Q2 2026 Neuren Pharmaceuticals Ltd Earnings Call

August 26, 2026

Speaker #1: Good morning, and welcome to today's investor webinar to discuss Neuron's first half 2026 financial results. And the company's first-ever dividend program. My name's Jerry Zell, Chief Business Officer at Neuron.

Gerry Zhao: Good morning, and welcome to today's investor webinar to discuss Neuren's H1 2026 financial results, and the company's first-ever dividend program. My name is Gerry Zhao, Chief Business Officer at Neuren. Joining me today are our Chairman, Patrick Davies, and Chief Executive Officer, Jon Pilcher. Jon will make the presentation followed by a Q&A session. A copy of today's presentation has been released to the ASX and is also available on our website. For Q&A, you may submit the questions at any time using the Q&A function on your screen. Before proceeding, please note that today's webinar will include forward-looking statements, which are subject to risks and uncertainties that may lead to different outcomes. I will now hand over to Jon to commence the presentation.

Speaker #1: Joining me today are our Chairman Patrick Davies, and Chief Executive Officer John Pelcher. John will make the presentation, followed by a Q&A session; a copy of today's presentation has been released to the ASX and is also available on our website.

Speaker #1: For Q&A, you may submit the questions at any time using the Q&A function on your screen. Both proceeding, please note that today's webinar will include forward-looking statements which are subject to risks and uncertainty that may lead to different outcomes.

Speaker #1: I'll now hand over to John to commence the presentation.

Speaker #2: Thanks very much, Jerry. Good morning, everyone. Thank you for sparing your time to listen to us this morning. We are going to try and keep this to 40 minutes, if we can.

Jon Pilcher: Thanks very much, Gerry. Good morning, everyone. Thank you for sparing your time to listen to us this morning. We are going to try and keep this to 40 minutes if we can. We have had some pre-submitted questions, many of which I will address during the slides that I go through. Then we will come to the other questions. Apologies in advance if we do not get to your question as we are going to stop after 40 minutes. I want to start with this slide, which we have used for a while, and this is my mantra to investors, that I strongly believe you can get the best of both worlds with Neuren. You have AUD 287 million of cash, the cash generation, strong generation from DAYBUE, and that picture has just got stronger again with the approval yesterday in Europe, which I will come to in a minute.

Speaker #2: We've had some pre-submitted questions; many of which I'll address during the slides that I go through, and then we'll come to the other questions.

Speaker #2: But apologies in advance if we don't get to your question as we are going to stop after 40 minutes. So I want to start with this slide, which we've used for a while, and this is my mantra to investors: that I strongly believe you can get the best of both worlds with Neuron.

Speaker #2: So you have 287 million dollars of cash, the cash generation strong generation from debut, and that picture has just got stronger again with the approval yesterday in Europe, which I'll come to in a minute.

Speaker #2: So you have all of that, but then you also get to participate in the potentially big value capital upside of NNZ2591. Being developed in multiple indications but with filament dermat syndrome, strongly leading the way, and the phase 3 result in that being the big catalyst from a value point of view.

Jon Pilcher: You have all of that, but then you also get to participate in the potentially big value capital upside of NNZ-2591 being developed in multiple indications, but with Phelan-McDermid syndrome strongly leading the way, and the phase III result in that being the big catalyst from a value point of view. Very rare to be able to participate in that, but have your downside protected by the value of DAYBUE, and you are not facing dilution from capital raises or any pressure on the share price from capital raises. I really think it is a unique position that we are in and a unique proposition for investors. I guess we have recognized that to a little bit more of an extent today and recognized the great success of DAYBUE by announcing our first-ever dividend program linked to DAYBUE.

Speaker #2: And very rare to be able to participate in that, but have your downside protected by the value of debut, and you're not facing dilution from capital raisers or any pressure on the share price from capital raisers.

Speaker #2: So I really think it is a unique position that we're in, and a unique proposition for investors. And I guess we've recognized that to a little bit more of an extent today, and recognize the great success of debut by announcing our first ever dividend program linked to debut.

Speaker #2: So let me go into the details of that. So this is an ongoing program. We anticipate it'll be semi-annual payment, so an interim and final.

Jon Pilcher: Let me go into the details of that. This is an ongoing program. We anticipate that it will be semi-annual payments, so an interim and final. We have identified what we are calling an available pool, which is the royalty income from DAYBUE, less our corporate and admin costs, less tax. That becomes our available pool. Then we have set a 70% to 100% range of payout of that pool. Today, we have started at the 90% level. We are paying out 90% of that pool in that AUD 0.15 per share interim dividend. It is fully franked. As most of you will be well aware, we have a large pool of franking credits. It is about AUD 76 million, I believe. This dividend is fully franked, and we intend to frank future dividends to the maximum extent that we can.

Speaker #2: And we've identified what we're calling an available pool, which is the royalty income from debut, less our corporate and admin costs, less tax. That becomes our available pool.

Speaker #2: And then we've set a 70 to 100 percent range of payout of that pool. And today we've started at the 90 percent level, so we're paying out 90 percent of that pool in that 15 cents per share interim dividend.

Speaker #2: And it's fully franked, as most of you will be well aware, we have a large pool of franking credits. It's about 76 million, I believe.

Speaker #2: So this dividend is fully franked, and we intend to frank future dividends to the maximum extent that we can. That dividend is going to be paid on the 7th of October, and there'll be some extra communication coming from our share registry to shareholders in coming days.

Jon Pilcher: That dividend is going to be paid on 7 October, and there will be some extra communication coming from our share registry to shareholders in coming days. I wanted to tell you today, those of you on the call who are shareholders, it is very important that you have your account details of where you want that dividend paid to registered with the share registry. It is very important that you get on and do that. There will be, as I said, more correspondence coming out around that in coming days. Let me touch on the full year. As in this table here and in the announcement this morning, we set out both the calculation of this interim dividend, but also what the full year may look like. Of course, we have guidance from Acadia for sales, which allows us to have our guidance for royalty income.

Speaker #2: But I wanted to tell you today, those of you on the call who are shareholders, very important that you have your account details of where you want that dividend paid to, registered with the share registry, very important that you get on and do that.

Speaker #2: There'll be, as I said, more correspondence coming out about that around that in coming days. Just let me touch on the full year. So in this table here, and in the announcement this morning, we set out both the calculation of this interim dividend, but also what the full year may look like.

Speaker #2: Of course, we have guidance from Acadia for sales, which allows us to have our guidance for royalty income. And therefore, it gives you a range of what the available pool might look like, and it's 48 million to 51.6 million for the full year.

Jon Pilcher: Therefore, it gives you a range of what the available pool might look like, and it is AUD 48 million to AUD 51.6 million for the full year. So that gives you some indication of what the available pool might be in the H2 for the final dividend. I think, it is a big moment for us, and I see this as an ongoing incentive, added incentive to hold the share. What I want to say is it does not mean that capital growth is not important and is still the most important thing. For me personally as a shareholder, it is absolutely the most important thing, and the progression of NNZ-2591 obviously is a critical part of that. I think this is a very good addition that optimizes the return to all of us as shareholders. Let me just have a few words about the H1 result beyond the dividend.

Speaker #2: So that gives you some indication of what the available pool might be in the second half for the final dividend. So I think big moment for us, and I see this as an ongoing incentive added incentive to hold the share.

Speaker #2: Now, what I want to say is it doesn't mean that capital growth is not important, and it's still the most important thing for me personally as a shareholder.

Speaker #2: It's absolutely the most important thing. And the progression of 2591 obviously is a critical part of that. But I think this is a very good addition that optimizes the return to all of us as shareholders.

Speaker #2: Let me just have a few words about the half-fund result beyond the dividend. So in US dollar terms, just over 23 million of royalty income earned in the first half.

