILITIES

EQUITY

Issued equity

Share–based payments reserve

Accumulated losses

TOTAL EQUITY

FINANCIAL PERFORMANCE

Net profit (loss) for the year

Other comprehensive income

TOTAL COMPREHENSIVE INCOME

24. SUBSEQUENT EVENTS
There have not been any matters financial in nature, other than
reference to the financial statements that has arisen since the end
of the financial year that has affected or could significantly affect the
operations of the consolidated entity.

25. ADDITIONAL COMPANY INFORMATION
Clinuvel Pharmaceuticals Ltd is a listed public company incorporated
and operating in Australia.

The Registered office is:

Level 5, 160 Queen Street
Melbourne VIC 3000
Ph: (03) 9660 4900

DIRECTORS’ DECLARATION

In the opinion of the Directors:

1. the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:

a) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of their performance for the year

ended on that date; and

b) complying with Accounting Standards; and

c) complying with International financial Reporting Standards as disclosed in Note 1

2. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

3. the remuneration disclosures set out in the Annual Report comply with Australian Accounting Standards 124 Related Party Disclosures

and the Corporations Regulations 2001.

This declaration is made in accordance with a resolution of the Board of Directors. The Directors have been given the declarations by the Chief
Executive Officer and Chief Financial Officer required by Section 295A of the Corporations Act 2001.

Dr. Philippe Wolgen, MBA MD

Director

Dated this 28th day of August, 2015

Auditor's Report

The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000

Correspondence to:
GPO Box 4736
Melbourne Victoria 3001

T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au

Independent Auditor’s Report
To the Members of Clinuvel Pharmaceuticals Limited

Report on the financial report
We have audited the accompanying financial report of Clinuvel Pharmaceuticals Limited
(the “Company”), which comprises the consolidated statement of financial position as at
30 June 2015, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for
the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information and the directors’ declaration of the consolidated entity
comprising the Company and the entities it controlled at the year’s end or from time to time
during the financial year.

Directors’ responsibility for the financial report
The Directors of the Company are responsible for the preparation of the financial report
that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error. The Directors also state, in the notes to the financial report, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
statements comply with International Financial Reporting Standards.

Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require us to comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error.

Grant Thornton Audit Pty Ltd ABN 94 269 609 023
ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.

Auditor's Report

In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation of the financial report that gives a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the
overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.

Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.

Auditor’s opinion
In our opinion:

the financial report of Clinuvel Pharmaceuticals Limited is in accordance with the
Corporations Act 2001, including:

giving a true and fair view of the consolidated entity’s financial position as at
30 June 2015 and of its performance for the year ended on that date; and

complying with Australian Accounting Standards and the Corporations
Regulations 2001; and

the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.

Report on the remuneration report
We have audited the remuneration report included in pages 10 to 18 of the directors’ report
for the year ended 30 June 2015. The Directors of the Company are responsible for the
preparation and presentation of the remuneration report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration
report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Clinuvel Pharmaceuticals Limited for the year
ended 30 June 2015, complies with section 300A of the Corporations Act 2001.

GRANT THORNTON AUDIT PTY LTD
Chartered Accountants

M.A. Cunningham
Partner - Audit & Assurance

Melbourne, 28 August 2015

Auditor's Independance Declaration

The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000

Correspondence to:
GPO Box 4736
Melbourne Victoria 3001

T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au

Auditor’s Independence Declaration
To the Directors of Clinuvel Pharmaceuticals Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Clinuvel Pharmaceuticals Limited for the year ended 30 June 2015, I
declare that, to the best of my knowledge and belief, there have been:

no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and

no contraventions of any applicable code of professional conduct in relation to the
audit.

GRANT THORNTON AUDIT PTY LTD
Chartered Accountants

M.A. Cunningham
Partner - Audit & Assurance

Melbourne, 28 August 2015

Grant Thornton Audit Pty Ltd ABN 94 269 609 023
ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.

SHAREHOLDER INFORMATION
AS AT 30 SEPTEMBER 2015

Additional information as at 30 September 2015 required by the ASX and not shown elsewhere in this report is as follows:

1. SHAREHOLDING

A) DISTRIBUTION OF SHAREHOLDER NUMBERS

CATEGORY (SIZE OF HOLDING)

TOTAL HOLDERS

1-1,000

1,001-5,000

5,001-10,000

10,001-100,000

100,001-999,999,999

TOTAL

1,818

750

154

206

2,956

QUOTED ORDINARY SHARES

UNQUOTED PERFORMANCE RIGHTS

UNITS

710,386

1,787,591

1,156,629

5,383,842

35,516,339

44,554,787

TOTAL HOLDERS

UNITS

5,000

7,500

424,876

2,118,874

2,556,250

B) SHAREHOLDINGS HELD IN LESS THAN MARKETABLE PARCELS

TOTAL

578

46,899

C) SUBSTANTIAL SHAREHOLDINGS (ACCORDING TO SUBSTANTIAL HOLDER DISCLOSURES RECEIVED UP TO 7 OCTOBER
2015)

NAME

FIL Limited

Lagoda Investment Management, LLC

Ender 1 LLC

D) VOTING RIGHTS

NO. ORDINARY SHARES & AMERICAN DEPOSITORY
RECEIPTS

2,788,449

2,717,149

2,340,824

% OF UNITS

6.26%

6.10%

5.25%

The voting rights attaching to each class of equity securities are set out below:

(i) ORDINARY SHARES

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

(ii) PERFORMANCE RIGHTS

Performance Rights have no voting rights.

