Neuren Pharmaceuticals Limited (NEU) Earnings Call Transcript & Summary

Good afternoon. Welcome to Neuren's Investor Webinar to discuss 2024 Calendar Year Full Year Results. My name is Gerry Zhao, Chief Business Officer at Neuren. Joining me on the call today is John Pilcher, CEO of Neuren. John will make the presentation and we will be available for Q&A. You can use the Q&A button to submit your questions. Before we start, I would like to remind everyone that we will be making forward-looking statements during today's call, which are subject to risks and uncertainties that may lead to different outcomes. I'll now turn the call over to Jon to start the presentation.

Thank you, Gerry. Good afternoon, everyone. Thank you very much for sparing your time over Friday lunchtime for us. Really appreciate that. Before I start, I just want to acknowledge and thank our CFO, our Chief Financial Officer, Lauren Frazer and just explain that for us, the full year results, we're in a bit of a unique situation where we have to wait until Acadia has reported before we can finalize our financial statements and the audit. And that means that we have basically a military operation to prepare for that and then have a massive sprint at the end to get our results out. And it requires a huge amount of advanced preparation and then a lot of skill during those last 2 days. You'll be aware that Acadia reported yesterday, and we commented on that, and then we have our results today. So thanks to Lauren for, again, skillfully navigating us through that whole process. So let's get to the results. And I just want to reiterate something that I said in my quote on our announcement this morning that I really think people shouldn't underestimate the advantage that our financial foundation gives us. We think we've got a massive opportunity here with NNZ-2591 that could create a huge amount of value. And often as an investor, when you're investing in that type of opportunity, you're exposed to a pretty binary risk. And sometimes the downside is 100% and along the way, you're often subject to capital raisings to fund it and maybe multiple capital raisings to fund it. And so I really think I've been saying for a long time that Neuren is in a privileged position of not being like that, and you're not facing that. So this financial foundation with both the cash we have at the moment and a lot of cash still to come from DAYBUE means that the downside is protected, and we don't need that series of capital raisings to fund what we're trying to do with the bigger opportunity. So I really think very few of any companies can give you that sort of profile as an investor, I believe. So now let's talk about the numbers and the results. And whatever way you look at it, it's a record year for us. So comprehensive income for shareholders of $166 million, and I'm going to explain in a second why we're looking at that particular measure. But I mentioned the comprehensive income margin there of 73%. So what that's saying is that the income after tax to shareholders divided by the total income, total revenue has a margin of 73%. So that's after tax. Again, that's unheard of. And again, it just portrays what I've been saying all along is that the financial power of the Acadia and DAYBUE situation is that we have no cost attached to that revenue. So it goes straight through to pre-tax profit. And that's what gives us that margin, and it really is very powerful for us. So now just let me quickly explain why we're homing in on comprehensive income, which I think is the right way to look at this. So many of you will know that I'm actually a chartered accountant by training. I don't tell everyone that. And that means I should have a bit of empathy with accounting standards, but there are times when you scratch your head and think that the outcome from the gearing to accounting standards really doesn't make any sense. And this is one of those. So because all of our income is coming in US dollars, we've been required to change our functional currency of the Australian company to US dollars. But we're retaining Australian dollars as our reporting currency, which I think is the right thing to do for our shareholders. So what it means is that in a year where the Australian dollar weakened significantly against the US, the value of our Australian dollar cash deposits which had to be translated into the US dollars, caused a $7 million loss in the profit in the income statement. So our profit after tax suffered that $7 million loss. And yet then when you translate everything back to Australian dollars, we actually hold way more US dollar cash deposits than Australian dollars, and we get a massive gain on those when you translate them back to Australian dollars. So it means we've got this crazy situation. We've got a $7 million loss in the income statement and then a $24 million gain outside the income statement. And we didn't, as you're not required to restate comparatives. And so the 2 years are not comparable if you just look at profit after tax. So the way we're saying you've got to look at this result, if you want to compare it to last year is to take the whole lot, include the FX gain, and that's why we're looking at that comprehensive income of $166 million. So it's up from AUD 157 million last year. And so we've got 2 years in a row here of total income for shareholders of more than AUD 150 million. And again, I think you'll find very few companies who can deliver that. So if you look on the cost side, I think we're very pleased with how that stands as well. As you know, we've always run a very lean operation. We're very cost conscious. And our corporate and admin costs for the year were $5 million. That's actually rounded up to $4.7 million, and our interest income was more than twice that. So again, that's a pretty unique situation to be in. All of this allowed us to invest AUD 33 million in the NNZ-2591 opportunity from an R&D point of view. And that's completing all the Phase II trials across the different indications, but also getting ahead of the game of preparing for Phase III, including manufacturing drug for Phase III. Something I drew attention to in the announcement and I want to again here is so the revenue we've now received from DAYBUE over just 2 years in '23 and '24 is AUD 445 million, which is a pretty staggering number. And as I said, 100% margin straight to pre-tax profit. But in a way, it's still early days in the journey of DAYBUE as we'll come to in a minute, with a lot more to come in the future. But again, that's a pretty impressive number. So all of that means that our cash and again, I'm going to explain why we're using a pro forma number, not the year-end number, AUD 359 million of cash is the pro forma cash number. And the way you get to that is that our cash at 31 December was AUD 222 million, but there are some big items that are not yet blown into cash. And one of them we've announced today. So we've just received in cash from Acadia, the sales milestone payment, AUD 80 million. We already received and announced the priority review voucher receipt since 31 December. We've also today received the fourth quarter royalty. So all of those, if you adjust cash to include all of those, but then you've also got to allow for tax. So we pay Australian tax quarterly. In fact, this year, we're going to move to monthly payments, but for last year, it's quarterly. So in the first quarter, we paid