Jon Pilcher: In USD terms, just over $23 million of royalty income earned in the H1, and $53 million to $56 million being the expected outcome based on Acadia's guidance. As you know, historically, very modest corporate and admin costs. That continues $3 million for the half year, more than offset by our interest income of $5.6 million. So that obviously remains a very strong position. A feature of this half was quite a big step up in R&D investment. So that grew to $27.4 million, which was completely expected given the progression of the Koala phase 3 study. The overall cost of the PMS program to get to New Drug Application remains within the range that we have set from the start, $80 million to $90 million USD. That step up in R&D will obviously continue as we go through the remainder of the trial.

Speaker #2: And 53 to 56 million being the expected outcome based on Acadia's guidance. As you know, historically, very modest corporate and admin costs that continues 3 million for the half year.

Speaker #2: More than offset by our interest income of 5.6 million, so that obviously remains a very strong position. Feature of this half was quite a big step up in R&D investment, so that grew to 27.4 million.

Speaker #2: Which was completely expected given the progression of the koala phase 3 study. The overall cost of the PMS program to get to new drug application remains within the range that we've set from the start, 80 to 90 million US dollars.

Speaker #2: And that step up in R&D will obviously continue as we go through the remainder of the trial. So at 30th of June, really strong cash position, still 287 million dollars.

Jon Pilcher: At 30 June, really strong cash position, still $287 million. That means all of our NNZ-2591 programs are fully funded. Again, if you think about the dividend pool versus the rest of the business, the R&D really then gets funded by the cash and the future milestone payments. The extent of that funding is going to depend a little bit on how we progress with the programs, not PMS, which is sort of set in stone, but how we progress with Pitt Hopkins and HIE and our interactions with FDA, which I will come onto later in the presentation. So, it was a really strong financial half for us again, and we are in a great position.

Speaker #2: And that means all of our 2591 programs are fully funded. So again, if you think about the dividend pool versus the rest of the business, the R&D really then gets funded by the cash and the future milestone payments.

Speaker #2: And the extent of that funding is going to depend a little bit on how we progress with the programs, not PMS, which is sort of set in stone, but how we progress with Pete Hopkins and HIE and our interactions with FDA, which I'll come on to later in the presentation.

Speaker #2: So really strong financial half for us again, and we're in a great position. Moving on from the financials, if we think sort of qualitatively about what has happened since 1st of January, you get this incredibly busy crammed slide, which I think is a reflection of the huge amount that's happened in those eight months.

Jon Pilcher: Moving on from the financials, if we think qualitatively about what has happened since 1 January, you get this incredibly busy crammed slide, which I think is a reflection of the huge amount that has happened in those 8 months. I mean, we have DAYBUE at the top of the slide here and NNZ-2591 at the bottom. Let me start with DAYBUE. I mean, an incredible period, really. Limited launch of STIX in Q1, then the broader launch in Q2 and the great outcome from that, which continues. Of course, we had the big disappointment in February of the CHMP giving a negative opinion on the European approval. Then we got the fantastic turnaround in June, where that opinion was reversed, and then yesterday we got the formal approval from the European Commission. What a fantastic outcome.

Speaker #2: And I think so we've got debut at the top of the slide here, and 2591 at the bottom. So let me start with debut.

Speaker #2: I mean, an incredible period, really. Limited launch of sticks in the first quarter, then broadly the broader launch in the second quarter, and the great outcome from that.

Speaker #2: Which continues. Of course, we had the big disappointment in February of the CHMP giving a negative opinion on the European approval. But then we got the fantastic turnaround in June, where that opinion was reversed, and then yesterday we got the formal approval from the European Commission.

Speaker #2: So what a fantastic outcome. I mean, for the rec communities, I've said before, it's a terrible outcome back in February, and a fantastic outcome now.

Jon Pilcher: I mean, for the Rett community, as I have said before, it was a terrible outcome back in February and a fantastic outcome now. I have to give huge credit to Acadia for the determination they showed to get that turned around and obviously with the big support of the Rett community. A fantastic outcome for us, and I will come back to that again in a minute. Another important thing that happened was the Delphi Expert Consensus Report, which formally recommended DAYBUE as part of the standard of care for Rett in the US. That was an important step forward. I think the great performance of STIX then led to Acadia upgrading their guidance for the year, which was obviously fantastic to see. A really strong period for DAYBUE.

Speaker #2: And I have to give huge credit to Acadia for the determination they showed. To get that turned around, and obviously with the big support of the rec community.

Speaker #2: So fantastic outcome for us, and I'll come back to that. And again, in a minute. Another important thing that happened was the Delphi expert consensus report, which formally recommended debut as part of the standard of care for RET in the US.

Speaker #2: That was an important step forward. So I think the great performance of sticks, then led to Acadia upgrading their guidance for the year, which was obviously fantastic to see.

Speaker #2: So really strong period for debut. And then if we switch to 2591, started with the publication of the phase 2 study, which is important from a sort of credibility in the scientific community.

Jon Pilcher: Then if we switch to NNZ-2591, it started with the publication of our phase II study, which is important from a credibility in the scientific community. Then really importantly, we had the first patient dosed in the Koala study, in the placebo-controlled part of the Koala study. That was in February. Then a few months later, we had the first patients going into the open-label extension part of that study. We got our feedback from the FDA on Pitt-Hopkins and HIE, which I will return to in a minute. Then importantly, the Priority Review Voucher program, which we tend to forget about, got reauthorized by the U.S. Congress, and the latest sale of a voucher was $215 million. Remember, we own the right to this ourselves 100% this time. That was a very important thing that happened during the period.

Speaker #2: Then really importantly, with the first patient dose in the koala study and the placebo control part of the koala study, that was in February.

Speaker #2: And then a few months later, we have the first patients going into the open label extension part of that study. We got our feedback on from the FDA on Pete Hopkins and HIE, which I'll return to in a minute.

Speaker #2: And then importantly, the priority review voucher program, which we tend to forget about, got reauthorized by the US Congress. And the latest sale of a voucher was 215 million US dollars.

Speaker #2: And remember, we own the right to this ourselves, 100% this time. So that was a very important thing that happened during the period. And then more recently, the study that was published showing that the prevalence of PMS is higher than previously been thought of before.

Jon Pilcher: Then more recently, the study that was published showing that the prevalence of PMS is higher than has previously been thought of before. Then we had a big presence at the PMS Family Conference, which I will again come back to in a minute. An amazing 8 months really, and has just left us in, I think, the strongest position we have ever been in. I am going to spend a few minutes just talking more about DAYBUE and then a few more talking about NNZ-2591, before we conclude. DAYBUE, which obviously, the strong momentum in sales and therefore the royalty has obviously driven the dividend announcement today. Acadia's Q2 earnings call was fantastic. Really strong growth in Q2 versus both Q2 in the previous year and Q1 this year.

Speaker #2: And then we had a big presence of the PMS family conference, which I'll again come back to in a minute. So an amazing eight months, really.

Speaker #2: And there's just left us in, I think, the strongest position we've ever been in. So I'm going to spend a few minutes just talking more about debut, and then a few more talking about 2591 before we conclude.

Speaker #2: So debut. Which obviously, the strong momentum in sales and therefore the royalty is obviously driven the dividend announcement today. So Acadia's Q2 earnings call was fantastic.

Speaker #2: Really strong growth in Q2 versus both Q2 and the previous year, and Q1 this year. And the upgraded guidance of both the lower and upper ends of that guidance were raised by 20 million so 480 to 510 million now.

Jon Pilcher: The upgraded guidance of both the lower and upper ends of that guidance were raised by AUD 20 million, so AUD 480 million to AUD 510 million now, the guidance for the year, with the consequential increase in our royalty guidance. DAYBUE STIX, I think we had high hopes for it, but I think that has been exceeded really. Katie said that by 30 June, 40% of DAYBUE patients were on STIX. That is an incredible outcome really when you think about how recently it had been launched. A lot of new patients and returning patients, that is the most important thing for us. The switch from the liquid to STIX does not really have any impact on us from a revenue point of view. It is good to see if families are doing better on STIX.

Speaker #2: The guidance for the year. And with the consequential increase in our royalty guidance. Sticks, I think we had high hopes for it, but I think that's been exceeded, really.

