OPERAT I NG REV I EW CON T I NU E D FINANCE Summary Financials 2022 $’m 2021 $’m Revenue from contracts with customers 14.5 – R&D Tax Incentive 0.9 3.2 Interest income 0.4 – Other income (Government cash-flow boost) – – Foreign exchange gain 1.2 0.4 Total income 17.0 3.6 Research & Development (12.7) (9.5) Corporate & Administration (3.4) (1.9) Loss on financial derivatives measured at fair value (0.7) – Foreign exchange loss – – (Loss)/Profit after tax 0.2 (7.8) Cash flow from operations 3.6 (10.0) Cash flow from financing – 22.2 Effect of exchange rates on cash balances (0.2) 0.4 Cash at 31 December 40.2 36.8 The consolidated financial statements are presented on pages 26 to 44. All amounts in the consolidated Financial Statements are shown in Australian dollars unless otherwise stated. The consolidated profit after tax attributable to equity holders of the Company for the year ended 31 December 2022 was $0.2 million compared with a loss of $7.8 million in 2021. Revenue of $14.5 million was received under the licence agreement with Acadia (2021: nil) and foreign exchange gains were $1.2 million (2021: $0.4 million). These were offset by an increase of $3.2 million in research and development costs, due to higher expenditures in 2022 for the NNZ-2591 Phase 2 clinical trials and the foundational work to prepare for Phase 3 development of NNZ-2591 across multiple indications. There was also an increase in corporate and administrative costs of $1.5 million, mainly due to share-based payments and higher employee benefits expense, reflecting some expansion for the NNZ-2591 program. In addition, a loss of $0.7 million on the fair value of outstanding forward contracts to sell Australian dollars and buy US dollars was recognised at 31 December 2022. Prudent control of expenditure continues to be an important principle in Neuren’s operations and financing. The basic earnings per share for 2022 was $0.001 (2021: loss per share of $0.066), based on a weighted average number of shares outstanding of 125,965,676 (2021: 117,770,052). Cash reserves at 31 December 2022 were $40.2 million (2021: $36.8 million). Net cash received from operating activities was $3.6 million, compared with net cash used in operating activities of $10.0 million in 2021. The increase of $13.6 million was due to the receipt of the first milestone payment from Acadia of $15.9 million (2021: nil), offset by higher payments for employees and directors of $2.8 million (2021: $1.8 million) and a lower receipt under the R&D Tax Incentive program of $1.4 million (2021: $2.5 million). Net cash from financing activities for 31 December 2022 was $22.2 million lower than 2021, when $22.2 million was received for the issue of new ordinary shares in a share placement and share purchase plan. No dividends were paid in the year, or in the prior year and the Directors recommend none for the year. Neuren Pharmaceuticals Limited Annual Repor t 2022 16
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