the fourth quarter tax from last year, and we've also had US withholding tax on the amounts coming from Acadia, the sales milestone royalty. So if you allow for that, you reduce it by $38.5 million, and that gives you our pro forma cash position of $359 million. So again, an unbelievably strong position to be in with a lot more to come in the future. So let's move to DAYBUE. And before I talk about this, just again point out, I'm sure most of you know, Acadia reported their results yesterday and DAYBUE was a very big part of what they reported. I always encourage our shareholders if you have time, you should look at those Acadia earnings calls, listen to them ideally or read a transcript because you're getting it straight from the horse's mouth there rather than secondhand through me, and there's a lot of interesting stuff on there. So when I talk about DAYBUE, draw out some of that. There was some extra stuff in slides and in prepared comments beyond the simple announcement that they made. So we'll come to that in a second. But the headlines, USD 348 million of net sales in 2024. Again, a fantastic outcome, big increase over 2023, but remembering that 2023 had only 3 quarters in it because the drug was launched beginning of the second quarter. And then they released guidance for the first time for next year of USD 380 million to USD 405 million. So on the right-hand side, the royalty outcome for us was AUD 56 million for 2024, and that will rise to between AUD 62 million and AUD 67 million based on Acadia's guidance. So again, great outcome. I'm going to return to the Acadia guidance number in a minute and again, say a few things from the call yesterday. But first of all, let's just look quarter-by-quarter, and it's funny and I say to people, I don't want you fixating on what each quarter's revenue is because the end impact to us is very slight really. But I recognize that people certainly are still looking at that and have looked at that. And I think it is interesting to have a look at it so far. I think in the future, I'm hoping it will be less interesting. So as we've done before, we've got DAYBUE in the purple bars here, and we've got a comparable there in the gray bars, which is another rare disease drug. It's SKYCLARYS, which is a Biogen drug. It was launched at a similar time, similar size rare disease population to Rett, similar pricing dynamics. So we think it's a pretty good comparator. And I said before, and I'll say it again this quarter, it's beaten SKYCLARYS every quarter, and you can see there's a big margin in quarter 4 that Acadia just reported. So again, any notion that this hasn't been a successful launch is frankly ridiculous. I think it's been really successful, and we're very happy with the way it's panned out. Now I'm going to talk about a lot of the dynamics leading into the future and what Acadia is doing, and then I'm going to come back to the guidance for next year. So I think the future, there's a lot of optimism, and you'll hear it. If you listen to the Acadia call yesterday, you'll hear it from them and you hear it from us as well. A lot of optimism for the future. This is still early days here. And so there's a few things working nicely in our favor here. So one is the diagnosed population. It was 4,500 at launch. Now I think 5,500 to 5,800. That's a pretty big increase in a relatively short time since launch. We've always felt 6,000 to 9,000 is the right number for the theoretical number. So we certainly hope that 5,500 to 5,800 is going to keep increasing. Now currently, despite the fact I'm saying it's a great outcome, and it is, only 30% of those diagnosed patients have tried DAYBUE so far. So there's still 70% to access. So there's huge opportunity in the U.S. to grow this. But it becomes harder. So in the early days, there's a concentration of patients in the centers of excellence in the U.S. and then a much broader spread of patients outside. In fact, 65% of the patients are treated outside those centers of excellence, which are more difficult to access. So what Acadia said yesterday, really, none of it was new news. It was all announced at the JPMorgan presentation that Gerry and I attended in San Francisco. But there's a few important initiatives that Acadia have taken, and they're championed by our new Head of Commercial, Tom Garner that they appointed just before that meeting. And I think he's a great appointment. His track record is exceptional in doing this sort of stuff as is the new CEO as well. So important thing, increasing the size of the field force by 30%. That's a big increase and improving the sophistication of how they're allocated. And that again is about reaching this 65% of patients that sit outside the centers of excellence. Some sophisticated direct-to-consumer campaigns, and that's all about sharing experiences on DAYBUE. That might be physician to physician, physician to caregiver, care giver to caregiver lots of different ways of getting those positive messages out. And then this other aspect is we've talked before about clinical trial data is quite sterile. It's scores on endpoints, but what really matters is what actually does it mean in the real world? And that's really what we're trying to do is bring the positive experience that felt by so many to life and they're collecting real-world evidence all the time that allows them to do that. And then -- so I guess there's 2 things here. There's the pool of patients increasing and then there's obviously trying to increase that 30% of patients who've tried the drug. And then the final thing is the stability, so the persistence on drug for the long term. And currently, that's running at 50% or higher after 12 months of treatment. And we're now at the stage where 62% of the patients who are on drug right now have been on treatment for more than 12 months. So there's a large bolus of patients now on treatment for long term. And Tom in the Acadia call yesterday made the point that people fixate a bit on this persistence chronic treatments, which is everyday treatments continuing in the long term, always have persistence rate. So no one stays on the drug, sorry, not everyone stays on the drug for good. So this is nothing unusual about this drug. So I think we've now reached a point of stability. And again, it's very important for Acadia to maintain that, and that's a big focus for them. So I just want to return to their guidance again. So remember, $380 million to $405 million. A couple of things to understand. One is that a lot of these initiatives that were announced in January, you're not going to see the impact of them in January, but you can't overnight increase the sales force by 30%, for example. So it's really the second half where we'd expect to start seeing the impact of some of these. The other thing is that there is a quarterly dynamic here in Acadia. We're very specific yesterday, and I don't want anyone being surprised by this when it comes. They said that the first quarter 2025, sales will be lower than the fourth quarter 2024 as they were last year, as you can see in the chart here. And then from then on, you'd expect sequential growth in the remaining 3 quarters. And as I said, with a lot of the initiatives particularly coming in the second half of the year. So that's the sort of profile you're going to see next year. There are 3 reasons for that Q4 to Q1 thing. Two of them were there last year and one is a new one. So 2 of them