Financial commentary The consolidated profit after tax attributable to equity holders of the Company for the year ended 31 December 2023 was A$157.1 million compared with A$0.2 million in 2022. Revenue of A$231.9 million was received under the licence agreement with Acadia (2022: A$14.6 million). This includes A$59.4 million for the first commercial sale milestone, an upfront of A$145.7 million under the expanded global licence agreement with Acadia and A$26.8 million from quarterly royalty income. Other income includes interest income of A$5.7 million (2022: A$0.4 million) and foreign exchange gains of A$2.4 million (2022: A$1.2 million). There was an increase of A$14.1 million in research and development costs, due to higher expenditures in 2023 for the NNZ-2591 Phase 2 clinical trials and the foundational work to prepare for Phase 3 development of NNZ-2591 across multiple indications. There was also an increase in corporate and administrative costs of A$2.5 million, mainly due to higher employee benefits and share-based payments expense. In addition, a loss of A$2.2 million on the fair value of outstanding forward contracts to sell Australian dollars and buy US dollars was recognised at 31 December 2023 (2022: A$0.7 million). The net income tax expense recognised for the year ended 31 December 2023 was A$48.1 million (2022: nil). After utilising Australian carried forward tax losses and the expectation of offsetting the 5% withholding tax paid to the US Internal Revenue Service in relation to the milestone payments, Neuren has recognised a current tax liability of A$37.1 million. OPERATING REVIEW CONTINUED Total cash and short-term investments at 31 December 2023 were A$228.5 million (2022: A$40.2 million). Net cash received from operating activities was A$184.9 million (2022: A$3.6 million). The increase of A$181.3 million was primarily due to the receipt of A$221.0 million (2022: A$15.9 million) from Acadia for the first commercial sale milestone payment of US$40 million, the up-front payment of US$100 million under the expanded global licence agreement for trofinetide and receipt of quarterly royalty payments. This was offset by higher payments to other suppliers of A$24.6 million (2022: A$11.3 million) due to higher expenditures for the NNZ-2591 Phase 2 clinical trials and the foundational work to prepare for Phase 3 development of NNZ-2591 across multiple indications. Withholding tax of A$11.8 million was paid to the US Internal Revenue Service by Acadia on Neuren’s behalf. This will be offset against Neuren’s Australian tax liability. Net cash from financing activities for 31 December 2023 was A$3.6 million (2022: nil), comprising proceeds received on conversion of loan funded shares and exercise of share options. Following the receipt of the first commercial sale milestone, up-front payment under the expanded global licence agreement for trofinetide and quarterly royalty payments, Neuren is holding more funds than are required to meet currently forecast short-term cash commitments. As a result, Neuren has classified A$211.4 million of short-term deposits as Short-term Investments. Neuren Pharmaceuticals Limited Annual Report 2023 20
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