Speaker #2: And Acadia said that by 30th of June, 40% of debut patients were on sticks. So that's an incredible outcome, really, when you think about how recently they've been launched.

Speaker #2: And a lot of new patients and returning patients. And that's the most important thing for us. I mean, the switch from the liquid to sticks, doesn't really have any impact on us from a revenue point of view.

Speaker #2: I mean, it's good to see if families are doing better on sticks. But really, the impact on us from a revenue point of view is the new and returning patients and certainly very encouraging early signs on that.

Jon Pilcher: Really the impact on us from a revenue point of view is the new and returning patients, certainly very encouraging early signs on that. Obviously we are more excited by the long-term story now. Remember in the US that we have still got many patients who have not tried treatment yet. Acadia did not provide updated numbers in this quarter, but in the previous quarter, the penetration into centers of excellence was 60% and only 28% outside that setting, that is two-thirds of the patients. There is still the scope for growth in the US alone is still very significant. Now we have the intact story that was always there. You have got that growth in the US, but then you have got following behind it Europe, then you have got following behind that Japan.

Speaker #2: But obviously, even more excited by the long-term story now. So remember in the US that we've still got many, many patients who haven't tried treatment yet.

Speaker #2: I mean, Acadia didn't provide updated numbers in this quarter, but in the previous quarter, the penetration into centers of excellence was 60% and only 28% in outside that setting.

Speaker #2: And that's two-thirds of the patients. So there's still the scope for growth in the US alone is still very significant. But now we have the intact story that was always there.

Speaker #2: You've got that growth in the US, but then you've got following behind it. Europe and then you've got following behind that, Japan. So really strong long-term growth story, which financially for us, both in terms of milestone payments and royalties, is just really strong.

Jon Pilcher: Really strong long-term growth story, which financially for us, both in terms of milestone payments and royalties, is just really strong. Let me just talk about a couple of milestone payments here. On the left-hand side there for the US, it is actually North America, so technically it is US, Canada, Mexico. The next milestone payment we could earn is when sales in a calendar year exceed $500 million, we get a $50 million one-off milestone payment. I just want to make sure people understand the guidance that Acadia has given for this year, which I guess, the brackets $500 million is for global sales, it is not for North American sales. The top end of their guidance is $510 million, I would certainly expect there to be more than $10 million in ex North America sales this year.

Speaker #2: Let me just talk about a couple of milestone payments here. So on the left-hand side there for the US, and it's actually North America, so technically it's US, Canada, Mexico.

Speaker #2: So the next milestone payment we could earn is when sales in a calendar year exceed 500 million US dollars. We get a 50 million US dollar one-off milestone payment.

Speaker #2: Now, I just want to make sure people understand the guidance that Acadia has given for this year, which I guess the brackets 500 million is for global sales.

Speaker #2: It's not for North American sales. And so the top end of their guidance is 510, and I would certainly expect there to be more than 10 million in ex-North America sales.

Speaker #2: This year. So I don't want you thinking that that guidance range means that that milestone payment necessarily will come this year. Of course, it could if they significantly exceed that guidance.

Jon Pilcher: I do not want you thinking that that guidance range means that that milestone payment necessarily will come this year. Of course, it could if they significantly exceed that guidance. We are certainly very optimistic about that for the following year. Acadia has reiterated a forecast of $700 million of global sales in 2028. That just shows the continuing growth that is expected. The other milestone payment I want to highlight is that the first commercial sale in Europe triggers a $35 million milestone payment. Acadia has said that they intend to launch early in Q4 in Germany, so we would expect that to trigger that milestone payment. Also it obviously unlocks a series of potentially series of sales milestone payments and also royalties that, as you know, are higher than the US royalties.

Speaker #2: But we're certainly very optimistic about that for the following year. Acadia has reiterated the forecast of 700 million dollars of global sales in 2028.

Speaker #2: So that just shows the continuing growth that's expected. Then the other milestone payment I want to highlight is that the first commercial sale in Europe triggers a 35 million US dollar milestone payment.

Speaker #2: Now, Acadia has said that they intend to launch early in Q4 in Germany. And so we would expect that to trigger that milestone payment.

Speaker #2: And then also, it obviously unlocks a series of potentially series of sales milestone payments and also royalties that, as you know, are higher than the US royalties.

Speaker #2: And while I'm on this slide, I just want to mention one more thing I forgot to mention with the dividend. One nice thing about linking it to the royalties is that there is a pattern of second half being bigger than the first half.

Jon Pilcher: While I am on this slide, I just want to mention one more thing I forgot to mention with the dividend. One nice thing about linking it to the royalty is that there is a pattern of H2 being bigger than the H1, and it is for 2 reasons. One is that there is that pattern of sales from DAYBUE anyway. Then if you think about our royalty structure, the H1, the first $250 million is at 10%, then it jumps to 12% after that. So there is a sort of natural growth of H2 versus H1, which we think is good from that dividend pool point of view. The last thing I will mention on this slide is Japan, which is an exciting follow-on as well. Acadia is running a phase III trial at the moment, which is due to read out September to November timeframe.

Speaker #2: And it's for two reasons. One is that there's that pattern of sales from debut anyway. But then if you think about our royalty structure, the first half, the first 250 million dollars, is at 10% and then it jumps to 12% after that.

Speaker #2: So there's a sort of natural growth of half two versus half one, which we think is good from that dividend pool point of view.

Speaker #2: The last thing I'll mention on this slide is Japan, which is an exciting follow-on as well. So Acadia is running a phase three trial at the moment, which is due to read out September to November timeframe.

Speaker #2: And hopefully you know this, but I just want to reiterate, this is not a big phase three trial where you're looking for statistical significance.

Jon Pilcher: Hopefully you know this, but I just want to reiterate, this is not a big phase III trial where you are looking for statistical significance. It is a small trial. I think it is 24 patients. It is placebo-controlled, but all they are looking for is trends, not statistical significance. The regulatory application in Japan is mainly based on Lavender and all the US application, but this is a supplement to that is required by the Japanese authority. Very excited about that. Expect a regulatory submission in 2027 following the result of that trial. There is a $15 million milestone payment coming to us on the first commercial sale, and again, with the higher royalty rates. So I think, as I said, really the DAYBUE position couldn't be any better and has strengthened very significantly during this period, which is fantastic to see. Let me move to NNZ-2591.

Speaker #2: It's a small trial, I think it's 24 patients. It is placebo controlled, but all they're looking for is trends, not statistical significance. The application, the regulatory application in Japan is mainly based on lavender and all the US application.

Speaker #2: But this is a supplement to that that's required by the Japanese authority. So very excited about that. Expect a regulatory submission in 2027 following the result of that trial.

Speaker #2: And there's a 15 million milestone payment coming to us on the first commercial sale. And again, with the high royalty rates, so I think as I said, really the debut position couldn't be any better.

Speaker #2: And strengthened very significantly during this period, which is fantastic to see. Okay, let me move to 2591. And obviously, I'm going to spend most of the time here talking about PMS, but I will come onto the others at the end.

Jon Pilcher: Obviously, I am going to spend most of the time here talking about PMS, but I will come onto the others at the end. Just a reminder, this is a big deal. This is the first-ever phase III trial for Phelan-McDermid syndrome. We are trying to be the first-ever treatment approved as we were in Rett. We have got all the designations you would expect, orphan drug, rare pediatric disease, which gives you the ability to get that Priority Review Voucher. We were highly encouraged by our results in our phase II trial. We went through a painstaking process with the FDA to agree the design of the phase III and agree that if we get a positive result, we can file a New Drug Application. The phase III trial, the Koala study, is up and running and enrolling in both the US and Canada now.

Speaker #2: So just a reminder, this is a big deal. This is the first ever phase three trial for filament dermat syndrome. We're trying to be the first ever treatment approved as we were in RET.

Speaker #2: We've got all the designations you would expect orphan drug or pediatric disease, which gives you that ability to get that priority review voucher. We were highly encouraged by our results in our phase two trial.

