Invex Therapeutics Ltd
Annual Report 2021

Plain-text annual report

ANNUAL REPORT 2021 CONTENTS Key Statistics ...................................................................................... 1 Chairman’s Letter ............................................................................ 2 Financial Report ............................................................................... 6 Directors’ Report ............................................................................. 7 Auditor’s Independence Declaration ..................................... 21 Consolidated Statement of Profit or Loss and Other Comprehensive Income .........................................22 Consolidated Statement of Financial Position ................ 23 Consolidated Statement of Changes in Equity ............... 24 Consolidated Statement of Cash Flows .............................. 25 Notes to the Consolidated Financial Statements ............ 26 Directors’ Declaration ................................................................. 45 Independent Auditor’s Report ................................................ 46 Corporate Governance Statement ........................................ 49 ASX Additional Information ..................................................... 50 Corporate Directory .................................................................... 53 ii INVEX THERAPUTICS LTDKEY STATISTICS A$1.6bn 3.4% >90% the annual the estimated percentage of IIH patients Total Addressable Market growth in IIH incidence who suffer headaches that for IIH in Europe and the per annum are progressively more United States severe and frequent 2.7days 40% ZERO average length of stay the percentage of number FDA/EMA in hospital for an IIH IIH patients who have cleared drug therapies admitted patient repeated hospital for the treatment of IIH admissions 37% 18-21% 7/10yrs the reduction in headache reduction in intracranial market exclusivity days per month from pressure for IIH patients – FDA/EMA orphan Invex Phase II trial of treated with Exenati- drug designation of Exenatide in IIH de in Invex Phase II trial Exenatide in IIH versus placebo versus placebo £462M 4.7x 45% cost of IIH Per Annum increase in emergency of IIH patients felt to the UK healthcare IIH surgeries during the life was harder under system by 2030 UK COVID-19 lockdown UK lockdown 1 ANNUAL REPORT 2021CHAIRMAN’S LETTER On behalf of the Board of Invex There are currently no approved the Company’s commercial Therapeutics Ltd (Invex, the treatments for IIH, repesenting an opportunity in IIH by virtue of Company), I am pleased to attractive market for Presendin™ ensuring our in-market pricing present the Invex Annual Report upon clinical and regulatory strategies and a significant margin to shareholders for the year success. We are therefore excited based on our commercial supply ended 30 June 2021 (FY21). by our prospects in IIH. pricing suffient to attract sales and marketing partners, upon clinical Our focus during the year has been As investors will appreciate, and regulatory success. to leverage the very strong Phase we are re-purposing Exenatide II clinical trial data for Exenatide (currently marketed as Byetta® In December, Invex successfully in the treatment of Idiopathic and Bydureon® in the treatment of concluded its protocol assistance Intracranial Hypertension (IIH) Type II diabetes) for IIH for which process with EMA. Overall the by seeking regulatory advice and we have obtained orphan drug EMA were supportive of a single input from the European Medicines designation in both the United pivotal Phase III trial as sufficient Agency (EMA) and US Food and States and Europe. As such, for registration. The EMA agreed Drug Adminsitration (FDA) for our path to market and market to a study design that would a Phase III trial of a proprietary position is accelerated, by our compare Presendin™ to placebo in formulation of Exenatide ability to rely on existing safety IIH patients and require Presendin™ (trademarked Presendin™). IIH is and toxicity data from these to demonstrate a reduction in a a chronic condition that develops already approved formulations clinically meaningful endpoint predominately in obsese women of Exenatide and the potential to such as monthly headache days, of child bearing age, where require one well-designed Phase III as well as a reduction in ICP. In intracranial pressure (ICP) in trial to file a marketing application parallel and with the benefit of the brain elevates siginficantly, for Presendin™. the EMA protocol assistance, resulting in disabling daily headaches and in some cases Operations permanent vision loss. the Company submitted a Phase III study protocol and statistical analysis plan (SAP) to the FDA in Our small, dedicated team March 2021. This was a significant Invex estimates the IIH annual made significant progress in achievement by the team. addressable market in the United collaboration with our key States (US) and European Union scientific, medical and regulatory In April, Invex was granted a Type (EU) to be around A$1.6 billion, advisors as we sought scientific C meeting by the FDA Division representing a treatable patient and Phase III study protocol of Neurology to review and population of approximately advice from the EMA and FDA. provide written responses on 92,000 patients (based on In addition, we progressed the Company’s planned Phase III prevalence). IIH is an orphan manufacturing discussions with clinical program for Presendin™. In disease, with an incidence several contract manufacturing June 2021, Invex received the Type growing at 3.4% per annum. IIH organisations (CMOs) capable C meeting response from the FDA. results in a material deterioration of producing Presendin™ The FDA recommended Invex of patients quality of life and for clinical supply, and more consider a clinically meaningful repeat hospitalisations costing particularly, commercial supply effect on visual function, such as government healthcare systems upon regulatory clearance(s). Perimetric Mean Deviation (PMD) significantly. This process is ongoing; and the – a measure of change in the Company anticipates signing patient’s visual field - as a primary an agreement that preserves endpoint to support an indication 2 INVEX THERAPUTICS LTDfor Presendin™ in IIH. The FDA was COVID-19 has and continues to Financials open to Invex providing proposals negatively impact IIH patients. for establishing the clinically Professor Sinclair (Invex Chief The Company recorded a net meaningful effect of Presendin™ Scientific Officer and Medical loss after tax of $2.284 million on visual function. With respect Director) recently published for the year ended 30 June 2021 to ICP, the FDA considered a study that showed 4.7 fold (FY21), a decrease of 32% on this measure as an appropriate increase in emergency surgical the prior corresponding period secondary endpoint for a interventions to avoid permanent (pcp). This was largely due to registration trial, but not a primary vision loss in IIH patients under lower R&D costs of $1.139 million endpoint that would support lockdown in the UK. There was (FY20: $1.591 million) as a result approval of Presendin™ in IIH. At a 367% increase in surgical of the additional time required to the end of the reporting period, interventions due to impaired progress drug manufacturing and the Company has and continues access to emergency care, delayed the Phase III clinical program. In to meet with its key regulatory and routine waiting times and lifestyle addition, share-based payment clinical advisors to determine the changes under lockdown. While expenses of $0.562 million (FY20: best design for a Phase III study a second IIH survey in the UK $0.983 million) were recognised, of Presendin™ in IIH which would highlighted the significant quality with a one-off impairment write provide Invex with the broadest of life impact on IIH patients under down and capital raising expenses possible commercial opportunity. lockdown conditions with 45% of reported in the previous period. COVID-19 IIH patients feeling that living with IIH was harder with significant challenges to access to medical The Coronavirus (COVID-19) care. pandemic declared in March 2020 persisted throughout the Such multi-city lockdowns during 2021 financial year with rolling COVID-19 continue to highlight lockdowns, particularly in Europe. the significant market need for While COVID-19 has not adversely new effective (non-surgical) impacted the Company financially therapies for IIH patients outside (to 30 June 2021), the Company’s of a hospital. quasi-virtual operation model meant that Invex experienced significant delays in a number of its lead-in activities required for the commencement of its planned Phase III trial in IIH. Notably, there were delays in obtaining the necessary third-party laboratory access to complete the formulation work for Presendin™. Such multi-city lockdowns during COVID-19 have highlighted the significant market need for new effective (non-surgical) therapies for IIH patients outside of a hospital setting. 3 ANNUAL REPORT 2021Importantly, the Company is Intellectual Property The patent would provide effectively structured as global protection until August 2035, an virtual business model, with a small Intellectual Property (IP) is key to additional barrier to entry over number of highly experienced Invex’s business. Our orphan drug and above market exclusivity executives and employees based designations for Exenatide in IIH in provided by the Company’s in the UK utilising the significant both the US and Europe provides US and European orphan drug and additional expertise of clinical, Invex with seven and ten years designations for Exenatide in IIH. regulatory and manufacturing market exclusivity, respectively, Additional patents are pending consultants, as required, to upon regulatory clearance being for other key territories, including progress our key clinical program granted. During the reporting the European Union and Australia, in Europe and the United States. period Invex continued to make which the Company expects will solid progress in expanding its eventually be granted. Additional The Company remains in a strong patent and other intellectual patents covering formulations of financial position with cash and property protection for Exenatide Exenatide have been filed and are cash equivalents of $32.7 million as in pressure related disorders of the currently pending. at 30 June 2021, which is sufficient brain, including IIH, as well as the to complete a Phase III pivotal trial Company’s trademark, Presendin™. During the year, Invex’s for Presendin™ for registration trademark - Presendin™ - was purposes in IIH. In November 2020, the Company formally registered by the US received formal correspondence Patent and Trademark Office from the United States Patent and in April (Reg. No. 6,317,927), Trademark Office (USPTO) on the with additional registrations issuance of a US patent (Patent granted by the European Union No. 10,835,579) for Invex covering Intellectual Property Office (Reg. the use of GLP1 receptor agonists, No. 1558488) for Europe and IP including Exenatide, in reducing Australia (Reg. No. 2133540) in elevated intracranial pressure (ICP) Australia. in a given subject. The Company remains in a strong financial position with cash and cash equivalents of $32.7 MILLION as at 30 June 2021, which is sufficient to complete a Phase III pivotal trial for Presendin™ for registration purposes in IIH. 4 Corporate Governance During the year, we strenghtened the capability and expertise of the Board with the appointment of additional experienced directors to the Company; Dr Tom Duthy, Executive Director and Dr Megan Baldwin, Non-executive Director. Dr Tom Duthy is currently the CEO of Nemean Group Pty Ltd, a boutique corporate advisory and investor relations (IR) firm based in Adelaide, Australia. Dr Duthy was formerly the Global Head of Investor Relations & Corporate INVEX THERAPUTICS LTDDevelopment at Sirtex Medical Concluding Remarks Limited, which was sold to CDH Investments in September 2018 On behalf of the Board I would for $1.9 billion. Tom has over 17 like to thank our shareholders, years of direct financial market IIH patients and key clinician experience and was a former and regulatory advisers for their leading sell-side Healthcare & support throughout the 2021 Biotechnology analyst at Taylor financial year. Despite the unique Collison Limited. challenges presented by COVID-19, Invex made substantial progress Dr Baldwin is CEO and Managing in the development of Presendin™ Director of Opthea Limited and remains committed to its (ASX:OPT; NASDAQ:OPT), a late- mission of developing innovative stage biopharmaceutical company therapies that focus on pressure- developing a novel therapy to related disorders of the brain. address the unmet need in the As we develop first in indication treatment of retinal eye diseases, drugs, such as Presendin™, including wet age-related macular we expect to materially grow degeneration (wet AMD). Under shareholder value as we achieve Dr Baldwin’s leadership, Opthea our clinical, regulatory and was added to the S&P/ASX 300 in commerical objectives. The 2022 June 2020 and in October 2020 financial year will be an exciting completed a $180 million Initial one for the Company and we Public Offering (IPO) and listing look forward to updating our on the US NASDAQ exchange shareholders on our progress. to progress two pivotal Phase III studies in wet AMD. Dr Baldwin is an experienced biotechnology executive, having over 20 years’ experience working on therapeutic drug development programs for cancer and ophthalmic indications. Dr Jason Loveridge Non-Executive Chairman 5 ANNUAL REPORT 2021FINANCIAL REPORT 6 INVEX THERAPUTICS LTDYour Directors present their report together with the consolidated financial statements of the Invex Therapeutics Ltd (Invex or Company) and its controlled entity (Group) for the financial year ended 30 June 2021. DIRECTORS The name of the Directors in office for the year ended 30 June 2021 until the date of this report are as follows. All Directors were in office for the entire year unless otherwise stated. Dr Jason Loveridge Non-executive Chairman Appointed 8 March 2019 Dr Loveridge is a founder of Invex and also CEO of 4SC AG, a German publicly listed oncology company. He has more than 30 years of international experience across Europe, Asia and the US in senior management positions in life sciences companies and as an investment professional dealing in both privately held and publicly traded companies. Additionally, he has substantial transactional experience in the sale and partnering of biotechnology assets. Dr Loveridge graduated in Biochemistry and Microbiology from the University of New South Wales, Australia, and holds a Ph.D. in Biochemistry from the University of Adelaide, Australia. He is also a fellow of the Royal Society of Medicine. Dr Loveridge is considered an independent Director. Current Directorships – Member of the Management Board of 4SC AG. Former Directorships in last three years - Director of Actinogen Medical Limited. Interests in shares and options – 3,374,246 shares and 800,000 unlisted options. Professor Alexandra Sinclair Executive Director – Chief Scientific Officer Appointed 28 June 2019 Professor Alexandra Sinclair is a founder of Invex Therapeutics and a Clinician Scientist and Neurology Consultant in the Metabolic Neurology Group at the Institute of Metabolism and Systems Research, College of Medical and Dental Sciences,The University of Birmingham, UK. She runs the Headache service and Idiopathic Intracranial Hypertension Service at University Hospital Foundation Trust. Professor Sinclair is a member of the British Medical Association, UK, the Association of British Neurologists (ABN), UK and a Fellow of the Royal College of Physicians, London. Professor Sinclair is a member of the board for the European Headache Federation and is on the scientific committees for the North American Neuro-Ophthalmology Society (NANOS). She is also a council member for the British Association for the Study of Headache (BASH). Professor Sinclair is on the MRC Neuroscience and Mental Health Board and the Midland Neuroscience Teaching and Research Fund Board, as well as being Chair of the Brain Research UK Scientific Advisory Board. Previously, she was an elected board member of the IHS and was the Deputy Chair for the Association for British Neurologists grouping for Headache and Pain (ABN AAG). She was on the research committee for the Association for British Neurologists and was also the previous patron of the patient charity IIH UK. Current directorships – None. Former directorships held in last three years – None. Interests in shares and options - 2,500,000 shares and 800,000 unlisted options. 7 ANNUAL REPORT 2021Directors’ ReportDr Thomas Duthy Executive Director Appointed 1 October 2020 Dr Duthy has over 15 years of direct financial markets experience having worked in sell-side equity research, and senior executive roles across investor relations and corporate development. Dr Duthy is the Founder and CEO of Nemean Group Pty Ltd, a boutique corporate advisory and investor relations firm specialising in delivering value-added services across the life sciences, medical devices, healthcare, technology and emerging companies sectors. Prior to establishing Nemean in October 2018, Dr Duthy was the Global Head of Investor Relations & Corporate Development at Sirtex Medical Limited (ASX:SRX), which was sold to CDH Investments in September 2018 for A$1.9 billion and remains the largest medical device transaction in Australian corporate history. Prior to Sirtex, Tom spent ten years as a leading sell-side Healthcare & Biotechnology analyst at Taylor Collison Limited, focused mainly on small cap companies. He is a Member of the Australian Institute of Company Directors (MAICD) and the Australasian Investor Relations Association (AIRA). Current directorships – Respiri Limited. Former directorships held in last three years – Respiri Limited Interests in shares and options – 106,923 shares and 800,000 unlisted options. Dr Megan Baldwin Non-executive Director Appointed 16 February 2021 Dr Baldwin is CEO and Managing Director of Opthea Limited (ASX:OPT; NASDAQ:OPT), a late-stage biopharmaceutical company developing a novel therapy to address the unmet need in the treatment of retinal eye diseases, including wet age-related macular degeneration (wet AMD). Under Dr Baldwin’s leadership, Opthea has rapidly advanced its ophthalmology program through Phase I and Phase II clinical development, was added to the S&P/ASX 300 in June 2020 and in October 2020 completed a $180 million IPO and listing on the US NASDAQ exchange to progress two pivotal Phase III studies in wet AMD. Dr Baldwin is an experienced biotechnology executive, having over 20 years’ experience working on therapeutic drug development programs for cancer and ophthalmic indications. Prior to Opthea, Dr Baldwin was employed at Genentech (now Roche) as a postdoctoral researcher before moving to Genentech’s commercial division. Dr Baldwin also serves on the Board of Ausbiotech. Dr Baldwin is considered an independent Director. Current directorships – Opthea Limited, Ausbiotech Former directorships held in last three years – Opthea Limited, Ausbiotech Interests in shares and options - 400,000 unlisted options. Mr David McAuliffe Non-executive Director Appointed 8 March 2019 Mr McAuliffe is an experienced company director and entrepreneur who has had over twenty years’ experience, mostly in the international biotechnology field. During that time, he was involved in numerous capital raisings and in-licensing of technologies. He is a founder of several companies in Australia, France and the United Kingdom, many of which have become public companies. Mr McAuliffe has an Honours degree in Law, a Bachelor of Pharmacy degree and is the President of the Dyslexia – Speld Foundation WA (Inc). Mr McAuliffe is considered an independent Director. Current directorships - 4DS Memory Ltd. Former directorships held in last three years - None Interests in shares and options - 3,350,001 shares and 200,000 unlisted options. 8 INVEX THERAPUTICS LTD Directors’ Report (cont.)Ms Narelle Warren Company Secretary Non-executive Director - Appointed 25 March 2019, Resigned 1 October 2020 Ms Warren is a Chartered Accountant with over twenty years of corporate advisory, financial management and company secretarial experience.  Ms Warren has coordinated and assisted in numerous corporate transactions, including acquisitions, divestments and raising funds via private and public equity markets. She holds both a Bachelor of Laws and Bachelor of Commerce. PRINCIPAL ACTIVITY Invex is a biopharmaceutical Group focused on the repurposing of an already approved drug, Exenatide, for efficacious treatment of neurological conditions derived from or involving raised intracranial pressure (ICP). The Group’s first program is the development of Presendin™ for IIH, a severe and chronic condition predominately in females of child bearing age, which can lead to disabling headaches in the vast majority of patients and permanent vision loss in a small percentage of patients. The principal activity of the Group during the year has been the reformulation of Exenatide to optimise the delivery of the drug for patients with IIH, completing regulatory submissions and feedback from global regulatory bodies including the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA) on a Phase III clinical trial in IIH, and the prosecution of the Group’s patent portfolio. A Phase II clinical trial of Exenatide in IIH was completed during the 2020 financial year and the Company continued to progress its regulatory, manufacturing and reformulation activities throughout the 2021 financial year. OPERATING RESULTS The result of the Group for the year ended 30 June 2021 was a loss of $2,283,911 (2020: $3,360,279 loss). The net loss of the Group predominantly related to Research & Development costs of $1,139,122 associated with the Phase II clinical trial, intellectual property prosecution, reformulation work, regulatory advice and planning for a Phase III clinical trial, administration and corporate costs of $740,752 and non-cash items; share-based payments of $562,723. REVIEW OF OPERATIONS The Group is well funded to meet its medium term objectives, including the completion of a Phase III study for Presendin™, in IIH, drug manufacture and supply for the Group’s planned clinical studies, commercial supply along with the commencement of a Phase II study for Presendin™ in a second indication. Highlights include: • In July 2020, the Group announced it had received initial Scientific Advice from both the EMA and the US FDA, regarding its proposed development plans for Presendin™ in IIH. The key highlights of the feedback were: – EMA indicated a single pivotal study of Presendin™ compared to placebo would be sufficient to support a filing for regulatory approval for IIH in Europe. – The FDA stated they would need more information to evaluate the Company’s proposed design and provided guidance that two well controlled studies would normally be required to support registration in the US. – Invex’s proposed preclinical and human pharmacokinetic approach was broadly acceptable to both EMA and the FDA. – Both regulatory bodies indicated a reduction in monthly headache days of moderate to severe headaches is a clinically meaningful endpoint. • During the year, Invex’s trademark - Presendin™ - was formally registered by the US Patent and Trademark Office in April (Reg. No. 6,317,927), with additional registrations granted by the European Union Intellectual Property Office (Reg. No. 1558488) for Europe and IP Australia (Reg. No. 2133540) in Australia. • In November 2020, the Company successfully registered a trademark for Presendin™ in the European Union. This follows the successful registration of the same mark in the UK in Q2 CY2020. The Company has filed for trademark registrations for Presendin™ in additional jurisdictions which are currently pending. 