EPITAN - Clinuvel Pharmaceuticals

EPITANDermatological products businessEpiTan is developing a sales and marketing infrastructure in Australia and NewZealand specialising in prescription dermatology products. We expect EpiTan tocontinue to build this capability ahead of the launch of MELANOTAN in thesemarkets providing the company with the ability to maximise returns by keepingmarketing in-house.EpiTan currently has four products in its portfolio and is in discussions to in-licenseseveral additional products. EpiTan is using its Medical Advisory Panel to evaluatefurther products for in-licensing. This strategy is benefiting from the lack of interest thatEuropean and American pharmaceutical companies express in setting up operations inthe Australian and New Zealand markets. The majority of European and Americanpharmaceutical companies view the potential returns from marketing products in theAustralian and New Zealand markets as too low to justify the substantial investment ininfrastructure that would be required to set up operations, and therefore are open toout-licensing their products for these markets. EpiTan is therefore aiming to capitaliseon this situation by building a profitable portfolio of dermatology products and developa fully integrated dermatology-focussed pharmaceutical company with MELANOTANas its key growth driver.EpiTan currently has three experienced sales representatives to launch Exorex andhas a further ten contract sales representatives supporting the re-launch of one of itsportfolio products, Linotar. We expect EpiTan to continue to strengthen its sales forceas it adds further products to its portfolio and particularly ahead of the launch ofMELANOTAN, which we expect in 2008.EpiTan’s current product portfolio is detailed below.ExorexExorex is a novel formulation of coal tar for the treatment of psoriasis. The product wasacquired from Trans Dermal Pharmaceuticals Australia on 22 February 2005 and issupplied by a South African firm Meyerzall. Exorex uses a liposomal delivery systemwhich improves its physicochemical properties and is used as a topical preparation.Exorex has advantages over other topical therapies for first-line treatment of chronicpsoriasis in that it combines the safety and effectiveness of coal tars with the improvedefficacy, lessened odour and lessened staining of the new formulation.Exorex has been approved for marketing in a large number of countries and is thesecond most prescribed psoriasis treatment in the UK (marketed by Forest Labs UK).However, the product has not been heavily promoted through Trans DermalPharmaceuticals in Australia and therefore we believe EpiTan should be able tosignificantly grow sales. EpiTan will launch Exorex in Australia to GP’s in April 2005.EpiTan has also submitted an application to the Australian government’sPharmaceutical Benefits Scheme (PBS) for medical reimbursement. If reimbursementis achieved we believe peak sales in Australia could reach up to $A2m.LinotarLinotar was also acquired from Trans Dermal Pharmaceuticals in February 2005 and isa similar coal tar based treatment for eczema. It is a topical emulsion and is licensedas an over the counter (OTC) product in Australia and many other countries for thefirst-line treatment of mild eczema. EpiTan re-launched Linotar in March 2005 usingten contract sales representatives. Sales promotion will then be expanded to NewZealand in July 2005. As the only cGMP manufactured coal tar cream specificallypromoted in Australia for the treatment of eczema we expect Linotar to be capable ofachieving sales in the region of $A1.2m in these territories in the first full year of relaunch.ZindaclinZindaclin was in-licensed from Pro-Strakan Pharmaceuticals in March 2004, and is thefirst non-alcohol based, once a day gel treatment for mild to moderate acne. EpiTanhas exclusive rights to sell the product in Australia and New Zealand. The product hasbeen submitted to the Therapeutic Goods Administration (TGA) for approval to marketand we expect approval in Q3 2005.13