5. R ECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH FROM/(USED IN) OPERATING ACTIVITIES Year ended Dec 2025 $’000 Year ended Dec 2024 $’000 Profit after income tax expense for the year 30,436 142,043 Adjustments for: Depreciation of plant and equipment 23 22 Share based payments expense 3,674 1,231 Foreign exchange (gain)/loss (8,028) 7,235 Unrealised loss/(gain) on derivative financial instruments 3,297 (3,587) Unrealised foreign exchange gain in other comprehensive income – 3,201 Change in working capital: Decrease/(increase) in trade and other receivables 155,758 (152,150) Increase in contract assets (1,168) (4,956) Decrease in current and deferred taxes (48,906) (3,830) Increase in prepayments (9,171) – Decrease in trade and other payables (493) (479) Net cash from/(used in) operating activities 125,422 (11,270) 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 2025 $’000 Year ended Dec 2024 $’000 Revenue from contracts with customers Licenses of intellectual property - royalty income 64,634 56,223 Licenses of intellectual property - milestone payments – 80,502 Licenses of intellectual property - Rare Disease priority review voucher – 76,518 Revenue from contracts with customers 64,634 213,243 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 the Acadia makes the sales of DAYBUE. 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, and to 14% for annual net sales greater than US$500 million but less than US$750 million. The royalty rates for sales of Trofinetide outside North America range from mid-teen to low twenties percent. Neuren is also eligible to receive future milestone payments of up to US$300 million on achievement of a series of three 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 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 2025 42
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