Cellmid 2018 Annual Report 15

Principal activities and signiﬁcant changes in nature of activities

The principal activities of the Group during the ﬁnancial year were:

• Midkine Business: The development and commercialisation of diagnostic and therapeutic products for the management

of diseases such as cancer and various chronic inﬂammatory conditions by targeting midkine (Lyramid Limited and Kinera

Limited); and

• Consumer Health Business: The development and sale of over-the-counter (OTC) and cosmetic treatments to alleviate

excessive and abnormal hair loss and re-establish the natural hair growth cycle (Advangen Limited)

There were no signiﬁcant changes in the nature of the Group’s principal activities during the ﬁnancial year.

2. OPERATING RESULTS AND REVIEW OF OPERATIONS FOR THE YEAR

Operating results

The operating results for the Group continued to improve during the 2018 ﬁnancial year. Revenue and Other Income for the

Group increased 23% to $6,834,924 (2017: $5,560,121) during the reporting period, with a 26% increase in Consumer Health

revenue to $5,647,930 (2017: $4,496,338). Consolidated loss was down 17% to $3,732,615 after providing for income tax

(2017: $4,482,273 loss). An R&D tax credit of $946,963 was received during the reporting period (2017: $831,408).

Review of operations

The Group achieved several major commercial milestones during FY2018 for the Consumer Health Business (Advangen

Limited) in Australia, Japan, USA and China. In Japan, the Group’s sales in television shopping channel QVC continued to

increase and the ﬁrst Advangen concept store was opened in October 2017 in Ginza, Tokyo. In Australia distribution rights for

a new product range, Fillerina®, have been secured to optimise existing sales channels. In the USA the Group signed retail

partnerships with Neiman Marcus, Bloomingdales and Soft Surroundings during the reporting period. In China, import permits

for the Group’s Japanese brands were issued in August 2017 and a distribution agreement was signed with Beijing Fukangren

Biopharma in May 2018.

The Group’s Midkine Business, Lyramid Limited and Kinera Limited, continued the preclinical development programs and

demonstrated efﬁcacy in new disease models. The Group has formed collaborations, which resulted in the development of

novel intellectual property and ﬁling of patent applications. The scientiﬁc developments around the Group’s key midkine asset

portfolio resulted in a publication in Nature, the highest ranked scientiﬁc journal. In addition to receiving the R&D tax credit of

$946,963 the Group received an Innovation Connections Grant to the value of $110,000 from the Federal Government for its

research into chronic kidney disease.

Mr Lee Tamplin Company Secretary (Appointed 6 September 2018)

Qualiﬁcations BA (Hons) Financial Services, Bournemouth University United Kingdom, Diploma of Financial

Planning, Graduate of the Australian Institute of Company Directors and Member of the

Governance Institute of Australia

Experience 20 years’ experience in ﬁnancial services in both Australia and UK. Company Secretary for a

number of ASX listed, NSX listed and proprietary companies.

Mr Raymond Ting Company Secretary (Resigned 6 September 2018)

Qualiﬁcations B.Com, University of Western Australia, Graduate Diploma of Applied Corporate Governance,

Member of The Institute of Chartered Accountants Australia and New Zealand

Experience A Chartered Accountant and Company Secretary with accounting and secretarial experience in

public listed companies, unlisted property fund managers, property developers, multi-national

engineering ﬁrms and large private companies.