Speaker #2: We went through a painstaking process with the FDA to agree the design of the phase three and agree that if we get a positive result, we can file a new drug application.

Speaker #2: And the phase three trial, the koala trial is up and running and enrolling in both the US and Canada now. So let me just very quickly recap on what the trial looks like.

Jon Pilcher: Let me just very quickly recap on what the trial looks like. A single phase III trial. We are looking for 160 kids. They will be randomized half and half to drug and placebo. They get treated for 13 weeks, and the result, drug versus placebo at the end of 13 weeks is the primary outcome of the study. But they can then continue treatment for another 12 months with everyone getting drug under the open-label extension. We have kept this as similar as we could to the phase II. So it is the same age range, the same length of treatment. The dose is the same. We have kept the study mainly in the US. We have got one site so far in Canada, but mainly it is the US, which reduces the heterogeneity. So we think this has got the best chance it could possibly have for success.

Speaker #2: So a single phase three trial, it's we're looking for 160 kids. They'll be randomized, half and half to drug and placebo. They get treated for 13 weeks.

Speaker #2: And the result, drug versus placebo at the end of 13 weeks is the primary outcome of the study. But they can then continue treatment for another 12 months with everyone getting drug under the open label extension.

Speaker #2: We've kept this similar as we could to the phase two. So it's the same age range, the same length of treatment, the dose is the same.

Speaker #2: We've kept the study mainly in the US. We've got one site so far in Canada, but mainly it's the US. Which reduces the heterogeneity.

Speaker #2: So we think this has got the best chance it could possibly have the success, as you know, 2591 closely related to debut from a biological point of view.

Jon Pilcher: As you know, NNZ-2591 closely related to DAYBUE from a biological point of view. So it all felt very good about the prospects here. The other nice thing about it, of course, it was fully funded from our existing cash, as I said earlier, so great position to be in. So how are we going? I am going to talk about three different things on this slide, but we will start with the right-hand side. We are gaining some great momentum here. At the start of the year, we had only two sites activated and enrolling, but we have now got 15 sites in the US and Canada activated. We are still expecting that to end up at somewhere between 20 to 24. So there are still more sites coming, but we have now got 15 sites, which is a real good critical mass of sites all enrolling.

Speaker #2: So we've always felt very good about the prospects here. And the other nice thing about it, of course, it was fully funded from our existing cash, as I said earlier.

Speaker #2: So great position to be in. So how are we going? So I'm going to talk about three different things on this slide, but we'll start with the right-hand side.

Speaker #2: So we're gaining some great momentum here. So at the start of the year, we had only two sites activated and enrolling. But we've now got 15 sites in the US and Canada activated.

Speaker #2: We're still expecting that to end up at somewhere between 2020 to 2024. So there are still more sites coming, but we've now got 15 sites, which is a real good critical mass of sites all enrolling.

Speaker #2: We said this before, we got more than 100 patients who whose families have approached us. And we've referred them to sites who are either open or still awaiting activation.

Jon Pilcher: We have said this before, we have got more than 100 patients whose families have approached us, and we have referred them to sites who are either open or still awaiting activation. Of the 15 sites, eight of them have now been activated for the open-label extension as well, which means that people completing the 13-week study can roll seamlessly into the open-label extension. Again, as sites start the main trial, they will get activated for the open-label extension too. We also had one nice thing that the first patient from our phase II study has enrolled in the open-label extension. We have offered that to those phase II patients. We could not do that, unfortunately, when we ran the phase II trial. So we are pleased to be able to offer that.

Speaker #2: Of the 15 sites, eight of them have now been activated for the open label extension as well, which means that people completing the 13-week study can enroll seamlessly into the open label extension and again, as sites start the main trial, they'll get activated for the open label extension too.

Speaker #2: We also had one nice thing that the first patient from our phase two study has enrolled in the open label extension. So we've offered that to those phase two patients.

Speaker #2: We couldn't do that, unfortunately, when we ran the phase two trial. So we're pleased to be able to offer that. Whether they all enroll is going to completely depend on their family circumstances and whether they meet the enrollment criteria for this trial.

Jon Pilcher: Whether they all enroll is going to completely depend on their family circumstances and whether they meet the enrollment criteria for this trial, but we certainly hope that they will, and the first patient is up and running. So lots of pre-submitted questions about how long is this going to take? When are we going to get results? Let me deal with that. I will say that at some point, we will give out formal guidance of when to expect top-line results. We are not there yet. We are not far enough through our enrollment to do that yet, which means I will use the informal benchmark that I have used from the start, and many of you will have heard before. That is the Lavender trial in Rett syndrome that Acadia ran. It is a good benchmark because the number of patients is similar.

Speaker #2: But we certainly hope that they will. And the first patient is up and running. So lots of pre-submitted questions about how long is this going to take?

Speaker #2: When are we going to get results? So let me deal with that. And I'll say that at some point, we will give out formal guidance of when to expect top-line results.

Speaker #2: We're not there yet. We're not far enough through our enrollment to do that yet. Which means I will use this or the informal benchmark that I've used from the start.

Speaker #2: And many of you will have heard before. And that's the lavender trial in RET syndrome that Acadia ran. And it's a good benchmark because the number of patients is similar.

Speaker #2: The trial design is very similar. Some other sites are the same. So there's a lot of similarities. So Acadia took two years from start to top-line results.

Jon Pilcher: The trial design is very similar. Some of the sites are the same, so there is a lot of similarities. Acadia took two years from start to top-line results for that trial. Before I talk about how we are going against that, I just want to make sure everyone knows this, and apologies to many of you that I am probably teaching you to suck eggs. Just in case anyone is not familiar with this, you might say, "Well, hold on, you have got 100 patients referred to sites. How can it take two years to get to the end of the study?" These studies are very onerous, not just for the patients and their families, but for the sites as well. They cannot have loads of patients all turning up at the same time on day one. It does not work like that.

Speaker #2: For that trial. And before I talk about how we're going against that, I just want to make sure everyone knows this. And apologies to many of you that I'm probably teaching you to suck eggs.

Speaker #2: But just in case anyone's not familiar with this, you might say, well, hold on, you've got 100 patients referred to sites. How can it take two years to get to the end of the study?

Speaker #2: These studies are very onerous, not just for the patients and their families, but for the sites as well. And so they can't have loads of patients all turning up at the same time on day one.

Speaker #2: It doesn't work like that. They have to take them stepwise, patient by patient. And of course, you start with not many sites and then gradually build out the number of sites as we have.

Jon Pilcher: They have to take them stepwise, patient by patient. Of course, you start with not many sites and then gradually build out the number of sites as we have. Therefore, it takes quite a long time to enroll all the patients. The results of the study all depend on when you enroll your last patient, who then goes through their 3 months of treatment. For Acadia, they actually took, it was more than 18 months to enroll the patients. They took about 20 months to enroll the patients in order to get that 2-year results timeline. How are we going compared with that sort of informal benchmark, I guess, our aspirational benchmark. I think with 15 sites all enrolling now, we are in a great position. I will give you an important statistic is that right now there are 15 patients in screening.

Speaker #2: So therefore, it takes quite a long time to enroll all the patients. And the results of the study, all depend on when you enroll your last patient who then goes through their three months of treatment.

Speaker #2: So for Acadia, they actually took it was more than 18 months to enroll the patients. It took about 20 months to enroll the patients.

Speaker #2: In order to get that two-year results timeline. So how are we going compared with that sort of informal benchmark? I guess our aspirational benchmark.

Speaker #2: So I think with 15 sites, all enrolling now in a great position. And I'll give you an important statistic is that right now there are 15 patients in screening.

Speaker #2: And so I just want you to think about the maths here. There's a four to six-week screening period in this trial. So if those 15 patients don't screen fail, then they all become enrolled patients a month later.