Shareholder Information

E) LARGEST SHAREHOLDERS

POSITION NAME

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

J P MORGAN NOMINEES AUSTRALIA LIMITED

NATIONAL NOMINEES LIMITED

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

ACN 108 768 896 PTY LTD

ENDER 1 LLC

CITICORP NOMINEES PTY LIMITED

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA

NATIONAL NOMINEES LIMITED

M BADCOCK AND P CHU SUPERANNUATION FUND PTY LTD

DR MARK EDWIN BADCOCK

HEADSTART GLOBAL AGGRESSIVE HOLDINGS LTD

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

HEADSTART GLOBAL HOLDINGS LTD

BIOTECH LAB SINGAPORE PTE LTD

MR YOGI PTY LTD

ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD

MR DAVID JOHN LEWIS

DR CORINNE GINIFER

DR MICHAEL JAMES FISH

RUSTY HAMMER PTY LTD

TOTALS: TOP 20 HOLDERS OF ORDINARY FULLY PAID SHARES (TOTAL)

TOTAL REMAINING HOLDERS BALANCE

NUMBER OF ORDINARY
FULLY PAID SHARES HELD

% HELD OF ISSUED
ORDINARY CAPITAL

10,564,074

6,561,531

4,860,020

3,077,308

2,340,824

1,955,758

1,095,241

594,192

500,000

499,335

379,515

364,736

337,633

301,568

244,280

220,691

200,000

183,849

180,361

148,456

34,609,372

9,945,415

23.71

14.73

10.91

6.91

5.25

4.39

2.46

1.33

1.12

0.85

0.82

0.76

0.68

0.55

0.50

0.45

0.41

0.40

0.33

77.68

22.32

Shareholder Information

2. COMPANY SECRETARY
The name of the Company Secretary is:

Darren Keamy

3. REGISTERED OFFICE
The address of the principle registered office in Australia is:

Level 5/160 Queen St

Melbourne, Vic 3000

Telephone: +61 3 9660 4900

Fax: +61 3 9660 4999

Email: mail@clinuvel.com

Website: http://www.clinuvel.com

4. REGISTER OF SECURITIES
Computershare Investor Services Pty Ltd

Yarra Falls, 453 Johnston St, Abbotsford, VIC 3067, Australia

Tel: +61 3 9415 4000

5. AUSTRALIAN SECURITIES EXCHANGE LIMITED
Quotation has been granted for all the ordinary shares on all Member

Exchanges of the Australian Securities Exchange Limited

(ASX: CUV).

7. DIRECTORY

Stan McLiesh
NON-EXECUTIVE CHAIR

Brenda Shanahan, Elie Ishag, Willem Blijdorp
NON-EXECUTIVE DIRECTORS

Dr Philippe Wolgen
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER

Dr Dennis Wright
ACTING CHIEF SCIENTIFIC OFFICER

Darren Keamy
CHIEF FINANCIAL OFFICER AND COMPANY SECRETARY

Grant Thornton Australia Limited
AUDITOR
The Rialto, Level 30, 525 Collins St, Melbourne, VIC 3000, Australia

National Australia Bank (NAB)
BANKER
Western Branch, 460 Collins St, Melbourne, VIC 3000, Australia

The company’s shares are also quoted on other international

exchanges as follows:

Arnold Bloch Leibler
LEGAL COUNSEL
Level 21, 333 Collins St, Melbourne, VIC 3000, Australia

• Germany: Frankfurt and XETRA: UR9
• USA: Level 1 American Depositary Receipt (ADR)code: CLVLY

(ADR Custodian: Bank of New York Mellon)

Bristows LLP

100 Victoria Embankment, London EC4Y 0DH, United Kingdom

6. RESTRICTED SECURITIES
Restricted securities on issue at June 30 2015: Nil.

Dipl.-Ing Peter Farago
IP LAWYER
Baadestr 3, Munich 80, Germany

MARKET PERFORMANCE

SHARE PRICE ASX:CUV

$6.00

$5.00

$4.00

$3.00

$2.00

$1.00

JUL 2014

OCT 2014

JAN 2015

APR 2015

DAILY TRADING VOLUME

1,000,000

800,000

600,000

400,000

200,000

JUL 2014

OCT 2014

JAN 2015

APR 2015

Glossary

A peptide hormone which activates or stimulates the production
and release of (eu)melanin in the skin (melanogenesis).
ALPHA-MELANOCYTE STIMULATING HORMONE (Α-MSH)

A formal application to the FDA to approve a drug product for
sale.
NEW DRUG APPLICATION (NDA)

The part of extraterrestrial solar radiation which, as a
collimated beam, reaches the earth’s surface after selective
DIRECT SOLAR RADIATION
attenuation by the atmosphere.