are some pull-through of sales that ordinarily would fall in January being pulled into December because of the holiday season, people getting refills early. And I think yesterday, they quantified that as having about $3 million of sales being pulled into December. So that has double that impact quarter-by-quarter. And then there's a bit of seasonality in that January has less activity from a sort of new patient meetings with physicians point of view. So those 2 were both there last year, as was explained at the time. The third one is there are some changes to Medicare happening at the moment. Now the majority of our patients are actually in Medicaid or private health insurance, but there's about 10% of the patients covered by Medicare. And there's a change to the arrangement with Medicare coming from 1 January, which slightly increases the gross to net discount. So the discounts and rebates that are going back to Medicare. So that causes a little bit of an increase in the gross to net in the first quarter versus the fourth quarter. So that's, again, another reason why the first quarter is reduced a little bit. So again, I want everyone to remember that when the next quarter comes. It's all been very clearly explained by Acadia yesterday. And as I said, you can listen to it if you want to for more color. But we feel really optimistic about the future. And it's not just about the U.S. We said before, this is a long-term growth opportunity for us. So 70% of the patients yet to be accessed in the U.S. Then Canada, as you know, approved. I said first sales are expecting in Q3 this year. They're in pricing negotiations at the moment. And then there's Europe, we announced we filed the marketing application in the first quarter, sorry, in January this year, expecting approval in the first quarter next year. But in the meantime, intending to initiate managed access programs subject to regulatory clearance in the second quarter of this year. But then in the meantime, what they're doing is building not just the launch teams, but the leadership of the organization in Europe, which they'll need once full approval comes and they have a full launch. So again, Acadia is making a big investment here. This is their first investment in Europe. And CEO and Head of Commercial are extremely experienced in Europe as they are in the U.S., and we're very pleased with what they're doing to make the most of Europe. And then there's Japan falling on behind that. So they need to run a small clinical trial in the Japanese population, intending to start that in Q3, which will then support the marketing application in Japan. So you've got big growth opportunities in the U.S., Canada, Europe, Japan, a huge opportunity for us. And I know you've seen this many times, but I don't want anyone to forget this. The economics we get from this I've already talked about the more than $400 million that we've had on just the U.S. so far, but there's still a lot to come from the U.S. in terms of royalties and potential milestone payments. And then outside North America, you've got, again, first commercial sale milestone payments, you've got sales milestone payments and you've got royalties and the royalty rates are better in the outside North America, so mid-teens to low 20% as opposed to 10% to 15% in the U.S. So I'm hoping they're going to make the very most of Europe. But even in that setting, if Europe ends up being lower sales in the U.S., we could get the same economics because we're earning a bigger share of it. So I think with that second layer that I showed on that first slide is not just about the U.S. and about now, it's about this long-term growth globally. And actually, I will mention one more thing that I forgot from the Acadia call yesterday for the first time, they actually talked about other jurisdictions and the possibility of running some access programs in other jurisdictions. haven't been specific at all, and they're still considering their options on that, but it's the first time they've mentioned that. So that is DAYBUE, then let's just move to that big value bar at the top of the first slide I showed to 291. I'm only going to show one slide because this hasn't impacted the financial result today, which is what this is all about. But obviously, this is really important, and I'm sure we'll have some Q&A on it in a minute. So this is a pretty simple depiction of what we've got here. So our 3 indications, we've ticked off a lot of things and then we've got potential additional indications, which, again, I'm sure we'll talk more about in Q&A. So I guess our job from here is to fill in the ticks on the blanks on this slide. I'm very confident we'll get fast track on PMS and AS in due course, and we'll look to have meetings with the FDA on Hopkins and Angelman, which will allow us to go to the registration trials. Now most importantly, of course, we have our Type C meeting with FDA in April. So that's not far away now. And so we had a positive end of Phase II meeting, just to recap, which agreed or reached alignment with the FDA on all the other important stuff relating to the Phase III program, apart from the primary efficacy endpoints. And so this Type C meeting in April is purely about the primary efficacy endpoints. We're putting another proposal to FDA different to the one we put to them in the end of Phase II meeting, hoping to get alignment on that. And in the meantime, we're making sure it doesn't slow us down and hasn't slowed us down, continuing all the preparations to be able to start the trial midyear. So that includes a lot of stuff with CRO, sites, manufacturing drug, all continuing as we speak. So I will just close before we get to Q&A. just a quick recap of the milestones here. So another huge year for us on the left-hand side, everything that we've ticked off. And so a lot of stuff I've talked about, but remembering DAYBUE got approved in Canada, that first stage of the European process was navigated successfully by Acadia. They sold the priority review voucher, very lucrative for us. We got our all positive results across all our Phase II studies, had that good end of Phase II meeting. So really set us up for another massive year in '25. Already, Acadia has filed that EU marketing application, again, bang on time, what they said they were going to do as they have done all the way through. We've got first sales in Canada to look forward to. Hopefully, these managed access programs effectively first sales in Europe. The investments they're making in the U.S., our really important meeting with FDA in April, commencing the trial, the Phase III trial, advancing those other indications towards that stage. And then we have our other potential indications and Prader-Willi falls into that grouping as well. So another huge year ahead of us already has been, and we're really excited about it as we were last year and looking forward to hopefully adding ticks to that side as we go through the year. So I'm going to stop there. Thank you for listening, and we'll move on to Q&A. So as usual, we have received some questions in advance, and then there are questions that have come in the while I've been talking. So there are sort of groupings of questions. So I'm not going to read every single question. I'll just try and answer the group of questions around particular items. So apologies if I don't read your precise question, but hopefully, I'm going to answer it in what I say.