Jon Pilcher: I just want you to think about the maths here. There is a 4 to 6-week screening period in this trial. If those 15 patients don't screen fail, then they all become enrolled patients a month later. If we keep that trajectory, you are talking about sort of a one patient per site per month sort of trajectory. It does not mean it will be that for every site. Some sites might have more, some sites might have less, but that is the sort of average. If we can continue that trajectory, then we are in very good shape for that sort of informal aspirational benchmark. That is as much as I am going to tell you today. I think, as I said, at some point, we will turn that into a formal guidance on results.

Speaker #2: So if we keep that trajectory, you're talking about sort of a one patient per site per month sort of trajectory. And it doesn't mean it'll be that for every site.

Speaker #2: Some sites might have more, some sites might have less, but that's the sort of average. If we can continue that trajectory, then we're in very good shape for that.

Speaker #2: That sort of informal aspirational benchmark. So that's as much as I'm going to tell you today. I think, as I said, at some point, we will turn that into a formal guidance on results.

Speaker #2: And we'll also when we reach something like a 50% enrollment milestone, we'll certainly tell you that as well. But overall, feeling really good. I think momentum is building now.

Jon Pilcher: We will also, when we reach something like a 50% enrollment milestone, we will certainly tell you that as well. Overall, feeling really good. I think momentum is building now. As I said, we started in a very small way with 2 sites. Now we have got 15 sites, which is the power of that is infinitely bigger. We are in a good position. Two more things to mention on this slide. I referred to it earlier. This new study suggesting that the prevalence of PMS in 7,300 people or could be 39,000 in North America, again, just emphasizes the huge need here and the need not just for treatment, but for better diagnosis because it is just so heavily underdiagnosed. That is really a fantastic target to have to try and raise the diagnosis towards that sort of number.

Speaker #2: As I said, we started in a very small way with two sites. Now we've got 15 sites, which is the power of that is infinitely bigger.

Speaker #2: So we're in a good position. Two more things to mention on this slide. So I referred to it earlier. So this new study suggesting that prevalence of PS1 in 7,300 people or could be 39,000 in North America again, just emphasizes the huge need here and the need not just for treatment, but for better diagnosis because it's just so heavily underdiagnosed.

Speaker #2: But that's really that's a fantastic target to have to try and raise the diagnosis towards that sort of number. Then the last thing I want to talk about in this slide is the filament dermat syndrome foundation family conference.

Jon Pilcher: The last thing I want to talk about in this slide is the Phelan-McDermid Syndrome Foundation Family Conference. We put out an update last month from the conference. We were the presenting sponsor. We were there en masse. 12 of us attended that conference. I was there for the whole time in Colorado in the US, and I have to say, for the whole Neuren team, it was incredibly inspiring and energizing. There were more than 800 people involved in the conference, which was incredible and shows the huge progression the Phelan-McDermid syndrome community has made in recent years. You would not have had anything like that a few years ago. The energy in the conference was amazing.

Speaker #2: So we put out an update last month from the conference. We were the presenting sponsor. We were there en masse, 12 of us attended that conference.

Speaker #2: I was there for the whole time. In Colorado in the US. And I have to say, for the whole new team, it was incredibly inspiring and energizing.

Speaker #2: There were more than 800 people involved in the conference, which was incredible and shows the huge progression of filament dermat syndrome community has made in recent years.

Speaker #2: You wouldn't have had anything like that a few years ago. And the energy in the conference was amazing. But the most amazing thing was spending time talking to both parents and siblings of PMS kids.

Jon Pilcher: But the most amazing thing was spending time talking to both parents and siblings of PMS kids, and hearing their stories, not just about the kids and what is important and what they are looking for in a treatment, but diagnosis stories from diagnosis at six months old, which is great, to diagnosis at 42 years old, which is terrible. It was just incredible for me to have all of those conversations and hear all of that, and incredibly valuable. I have to say that personally, it has made me doubly determined that we make a success of this because we can have a huge impact here if we are successful here and get the first treatment approved. I think that is going to be incredibly rewarding for all of us and also for all of you as shareholders.

Speaker #2: And hearing their stories. Not just about the kids and what's important and what they're looking for in a treatment, but diagnosis stories from diagnosis at six months old, which is great to diagnosis at 42 years old, which is terrible.

Speaker #2: So it was just incredible for me to have all of those conversations and hear all of that and incredibly valuable. And I have to say that personally, it's made me doubly determined that we make a success of this because we can have a huge impact here if we're successful here and get the first treatment approved.

Speaker #2: And I think that's going to be incredibly rewarding for all of us and also for all of you as shareholders. So really. You know, doubly determined and it was a very important few days that we spent there.

Jon Pilcher: So really, doubly determined, and it was a very important few days that we spent there. Let me just move on and bring in the other indications. This, I guess, is the mirror image of what I showed at the start, which was what had happened in the last eight months. This is what is coming up. Again, a lot of milestones, important catalysts coming up. This time, I will start at the bottom of the slide with NNZ-2591 and then move to DAYBUE. Let me now talk about the two other indications, and I will start with Pitt-Hopkins syndrome. I am really, really pleased to have announced this morning within our update that we have now got a scheduled date in October for a Type B end-of-phase 2 face-to-face meeting with FDA. I deliberately go through each of those things because they are important.

Speaker #2: So let me just move on and bring in the other indications. So this, I guess, is the mirror image of what I showed at the start, which was the what had happened in the last eight months.

Speaker #2: This is what's coming up. Again, a lot of milestones important catalysts coming up. This time I'll start at the bottom of the slide with 2591 and then move to debut.

Speaker #2: So let me now talk about the two other indications and I'll start with Pete Hopkins syndrome. So I'm really, really pleased to have announced this morning within our update that we have now got a scheduled date in October for a type B endophase 2 face-to-face meeting with FDA and I deliberately go through each of those things because they're important.

Speaker #2: You remember I complained that we just got written responses on that previous meeting, which was really unhelpful. This time we have been granted a face-to-face meeting.

Jon Pilcher: You will remember I complained that we just got written responses in that previous meeting, which was really unhelpful. This time, we have been granted a face-to-face meeting, and that is good. It is actually not common these days to get that, so I am really pleased to have got that. Also, its designation as an end-of-phase 2 meeting, again, acknowledges that what we are talking about here is the phase III study. You will remember that FDA said that if we did the same thing as we are doing with PMS from an endpoint and design point of view, that will be acceptable. Our position was, well, it is just not executable, and you should not have to do that for a condition this rare and this severe. We spent a lot of time looking at alternative designs and alternative ways of analyzing the endpoints.

Speaker #2: And that is good. It's actually not common these days to get that. So I'm really pleased to have got that. And also it's designation as an endophase 2 meeting.

Speaker #2: Again, acknowledges that what we're talking about here is the phase 3 study. So you'll remember that FDA said that if we did the same thing as we're doing with PMS from an endpoint and design point of view, that'll be acceptable.

Speaker #2: And our position was, well, it's just not executable. And it's not, you shouldn't have to do that for a condition this rare and this severe.

Speaker #2: So we spent a lot of time looking at alternative designs and alternative ways of analyzing the endpoints. And we're now really looking forward to getting to Washington in October and discussing that with FDA.

Jon Pilcher: We are now really looking forward to getting to Washington in October and discussing that with FDA. I am very pleased about that. Then, another interesting thing, I think with Pitt-Hopkins, which just shows again that that community is on the move and things are moving, and that is the externally led Patient-Focused Drug Development meeting, which is going to be held in November, and that is where FDA and the community come together to talk about it. There was one for PMS and there was also one for Rett syndrome, and both of those were very useful. It really does give the community the opportunity to educate everyone about what Pitt-Hopkins is, what they are dealing with, what is important to do something about from a treatment point of view and a diagnosis point of view, and really get FDA's head around all of that.

Speaker #2: So I'm very pleased about that. And then another interesting thing I think with Pete Hopkins, which just shows again move. And things are moving.

Speaker #2: And that's the externally led patient-focused drug development meeting. Which is going to be held in November. And that's where FDA and the community come together to talk about it.

