5. R ECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH (USED IN)/FROM OPERATING ACTIVITIES Year ended Dec 2024 $’000 Year ended Dec 2023 $’000 Profit after income tax expense for the year 142,043 157,081 Adjustments for: Depreciation of plant and equipment 22 17 Share based payments expense 1,231 2,928 Foreign exchange loss 7,235 136 Unrealised (gain)/loss on financial assets (3,587) 1,526 Unrealised foreign exchange gain in other comprehensive income 3,201 – Change in working capital: Increase in trade and other receivables (152,150) (15,551) Increase in contract assets (4,956) – (Decrease)/increase current and deferred taxes (3,830) 36,348 (Decrease)/increase in trade and other payables (479) 2,440 Net cash (used in)/from operating activities (11,270) 184,925 6. REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of revenue from contracts with customers The Group derives revenue from license agreements with customers at a point in time under the following major business activities: Year ended Dec 2024 $’000 Year ended Dec 2023 $’000 Revenue from contracts with customers Licenses of intellectual property - royalty income 56,223 26,780 Licenses of intellectual property - up-front payments – 145,711 Licenses of intellectual property - milestone payments 80,502 59,434 Licenses of intellectual property - Rare Disease priority review voucher 76,518 – Revenue from contracts with customers 213,243 231,925 All revenue from licences of intellectual property is from the United States. Neuren is eligible to receive quarterly royalty income, calculated as a percentage of net sales of DAYBUE in North America and is recognised in the period that Acadia makes the sales of DAYBUE. Sales of DAYBUE commenced in April 2023. The royalty rate for ≤US$250 million of annual net sales is 10%. The royalty rate then increases to 12% for annual net sales greater than US$250 million but less than or equal to US$500 million. Neuren is also eligible to receive milestone payments of up to US$350 million on achievement of a series of four thresholds of total annual net sales. For the year ended 31 December 2024, Neuren earned the first sales milestone payment of US$50 million, as net sales for the year exceeded US$250 million. Under the license agreement with Acadia, Neuren is eligible to receive variable consideration that is contingent on Acadia selling or using the Rare Disease priority review voucher. During the year ended 31 December 2024, Acadia sold the voucher for net proceeds of US$146.5 million and therefore Neuren has recognised the net variable consideration of US$48.8 million (A$76.5 million). NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED Neuren Pharmaceuticals Limited Annual Report 2024 34
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