So firstly, there are questions around our share buyback. So will it be recommenced? Why was it stopped? Are we going to increase it with the sort of the 3 things that I've seen here. So I really just want to make the point that I'm trumpeting a fantastic financial outcome today, and I absolutely think that's very true, and there are a few companies that can match that. but none of it is a surprise. It's exactly as we planned and expected. So really, nothing's changed as far as the buyback is concerned. The reason it stopped was because it had to. So the rules around buybacks that if you're in a blackout period and we do have a formal blackout period from 31 December to our results, you have to stop. So we did have to stop. So nothing's changed. We've got a buyback, we can buy back during 12 months. We can buy back up to a certain amount, and we can change that amount during the time we want to. So nothing's changed. But I also want to say there's no reason you have to buy back every day and buy back the same amount every day. So I don't want people thinking that's what's going to happen. And if it doesn't happen, there's something awry. That's not the way buybacks work. So the buyback is still in place, and we will consider it as we go along. But please I don't want to be bombarded with questions of why didn't you buy back yesterday and or why did you buy back a different amount. That's not the way it works. And remember, buybacks are by the rules designed to be price taking rather than price setting. We always have to remember that. Okay. There's a specific question. sorry, last thing was about, is the buyback going to be increased? Again, I'll just make the point, nothing has changed here, all is expected. So right now, there's no reason to increase the buyback. Completely different question. Are you able to expand on when the development milestones for Fragile X could be triggered by Acadia? So look, it's basically down to Acadia deciding to do work in Fragile X, and they haven't done that. So we haven't disclosed exactly what those milestones are for. But to be honest, of course, remember, they've got rights to Fragile X in both drugs, trofinetide and NNZ 2591. So it could be either, but there's nothing more I can say on that currently. Right. A question about the revenue from the managed access programs in Europe this year. And I've been asked, would that revenue trigger the $35 million U.S. milestone payment for first commercial sale in Europe? And the answer is it very much depends on what those early access programs look like in terms of scope, size, price, type of sales. None of that detail has been determined yet. So that's still to be determined. Right. I've got a few questions around the FDA meeting in April. And they really sort of split into the process, I guess, and then my confidence about the outcome in April. So say what I can about them. And again, just sort of caveat by saying I'm again not going to talk about specifics here. So that makes it a little bit tricky, but I'll try and give you as much color as I can. So some of the questions have been pretty pointed and basically said that we said we'd have this resolved by the end of the year last year, and it would be done by e-mail. So to get just want to make the point, that's not what happened. I think in the webinar that we gave after that end of Phase II meeting was held, I was asked about both of those things in the Q&A, so both the process and the time line. On the process, I was asked, would it require a meeting? And I said I hope that we might be able to resolve it without a meeting, but I said couldn't determine that until we had more dialogue with FDA. And I was asked about the timing. Could this be resolved before the end of the year? And I said again, my personal hope was that we might be able to do that. But again, it completely dependent on interaction with FDA. So I wouldn't characterize that as quite what's been said. I mean, obviously, that means that the fact that it's taken a few months longer is not what I'd originally hoped. But this is very usual when there are very substantive things to agree with the FDA, it's very usual that it's all done through a formal meeting. That's how FDA works with very formal process and time lines. That's how they manage to meet deadlines for every company that they're dealing with. And once you're in that thing, then there is a time line and you have to provide very detailed information to support what you're doing at the meeting. So that's the position we are in. A huge effort now going we've submitted the information to them and a huge effort going into preparing for that meeting in April. So the other part of the question really was my confidence about the outcome. And again, you're going to be very careful what you say about this stuff when you're meeting with the FDA because, of course, there's no guarantee on anything. So the way I would characterize it, I'm very confident that the proposal we've put to them is a good proposal, and I think is the right proposal before what we're trying to do here. And I think we've put together a strong case to support it. But the outcome, of course, is in FDA's hands. And I just want to again recap a little bit that with this sort of interaction with endpoints, and remember, for the end of Phase II meeting, there's a ton of other stuff we're discussing as well. Endpoints is part of it. This time, it's purely around the endpoints. We're looking for certain things from the endpoints, the data to be able to give you a reasonable chance of success in the trial, a reasonable trial size statistically and give you data that really describes the impact that the drug is having on the patients. That's what we want. And what FDA wants is that certain characteristics of those ways that you measure it and that aligns with all their guidance and the experience they've had. And the tricky thing in these sort of indications is there's no precedent at all for them or us. So it's very easy in something where someone else has done it before and the precedent is there, and you pretty much do that. This time, it's a blank sheet of paper. So it really is the most tricky thing, and that's why it takes some time and a lot of effort and a lot