CHA I R AND CEO MESSAGE PAT R I C K DA V I E S & J ON P I LCH E R Dear Shareholders, The recent approval by the US Food and Drug Administration (FDA) of DAYBUE™ as the first ever treatment for Rett syndrome was the most important milestone in Neuren’s history. As we foreshadowed in our message to you last year, the approval has transformed our financial position and outlook, placing us in a very strong position to make the most of the opportunities ahead as we strive to make a difference to patients and families impacted by neurodevelopmental disabilities. Many people showed great determination over the journey to reach this historic milestone. The greatest was shown by the Rett syndrome community and we are delighted for them. Ten years ago, the Neuren team embarked on the first ever multi-centre trial in Rett syndrome and painstakingly created the path forward with all stakeholders. Our partner Acadia has done an outstanding job executing the final stage of development and the FDA application and review process. The broad approved label for DAYBUE means that all people with Rett syndrome aged 2 years and older can be eligible for treatment. We are also very pleased that Acadia is able to launch DAYBUE so soon after approval, made possible by the very extensive preparations they made during the FDA review process. We are confident that they are very well placed for successful commercialisation. The next payment from Acadia is US$40 million, payable following the first commercial sale, which is anticipated at the end of April 2023. This will be followed by quarterly royalties, plus potential milestone payments of up to US$350 million on achievement of a series of four thresholds of total annual net sales, plus Neuren’s one third share of the market value of the Rare Pediatric Disease Priority Review Voucher awarded to Acadia by the FDA. In the meantime, we are advancing discussions with potential partners for the registration and commercialisation of trofinetide outside North America. Our revenue from trofinetide partners will flow through to pre-tax profit, as no royalties or similar costs are payable by Neuren. The first in a series of results from the Phase 2 trials of our second drug NNZ-2591 in four neurodevelopmental disorders are anticipated before the end of 2023. The number of potential patients targeted is more than five times the number for Rett syndrome and Neuren retains global rights, which means NNZ-2591 has the potential to generate larger value for shareholders than trofinetide. We are now carefully evaluating all options to maximize this value, preparing actively for Phase 3 studies while remaining receptive to partnering alternatives. Neuren’s market capitalisation at 31 March 2023 was 3.6 times higher than at the end of 2021, against the backdrop of a bear market for healthcare stocks. This resulted in promotion into the S&P/ASX 300 index in September 2022, with the S&P/ASX 200 becoming a potential prospect in the near term. The institutional audience for our investor relations activities is now much broader and Neuren is now covered actively by 6 broker analysts. The transformation of Neuren is just beginning, and the Board is committed to maximizing value for our shareholders by maintaining a robust balance sheet that can facilitate the pursuit of all value-adding opportunities to their fullest potential. Finally, we would like to thank the Neuren team and Board, the patient communities and our many development partners for their dedication and achievements over the last year. We anticipate that the coming year can be even more productive. Neuren’s Values We are passionate about making a difference to the lives of patients and their families We aim to earn the respect of everyone we deal with We are determined and creative to break through barriers We recognise the importance of all stakeholders and endeavour to use financial resources efficiently We harness the power of collaboration and different perspectives Patrick Davies Chair Jon Pilcher CEO Neuren Pharmaceuticals Limited Annual Repor t 2022 2
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