OPERATING REVIEW CONTINUED Growing sustainable income to Neuren In June 2023, Neuren received from Acadia a milestone payment of US$40 million earned following the first commercial sale of DAYBUE (trofinetide). Neuren is eligible to receive ongoing royalties on net sales of trofinetide in North America, plus milestone payments of up to US$350m on achievement of a series of four thresholds of total annual net sales, plus one third of the market value of the Rare Pediatric Disease Priority Review Voucher that was awarded to Acadia by the FDA upon approval of the New Drug Application (NDA)”, to be paid when Acadia sells or uses the voucher. Neuren estimates the value of its one third share as US$33 million. No royalties or similar costs are payable by Neuren to third parties, which means Neuren’s revenue from Acadia will flow through to pre-tax profit. The royalty rates and sales milestone payments are related to the total amount of annual net sales of trofinetide in all indications in North America, as set out in the following tables: 1 Royalty rates payable on the portion of annual net sales that fall within the applicable range. Each sales milestone payment is payable once only. Tiered royalty rates (% of net sales)1 Sales milestone payments1 Annual Net Sales Rates Net Sales in one calendar year US$m ≤US$250m 10% ≥US$250m 50 >US$250m, ≤US$500m 12% ≥US$500m 50 >US$500m, ≤US$750m 14% ≥US$750m 100 >US$750m 15% ≥US$1bn 150 Persistency rates improving in new patient cohorts 14 1 Acadia Fourth Quarter and Full Year 2023 Earnings Call presentation in Feb 2024 66% 64% 58% 51% 75% 68% 80% 76% 70% 63% Month 4 Month 5 Month 6 Month 7 Persistency Rates1 (Based on confirmed discontinuations and patients who were 60 days past their scheduled refill) Lilac-1 experience Previously presented real world Current real world n.a. n.a. 1 Acadia Fourth Quarter and Full Year 2023 Earnings Call presentation in Feb 2024 A characteristic of all long-term medicines is that not all patients who commence treatment will persist with treatment. Furthermore, for patients and caregivers, adjusting to a novel treatment regimen can take time, especially when it is the first treatment ever to become available. The number of patients commencing treatment and the proportion that persist with treatment long-term are key factors in the sales outcome. Acadia has provided detailed metrics for real world persistency since launch, which continues to outperform the clinical trial experience and has improved as new patient cohorts are added. The chart below shows the data reported in Acadia’s Q4 earnings call presentation in February 2024. The real world persistency has consistently tracked at more than 10 percentage points above clinical experience and monthly cohort persistency rates are trending up. Neuren Pharmaceuticals Limited Annual Report 2023 6
RkJQdWJsaXNoZXIy MjE2NDg3