A reddish pigment, a very weak absorptive of UV radiation. It
also acts as a photosensitiser (makes your skin sensitive to
PHEOMELANIN
light), where it increases sun sensitivity and skin ageing.

The decentralised body of the European Union regulating
medical drugs and devices.
EUROPEAN MEDICINES AGENCY (EMA)

Reddening of the dermis (the top layer of skin), with or without
inflammatory component, caused by the actinic effect of solar
ERYTHEMA (ACTINIC-SOLAR)
radiation or wavelengths of light by artificial optical radiation
(source).

A black or brown pigment mainly concerned with the
protection of the skin by absorbing incoming UV radiation.
EUMELANIN
This protective ability warrants melanin to be termed a
photoprotectant (a substance capable of providing protection
against radiation from the sun). α-MSH acts specifically to
stimulate (eu)melanin synthesis.

The USA’s regulatory agency for food, tobacco, medicines and
devices.
FOOD AND DRUG ADMINISTRATION (FDA)

The first trials of a new drug candidate in humans, Phase I
trials are designed to evaluate how a new drug candidate
PHASE I
should be administered, to identify the highest tolerable dose
and to evaluate the way the body absorbs, metabolises and
eliminates the drug.

A Phase II trial is designed to continue to test the safety of the
drug candidate, and begins to evaluate whether, and how well,
PHASE II
the new drug candidate works (efficacy). Phase II trials often
involve larger numbers of patients.

Advanced-stage clinical trials that should conclusively
demonstrate how well a therapy based on a drug candidate
PHASE IIB/PHASE III
works. Phase III trials can be longer and typically much
larger than Phase II trials, and frequently involve multiple
test sites. The goal is statistically determining whether a
therapy clinically improves the health of patients undergoing
treatment while remaining safe and well tolerated.

A numerical classification schema that classifies the response
of different types of skin to UV light.
FITZPATRICK SCALE

The study of the time course of a drug’s actions in the body.
PHARMACODYNAMICS

The part of pharmacology that studies the release and
availability of a molecule and drug in the human body.
PHARMACOKINETICS

Skin diseases onset by exposure of skin to sunlight and UV.
PHOTODERMATOSES

Protection from light and ultraviolet radiation. Melanin
provides natural photoprotection to skin, whilst sunscreens
PHOTOPROTECTION
provide artificial photoprotection.

Underneath the skin.
SUBCUTANEOUS

Process whereby a drug is released from a formulation over a
period of time.
SUSTAINED RELEASE/CONTROLLED-RELEASE

DNA changes which are characteristic of UV damage.
THYMINE DIMERS

Australia’s regulatory agency for medicinal products and
devices.
THERAPEUTIC GOODS ADMINISTRATION (TGA)

Part of the electromagnetic spectrum at wavelengths below
400 nanometers, also called the invisible portion of light.
ULTRAVIOLET (UV) RADIATION
There are three sub-types of UV: UVC <280 nm; UVB 280 – 320
nm; UVA 320 – 400 nm.

• Fitzpatrick type I - white unpigmented skin, always burns;
• Fitzpatrick type II - white unpigmented skin, usually burns;
• Fitzpatrick type III - olive pigmented skin, sometimes mild

burns;

• Fitzpatrick type IV - brown pigmented skin, rarely burns;
• Fitzpatrick type V - dark brown pigmented skin, seldom burns;
• Fitzpatrick type VI - black pigmented skin, never burns.

Having an immune system that has been impaired by disease
or treatment, such as immunosuppressive drugs used to
IMMUNOCOMPROMISED
prevent organ rejection in transplant patients.

Changes to the level of a person’s immunity.
IMMUNOMODULATORY

A formal application to the EMA to approve a drug product or
medical device for sale.
MARKETING AUTHORISATION APPLICATION (MAA)

The dark pigment synthesised by melanocytes; responsible
for skin pigmentation.
MELANIN

The cells in the skin that produce melanin.
MELANOCYTES

The process whereby melanin is produced in the body.
MELANOGENESIS

The actinic dose that produces a just noticeable erythema
on normal, non-exposed, “fair” skin. The quantity usually
MINIMUM ERYTHEMA DOSE (MED)
corresponds to a radiant exposure of monochromatic (=1
wavelength) radiation at the maximum spectral efficiency
(α=295 nm) of approximately 100 J/m2.

Therapy which utilises an ultraviolet B light source to activate
NARROWBAND ULTRAVIOLET B (NB-
melanin in vitiliginous lesions of the skin.
UVB) PHOTOTHERAPY