Algorae Pharmaceuticals Ltd Clarifies NSW Health Supply Panel Terms

Algorae clarifies terms of NSW Health public hospital supply arrangement

In a supplementary announcement dated 2 July 2026, Algorae Pharmaceuticals (ASX: 1AI) has provided further detail on its NSW Health public hospital supply arrangement, clarifying terms of the award first disclosed on 1 July 2026.

The clarification builds on the original announcement of Algorae’s NSW Health supply contract, which outlined the competitive tender process, the role of AlgoraeRx, and the strategic framing of the award within the company’s commercialisation pathway.

The clarification confirms that AlgoraeRx, Algorae’s wholly owned commercial division, has been appointed a supplier under a NSW Health standing offer arrangement for an awarded pharmaceutical product. The appointment establishes AlgoraeRx as an approved supplier to one of Australia’s largest healthcare procurement networks.

The counterparty is the Health Administration Corporation, a statutory corporation under the Health Administration Act 1982 (NSW), with procurement administered by HealthShare NSW. First supply under purchase orders is expected in Q4 2026.

Algorae has framed the award as strategically significant, though it carries no minimum volume or spend commitment. The company does not expect the arrangement, of itself, to have a material impact on revenue in the current calendar year. Rather, it represents a step in the development of the company’s pathway to revenue.

What the arrangement actually involves

AlgoraeRx secured the appointment following a competitive tender in which the company satisfied NSW Health’s supplier, quality and probity requirements. Importantly, Algorae is one of several appointed suppliers, as NSW Health appoints multiple parties to cover the tender requirements.

Under the standing offer arrangement, NSW Health “Eligible Customers” may place purchase orders for the awarded product at prices set out in an agreed schedule. The arrangement is not exclusive, and Eligible Customers are under no obligation to acquire any minimum volumes.

The key terms are as follows:

• Customer: Health Administration Corporation, a statutory corporation under the Health Administration Act 1982 (NSW)
• Buyers: NSW Health “Eligible Customers”, such as local health districts and public hospitals
• Product: an awarded pharmaceutical product (identity commercial-in-confidence at this time)
• Term: an initial three years, plus two optional one-year extensions (3+1+1 years)
• Rollout: onboarding underway, with first supply under purchase orders expected in Q4 2026
• Conditions: no conditions precedent to the rollout

The following table summarises the key features against their potential relevance for investors.

Understanding NSW Health standing offer arrangements

A standing offer arrangement, sometimes called a supplier panel, is a pre-approved list from which public hospitals and other eligible buyers can order goods at agreed schedule prices. Being on the panel does not guarantee any volume; it simply grants the right to receive purchase orders if customers choose to buy.

For a small-cap pharmaceutical supplier, passing a competitive tender and satisfying NSW Health’s quality and probity requirements is a credibility marker. It signals the supplier has met the standards of a major public procurement body.

For investors, the distinction is straightforward. Panel appointment is the gateway to orders, but actual revenue depends on whether Eligible Customers place purchase orders under the arrangement.

Why it matters for Algorae’s revenue pathway

The award sits within Algorae’s dual-track strategy, which combines AI-driven drug discovery through AlgoraeOS with pharmaceutical commercialisation through AlgoraeRx. The NSW Health appointment builds the AlgoraeRx revenue base, which is intended to complement the company’s longer-term discovery pipeline.

The Zydus Lifesciences partnership, which grants AlgoraeRx exclusive distribution rights across injectable, oral and specialty pharmaceutical products in Australia and New Zealand, forms part of the product base from which the NSW Health arrangement can be fulfilled.

Algorae has been transparent that revenue will depend on the volume and value of purchase orders received. Any revenue will be recognised within the company’s total product revenue and reported through its periodic reporting, including quarterly cash flow reports. Further disclosure will follow if the company receives orders that are, individually or in aggregate, material.

On the discovery side, AlgoraeOS is a proprietary AI platform that applies machine learning and deep neural networks to predict synergistic drug combinations. It was developed in collaboration with the UNSW AI Institute, with support from CSIRO Data61, and its predictions have been independently validated by the Peter MacCallum Cancer Centre.

What comes next

The near-term roadmap is clear: complete onboarding and begin supply under purchase orders from Q4 2026. There are no conditions precedent to the rollout.

Pricing and volume terms under the arrangement remain commercial-in-confidence. Consistent with section 4.22 of ASX Guidance Note 8, this confidentiality does not derogate from the company’s obligations under Listing Rule 3.1 and section 674 of the Corporations Act 2001 (Cth).

The appointment represents a material step in the development of Algorae’s pathway to revenue, with financial impact set to become clearer as orders, if any, are received. For investors, the key watch-point will be Algorae’s quarterly cash flow reports for evidence of purchase order flow over the term of the arrangement.

Ready to Learn More About Algorae’s NSW Health Supply Arrangement?

AlgoraeRx has secured approved supplier status under a NSW Health standing offer arrangement, positioning the company within one of Australia’s largest public healthcare procurement networks ahead of first supply in Q4 2026.

To explore Algorae’s dual-track commercialisation strategy and stay across developments as purchase orders are received, visit the Algorae Pharmaceuticals investor centre for the latest company updates and announcements.