of skill to get to the desired outcome. So that's the situation we're in, as I said, huge preparation now going in for that meeting. But again, make the point that I made earlier on, this hasn't really delayed us because we're just continuing to prepare for the trial as we would have done if we got the outcome at the end of Phase II meeting. Sorry, that was a very long answer, but that's an important point, and there's quite a lot of questions about that. So hopefully, that's dealt with all of that. Now on to other things quickly. Has there ever been any thought of addressing cognitive improvement in RPD? I presume that means rare pediatric diseases as well. So the answer is that cognitive improvement is one of the things that we are improving and looking at in all of these endpoints. If you look at the results of our trials, you'll see some of the endpoints are broken out in different domains. One of them is cognitive function, and we have shown improvement in those trials. Right. There are then a bunch of questions about new indications. And so again, well, in fact, just about all of them are asking me, when are they going to be publicized. So I'm not going to give you a direct answer to that other than saying we're close to being able to do that. And again, just recap of the things we're doing, there's studies, nonclinical studies, the scientific evidence to support what we want to do. There is patent considerations and then there's also commercial considerations. So we've got to rank these potential opportunities. We're not going to go after everything. That's just no company does that. We're going to pick the best options on the things that are in front of us. And so we've got to do a careful commercial analysis of all of that as well. So that's all going on, and we're not far away from an outcome from that. Okay. Again, switching to completely, is the team satisfied with the current share price versus the company's outlook and the revenue streams coming into the business? So no surprise. And of course, we're not satisfied. The Board is absolutely not satisfied with where the share price is and particularly compared to where it was. Things have only got better over the last year. We're now covered by 9 different analysts, which is a pretty great position to be in. And the average of all of their valuations, risk-adjusted valuations is well in the 20s range. So of course, we're not satisfied, and we'll do all we can to try and improve that as the year unfolds. Right. Another question specifically about Phase 3 keen to understand rough numbers and time lines for the Phase 3. So I will just repeat what I said before, you've got a very good rather than words from me, a very good objective example out there, which was the Acadia trial in Rett syndrome. This trial is going to look pretty similar to that. It took them 2 years from start to results for that trial. So I think that's a good benchmark to have. I'm not going to tell you exact numbers of patients or I don't know whether you meant numbers of patients or dollar numbers. I mean, again, I'll repeat what I said before, I've said, I think USD 50 million to USD 100 million is the sort of the bookends for the cost and probably $100 million to $200 million is the bookends for the patients. And again, nothing has changed as we stand today. Right. Has Neuren applied for breakthrough designation with the FDA for PMS? It won't surprise you at all, but I'm not going to answer that. I said before, we've answered those sort of questions in the past, and it wasn't a good idea to answer them. So I'm not going to answer that. I'm afraid. If we ever get breakthrough designation, of course, we will tell you. It's an important question. Have you noticed any changes in dealing with FDA as a consequence of the new administration in the U.S. So I think this question is probably aimed at our day-to-day dealings from a development point of view. I'd say no, we haven't noticed any changes. And in fact, since that change happened, we've requested a face-to-face meeting at a certain time that's been granted. We've been granted Fast Track Pitt Hopkins, we've been granted rare pediatric disease designation in 2 indications. So everything has happened as you'd expect it to and on the time line you'd expect it to. So we haven't noticed any change so far. A couple of questions about takeovers. Again, as you know, I'm not going to answer anything about that. Back to capital sort of management. So the question is, is Neuren planning to start paying dividends in the short to medium term. Now this might depend on what you mean by medium term, but I'll say that the Board is continuously assessing this as it continuously assesses current share buyback, and we'll continue to do so. My personal view on this, and I've said this many times, is that I don't feel that a one-off dividend is a great incentive to hold the shares off into the future. In fact, it potentially incentivizes some people to sell. And I've had not great experience with that in the past, but that's my personal experience, not the Board necessarily. However, an ongoing dividend policy in the future is a completely different matter. And we'll certainly be considering that in the future. I have much of the questions have been submitted yet, but someone may say, well, you've got a lot of franking credits, which we have. I talked in the presentation about all the taxes paid. So we are in a position where we could pay some franked dividends, which we weren't last year. But again, if you're going to start paying dividends, there's got to be a long-term strategy there, and we're not at that point yet. We've got a huge growth opportunity. So we will keep it under review all the time. Okay. I think that's all the pre-submitted questions. I'm going to go to some others, and I may have answered them all. But if I haven't, I will deal with them. So here's another question about, I guess, the new administration in the U.S. So there's been some talk about cuts to Medicaid. And there's no detail about this at all at the present. So the question is how closely Acadia and you in tracking this issue? And what's the potential impact on DAYBUE access given 60% of coverage is provided through Medicaid? So look, Acadia, this