Speaker #2: That there was one for PMS and there was also one for Rett syndrome and both of those were very useful. Really does give the community the opportunity to educate everyone about what Pete Hopkins is, what they're dealing with, what's important, what's important to do something about from a treatment point of view and a diagnosis point of view and really get FDA's head around all of that.

Speaker #2: So that's going to be an important meeting that will support as much as we can. Then let me move to HIE. So if you remember that what happened in February was we proposed a study to be able to file an IND.

Jon Pilcher: That is going to be an important meeting that we will support as much as we can. Let me move to HIE. If you remember what happened in February was we proposed a study to be able to file an IND, and FDA was broadly okay with that, but said, "We want you to do an additional juvenile animal toxicity study before you do that." Which was frustrating, but we were okay to do that. We actually submitted the protocol to them for review in mid-May, and we still have not received feedback. We are expecting to receive feedback very soon, and we have been ready to start for a long time. We are ready to start as soon as we get that feedback, and we expect it to be imminent.

Speaker #2: And FDA was broadly okay with that, but said we want you to do an additional juvenile animal tox study before you do that. Which was frustrating, but we were okay to do that.

Speaker #2: We actually submitted the protocol to them for review in mid-May and we still haven't received feedback. We are expecting to receive feedback very soon and we've been ready to start for a long time.

Speaker #2: We're ready to start as soon as we get that feedback and we expect it to be imminent. It's a three-month study. So what it does mean is it pushes our ability to file an IND from Q4 this year into the first half of next year.

Jon Pilcher: It is a 3-month study, so what it does mean is it pushes our ability to file an IND from Q4 this year into the H1 of next year. But that is all it is. It is a delay. I mean, and I think one thing to just point out is the different divisions of FDA to the one we are dealing with all the other programs. Just importantly understand that. Obviously, I would have liked to have got some feedback much sooner. We expected it much sooner, but we still anticipate we are going to get it. The last thing I will say on the NNZ-2591, on the forward-looking roadmap, of course, the most important thing here is Koala progress. We will be giving updates on that. As I said, at some point, we will give you guidance on the top-line results, timing, and also some milestones along the way.

Speaker #2: But that's all it is. It's a delay. I mean, and I think one thing to just point out is the different division to FDA to the one we're dealing with, with all the other programs.

Speaker #2: Just importantly understand that. So obviously I would like to have got some feedback much sooner. We expected it much sooner, but we still anticipate we're going to get it.

Speaker #2: So then the last thing I'll say on the 2591, you know, on the forward looking roadmap, of course, the most important thing here is Koala progress.

Speaker #2: So we'll be giving updates on that. As I said, at some point we'll give you guidance on the top line results. Timing and also some milestones along the way.

Speaker #2: Then if we shift to the top of the slide. So again, a great cascade of stuff coming with debut. So the results from that Japan trial between September and November.

Jon Pilcher: If we shift to the top of the slide. Again, a great cascade of stuff coming with DAYBUE. The results from that Japan trial between September and November. Acadia will give their Q3 results, so we will get more insight into how DAYBUE STIX is going. They have said commercial launch in Germany early Q4. There will be our milestone payment that gets triggered by first commercial sale. There then obviously be their Q4 results and then a Japan NDA submission. Again, a real rich series of stuff coming on DAYBUE. I think that is a great period coming up for us, which if all of this again goes our way, then we will be in an even stronger position when we next look back on this progress. I think I will stop there.

Speaker #2: Katie will give their Q3 results. We'll get more insight into how Styx is going. They've said commercial launch in Germany early Q4. There'll be our milestone payment that gets triggered by first commercial sale.

Speaker #2: They're then obviously be there Q4 results and then a Japan NDA submission. So again, a real rich series of stuff coming on debut. So I think that's a great period coming up for us, which if all of this again goes our way, then we'll be in an even stronger position when we next look back on this progress.

Speaker #2: So I think I will stop there. Or I'll just say in conclusion is as you know, as you and I have been at neuro for 13 years, it's been a hell of a long journey with ups and downs, but I really think we've never been in a better position than the one we're in today.

Jon Pilcher: All I will just say in conclusion is, as you and I have been at Neuren for 13 years, it has been a hell of a long journey with ups and downs, but I really think we have never been in a better position than the one we are in today. I think that the dividend program is a reflection of that, but only part of it. We really are in a great position and determined to make the absolute most of it for all of us. Thank you very much. We will now turn to Q&A. First question was a little bit of a follow-on about Koala. Assuming that the phase III trial is successful, what is your strategy for the company from thereon? There is actually another question, which probably I will bracket with this. Has Neuren's stronger balance sheet made self-commercialization in the US a realistic alternative?

Speaker #2: And I think the dividend program is a reflection of that, but only part of it. We really are in a great position and determined to make the absolute most of it for all of us.

Speaker #2: So thank you very much. We'll now turn to Q&A. So first question was a little bit of a follow-on about Koala. So assuming that the phase 3 trial is successful, what is your strategy for the company from there on?

Speaker #2: And there's actually another question, which is probably I'll bracket with this. Has neuro and stronger balance sheet made self-commercialization in the US a realistic alternative?

Speaker #2: So I think the position remains as it has been in the past that there are multiple options I think open to us post phase 3.

Jon Pilcher: So I think, the position remains as it has been in the past, that there are multiple options, I think, open to us post phase III, and I think they fall broadly into three camps. M&A of some sort, a licensing deal or deals, or could we commercialize it ourselves in the US? I still think those three remain live options. I think the commercialization one, I think is less likely than the others as we stand today, but it is still a possible option if Shell would want to do it at that point in time. But I have said before, that would require a very big change to the company, probably a move to the US, different people, a big change.

Speaker #2: And I think if we're broadly into three camps, M&A of some sort, a licensing deal or deals, or could we commercialize it ourselves in the US?

Speaker #2: And I still think those three remain live options. So I think the commercialization one I think is less likely than the others as we stand today, but it's still a possible option if shelters wanted it at that point in time.

Speaker #2: But I've said before, that would require a very big change to the company. Probably a move to the US, different people, a big change.

Speaker #2: Now, one thing we do have to do, we do have to do some groundwork in that regard. In advance of the need, certainly of the new drug application, because if we were going to partner with someone or have an M&A, you don't want them starting from scratch and being held back from a timeline point of view.

Jon Pilcher: Now, one thing we do have to do, we do have to do some groundwork in that regard in advance of the New Drug Application, because if we were going to partner with someone or have an M&A, you do not want them starting from scratch and being held back from a timeline point of view. So we are already in the background doing some groundwork in that regard, but it is not big cost or big change. But I think it is important to have all those options as live options. If we are going to do any negotiating at the end, we want all of those things to be live options. Next question.

Speaker #2: So we are already in the background doing some groundwork in that regard, but it's not big cost or big change. But I think it's important to have all those options as live options if you're going to do any negotiating at the end.

Speaker #2: We want all of those things to be live options. Next question. Of the two co-primary endpoints agreed with FDA, this is for the phase 3 trial.

Jon Pilcher: Of the two co-primary endpoints agreed with FDA, this is for the phase III trial, which do you consider the greater execution risk, and what gives you confidence that the phase II treatment effect will translate into a placebo-controlled study? I did not talk about this in the slides, but yes, there are two co-primary endpoints that we have to hit from an efficacy point of view. One is a physician measure, one is a caregiver measure. So we have very conservatively powered this trial. The more people you have in the trial, the greater your statistical significance of your result. And we have powered it based on the weaker endpoint, and that of the two is the Vineland, the caregiver, one of the two endpoints. So it is 90% powered to get a result on that, which means the power is much higher on the other one.

Speaker #2: Which do you consider the greater execution risk? And what gives you confidence that the phase 2 treatment effect will translate into a placebo-controlled study?

Speaker #2: So I didn't talk about this in the slides, but yeah, so there's two co-primary endpoints that we have to hit from an efficacy point of view.

Speaker #2: One's a physician measure, one's a caregiver measure. So we have very conservatively powered this trial. So the more people you have in the trial, the greater your statistical significance of your result.

Speaker #2: And we have powered it based on the weaker endpoint. And that of the two is the Vineland, the caregiver one of the two endpoints.