9 ANNUAL REPORT 2021Directors’ Report (cont.)• • • • • In November 2020, the Company received formal correspondence from the United States Patent and Trademark Office (USPTO) on the issuance of a US patent for Invex covering the use of GLP1 receptor agonists, including Exenatide, in reducing elevated intracranial pressure (ICP) in a given subject. In December 2020, the Group concluded its protocol assistance process with the EMA. Invex now has sufficient regulatory input to complete the design of a Phase III trial to support market approval for Presendin™ in Europe, subject to meeting safety and efficacy requirements. In March 2021, Invex announced the filing of a pre- Investigational New Drug Application (pre-IND) / Type B meeting request with the US Food and Drug Administration (FDA) seeking further protocol assistance on a proposed Phase III clinical trial of Presendin™ in IIH patients. In April 2021, the Company received notification from the FDA Division of Neurology that it had granted Invex a Type C meeting based on the statement of purpose, objectives, and proposed agenda. In addition, the FDA determined that written responses only (WRO) to questions posed by Invex would be the most appropriate means for responding as part of the Type C meeting. In June 2021, the FDA provided WRO to the Type C meeting, requesting the Company demonstrate a clinically meaningful effect on visual function as the primary endpoint of a Phase III study in order to support regulatory clearance for the treatment of IIH in the United States. The FDA considered ICP an acceptable secondary endpoint, and overall, had few comments relating to the Company’s planned measure of monthly headache days and other key headache measures. • The Group also presented at a number of investor events during the period, including the Bell Potter Healthcare Conference and the NWR Small Caps conference. LIKELY DEVELOPMENTS The Group has continued to lay solid foundations during its second year of operations and is actively progressing the necessary activities to commence a Phase III registration study of Presendin™ in IIH. The Group’s main regulatory strategy seeks to harmonise the Phase III design to meet the requirements of both the EMA and US FDA for registration of Presendin™ in IIH. The Group expects to appoint a contract manufacturer for production of clinical trial material (and thereafter commercial supply) in 2021 ahead of initiating further its clinical studies in IIH. DIVIDENDS No dividends were paid or recommended by the Directors since the commencement of the year. SIGNIFICANT CHANGES IN STATE OF AFFAIRS Other than as outlined above, there were no significant changes in the Group’s state of affairs during the year. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not adversely financially impacted the consolidated entity up to 30 June 2021, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is changing rapidly and the Company’s ability to operate normally is subject to measures imposed by the Australian Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and other economic stimulus that may be provided. No other significant events occurred after balance date which may affect either the Group’s operations or results of those operations or the Group’s state of affairs. 10 INVEX THERAPUTICS LTD Directors’ Report (cont.)MEETINGS OF DIRECTORS During the year the following Director meetings were held. Director Dr Jason Loveridge Prof Alexandra Sinclair Dr Thomas Duthy Mr David McAuliffe Dr Megan Baldwin Ms Narelle Warren Board Meetings Number Eligible to Attend Number Attended 7 7 6 7 3 1 7 7 6 7 3 1 ENVIRONMENTAL REGULATIONS The Group is not subject to significant environmental regulation in respect of its research and development activities. UNISSUED SHARES UNDER OPTION Unissued ordinary shares of Invex Therapeutics Ltd under option at the date of this report are as follows: Date Options Granted Expiry Date Exercise Price 22 November 2019 22 November 2023 21 January 2020 9 April 2020 20 October 2020 21 January 2023 9 April 2023 20 October 2023 18 November 2020 18 November 2023 8 April 2021 Total 8 April 2024 $0.60 $1.00 $0.60 $1.30 $1.30 $1.10 Number Under Option 2,200,000 750,000 60,000 400,000 800,000 400,000 4,610,000 INSURANCE OF OFFICERS AND INDEMNITIES Invex paid a premium to insure the directors and company secretary of the Group. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for them or someone else or to cause detriment to the Group. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. PROCEEDINGS ON BEHALF OF THE GROUP No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility on behalf of the Group for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of the Corporations Act 2001. 11 ANNUAL REPORT 2021Directors’ Report (cont.) NON-AUDIT SERVICES The Group may decide to employ its auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Group is important. During the year, other services were performed in addition to their statutory duties. The details of the amount paid are disclosed in Note 23 of the consolidated financial report. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on the page following this Directors’ Report. ADDITIONAL INFORMATION The statutory key performance indicators of the consolidated entity over the last three years to 30 June 2021 are summarised below: Sales revenue EBITDA EBIT Loss after income tax Basic earnings per share Share price as at 30 June 2021 $ — (2,283,911) (2,283,911) (2,283,911) (0.03) 0.63 2020 $ — (3,360,279) (3,360,279) (3,360,279) (0.06) 1.30 2019 $ — (232,122) (232,122) (232,122) (0.01) 0.40 REMUNERATION REPORT - AUDITED The remuneration report outlines the remuneration arrangements which were in place during the year and remain in place as at the date of this report, for the Directors and Key Management Personnel of the Group. The information provided in this remuneration has been audited as required by section 308(3C) of the Corporations Act 2001. KEY MANAGEMENT PERSONNEL Key Management Personnel are those persons who are responsible for directing and controlling the activities of the Group. The Board has determined that the key management personnel of the Group are the Non-executive Directors and Executives of Invex, whose details are set out below. The following Key Management Personnel during the period unless otherwise stated: Director Date of appointment/resignation Role Dr Jason Loveridge Appointed 8 March 2019 Prof Alexandra Sinclair Appointed 28 June 2019 Dr Thomas Duthy Dr Megan Baldwin David McAuliffe Narelle Warren Appointed 1 October 2020 Appointed 16 February 2021 Appointed 8 March 2019 Appointed 25 March 2019/Resigned 1 October 2020 Non-executive Chair Executive Director Executive Director Non-executive Director Non-executive Director Non-executive Director Appointed 8 March 2019 Company Secretary 12 INVEX THERAPUTICS LTD Directors’ Report (cont.)REMUNERATION POLICIES The Board has not elected to establish a remuneration committee. Given the size of the current Board remuneration matters will be considered and approved by the full Board. The following items will be considered and discussed as deemed necessary at the Board meetings: • recommend the terms and conditions of employment for the Executive Directors and Senior Officers; • undertake a review of the Executive Directors’ performance, at least annually, including setting with the Executive Directors goals for the coming year and reviewing progress in achieving those goals; • consider and report on the recommendations of the Executive Directors on the remuneration of all direct reports; and • develop and facilitate a process for Board and Director evaluation. Non-executive Director’s remuneration The compensation of Non-executive Directors is based on market practice, Director’s duties and the level of accountability. The compensation policy is designed to attract and retain competent and suitably qualified Non-executive Directors and aims to align Director’s interests with interests of shareholders. Non-executive Directors fees are paid a set fee plus statutory superannuation where appropriate, and are reimbursed for out-of-pocket expenses. The Chair’s fees are determined independently to the fees of Non-executive Directors based on comparative roles in the external market. The base fees are reviewed annually and were last reviewed at a recent Board meeting. Non-executive Directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended for approval by shareholders. The current limit stands at $250,000 per annum and was approved by shareholders at its first Annual General Meeting of shareholders in November 2019. A Director may also be paid fees or other amounts as the Directors determine if a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. Executive remuneration In determining executive remuneration, the Board aims to ensure that remuneration practices are: • competitive and reasonable, enabling the company to attract and retain key talent; • aligned to the company’s strategic and business objectives and the creation of shareholder value; • transparent; and • acceptable to shareholders. The executive remuneration framework has three components: • fixed annual compensation comprising salary or fees and benefits, including superannuation; • short-term performance incentives; and • long-term incentives through participation in the Invex Employee Share Option Plan. 13 ANNUAL REPORT 2021Directors’ Report (cont.)Fixed annual compensation Executives receive their base salary/fees and benefits structured as a total employment cost (TEC) package which may be delivered as a combination of cash and prescribed non-financial benefits at the executives’ discretion. Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Independent remuneration consultants provide analysis and advice to ensure base pay is set to reflect the market for a comparable role. Base pay for executives is reviewed annually to ensure the executive’s pay is competitive with the market. An executive’s pay is also reviewed on promotion. There are no guaranteed base pay increases included in any executives’ contracts. There are no short-term incentives outstanding. No benefits other than noted above are paid to Directors or management except as incurred in normal operations of the business. Short term incentives No benefits other than remuneration disclosed in the remuneration report are paid to Directors or management except as incurred in normal operations of the business. Long term incentives The Group’s current Employee Share Option Plan (ESOP) is designed to provide medium and long term incentives for all employees (including Non-executive and Executive Directors) and to attract and retain experienced Employees, Board Members and Executive Officers and provide motivation to make the Group more successful. As options granted to Directors and Employees are considered to represent the value of the services received over the vesting period of the options, the assessed value of the options are recognised and expensed over the vesting period. Options vesting during the period of issue are fully expensed under the accounting standards. Other than options disclosed in the remuneration report there have been no options issued to Directors at the date of this financial report. Voting and comments made at the Company’s 2020 Annual General Meeting (AGM) At the 2020 AGM, 100.00% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2020. The company did not receive any specific feedback at the AGM regarding its remuneration practices. Remuneration consultants The Group did not engage any remuneration consultants during the year. The Group will engage independent remuneration consultants should it look to make any changes to director fee levels to ensure they are in line with market conditions and any decisions are made free from undue influence from members of the Group’s Key Management Personnel (KMP’s). 14 INVEX THERAPUTICS LTD Directors’ Report (cont.)Service agreements Name Executive Directors Term of agreement Fees Termination benefit Prof Alexandra Sinclair Open $150,000 Dr Thomas Duthy – appointed 1 October 2020 Open $125,000 Relevant notice periods apply, being 1  months’ notice with reason or 3 months without reason. Relevant notice periods apply, being 1 months’ notice with reason or 3 months without reason. The relative proportions of remuneration that are linked to performance and those that are fixed are as follows: Name Executive Directors Prof Alexandra Sinclair Dr Thomas Duthy Non-executive Directors Fixed remuneration 2021 Performance based remuneration (%) 2021 150,000 125,000 47.59 54.40 On appointment to the Board, all Non-executive Directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board’s policies and terms, including compensation, relevant to the director, and among other things: • the terms of the directors appointment, including governance, compliance with the Company’s Constitution, committee appointments, and re-election; • the directors duties, including disclosure obligations, exercising powers, use of office, attendance at meetings and commitment levels; • the fees payable, in line with shareholder approval, any other terms, timing of payments and entitlements to reimbursements; • insurance and indemnity; • disclosure obligations; and • confidentiality. 15 ANNUAL REPORT 2021Directors’ Report (cont.)% 9 5 7 4 . 4 9 2 5 . 0 0 . 1 4 . 7 3 4 3 9 5 7 4 . 0 4 4 5 . $ 1 8 1 , 6 8 2 2 1 6 2 4 , 5 4 0 3 8 , s n o i t p O $ 1 8 1 , 6 3 1 0 6 5 2 2 , 5 4 0 4 3 , $ — — 6 2 6 , 1 - r e p u S s n o i s n e P n o i t a u n n a 0 9 0 8 9 1 , 1 8 1 , 6 8 2 , 5 1 6 5 0 2 , 6 8 8 9 8 6 0 9 0 8 6 , 1 8 1 , 6 3 1 5 6 8 , 1 1 1 6 3 1 , 6 1 3 — — — — 8 3 8 , 1 1 4 6 8 7 2 9 1 , 6 2 6 , 1 0 2 6 4 . 4 2 7 , 1 0 1 , 1 , 2 2 9 8 0 5 6 2 6 , 1 $ — — — — — — — — L S L — — $ e e f 0 0 0 0 9 , 0 0 0 0 9 , — — — — 0 0 0 0 9 , $ — — — — — — — — $ 0 0 0 0 6 , 3 2 1 , 7 1 0 0 0 0 5 , 3 2 1 , 7 2 1 1 0 0 0 0 3 1 , s r o t c e r i D e v i t u c e x e - n o N e g d i r e v o L n o s a J r D e v i t u c e x e - n o N l a t o T e f f i l u A c M d v a D i n e r r a W e l l e r a N s e v i t u c e x E s r o t c e r i D i l n w d a B n a g e M r D 0 0 0 0 5 1 , l i r i a c n S a r d n a x e A l f o r P 2 0 5 7 3 9 , 0 5 7 3 7 3 , , 3 7 8 0 0 5 s M o t n o i t a e r n l i s i t n u o m a s i h T . 1 y h t u D s a m o h T r D s e v i t u c e x E l a t o T l a t o T - t s o P e c n a m r o f r e P d e s a b - e r a h S t n e m y o p m e l e v a e L d e s a b l a t o T s t n e m y a p s t i f e n e b s e c n a w o l l a l s t i f e n e b e e y o p m e m r e t - t r o h S : l w o e b d n u o f e r a p u o r G e h t ’ f o s P M K e h t d n a s r o t c e r i D e h t f o n o i t a r e n u m e r e h t f o s l i a t e D l e n n o s r e P t n e m e g a n a M y e K f o n o i t a r e n u m e R 16 d n a l a u n n A g n i t l u s n o C & y r a l a s h s a C s u n o b h s a C s e e f 1 2 0 2 . d t L y t P h c e t o B t p e c n o C o t i y n a p m o C e h t i y b d a p d n a y n a p m o C e h t h t i l w e o r d n a e c n a n F i , y r a t e r c e S y n a p m o C s n e r r a W ’ . d t L y t P p u o r G n a e m e N o t y n a p m o C e h t i y b d a p d n a y n a p m o C e h t h t i w e o r l ’ r o t c e r i D e v i t u c e x E s y h t u D r D o t n o i t a e r n l i s i t n u o m a s i h T . 2 INVEX THERAPUTICS LTD Directors’ Report (cont.)       - t s o P e c n a m r o f r e P d e s a b - e r a h S t n e m y o p m e l e v a e L d e s a b l a t o T s t n e m y a p s t i f e n e b s e c n a w o l l a l s t i f e n e b e e y o p m e m r e t - t r o h S - r e p u S s n o i s n e P n o i t a u n n a L S L s e e f s u n o b h s a C s e e f d n a l a u n n A g n i t l u s n o C & y r a l a s h s a C % 6 1 . 3 5 . 7 7 5 3 8 7 7 3 . 6 1 . 3 5 $ 0 1 3 , 1 9 9 6 4 6 2 3 , s n o i t p O $ 6 4 5 3 7 1 , 7 8 3 3 4 , 9 7 7 7 1 4 , 3 3 9 6 1 2 , 6 9 6 9 2 2 , 9 6 4 6 2 3 , 5 6 1 , 6 5 5 3 7 7 6 8 , 6 4 5 3 7 1 , , 9 1 3 0 6 2 5 5 7 4 . 4 4 9 3 7 9 , 2 5 2 7 7 4 , $ — — — — — — — $ — — — — — — $ — — — — — — — e m i t n o l a i r t I I e s a h P l u f s s e c c u s e h t f o n o i t e p m o c n l i t r o f f e d n a e m i t l a n o i t i d d a r i e h t f o n o i t i n g o c e r n i l i r i a c n S a r d n a x e A l $ — 1 0 0 0 0 7 , $ 0 0 0 0 7 , 0 0 0 5 3 , 0 0 0 0 7 , 0 0 0 5 0 1 , — 2 0 0 0 0 3 1 , s r o t c e r i D e v i t u c e x e - n o N 0 2 0 2 e g d i r e v o L n o s a J r D e f f i l u A c M d v a D i e v i t u c e x e - n o N l a t o T n e r r a W e l l e r a N s e v i t u c e x E s r o t c e r i D 1 0 0 0 0 7 , 0 0 0 0 7 , l i r i a c n S a r d n a x e A l f o r P 0 0 0 0 7 , 0 0 0 0 0 2 , s e v i t u c e x E l a t o T 0 0 0 0 4 1 , 0 0 0 5 0 3 , l a t o T f o r P d n a e g d i r e v o L n o s a J i r D o t d a p s e s u n o b o t e t a e r l s t n u o m a e s e h T . 1 . g n i s i a r l a t i p a c n o i l l i . m 2 6 2 $ e h t o s l a d n a t e g d u b n h t i i w d n a . d t L y t P h c e t o B t p e c n o C o t i y n a p m o C e h t i y b d a p d n a y n a p m o C e h t h t i l w e o r d n a e c n a n F i , y r a t e r c e S y n a p m o C s n e r r a W ’ s M o t n o i t a e r n l i s i t n u o m a s i h T . 2 17 ANNUAL REPORT 2021Directors’ Report (cont.)     The Non-executive Director fees paid during the year: Base salary including superannuation Termination benefit Relevant notice periods apply, being 1 months’ notice with reason. $90,000 $60,000 Nil $50,000 Nil $50,000 Nil Name Term of agreement Non-Executive Directors Dr Jason Loveridge – Consultancy Open Dr Jason Loveridge – Non-executive fee Shareholder Approval by rotation Dr Megan Baldwin1 David McAuliffe- Non-executive fee Shareholder Approval by rotation Shareholder Approval by rotation 1. Appointed 16 February 21. SHARE-BASED COMPENSATION Options The Company’s current Employee Share Option Plan (ESOP) was approved by the board of directors on 20 May 2019. The ESOP is designed to provide medium and long term incentives for all employees (including Non-executive and Executive Directors) and to attract and retain experienced employees, board members and executive officers and provide motivation to make the Company more successful. Under the ESOP, participants have been granted options which only vest if certain milestones are met. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefit. Any option may only be exercised after the option has vested and other conditions imposed by the board have been satisfied. Options are granted under the ESOP for no consideration. Options granted under the ESOP carry no dividend or voting rights. When exercisable, shares allotted pursuant to the exercise of options will be allotted following receipt of relevant documentation and payments will rank equally with all other shares. As options granted to employees are considered to represent the value of the services received over the vesting period of the options, the assessed value of the options are recognised and expensed over the vesting period. Options vesting during the period of issue are fully expensed under the accounting standards. During the year 30 June 2021 1,200,000 share options (2020: 2,200,000) were granted, no options were cancelled and no options were forfeited. These options were issued pursuant to the Invex Therapeutics Employee Share Option Plan. 18 INVEX THERAPUTICS LTD Directors’ Report (cont.)Details of the share-based component issued during the year included in the remuneration are set out below. Directors Grant Date Expiry Date Granted Exercise Price during the period Vested during the Period Fair value of each options Granted Total Share-based payment expense for the year $ Dr Thomas Duthy Dr Megan Baldwin Total 18 Nov 2020 18 Nov 2023 $1.30 800,000 8 April 2021 8 April 2024 $1.10 400,000 1,200,000 — — — $0.32 111,865 $0.33 22,560 134,425 The vesting conditions attached to the Director Options are as follows: • 50% of the Options will vest and become exercisable upon completion of 12 months continuous service from date of issue. • 50% of the Options vest and become exercisable upon completion of 24 months continuous service from date of issue. All options were granted over unissued fully paid ordinary shares in the company. The number of options granted was determined having regard to the satisfaction of performance measures. Options vest based on the provision of service over the vesting period whereby the director or other key management personnel becomes beneficially entitled to the option on vesting date. Options are exercisable by the holder as from the vesting date. There has not been any alteration to the terms or conditions of the grant since the grant date. There are no amounts paid or payable by the recipient in relation to the granting of such options other than on their potential exercise. EQUITY INSTRUMENTS HELD BY KEY MANAGEMENT PERSONNEL Shareholdings The numbers of shares in the Company held during the year by each director or key management personnel of Invex, including their personally related parties are set out below. There were no shares granted during the reporting year as compensation. 