is not news today. And of course, Acadia, what I'll say is yesterday didn't say anything about it, and there were no questions at all from the U.S. analysts about it. It doesn't mean it's not a valid question. It is. Obviously, Acadia will be all over it. We're secondary to that. We can't really input into it, but obviously, we'll track it closely. I've always felt with the new administration, rare diseases in kids that have a devastating impact on their lives and families surely the last target for any of this stuff. So I'm not expecting an impact at the moment, and I certainly haven't heard of any impact, but we'll obviously keep it under review as things pan out. Right. Again, I've answered a lot of this. I've got a more specific question about the time lines for other indications and asking me which quarter or anything. But again, I'm not going to answer that just to say it's close. All right. Sorry. This is quite a long question, so let me just digest it. So this is someone saying I have significant holdings in both Neuren and other profitable biotech, both are down considerably over the last 18 months. I'm not sure that's quite true for us. We're down over the last 12 months. We were across hugely up over the previous 12 months. It seems that profitable biotechs are no longer considered by ASX and brokers that follow biotechs to be high growth anymore. Companies without any prospects of secure profits are trading at 100 multiples and profitable companies are trading at 15 to 20 PE multiples. Any insights from your discussions with brokers across the board? Right. So again, talking about what I said at the start and that I think is unique about Neuren compared to anyone else, I do think that, that is being underestimated by everyone. And I do see companies out there that have got enormous market caps and fee multiples, and I scratch my head a little bit compared to where we are. But when I talk to brokers, they'll be covered by 9 different brokers. We've got huge coverage. Everyone has the same view about us. So the brokers are giving fund managers, I believe, the same message as we are. We have to continue to do that. I think there's a lot of momentum trading happening on the ASX these days, and you can benefit from that. And some of what I just talked about is people, including us in 2023, benefiting from this just momentum trading that just keeps going. And then, of course, when it turns, you get hit by the opposite. So I think that's not helpful, but you can easily shift that around the other direction and then it acts in your favor again. So all I can say is, again, we'll do everything we can to turn that around. And in the end, the value is going to be determined by what we do. It's not going to be determined by momentum trading. Okay. Again, there's more sort of talk about dividends and stuff, but I think I've answered those. Okay. So there's a question I'll ask. I'm going to save the answer of this, I think, to the AGM, I think is where you answer talking about when is the company going to have a Board refresh as directors have been involved for a long time. Again, I think that's a question for the AGM. All I'll say is for me, the Board is incredibly supportive. And I think it's certainly a good thing that the Board has a lot of experience in what you're doing. But I think, again, this is a question for the AGM. That's again a question about special dividends and I think I've answered all of that, hopefully. Okay. A very specific one on DAYBUE here. As I understand that diarrhea is a big problem for DAYBUE is R&D showing any likelihood of significant reduction in this problem. So I've said before, of course, Acadia will be doing anything that they can potentially to do anything about that, but there's nothing I can tell you about specifics. And I again go back to the point that, say, Tom Garner made yesterday, you shouldn't think that 50% persistence rate is completely different to every other chronic rare disease treatment. It's not chronic treatments have a certain persistence rate and Acadia is doing all they can to make that as good as it possibly can be. Okay. There's lots of questions about the managed access programs, which I think I've answered. Dividend policy again, which I think I've answered. It's interesting. There's so many questions about dividends. Again, I'm speaking from a personal viewpoint here, and this doesn't mean we're not going to pay dividends in the future, we may well. But if we were talking to US life science investors, they're probably already scratching their heads about a share buyback. They'd be scratching their heads big time about dividends when you've got this huge value opportunity ahead of you. Now I'm not saying we're going to get driven by that, but I'm just saying you've got to have a complete perspective about everything here. What do you feel is a 12-month share price target? Obviously, I'm not allowed to answer that. I think you need to look at the brokers. And those sometimes they call price targets, but they're actually valuations of what we're worth today, risk-adjusted. And they're all as I said, the mean and median are well into the 20s now. Share price is down 6% today despite great announcements, will the share buyback be recommencing? So I'll just read that out because it's as the first bit. So of course, we were up 8% yesterday. I think today is fantastic result. And again, I really think there's a few companies can match what we've announced today. But as I said, it's exactly as we expected, whereas yesterday, of course, was new news about babies. So I can sort of understand it. But absolutely, I mean, today doesn't justify the price falling, but that's the market. Okay, there's a different endpoint, sorry, a different question about the Phase III trial, which I will answer because I didn't really answer this. Is the new primary endpoint proposal using existing utilized endpoints from the previous Phase II trials? And will it be a single or co-primary endpoint? So yes, it is. I've said we're going back with a different proposal to the one we originally went with, but it's still endpoints that we used in the Phase II trials. It's not something new. Single or co-primary that's said before, either is possible and