Speaker #2: So it's 90% powered to get a result on that, which means the power is much higher on the other one. So I think the straight answer to the question is that that's theoretically the riskier, but we think we've powered it to such an extent that we think the probability of success is high.

Jon Pilcher: I think the straight answer to the question is that that is theoretically the riskier, but we think we have powered it to such an extent that we think the probability of success is high. And then if I think about phase II to phase III, as I mentioned, we have kept everything that we could the same. So the only difference is we are bringing in a placebo group, which is not a trivial difference, but we have done a lot of analysis on how a placebo group performed in a phase II trial that was run by one of our investigators in using IGF-I, and we have been able to make again, some very conservative assumptions from that to give us our number of patients in the trial.

Speaker #2: And then if I think about phase 2 to phase 3, as I mentioned, we've kept everything that we could the same. So the only difference is we're bringing in a placebo group, which is not a trivial difference, but we've done a lot of analysis on how placebo group performed in a phase 2 trial that was run by one of our investigators using IGF-1.

Speaker #2: And we've been able to make again some very conservative assumptions from that. To give us our number of patients in the trial. So there's no slam dunk ever in a clinical trial.

Jon Pilcher: There's no slam dunk ever in a clinical trial, but we feel as good as we can do about it. This is switching to HIE. When are the results of the HIE juvenile animal study expected, and will the results only be safety-related, or will there be any behavior change or brain scan data as well? This is purely a safety study. It's a standard safety study that you have to do in normal animals before you can get into humans. If we're able to start imminently, as I said, then we would get our results December and then early next year. But don't expect them to be announced. You don't announce the results of these sort of studies. All they are is data that you need to put into the IND. There's no efficacy involved here.

Speaker #2: And but we feel as good as we can do about this one. Okay, this is switching to HIE. When are the results of the HIE juvenile animal study expected?

Speaker #2: And will the results only be safety related or will there be any behavior change or brain scan data as well? So look, this is purely a safety study.

Speaker #2: It's a standard safety study that you have to do in normal animals. Before you can get into humans. So as I said, if we're able to start imminently, as I said, then we would get our results December and then early next year.

Speaker #2: But you don't expect them to be announced. You don't announce the results of these sort of studies. All they are is data that you need to put into the R&D.

Speaker #2: There's no efficacy involved here. Assuming the Koala study is successful and 2591 is approved, can you envisage clinicians might try to use it off label for Pitt-Hopkins and HIE before those trials are completed?

Jon Pilcher: Assuming the Koala study is successful and NNZ-2591 is approved, can you envisage clinicians might try to use it off-label for Pitt-Hopkins and HIE before those trials are completed? Formally companies, they certainly can't encourage off-label use. In fact, they should discourage it. We're certainly not going to be trying to make that happen, and I think I was feeling all these indications it's unlikely because the cost is high, and it's generally funded by insurers or by governments, and they will typically require evidence of a diagnosis. In our syndrome cases, it's a genetic test in order to agree to fund it. I do think it's very unlikely that you get cross-use for that reason. Next question. Could you please give specific details on European sales milestones and royalties? When can we see the breakdown of the AUD 170 million sales milestone payments? Thank you.

Speaker #2: So look, formerly companies they certainly kind of carriage off label use. In fact, they should discourage it. So we're certainly not going to be trying to make that happen.

Speaker #2: And I think I was feeling all these indications. It's unlikely because the cost is high. And it's generally funded by insurers or by governments.

Speaker #2: And they will typically require evidence of a diagnosis. And in our syndrome cases, it's a genetic test in order to agree to fund it.

Speaker #2: So I do think it's very unlikely that you get cross-use for that reason. Next question. Could you please give specific details on European sales milestones and royalties?

Speaker #2: When can we see the breakdown of the 170 million sales milestone payments? Thank you. Okay, so you remember my slide. I showed the sales milestones and then royalties.

Jon Pilcher: Okay, so you remember my slide I showed with the sales milestones and then royalties, but not the same detail as the US. Acadia hasn't disclosed any of that yet, so we can't. I think we will at some point. We will need to discuss that with them. That happened with the US. We didn't disclose that until the drug was launched and being sold. The pattern is similar to the US, as you saw on that slide, but we can't tell you that at this time. Next question. Does the success of DAYBUE surprise you? Do you have the same positivity with NNZ-2591 as you did with DAYBUE? The success of DAYBUE doesn't surprise me. The unmet need is enormous in these conditions. Obviously, I've been here 13 years. I was always a believer in DAYBUE and the results we got.

Speaker #2: But not the same detail as the US. So look, Acadia hasn't disclosed any of that yet. So we can't. I think we will at some point.

Speaker #2: We will need to discuss that with them. That happened with the US. We didn't disclose that until the drug was launched and being sold.

Speaker #2: The pattern is similar to the US as you saw on that slide. But yeah, we can't tell you that at this time. Next question.

Speaker #2: Does the success of debut surprise you? Do you have the same positivity within NZ2591 as you did with debut? So success of debut doesn't surprise me.

Speaker #2: I mean, the unmet need is enormous in these conditions. Obviously, I've been here 13 years. I was always a believer in debut. And the results we got.

Speaker #2: So no, it doesn't surprise me. I do think Acadia has done a great job. It continues to do a great job with that community.

Jon Pilcher: No, it doesn't surprise me. I do think Acadia's done a great job, continues to do a great job with that community, but certainly doesn't surprise me. The second part of the question, well, any of you who've been following me for a number of years will know that I have more positivity with NNZ-2591 than DAYBUE. I've always been a big believer in NNZ-2591 and was a big proponent for us propelling it forward from the start. Yeah, and I still have that same positivity. I'm very excited about the prospects for NNZ-2591 and what we might be able to do with it. Okay. Right. I think I've sort of answered this, but let's reiterate it. Koala trial progress, 15 sites, open eight, managing open-label extension patients.

Speaker #2: But it does certainly doesn't surprise me. And then the second part of the question, well, any of you who've been following me for a number of years will know that I have more positivity with 2591 than debut.

Speaker #2: I've always been a big believer in 2591 and was a big opponent for us propelling it forward. From the start, so yeah, and I still have that same positivity.

Speaker #2: Very excited about the prospects for 2591 and what we might be able to do with it. Okay. Right. I think I've sort of answered this, but let's make reiterate it.

Speaker #2: So Koala trial progress, 15 sites open, 8 managing open label extension patients. Any color on the number of completed patients. The far and will you provide the market recruitment milestone updates like 25% or 50% or enrollment complete?

Jon Pilcher: Any color on the number of completed patients thus far, and will you provide the market recruitment milestone updates like 25% or 50% or enrollment complete? Yes, I think I already said we will provide those sort of milestone updates. I am not going to talk about specific patient numbers other than you are right, we have got multiple sites with open-label extension patients in them. Okay, next question. Any particular reason the meeting with FDA for Pitt-Hopkins is before the caregiver meeting with FDA in November? Would it be more logical to do it after? That is easier to get alignment on the trial design. It is a fair question, and we have considered that. The trouble is we have already waited so long for that meeting, and really to get a face-to-face meeting, there were limited options.

Speaker #2: So yes, I think I already said we will provide those sort of milestone updates. I'm not going to talk about specific patient numbers other than you're right.

Speaker #2: We've got multiple sites with open label extension patients. In them. Okay, next question. Any particular reason the meeting with FDA for Pitt-Hopkins is before the caregiver meeting with FDA in November?

Speaker #2: Would it be more logical to do it after? That's easier to get alignment on the trial design. Yeah, it's a fair question. And we've considered that.

Speaker #2: The trouble is, we've already waited so long for that meeting. And really, to get a face-to-face meeting, there were limited options. And so if we said no to that date, to get a face-to-face meeting, we may well have been not two weeks later, but a very significant amount of time later.