2021 Name Directors Dr Jason Loveridge Prof. Alexandra Sinclair Dr Thomas Duthy David McAuliffe Dr Megan Baldwin Narelle Warren Total Capital Raising shares subscribed for 38,246 — — — — — Balance at the start of the year 3,336,000 2,500,000 — 3,350,001 — 200,000 9,386,001 38,246 On Market Purchases/ On appointment Balance at the end of the year Disposals — — — — — — — — — 3,374,246 2,500,000 106,923 106,923 — — — 3,350,001 — 200,000 106,923 9,531,170 19 ANNUAL REPORT 2021Directors’ Report (cont.)Option holdings The number of options over ordinary shares in the Company held during the year by each director and KMP of Invex Therapeutics Ltd, including their personally related parties, are set out below. Balance at the start of the year Granted as compensation Exercised/ Expired Balance at end of the year Vested and exercisable Un-vested Fair value at grant date 2021 Name Directors and KMP’s Dr Jason Loveridge Prof Alexandra Sinclair Dr Thomas Duthy 800,000 800,000 — — — 800,000 David McAuliffe 200,000 — Dr Megan Baldwin — 400,000 Narelle Warren 400,000 — — — — — — — 800,000 400,000 400,000 $0.42 800,000 400,000 400,000 $0.42 800,000 — 800,000 200,000 100,000 100,000 400,000 — 400,000 400,000 200,000 200,000 $0.32 $0.42 $0.33 $0.42 Total 2,200,000 1,200,000 — 3,400,000 1,100,000 2,300,000 LOANS WITH KEY MANAGEMENT PERSONNEL There were no loans to or from key management personnel during the year ended 30 June 2021. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL The following payments were made to Concept Biotech Pty Ltd, of which David McAuliffe and Narelle Warren are shareholders and directors, during the year for company secretarial work, financial and due diligence services. These services are provided on normal commercial terms and at arm’s length. Payments to Concept Biotech Pty Ltd This is the end of the Remuneration Report. Signed in accordance with a resolution of the Board of Directors. 2021 $ 130,000 130,000 2020 $ 130,000 130,000 David McAuliffe Non- Executive Director Perth, Western Australia, 27 August 2021 20 INVEX THERAPUTICS LTD Directors’ Report (cont.)Auditors’ Independence Declaration Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au 38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF INVEX THERAPEUTICS LTD As lead auditor of Invex Therapeutics Ltd for the year ended 30 June 2021, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Invex Therapeutics Ltd and the entity it controlled during the period. Jarrad Prue Director BDO Audit (WA) Pty Ltd Perth, 27 August 2021 BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. 21 ANNUAL REPORT 2021 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2021 Other income Research and development expenditure Capital raising expenses Finance, compliance and administration expenses Impairment of intangible asset Share-based payment expenses Loss before income tax from continuing operations Income tax expense/benefit Note 2021 $ 2020 $ 4 5 5 5 19 6 158,785 165,703 (1,139,222) (1,591,547) — (158,743) (740,752) (674,354) — (117,946) (562,723) (983,392) (2,283,911) (3,360,279) — — Loss for the year from continuing operations (2,283,911) (3,360,279) Other comprehensive income for the year, net of tax Items that may be reclassified subsequently to profit or loss — — Exchange differences on translation of foreign operations, net of tax Total other comprehensive income for the year, net of tax attributable to members of the Group Loss for the year is attributable to: Owners of Invex Therapeutics Ltd 1,591 (6,275) (2,282,320) (3,366,554) (2,283,911) (3,360,279) Total comprehensive income for the year is attributable to: Owners of Invex Therapeutics Ltd (2,282,320) (3,366,554) Loss per share (cents) 13 (3.04) (5.98) The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 22 INVEX THERAPUTICS LTD Consolidated Statement of Financial Position As at 30 June 2021 ASSETS Current Assets Cash and cash equivalents Other receivables Total Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables Unallocated shares Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Reserves Accumulated losses TOTAL EQUITY Note 2021 $ 2020 $ 7 8 9 10 11 12 14 32,716,091 26,300,459 21,199 116,882 32,737,290 26,417,341 32,737,290 26,417,341 658,614 712,946 — 1,302,427 658,614 658,614 2,015,373 2,015,373 32,078,676 24,401,968 36,413,432 27,017,127 1,541,556 977,242 (5,876,312) (3,592,401) 32,078,676 24,401,968 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. 23 ANNUAL REPORT 2021Consolidated Statement of Changes in Equity For the year ended 30 June 2021 Contributed Equity Accumulated Losses $ $ Reserves $ Total Equity $ Balance as at 1 July 2020 27,017,127 (3,592,401) 977,242 24,401,968 (Loss) for the year Other comprehensive income for the year Exchange difference on translation of foreign operations Total comprehensive (loss) for the year Share-based payment reserve movement Transactions with owners in their capacity as owners: — — — — — — Issue of share capital, net of transaction costs 9,396,305 (2,283,911) — — (2,283,911) — — — — — 1,591 1,591 (2,283,911) — 1,591 (2,282,320) 562,723 562,723 — — — 9,396,305 Balance as at 30 June 2021 36,413,432 (5,876,312) 1,541,556 32,078,676 Balance as at 1 July 2019 (Loss) for the year Other comprehensive income for the year Exchange difference on translation of foreign operations Total comprehensive (loss) for the year Share-based payment reserve movement Transactions with owners in their capacity as owners: Contributed Equity Accumulated Losses Reserves $ $ 11,670,444 (232,122) Total Equity $ 11,438,322 (3,360,279) — $ — — — (3,360,279) — — — — — — — — (6,275) (6,275) (3,360,279) (6,275) (3,366,554) — — — 983,517 983,517 — 15,346,683 Issue of share capital, net of transaction costs 15,346,683 Balance as at 30 June 2020 27,017,127 (3,592,401) 977,242 24,401,968 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. 24 INVEX THERAPUTICS LTD Consolidated Statement of Cash Flows For the year ended 30 June 2021 CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received Net cash outflow from operating activities CASH FLOWS FROM FINANCING ACTIVITIES Note 2021 $ 2020 $ (1,837,030) (1,769,096) 158,785 165,703 (1,678,245) (1,603,393) Subscription proceeds received for ordinary shares 8,647,547 16,250,000 Subscription proceeds received for options IPO capital raising costs Placement capital raising costs Subscriptions proceeds unallocated Net cash inflow from financing activities — — 125 (847,881) (553,670) (971,066) — 1,302,427 8,093,877 15,733,605 Net increase in cash and cash equivalents held Cash and cash equivalents at the beginning of the year 6,415,632 14,130,212 26,300,459 12,170,247 Cash and cash equivalents at end of financial year 7 32,716,091 26,300,459 The above Consolidated Statement of Cash Flows should be read in conjunction with accompanying the notes. 25 ANNUAL REPORT 20211. BASIS OF PREPARATION The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Invex Therapeutics Limited is a listed public company, incorporated and domiciled in Australia and is the parent entity. Invex Therapeutics Limited is a for-profit entity for the purpose of preparing the financial statements. These consolidated financial statements comprise the Company and its controlled entity at the end of, or during the year (together referred to as ‘the Group’) and were authorised for issue by the Board of Directors. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated. The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. 2. NEW AND AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Conceptual Framework for Financial Reporting (Conceptual Framework) The consolidated entity has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement that affects several Accounting Standards, but it has not had a material impact on the consolidated entity's financial statements. 3. SUMMARY OF ACCOUNTING POLICIES The following material accounting policies adopted by the Group in the preparation of the financial report, have been consistently applied unless otherwise stated. (a) Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in Note 21. (b) Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Invex Therapeutics Ltd (Company or Invex) as at 30 June 2021 and the results of its subsidiary for the year then ended. Invex Therapeutics Ltd and its subsidiary together are referred to in these financial statements as the 'consolidated entity’. Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases. 26 INVEX THERAPUTICS LTD Notes to the Consolidated Financial StatementsIntercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. (c) Foreign currency translation The financial statements are presented in Australian dollars, which is Invex's functional and presentation currency. Foreign currency transactions Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of. (d) Operating segments Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance. (e) Revenue recognition Revenue is recognised when or as the Group transfers control of goods or services to a customer at the amount at which the Group expects to be entitled. The following specific recognition criteria must also be met before revenue is recognised: Interest income Revenue is recognised as the interest accrues (using the effective interest method), which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset. (f) Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method. At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been impaired. (g) Right-of-use asset A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. 27 ANNUAL REPORT 2021Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. (h) Lease liability A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. (i) Share-based payments Equity-settled and cash-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows: • during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period. • from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date. All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability. 28 INVEX THERAPUTICS LTD Notes to the Consolidated Financial Statements (cont.)(j) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of investing and financing activities, which are disclosed as operating cash flows. (k) Cash and Cash Equivalents Cash and short-term deposits in the Statement of Financial Position comprise cash at bank and on hand and short-term deposits. (l) Trade and Other Receivables Trade receivables, which generally have 30-90 day terms, are recognised and initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less loss allowance. The Group applies the AASB 9 simplified approach to measure expected credit losses which uses lifetime expected loss allowance for trade receivables. Bad debts are written off when identified. (m) Income Tax Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity. Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian Taxation Office (ATO) and other fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Deferred income taxes are calculated using the full liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with investments in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable income, based on the Group’s forecast of future operating results which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. Deferred tax liabilities are always provided for in full. Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off current tax assets and liabilities from the same taxation authority. Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income (such as the revaluation of land) or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively. 29 ANNUAL REPORT 2021(n) Equity, reserves and dividend payments Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing of shares are deducted from share capital, net of any related income tax benefits. Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been approved in a General Meeting prior to the reporting date. All transactions with owners of the parent are recorded separately within equity. (o) Trade and other Payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the period end and which are unpaid. These amounts are unsecured, have 30-60 day payment terms and are measured at amortised cost. (p) Provisions, contingent liabilities and contingent assets Provisions for legal disputes, onerous contracts or other claims are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be required from the Group and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain. Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material. No liability is recognised if an outflow of economic resources as a result of present obligation is not probable. Such situations are disclosed as contingent liabilities, unless the outflow of resources is remote in which case no liability is recognised. (q) Research and Development Research expenditure is recognised as an expense is incurred. Costs incurred on developments projects (relating to the development and testing of new or improved products) are recognised as intangible assets when it is probable that the project will, after considering its commercial and technical feasibility, be completed and generate future economic benefits and its costs can be measured reliably. The expenditure capitalized comprises all directly attributable costs, including costs of materials, services, direct labour and an appropriate proportion of overheads. Other development expenditures that do not meet these criteria are recognized as an expense as incurred. Development costs previously recognised as an expense are not recognized as an asset in a subsequent period. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use. (r) Impairment of assets Non-financial assets At the end of each reporting period, non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value- in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit. Financial assets At the end of each reporting period, the Group assesses whether there is objective evidence that a financial asset has been impaired. For financial assets measured at fair value, gains or losses will be recorded in profit or loss, or through Other Comprehensive Income (FVTOCI) if the Group has made an irrevocable election at the time of initial recognition to account for equity instruments through OCI. 30 INVEX THERAPUTICS LTD Notes to the Consolidated Financial Statements (cont.)(s) Critical Accounting Estimates and Judgments Required The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available 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. Coronavirus (COVID-19) pandemic Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the consolidated entity based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic. Research and development expenditure Distinguishing the research and development phases of a new customized project and determining whether the recognition requirements for the capitalization of development costs are met requires judgement. The Group has expensed all costs relating to research and development expenditure to date on the basis that the capitalisation requirements have not been met. The Group’s consideration of whether its internal projects to develop drugs are in a research phase or development phase involves significant judgement. The Group considers a project to be in a development phase when the following can be demonstrated: • The technical feasibility of completing the intangible asset so that it will be available for use or sale; • There is intention to complete the project; • The existence of a market to be able to sell output resulting from the project; • How the intangible asset will generate probable future economic benefits; • There is adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and • Expenditure attributable to the project can be reliably measured. Share-based payment transactions The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes model. 4. OTHER INCOME Interest income 2021 $ 158,785 2020 $ 165,703 31 ANNUAL REPORT 20215. LOSS FOR THE YEAR The loss for the year before income tax includes the following specific expenses: 2021 $ 106,828 15,779 106,073 395,097 247,908 2,652 — 150,000 114,886 1,139,222 — — — 131,703 89,462 93,750 128,750 25,896 31,626 63,025 (11,430) 68,575 55,152 30,785 22,202 11,256 2020 $ 227,791 621,377 — 28,932 262,367 10,999 86,314 140,000 213,767 1,591,547 27,583 131,160 158,743 134,652 45,290 — 70,000 68,661 28,943 47,136 73,845 51,691 105,451 — 37,117 11,568 740,752 674,354 (a) Research and development expenses Reformulation Phase II Clinical Trial Phase III Clinical Trial Employee costs Consultants Scientific Advisory Board PK Studies CSO fees Patent expenses Total (b) Capital raising expenses ASX listing/quotation fees Corporate advisory and consultants Total (c) Administration expenses Accounting and company secretarial fees ASX, ASIC and bank fees Executive Director’s fees Non-executive Director’s fees Legal fees Rent and office expenses Audit and tax fees Travel and entertainment D&O Insurance Investor relations and PR expenses Share registry and shareholder meetings Other general expenses Website and IT expenses Total 32 INVEX THERAPUTICS LTD Notes to the Consolidated Financial Statements (cont.)6. INCOME TAX (a) The components of tax expense comprise: Current tax Deferred tax expense Total income tax expense from continuing operations Deferred income tax expense included in income tax expense comprises: Decrease/(increase) in deferred tax assets Decrease/(increase) in deferred tax liabilities 2021 $ 2020 $ — — — — — — — — — — (b) The prima facie tax on profit from ordinary activities before income tax is reconciliation of income tax expense to prima facie tax payable: Loss before income tax (2,283,911) (3,360,279) Prima facie tax benefit on loss from ordinary activities before income tax at 30% (2020: 30%) (685,173) (1,008,084) Tax effect of: - share-based payments - intellectual property costs - change in corporate tax rate - entertainment - other - tax differential rate Tax losses and temporary differences not recognised Income tax expense/(benefit) The applicable weighted average effective tax rate are as follows: (c) Amounts recognised directly in equity Aggregate current and deferred tax arising in the reporting period and not recognised in net loss or other comprehensive income but directly debited or credited to equity. Current tax Net deferred tax 168,187 34,446 — 422 127 77,448 403,894 — 30% 295,018 99,514 (29,263) 1,882 552 13,578 628,803 — 30% 166,109 270,995 33 ANNUAL REPORT 2021(d) Deferred tax assets Patents Accruals Business related costs Australian tax losses Unrealised fx losses Foreign tax losses Other Capital raising costs in equity 7. CASH AND CASH EQUIVALENTS Cash at bank and on hand 8. OTHER RECEIVABLES GST/VAT receivable 2021 $ 2020 $ 29,801 7,200 37,413 1,175,857 4,734 211,221 — 1,080 6,600 62,406 736,768 — 40,735 (194) 408,202 385,872 1,874,427 1,233,267 2021 $ 2020 $ 32,716,091 26,300,459 32,716,091 26,300,459 2021 $ 21,199 21,199 2020 $ 116,882 116,882 There are no other receivables that are past due or impaired at 30 June 2021. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. At 30 June 2021, this is included as part of GST receivable above. 9. TRADE AND OTHER PAYABLES Trade payables Accruals and other payables 2021 $ 11,333 647,281 658,614 2020 $ 30,398 682,548 712,946 Trade payables are non-interest bearing and are normally settled on 30-day terms. 34 INVEX THERAPUTICS LTD Notes to the Consolidated Financial Statements (cont.)10. UNALLOCATED SHARES Unallocated shares 2021 $ — — 2020 $ 1,302,247 1,302,247 Following shareholder approval on the 29 June 2020, these shares were allotted on the 2 July 2020. 11. CONTRIBUTED EQUITY 2021 $ 2021 Number of shares 2020 $ 2020 Number of shares Ordinary shares on issue – fully paid 36,413,432 75,153,848 27,017,127 67,500,001 36,413,432 75,153,848 27,017,127 67,500,001 Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders meetings. In the event of winding up of the Company ordinary shareholders rank after creditors and are fully entitled to any proceeds of liquidation in proportion to the number and amount paid on the shares held. Movement in fully paid ordinary shares on issue Balance at beginning of financial period 2021 $ 2021 Number of shares 2020 $ 2020 Number of shares 27,017,127 67,500,001 11,670,444 55,000,001 Placement (May 20 and July 20) 9,949,975 7,653,847 16,250,000 12,500,000 Cost of capital raising (553,670) — (903,317) — Balance at end of financial year 36,413,432 75,153,848 27,017,127 67,500,001 12. RESERVES Share-based payment reserve Foreign currency translation reserve Nature and Purpose of Reserve 2021 $ 1,546,240 (4,684) 1,541,556 2020 $ 983,517 (6,275) 977,242 The share-based payment reserve records the value of options, performance rights and performance shares issued to the Group’s directors, employees, and third parties. The value of the amount disclosed during the period reflects the value of options, performance rights and performance shares issued by the Group. The Foreign currency translation reserve records exchange differences arising on translation of foreign controlled entities. 35 ANNUAL REPORT 2021Options outstanding at 30 June 2021 The following options over ordinary shares of the Company were granted at reporting date: Grant Date Expiry Date Exercise Price Balance at start of year Granted during the year Exercised during the year Forfeited during the year Balance at year end Vested and exercisable at year end 22 Nov 2019 22 Nov 2023 $0.60 2,200,000 21 Jan 2020 21 Jan 2023 $1.00 1,250,000 9 April 2020 9 April 2023 $0.60 60,000 — — — 20 Oct 2020 20 Oct 2023 18 Nov 2020 18 Nov 2023 8 April 2021 8 April 2024 $1.30 $1.30 $1.10 — 400,000 — 800,000 — 400,000 — — 2,200,000 1,100,000 — (500,000) 750,000 750,000 — — — — — 60,000 30,000 — 400,000 — 800,000 — 400,000 — — — 3,510,000 1,600,000 — (500,000) 4,610,000 1,880,000 Reconciliation of movement in Share-based payment reserve: Opening Balance - 1 July 2020 Number of Options Value $ — 983,517 Share-based payment expense in respect to Director options on issue at 30 June 2021 2,200,000 374,497 Share-based payment expense in respect to adviser options on issue at 30 June 2021 Share-based payment expense in respect to employee options on issue at 30 June 2021 Share-based payment expense in respect to employee options on issue at 30 June 2021 and granted during the period Share-based payment expense in respect to Director options on issue at 30 June 2021 and granted during the period Share-based payment expense in respect to Director options on issue at 30 June 2021 and granted during the period Closing Balance – 30 June 2021 13. LOSS PER SHARE Basic and Diluted (Loss) per Share – cents Total basic and diluted loss per share – cents 750,000 (32,228) 60,000 21,035 400,000 64,994 800,000 111,865 400,000 22,560 4,610,000 1,546,240 2021 $ (3.04) 2020 $ (5.98) Basic and diluted loss per share is calculated by dividing the loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. 