either is completely fine with us, but I can't say any more than that at this stage. Okay. A question here. What about commercialization plans for 2591? So we've said before that there's a massive value uplift to be captured in Phase III. And you've seen multiple examples of deals, including our own deal of that massive increase in value. Right now, our plan is that we won't commercialize ourselves, that we will partner in some form for the commercial stage, be that partnering in territories, partnering overall M&A. So that's the current situation. We don't have the strategy right now to turn ourselves into a commercial company. Down the track, if the shareholders wanted that to capture 100% of the value, then that's a possibility down the track, but it's not our strategy right now. Right. So there's quite a detailed question here about Medicare Part D redesign and small manufacturer phasing. So this is the thing I talked about earlier, which is what Acadia talked about yesterday. So if you want the precise details of it, just look at the transcript of the Acadia call. So there is an impact on the net sales in 2025. Now this question is about 2026. So I don't know any details about that. I haven't heard anything from Acadia about that. But certainly, I talked yesterday about the implications of this in 2025, which is relatively small, given again, Medicare is a tiny fraction of the DAYBUE business. How good is the Acadia partnership? Sorry, I just to look at the time. I'm certainly going to look to wrap this up by half past. How good is the Acadia partnership? Does this have implications for marketing of 2591? So Acadia partnership continues to be great, has been from day one. As I said, best partnership I've been involved in. I think they've done an outstanding job in both the clinical phase, the regulatory phase and now commercial phase. And I think the leadership changes and the profile and caliber of the new leadership is excellent and can only improve that further. As for marketing of 2591, they have their rights to Retin Fragile X, so they will be responsible for that. It doesn't have any implications for what we're doing with 2591. Okay. There's more about the FDA. Yes. Again, a question about managed plan access. And again, all I can do is point you to Acadia's comments yesterday, and they've obviously given guidance. We're taking all of that into account. So I don't have anything more to add on that. Okay. So again, more questions about Phase III, which I think I've answered all of those. A little bit on the end about timing for the other 2 indications, if that means timing for Phase III. Sorry, I can't give you that yet. We need to have our FDA interaction first. All I'll say is there's big synergy with the others coming off what we do with PMS from an operational point of view as well. Answer a question about the other indications and specific what are they? Again, I'm not going to disclose what they are until we announce it, obviously. Can you give an indication of the items that are deducted from gross sales in determining what is net sales? So remember, our royalty and our milestone payments are paid on net sales. But net sales is what Acadia reports as sales in their financials. So it's not got any costs in it. It is sales, but it is sales net of discounts, rebates, returns. So that's very typical in the pharmaceutical industry. That's how sales are measured. In the case of DAYBUE, the vast majority of it is Medicaid discounts. I think they said that the total percentage for the fourth quarter was 18.8% reduction from gross sales to net sales. The discount you have to give to Medicaid is 23%. So the bulk in fact, more than 18%, but that's because some of the sales are less than that. But it's really driven by the Medicaid discounts, nothing else. What are the implications for 2 slots at the autism conference this year? So yes, as you know, we announced, we've got presentations at an autism conference soon. That's really around Phelan-McDermid syndrome. There's a very close association with autism. In fact a lot of misdiagnosis, a lot of people who are co-diagnosed. So really, it's PMS awareness and diagnosis and driving that diagnosis that is important thing for us at that meeting. Asking about guidance on R&D expenditure and about ballpark levels of Phase 3 programs. So again, I've given that guidance in the past, about USD 50 million to USD 100 million still applies per indication. So I think you can take that for PMS. The other is obviously to be determined as to when the timing of that is. And of course, that's not all in year 1. That's spread some in advance of the trial, some during the trial, some after the trial. So as soon as we have clarity and that we can start the trial, then I'll give more on that. I think I answered those questions. Can you bundle 2 indications, say, Hopkins and Angelman in one end of Phase 2 meeting with FDA? Theoretically, you might be able to, but these things are still separate indications. They have separate endpoints. So the more we bundle in, the more superficial it becomes and the less you can have on the details. So I think it's much more likely that we will treat them separately with FDA. But as I said, there's a lot of synergy from an operational point of view once you get into it. Right. So here's a question about really about licensing. And again, I've given that sort of overall framework here. But have you had any early interest or discussions or other validation points around licensing for 2591? And/or what point in the trial phase you begin that process? So as I steered away from other questions about this because they included talking about takeovers, which I'm not going to do, but this is specifically about licensing. So Gerry, would you like to just make a comment about process and timing and all of that stuff, please?

Sure. So the best time for us to maximize the value of NNZ-2591 is going to be after the Phase 3 data. But of course, before that, there are already parties expressed interest, and we continue to have discussions with the interested parties. And if there is a knockout bid, we're very happy to consider. But we made it clear it's a very high threshold for us to license our NNZ-2591 now at this moment.