Jon Pilcher: If we said no to that date to get a face-to-face meeting, we may well have been not 2 weeks later, but a very significant amount of time later. We do not think that is the right thing to do. We need to get going, and we do not think that meeting is not going to change our approach and what we think is the best thing to do. I think it is just going to increase the knowledge of all the proponents, which will be very useful. I do not think it would not make any difference to our approach to the meeting. Okay. A question, I think from a New Zealand holder. Will the dividend have any NZ imputation credits? Look, we have paid a huge amount of Australian tax.

Speaker #2: So we don't think that's the right thing to do. We need to get going. And we don't think that meeting's not going to change our approach and what we think is the best thing to do.

Speaker #2: I think it's just going to increase the knowledge of all the proponents, which will be very useful. But I don't think it wouldn't make any difference to our approach to the meeting.

Speaker #2: Okay, question, obviously, I think from a New Zealand holder. Will the dividend have any NZ imputation credits? So look, we've paid a huge amount of Australian tax.

Speaker #2: We haven't paid any New Zealand tax. And that's partly because very large amount of New Zealand tax losses from the early days of Neuron before my time.

Jon Pilcher: We have not paid any New Zealand tax, and that is partly because we had very large amount of New Zealand tax losses from the early days of Neuren Pharmaceuticals before my time. No, we do not have any imputation credits for New Zealand, I am afraid. One thing also, because it is fully franked, there will be no withholding tax for overseas holders. Right. Another question about Koala. How is R&D expense tracking versus expectations for Koala and other pipeline investment? How lumpy is H1 R&D expense? Then looking for some guidance on that. I think I said during the presentation, our $80 million to $90 million USD guidance for the total cost still intact. That has not changed. The other pipeline investment, to be honest, it is uncertain because until we have that agreement with FDA on Pitt-Hopkins and on HIE, we will not know the total quantum of that.

Speaker #2: So no, we don't have any imputation credits for New Zealand, I'm afraid. But one thing also, because it's fully frank, there'll be no withholding tax for overseas holders.

Speaker #2: Right, another question about Koala. How is R&D expense tracking versus expectations for Koala? And other pipeline investment. How lumpy is half-year R&D expense? And then looking for some guidance on that.

Speaker #2: So I think I said during the presentation, our 80 to 90 million US dollar guidance for the total cost still intact. So that hasn't changed.

Speaker #2: The other pipeline investment, to be honest, it's uncertain because until we have that agreement with FDA on Pitt-Hopkins and on HIE, we won't know the total quantum of that.

Speaker #2: I mean, I think obviously we're expecting and trying to have a smaller trial Pitt-Hopkins than the BMS trial. And we won't need to do some of the ancillary stuff.

Jon Pilcher: I think obviously we are expecting and trying to have a smaller trial at Pitt-Hopkins than the PMS trial, and we will not need to do some of the ancillary stuff. I would expect the overall cost of Pitt-Hopkins to be less than PMS. That is probably about as much as I can tell you, other than obviously the step up in this half, you would expect that to continue through this year and next year, given the PMS program progression. Okay. Question about the dividends. Okay, so why does not the full-year dividend earnings, so we are now talking about, I think, the available pool that I talked about, that calculation. Why does not it include the potential of $35 million USD milestone payment for the first sale in Europe? If the first sale is made, will the dividend be increased to reflect the same?

Speaker #2: So I would expect the overall cost of Pitt-Hopkins to be less than PMS, but that's probably about as much as I can tell you other than obviously the step-up in this half you'd expect to continue.

Speaker #2: Through this year and next year, given the PMS program progression. Okay, question about the dividend. Okay, so why doesn't the full-year dividend earnings? So now talking about, I think the available pool that I talked about, that calculation.

Speaker #2: Why doesn't it include the potential of 35 million US dollar milestone payment for the first sale in Europe? And if the first sale is made with the dividend be increased to reflect the same.

Speaker #2: So look, we've deliberately set the policy as linked to the royalty in the growth path that gives you. So the growing pool available for dividends.

Jon Pilcher: So look, we've deliberately set the policy as linked to the royalty and the growth path that gives you, so the growing pool available for dividends. I think as I mentioned in the presentation, on the face of it, our R&D has now got to be funded by the cash and the milestone payments. Whether all the milestone payments are needed for that or not will be a judgment that we'll make as we go along. We haven't got that milestone payment yet. Obviously, we expect to get it, and there's a lag between earning it and receiving it, so we wouldn't receive it anyway until Q1 next year. But with all those milestone payments, we'll make a judgment as our certainty around the R&D obviously crystallizes a little bit over the coming months. Okay. The Acadia guidance was given pre-EU approval.

Speaker #2: I think as I mentioned in the presentation, on the face of it, R&D has now got to be funded by the cash and the milestone payments.

Speaker #2: And whether all the milestone payments are needed for that or not will be a judgment that we'll make as we go along. So we don't have, we haven't got that milestone payment yet.

Speaker #2: We'll see if we expect to get it. And there's a lag between earning it and receiving it. So we wouldn't receive it anyway until first quarter next year.

Speaker #2: But with all those milestone payments, we'll just, we'll make a judgment as our certainty around the R&D obviously crystallizes a little bit over the coming months.

Speaker #2: Okay, the Acadia guidance was given pre-EU approval. I found their commentary a little unclear. As to whether Q4 EU launch with the Germany launch was included in their guidance.

Jon Pilcher: I found their commentary a little unclear as to whether Q4 EU launch or the Germany launch was included in their guidance. Look, I think obviously it was given pre-approval, but it was given post the decision, the positive recommendation, which I think everyone felt was 95% likely to result in approval. So I think they will have factored that in. Now, how conservative they've been or not, that's up to them. But it was given post the change in recommendation. Okay. Question on. Sorry, I'm just conscious of time. I said I'd stop after 40 minutes. We've gone past that, so we'll try and wrap it up very soon. Any progress on Canada insurance coverage for Rett? I did see a report that one fund had said they were going to fund it. I don't have any update beyond that.

Speaker #2: So look, I think obviously it was given pre-approval, but it was given post the decision, the positive recommendation, which I think everyone felt was 95% likely to result in approval.

Speaker #2: So I think they will affect that in. Now, whether how conservative they've been or not, that's up to them. So but it was given post the change in recommendation.

Speaker #2: Okay, question on, sorry, I'm just conscious of time. I said I'd stop after 40 minutes. We've gone past that. So we'll try and wrap it up very soon.

Speaker #2: Any progress on Canada insurance coverage for RET? So I did see a report that one fund had said they were going to fund it.

Speaker #2: I don't have any update beyond that. So yeah, nothing to add on that, I'm afraid. Right, let's take this as the last question. So noted as a type B meeting for Pitt-Hopkins in late October.

Jon Pilcher: Yeah, nothing to add on that, I'm afraid. Right. Let's take this as the last question. Noted there's a Type B meeting for Pitt-Hopkins in late October. What do you anticipate the outcomes of this meeting are? I.e., will you come away with the ability to start a Phase II-III trial or anticipate further FDA meetings before any trial starts? Look, we're going to that meeting proposing what a Phase III trial should be, and so the best outcome is going to be, yes, we can go on and do that. I mean, that's certainly what we're hoping for. I guess the fallback from that is there's some aspect of it that needs further refinement, but that's certainly not what we're hoping for. We're hoping to be able to proceed following the meeting. All right.

Speaker #2: What do you anticipate the outcomes of this meeting are? A, will you come away with the ability to start a phase two, three trial or anticipate further FDA meetings before any trial start?

Speaker #2: So look, we're going to that meeting proposing what a phase three trial should be and so the best outcome is going to be yes, we can go on and do that.

Speaker #2: I mean, that's certainly what we're hoping for. I guess the fallback from that is some aspect of it that needs further refinement, but that's certainly not what we're hoping for.

Speaker #2: We're hoping to be able to proceed following the meeting. All right, thank you so much all of you for sticking with us for 48 minutes, 8 minutes over my stated deadline.

Jon Pilcher: Thank you so much, all of you, for sticking with us for 48 minutes, eight minutes over my stated deadline, and look forward to talking to you again next time. Thank you.