36 INVEX THERAPUTICS LTD Notes to the Consolidated Financial Statements (cont.)The following table reflects the loss and share data used in the basic and diluted loss per share: Net loss attributable to members of the Group (2,283,911) (3,360,279) Earnings used in calculating basic and diluted earnings per share from continuing operations (2,283,911) (3,360,279) 2021 $ 2020 $ Weighted average number of Ordinary Shares used in calculating basic and diluted earnings per share 75,153,848 56,165,385 2021 Number of shares 2020 Number of shares Dilutive Potential Ordinary Shares As at balance date, there were no options on issue. 14. ACCUMULATED LOSSES 2021 $ 2020 $ Accumulated losses at the beginning of the financial period (3,592,401) (232,122) Net loss attributable to members of the Group Accumulated losses at the end of the financial year (2,283,911) (3,360,279) (5,876,312) (3,592,401) 15. RECONCILIATION OF NET CASH FLOWS OPERATING ACTIVITIES TO OPERATING (LOSS) AFTER TAX Loss (after income tax) for the year Non-cash items included in profit or loss: Write-off acquisition costs Share-based payment expenses Unrealised fx reserve movements Net changes in working capital: Decrease in trade and other receivables (Decrease)/increase in trade and other payables Net cash used in operating activities Non-cash investing and financing activities disclosed in other notes are: Share-based payment expense (refer Note 19). FX reserve movements (refer Note 12). 2021 $ 2020 $ (2,283,911) (3,360,279) — 562,723 1,591 117,946 983,392 (6,275) 95,682 (54,330) 36,487 624,976 (1,678,245) (1,603,393) 37 ANNUAL REPORT 202116. FINANCIAL RISK MANAGEMENT The Group’s principal financial instruments comprise cash, short-term deposits and trade payables. The Group does not have any derivative instruments at 30 June 2021 and does not speculate in any financial instruments. Financial Risks The activities of the Group expose it primarily to the financial risks of interest rate risk, liquidity risk, foreign exchange risk and credit risk. The Board of Directors is responsible for monitoring and managing the financial risks of the Group. The Company Secretary/CFO monitors these risks by the review and analysis of monthly management accounts and other financial data. Interest Rate Risk The Group’s main interest rate risk arises from cash held on deposit by Australian Financial Institutions. Cash held in term deposits is subject to prevailing variable interest rates and expose the Group to cash flow interest rate risk. The following table summarises interest rate risk for the Group. Fixed Interest Rate Maturing Floating Interest Rate $ 1 Year or Less $ 1 to 5 Years $ Non- Interest Bearing $ Total $ 32,716,091 32,716,091 — — — — — 32,716,091 — 32,716,091 Fixed Interest Rate Maturing Floating Interest Rate $ 1 Year or Less $ 1 to 5 Years $ Non- Interest Bearing $ Total $ 2021 Interest-bearing financial instruments Cash and cash equivalents 2020 Interest-bearing financial instruments Cash and cash equivalents 26,300,459 26,300,459 — — — — — 26,300,459 — 26,300,459 The Group does not rely on the generation of interest on cash at bank to provide working capital and does not consider the exposure to be material to the Group and have therefore not undertaken any further analysis of exposure. Liquidity Risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board of Directors manage liquidity risk by continually monitoring cash reserves and cashflow forecasts to ensure that financial commitments can be met as and when they fall due. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of equity funding. 38 INVEX THERAPUTICS LTD Notes to the Consolidated Financial Statements (cont.)The following table details the expected contractual maturity for its non-derivative financial liabilities. 2021 Financial liabilities due Trade and other payables 2020 Financial liabilities due Trade and other payables Credit Risk Exposure Total $ 1 year or less $ 1 – 5 years $ 5+ years $ 658,614 658,614 658,614 658,614 — — — — Total $ 1 year or less $ 1 – 5 years $ 5+ years $ 712,946 712,946 712,946 712,946 — — — — Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s cash at bank. The carrying amount of the financial assets on the Statement of Financial Position represents the maximum credit exposure. All cash and cash equivalents are held with large reputable financial institutions within Australia and therefore credit risk is considered minimal. Cash and cash equivalents: AA rated Foreign currency risk 2021 $ 2020 $ 32,716,091 26,300,459 The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations. Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting. 17. RELATED PARTY TRANSACTIONS Key Management Personnel There were no key management personnel, other than the directors, during the year ended 30 June 2021. The names of each person holding the position of director of the Company during the financial year are set out below: • Dr Jason Loveridge • Prof. Alexandra Sinclair • Dr Thomas Duthy • Dr Megan Baldwin • Mr David McAuliffe • Ms Narelle Warren 39 ANNUAL REPORT 2021Transactions with key management personnel (i) Total key management personnel remuneration is as follows: Short Term Benefits Other non-cash Benefits Post Employment Benefits Share-based payments 2021 $ 2020 $ 590,873 445,000 — 1,626 51,692 — 508,922 477,252 1,101,224 973,944 (ii) Nil loans were payable to or receivable from KMPs during or at the end of the financial year. Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received. 18. INTERESTS IN SUBSIDIARY The consolidated financial statements incorporate the assets, liabilities and results of the following wholly- owned subsidiary in accordance with the accounting policy described in note 3: Name Principal place of business / Country of incorporation Invex Therapeutics Ltd United Kingdom Invex Therapeutics Ltd UK was incorporated on 12 December 2019. 19. SHARE-BASED PAYMENTS Ownership interest 2021 % 100 2020 % 100 Share-based payments made during the year ended 30 June 2021 are summarised below. Recognised Share-based payment expense Options granted to Directors as incentive Options granted to Advisers as incentive Options granted to Employees as incentive 2021 $ 2020 $ 508,922 477,252 (32,228) 500,582 86,029 5,558 562,723 983,392 Options granted to Directors and employees for services The Group’s current Employee Share Option Plan (ESOP) was approved by the Board of Directors on 20 May 2019. The ESOP is designed to provide medium and long term incentives for all employees (including Non-executive and Executive Directors) and to attract and retain experienced Employees, Board Members and Executive Officers and provide motivation to make the Group more successful. Under the ESOP, participants have been granted options which only vest if certain milestones are met. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefit. Any option may only be exercised after the option has vested and other conditions imposed by the board have been satisfied. Options are granted under the ESOP for no consideration. Options granted under the ESOP carry no dividend or voting rights. When exercisable, shares allotted pursuant to the exercise of options will be allotted following receipt of relevant documentation and payments will rank equally with all other shares. 40 INVEX THERAPUTICS LTD Notes to the Consolidated Financial Statements (cont.)As options granted to employees are considered to represent the value of the services received over the vesting period of the options, the assessed value of the options are recognised and expensed over the vesting period. Options vesting during the period of issue are fully expensed under the accounting standards. The total Directors and Employee Options expense for the period is outlined below. Valuation Tranche Date Expiry Date Exercise Price Balance at start of year Granted during the year Vested during the year Total Share- based payment expense for the year 1 3 4 5 6 Total 22 Nov 2019 22 Nov 2023 $0.60 2,200,000 9 April 2020 9 April 2023 $0.60 60,000 — — 20 Oct 2020 20 Oct 2023 18 Nov 2020 18 Nov 2023 8 April 2021 8 April 2024 $1.30 $1.30 $1.10 — — — 400,000 800,000 400,000 1,100,000 347,497 30,000 — — — 48,035 64,994 111,865 22,560 2,260,000 1,600,000 1,130,000 594,951 Appropriate values for the options using the Black Scholes Model applying the following inputs. Tranche Share price Exercise price Expected volatility Expiry date (years) Expected dividends Risk free rate Value per option 1 $0.71 $0.60 75% 4.00 Nil 0.77% $0.42 2 $1.17 $1.00 75% 3.00 Nil 0.77% $0.62 3 $0.92 $0.60 75% 3.00 Nil 0.77% $0.55 4 $0.96 $1.30 80% 3.00 Nil 0.77% $0.35 5 6 $0.805 $0.78 $1.30 80% 3.00 Nil 0.87% $0.32 $1.10 80% 3.00 Nil 0.77% $0.33 The vesting conditions attached to the Tranche 1, 3, 4, 5 and 6 Director and Employee Options are as follows: • 50% of the Options will vest and become exercisable upon completion of 12 months continuous service from date of issue; and • 50% of the Options vest and become exercisable upon completion of 24 months continuous service from date of issue. The vesting conditions attached to the Tranche 2 Options are as follows: • 250,000 of the Options vest from date of issue. • 250,000 of the Options will vest and become exercisable 6 months from date of issue. • 250,000 of the Options will vest and become exercisable 9 months from date of issue. 41 ANNUAL REPORT 2021Options granted to Advisers (Tranche 2) On 21 January 2020 the Company issued 1,250,000 options to advisers in relation to services provided. The agreement with the adviser was terminated on 12 December 2020 and the remaining unvested 500,000 options were forfeited pursuant to the agreement. An expense of $82,398 for the options vested during the year was recognised and an adjustment of ($114,626) for the forfeiture of the advisor options. The weighted average remaining contractual life of options outstanding at the end of the year was 2.04 years. 20. MATTERS SUBSEQUENT TO END OF FINANCIAL YEAR The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not adversely financially impacted the consolidated entity up to 30 June 2021, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is changing rapidly and the Company’s ability to operate normally is subject to measures imposed by the Australian Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and other economic stimulus that may be provided. Other than as disclosed above, no matters or events have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the company, the results of those operations or the state of affairs of the company in subsequent financial periods. 