Is there a fallback plan if the Type C meeting doesn't go away? So yes, I said there's massive preparation going for the meeting. A lot of it is we've already given a massive written support for what we're proposing, but obviously, you can augment that in the meeting. But we're also brainstorming fallback positions as you always do with these meetings. So we will have fallback plans. And again, it's not necessarily a binary outcome of exactly what you want or nothing. There are various degrees within that. So someone asking, and Gerry is probably mostly answered this, is there a possibility you would agree to a deal with Acadia for 2591 akin to trofinetide in a milestone royalty structure. I mean, certainly not like the deal we did with trofinetide. There's no sense in a back heavily back-ended deal. So no, I don't think that's likely. And I think as Gerry said, the further along we can take it, then the bigger value of the entire thing, you're not really going to chop that up or reduce it by doing something you don't need to do. Okay. Question. At what point would you need to see in your journey in neurodevelopmental disorders, at what point can you decide whether 2591 has legs to be tested for autism? Interesting question. Theoretically, there's a lot of similarities. I've talked about this before. We've got a patent in autism, but there are aspects of it that make it challenging. One is it's not an Orphan indication. So you've got to have an Orphan indication, sorry, not orphan indications at a certain price next to a non-Orphan indication is very challenging. Secondly, autism is incredibly heterogeneous. I mean the things we're dealing with already are pretty variable, but autism order of magnitude more variable. So that makes it more difficult. And also to get approval, it's very likely that you would have to do a much larger trial than the sort of trials we're running and possibly take much longer. So right now, we're not doing it alongside this other stuff we're doing, but I think certainly, the potential for that in the future is there. And we certainly have a theoretical reason to believe. All right. Sorry. Is Neuren noting the advances of AI and drug identification development? And is it relevant to Neuren's future success? So look, at this stage, it's not really relevant. We're not in drug identification. We're in very late-stage development. And so whilst AI is helping in many respects in everything happening, it doesn't have a fundamental impact on us at the moment. Sorry, let me just read this one okay. Similar question to the autism one, but now talking about neurodegenerative conditions like Alzheimer's to help build our commercial value. Again, it's what I just said about autism, but probably times 10. There is preclinical reason to believe that 2591 could have an impact in these sort of things. But don't have any patent protection. It's not Orphan, massive trials required, huge expense, certainly can't fund any of that with our resources. And telling that story to big pharma without them realizing all of that, that's not going to happen. They're not going to just think great, you've got preclinical data. So there really has to be the business case for it. And right now, we don't think there is. Again, all bets are off in the future. But right now, it's not our area of focus. I don't think it's the right one for shareholders. Right, gosh, I'm 2 minutes over my 1:30 deadline. Sorry, there's just a few left, which I hope I've answered most of. On my clinical trials, will clinical trials run concurrently or will the first one be completed and then realize value to fund the further trials. So no, I mean, if we're going to do multiple indications, there's no point in doing them sequentially. You would want to do things in parallel, but they're not all going to start at the same time. They'll be sequenced. There's massive effort starting up a trial. There's massive effort at the end, so you will sequence them with that in mind. Right. There's a couple left. What do you make of a Vanguard holding 5% of shares? Have you had any direct discussions with them? So this is relating to there was an initial substantial holding notice filed a couple of days ago by Vanguard to say they've gone over 5%. They're not a new shareholder. They've been a shareholder for a while. They're typically index tracking buyers typically, I think, passive rather than active. It's great to see them on the register. Gosh, if we weren't in the situation we've been in the ASX 200, I'm sure they wouldn't be on there. So I don't really have anything more to say about that. In the bio space, would you regard short term as 2-year, medium, 5-year, long term, 12 years? I feel that some are becoming shortsighted with an extremely successful company. I'll ask to answer that directly other than to say, I agree with you. I mentioned about momentum trading and fixation on the next quarter's sales. That's a disappointing feature of the market when you're doing the sort of stuff we're doing. But all we have to do is make sure we keep executing what we're trying to do and that big value opportunity just becomes more and more apparent. And that will turn that around, I believe. When you consider U.S. listing, I said before, it will be kept under review the whole time. personally, I don't think we should do a U.S. listing without raising money. There's a massive cost and compliance burden. You become a little fish in a very big pond. There's not a great history of Australian companies doing that. But if there came a time when the company should transition to being a U.S. company and you're going to raise money for something, then that's a whole different matter, but we're not in that position today. So can any form of patient recruitment be done whilst we are writing also we're waiting for finalization of endpoints with the FDA. No, you can't. Sites can't recruit until they've got ethics approval, which requires the protocol to be cleared by FDA and which requires the meeting. But you can do a lot of groundwork with sites leading up to that, which is what is happening. So this is a disappointing one, but it doesn't surprise me. This is all about what I said about FX in the first place and why we're talking about comprehensive income and $166 million. So someone saying there's an article recently posted in the AFR stating our result this year is $145.6 million, down from $156.9 million. I don't understand the results better. So sorry, person saying they were late to the presentation. So look, I'm not going to repeat everything I said, can you if you can listen there'll be a recording of this presentation, if you can listen to that. But it's exactly why we're pointed to the comprehensive income rather than the profit. And again, unfortunately, they just picked up profit is the headline. Gosh, I really want to finish here, but these are still new ones. Does the license to allow Acadia to develop 2591 for Rett and Fragile X involve an upfront payment? It doesn't. As you know, we expanded our deal with them last year. We got 100% sorry, USD 100 million upfront last year. That was for the expanded global rights to trofinetide, but there's no additional upfront payment for 2591. Is the share price volatility being driven by parties that don't care about company goals? I mean, quite possibly and probably. But again, I don't think there's anything we can do about that other than execute what we thought we said we're going to do, tell the story to as many people as we can and turn that momentum around and then that stuff sort of gets swamped out. I certainly appreciate that many shareholders care deeply about our company goals, been with us a long time. And as we do, care deeply about what we're trying to achieve here, and I'm grateful for that, and we need as many people as possible to think like that. Okay. The rest of them are actually some thank you and there were another side. I really appreciate those sentiments that many of you have said in those questions. So finally, we reached the end, 7 minutes after my deadline. Sorry, I've taken up your whole Friday lunch times, but thank you very much, everyone who stayed the course. Really look forward to conversations with many of you in the coming weeks and to executing everything we've got coming ahead of us in '25, which is, as I said, really exciting for the whole team. Thank you very much, and I will speak to you next time. Thanks.