OPERATING REVIEW CONTINUED THE IMPORTANCE OF ORPHAN DRUG DESIGNATION The US Food and Drug Administration (FDA) and European Medicines Agency (EMA) have both granted Orphan Drug designation for trofinetide in Rett syndrome and Fragile X syndrome and for NNZ-2591 in each of Phelan-McDermid, Angelman and Pitt Hopkins syndromes. The FDA has also granted Orphan Drug designation for Prader-Willi syndrome. Orphan Drug designation is a special status that the regulators may grant to a drug to treat a rare disease or condition. Amongst other incentives, Orphan Drug designation qualifies the sponsor of the drug for exclusivity periods during which the regulators will not approve a generic competitor product. These marketing exclusivity periods are extremely valuable for the commercialisation of Orphan Drugs. They provide additional protection, along with patents, against generic competitors and potentially can continue to provide protection after patent expiry. The exclusivity periods after marketing authorisation of products approved for pediatric use are 7.5 years in the United States and 12 years in the EMA region. Japan, South Korea and Taiwan also have Orphan Drug programs. As well as the exclusivity periods, Orphan Drugs have many other commercial advantages compared with existing markets that have apparently attractive large sales in which established products and companies have to be displaced. The serious and urgent unmet need results in a more supportive regulatory and pricing environment and strong engagement from the patient community and leading physicians. Historical data indicates a higher probability of achieving regulatory approval and the potential for immediate access to known patients means that a large sales organisation is less important. In short, the Orphan Drug business model targets a leadership position in markets with urgent need, at an attractive price and with a higher probability of getting to market. The neurodevelopmental disorders that Neuren is aiming to treat are “rare diseases”, however they are not “ultra-rare”, and in each disorder there are tens of thousands of potential patients around the world. COMMERCIAL EXCLUSIVITY In addition to the primary protection of the important exclusivity periods from Orphan Drug designation explained above, Neuren has additional commercial protection from issued patents and pending patent applications, which extend as far as 2041. Since trofinetide and NNZ-2591 are new chemical entities, following the first marketing authorisation for each drug, the term of one patent may potentially be extended by up to 5 years in many countries, including the United States, Europe and Japan. TROFINETIDE FOR RETT SYNDROME Growing, sustainable income to Neuren from DAYBUE™ (trofinetide) in the United States In March 2023, Neuren’s partner for trofinetide, Acadia Pharmaceuticals (NASDAQ: ACAD), received FDA approval of DAYBUE™ (trofinetide) for the treatment of Rett syndrome in adult and pediatric patients two years of age and older. On 17 April 2023, Acadia launched DAYBUE™ (trofinetide) in the United States as the first ever approved treatment for Rett syndrome. Access to DAYBUE has been well supported by Medicaid and private health insurance payors. 380 177 348 405 CY2023 (Apr- Dec) CY2024 CY2025 Acadia Guidance DAYBUE US NetSales (US$m) + 97% + 9-16% C 380 177 348 405 CY2023 (Apr- Dec) CY2024 CY2025 Acadia Guidance DAYBUE US NetSales (US$m) + 97% + 9-16% 62 27 56 67 CY2023 CY2024 CY2025E* US Royalty to Neuren(A$m) + 110% + 11-19% * Based on CY25 Acadia DAYBUE US Net Sales Guidance of US$380-405m, 10% of DAYBUE net sales up to US$250m and 12% of DAYBUE net sales between US$250m and US$500m, and AUDUSD of 0.65 380 177 348 405 CY2023 (Apr- Dec) CY2024 CY2025 Acadia Guidance DAYBUE US NetSales (US$m) + 97% + 9-16% 62 27 56 67 CY2023 CY2024 CY2025E* US Royalty to Neuren(A$m) + 110% + 11-19% Neuren Pharmaceuticals Limited Annual Report 2024 5
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