42 INVEX THERAPUTICS LTD Notes to the Consolidated Financial Statements (cont.)21. PARENT ENTITY INFORMATION Set out below is the supplementary information about the parent entity. Statement of profit or loss and other comprehensive income Loss after income tax Total comprehensive income Statement of financial position Total current assets Parent 2021 $ 2020 $ (1,579,841) (3,224,497) (1,579,841) (3,224,497) Parent 2021 $ 2020 $ 32,667,047 26,393,062 Total non-current assets 901,054 157,095 Total current liabilities Total liabilities Equity Issued capital Reserves Accumulated losses Total equity 22. AUDITOR’S REMUNERATION Amounts paid or payable to BDO for: Audit services – an audit or review of the financial report of the entity Total audit services Taxation services Total other services 655,521 2,006,132 655,521 2,006,132 36,413,432 27,017,127 1,541,556 983,517 (5,036,460) (3,456,619) 32,918,528 24,544,025 2021 $ 2020 $ 35,126 35,126 2,500 2,500 35,291 35,291 2,000 2,000 43 ANNUAL REPORT 202123. DIVIDENDS There are no dividends paid or payable at 30 June 2021. 24. COMMITMENTS There are no other commitments which require disclosure as at 30 June 2021. 25. SEGMENT REPORTING The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors in assessing performance and determining the allocation of resources. The Group is managed primarily on the basis of its research and development activities. Operating segments are therefore determined on the same basis. Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics. The Group operated in one segment which is research and development activities within Australia. The Company is domiciled in Australia. 26. CONTINGENT LIABILITIES AND CONTINGENT ASSETS The Directors are not aware of any contingent liabilities or contingent assets which require disclosure as at 30 June 2021. 44 INVEX THERAPUTICS LTD Notes to the Consolidated Financial Statements (cont.)Directors’ Declaration In the Directors’ opinion: (a) the financial statements and notes are in accordance with the Corporations Act 2001, and: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and (ii) give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year ended on that date of the Group. (iii) are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board, as stated in note 1 to the financial statements; and (b) In the Directors’ opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable; and (c) The Directors have been given the declarations by the Executive Director as required by section 295A, of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by; David McAuliffe Non-executive Director Perth, Western Australia, 27 August 2021 45 ANNUAL REPORT 2021Independent Auditor’s Report Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au 38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia INDEPENDENT AUDITOR'S REPORT To the members of Invex Therapeutics Ltd Report on the Audit of the Financial Report Opinion We have audited the financial report of Invex Therapeutics Ltd (the Company) and its subsidiary (the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration. In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i) (ii) Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. 46 INVEX THERAPUTICS LTD Measurement of Share-Based Payments Key audit matter How the matter was addressed in our audit During the financial year ended 30 June 2021, the Our procedures included, but were not limited to the Group issued options to employees and key following: management personnel, as disclosed in Note 19 of the financial report. The Group performed calculations to record the related share based payment expense in accordance with AASB 2 Share Based Payments in the consolidated statement of profit or loss and other comprehensive income. Refer to Notes 3(i) and 3(s) of the financial report for a description of the accounting policy and significant estimates and judgements applied to these arrangements. Due to the complex and judgemental estimates used in determining the fair value of the share-based payments, we consider the Group’s calculation of the share based payment expense to be a key audit matter. • Reviewing the relevant agreements to obtain an understanding of the contractual nature and terms and conditions of the share-based payment arrangements; • Reviewing management’s determination of the fair value of the share-based payments granted, considering the appropriateness of the valuation models used and assessing the valuation inputs; • Involving our valuation specialists to assess the assumptions used in the Group's calculation being the share price of the underlying equity, risk free rate and volatility; • Assessing the allocation of the share-based payment expense over the relevant vesting period; and • Assessing the adequacy of the related disclosures in the financial report. Other information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2021, but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 47 ANNUAL REPORT 2021 Independent Auditor’s Report (cont.) Responsibilities of the directors 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 and for 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. In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 12 to 20 of the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Invex Therapeutics Ltd, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. Responsibilities 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. BDO Audit (WA) Pty Ltd Jarrad Prue Director Perth, 27 August 2021 48 INVEX THERAPUTICS LTD Corporate Governance Statement In fulfilling its obligations and responsibilities to its various stakeholders, the Board is a strong advocate of corporate governance. This statement outlines the principal corporate governance procedures of Invex Therapeutics Ltd (Group). The Board of Directors (Board) supports a system of corporate governance to ensure that the management of Invex Therapeutics Ltd is conducted to maximise shareholder wealth in a proper and ethical manner. ASX CORPORATE GOVERNANCE COUNCIL RECOMMENDATIONS The Board has adopted corporate governance policies and practices consistent with the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations ("ASX Principles and Recommendations 4th Edition") where considered appropriate for Invex Therapeutics Ltd size and nature. Such policies include, but are not limited to the Board Charter, Board Committee Charters, Code of Conduct, Trading in Securities, Continuous Disclosure, Shareholder Communication and Risk Management Policies. Further details in respect to the Group’s corporate governance practises and copies of Group’s corporate governance policies and the 2021 Corporate Governance Statement, approved by the Board and applicable as at 30 June 2021 are available of the Group’s website: http://www.invextherapeutics.com/company/corporate-governance 49 ANNUAL REPORT 2021ASX Additional Information Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Annual Report is set out below. 1. SHAREHOLDINGS The issued capital of the Company as at 4 August 2021 is 75,153,848 ordinary fully paid shares. All issued ordinary fully paid shares carry one vote per share. Ordinary Shares Shares Range 1-1,000 1,001-5,000 5,001-10,000 10,001-100,000 100,001 and above Total Unmarketable parcels Holders 235 517 254 439 92 Units 150,448 1,413,741 2,001,368 14,589,135 % 0.20 1.88 2.66 19.41 56,999,156 75.84 1,537 75,153,848 100.00 There were 150 holders of less than a marketable parcel of ordinary shares representing a total of 68,368 shares. 2. TOP 20 SHAREHOLDERS AS AT 4 AUGUST 2021 Name 1 TATTARANG 2 TISIA NOMINEES PTY LTD 3 ANTHONY GRIST 4 DR JASON LOVERIDGE 5 MR DAVID JERIMIAH MCAULIFFE 6 JK NOMINEES PTY LTD 7 ALEXANDRA JEAN SINCLAIR 8 MRS KATHRYN SALKIlLD 9 THE UNIVERSITY OF BIRMINGHAM Number of shares 8,846,154 4,000,000 3,597,700 3,374,462 3,350,001 3,000,000 2,500,000 2,293,000 2,000,000 10 BANNABY INVESTMENTS PTY LIMITED 1,625,000 11 SUNSET CAPITAL MANAGEMENT PTY LTD 1,518,175 12 BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD 13 CITYSCAPE ASSET PTY LTD 14 CITICORP NOMINEES PTY LIMITED 15 SANDHURST TRUSTEES LTD 16 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 17 PETER KYROS PTY LTD 18 PALLA NOMINEES PTY LTD

19 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 20 MAGAURITE PTY LTD 1,390,000 1,250,000 1,184,837 1,081,924 655,050 583,616 580,000 561,504 560,000 % 11.77 5.32 4.79 4.49 4.46 3.99 3.33 3.05 2.66 2.16 2.02 1.85 1.66 1.58 1.44 0.87 0.78 0.77 0.75 0.75 TOP 20 TOTAL TOTAL REMAINING HOLDERS BALANCE TOTAL 43,951,423 31,202,425 58.48 41.52 75,153,848 100.00 50 INVEX THERAPUTICS LTD 3. UNQUOTED SECURITIES The unlisted options over shares in the Company as at 4 August 2021 are as follows: Holder MR JASON LOVERIDGE ALEXANDRA JEAN SINCLAIR CIPA INVESTMENTS PTY LTD WACC PTY LTD DR MEGAN BALDWIN CAROL PARISH PHILUCHNA PTY LTD DAVID JERIMIAH MCAULIFFE EMMA HILTON TOTAL 4. VOTING RIGHTS See note 12 of the financial statements. Number of options held % of issued capital held 800,000 800,000 800,000 750,000 400,000 400,000 400,000 200,000 60,000 17.35 17.35 17.35 16.27 8.68 8.68 8.68 4.34 1.30 4,610,000 100.00% 5. SUBSTANTIAL SHAREHOLDERS AS AT 4 AUGUST 2021 Holder TATTARANG TISIA NOMINEES PTY LTD Total Number of options held % of issued capital held 8,846,154 4,000,000 12,846,154 11.77 5.32 17.09 6. RESTRICTED SECURITIES SUBJECT TO ESCROW PERIOD There are no restricted securities. 7. ON-MARKET BUYBACK There is currently no on-market buyback program for any of Invex’s listed securities. 8. COMPANY CASH AND ASSETS In accordance with Listing Rule 4.10.19, the Company confirms that it has been using the cash and assets it had acquired at the time of admission and for the year ended 30 June 2021 in a way that is consistent with its business objective and strategy. This financial report includes the consolidated financial statements and notes of the Group consisting of Invex Therapeutics Ltd and its controlled entity (Invex Therapeutics UK). The Group’s functional and presentation currency is Australian Dollars ($). A description of the Group’s operations and principal activity is included in the review of operations and activities in the Directors’ report on pages 6–20. The Directors’ Report is not part of the Consolidated Financial Report. 51 ANNUAL REPORT 2021This page has been left blank intentionally. 52 INVEX THERAPUTICS LTD Corporate Directory Directors: Dr Jason Loveridge Professor Alexandra Sinclair Dr Thomas Duthy Dr Megan Baldwin Mr David McAuliffe Company Secretary: Ms Narelle Warren Registered Office & Principal Place of Business: Level 1, 38 Rowland St SUBIACO WA 6008 Tel: +61 8 6382 0137 Website: www.invextherapeutics.com Auditors: BDO Audit (WA) Pty Ltd 38 Station St SUBIACO WA 6008 Bankers: Westpac Banking Corporation Solicitors: Steinepreis Paganin Level 4, The Read Buildings 16 Milligan St PERTH WA 6000 Share Registry: Automic Registry Services Telephone: 1300 288 664 International: +61 2 9698 5414 Website: www.automicgroup.com.au ASX code: IXC ideate Co. 53 ANNUAL REPORT 2021

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