CHAIR AND CEO MESSAGE PATRICK DAVIES & JON PILCHER 2024 was another highly successful year for the Neuren business, with record financial performance, record sales of DAYBUE™ and two more successful Phase 2 trial results for NNZ-2591. For the second year in succession Neuren received the Australian Growth Company of the Year Award for Health and Life Sciences. Across 2023 and 2024 our income from Acadia for DAYBUE was A$445 million at 100% pre-tax margin, which led to pro-forma cash of A$359 million at 31 December 2024. That cash has come from income and not from capital raising. This puts us in an enviable position to pursue the realisation of the value of NNZ-2591, which can potentially be many multiples of DAYBUE. Relative to our peers, we believe this provides a unique proposition for investors – a valuation backstop as well as the potential to add much more value using existing funds. Despite this progress and “buy” recommendations from all nine analysts that cover Neuren, the share price has fallen significantly from its peak, which is frustrating and disappointing. Neuren was the best performing ASX 200 stock in 2023, a year in which DAYBUE was approved and launched, together with a first positive Phase 2 trial result for NNZ-2591. In 2024 we were impacted negatively by momentum trading, initially triggered by a switch to negative sentiment about DAYBUE sales. In the early launch period with limited experience there was heavy focus in the investment community on quarterly sales rather than the long-term opportunity for Neuren. We continue to maintain that the launch has been very successful and better than comparators, with net sales reaching US$348 million in the first full year of sales. Acadia has committed substantial additional resources to expand DAYBUE in the USA and has forecast continued growth in 2025. More than 60% of patients currently on therapy have now been treated for more than 12 months. This provides a very stable base which means that sales have become much more predictable. There are still 70% of the expanding pool of diagnosed patients in the US who have not yet tried treatment. This, together with the coming expansion into Canada, Europe, Japan and potentially other countries, provides substantial upside and a long-term growth opportunity for Neuren. Acadia has done an impressive job so far and with new commercial leadership and initiatives in place is now in an even better position to maximise that global opportunity. Most importantly, the stories from families of benefits that children and adults with Rett syndrome are experiencing on DAYBUE are heartening and extremely motivating for the Neuren team. Patrick Davies Chair Jon Pilcher CEO For NNZ-2591, we were excited that during 2024 the positive Phase 2 trial results for Pitt Hopkins syndrome and Angelman syndrome were consistent with the Phelan-McDermid syndrome results, validating our thesis that NNZ-2591 can potentially have a broad impact on neurodevelopmental conditions. We were very pleased with the outcome of our End of Phase 2 Meeting with the FDA for Phelan-McDermid syndrome, enabling us to move straight to Phase 3 with a similar program to the successful DAYBUE program in Rett syndrome. Efficacy endpoints are always the most complex issue when you are leading the way as a first treatment and there is no precedent to follow. We went through a similar journey with FDA to align on efficacy endpoints for Rett syndrome. Overall, we believe that the success of DAYBUE de-risks the NNZ-2591 programs, given the similarities in clinical profile, scientific rationale, trial design and endpoints. Building on the Rett syndrome experience, we are eager to embark on the first ever Phase 3 trial in Phelan-McDermid syndrome, aiming to provide a first treatment option to that community. We are excited to also now be targeting hypoxic-ischemic encephalopathy (HIE), a devastating type of brain injury in newborns. We believe that NNZ-2591 can potentially provide a highly differentiated form of treatment continuing beyond acute treatment in the neonatal intensive care unit to target both the acute effects and the long term neurodevelopmental impairments resulting from HIE. During the past year we have been transitioning Neuren’s capabilities from Phase 2 development to Phase 3 development. That has required some changes in the skills and location of roles as well as a major focus on uplifting the sophistication of Neuren’s quality systems. We thank the Neuren team for their diligence through this transition and for all their many achievements during the year. We are also grateful to all our supportive shareholders and can assure you that we will continue to evaluate all options to maximise shareholder value. Last but not least, we thank the patient communities across the indications we are pursuing for their support, determination and courage, which is so critical to achieving the outcomes we are all striving for. Neuren Pharmaceuticals Limited Annual Report 2024 2
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