Company Interview / Why Neuren Pharmaceuticals is looking healthy

Neuren Pharmaceuticals (ASX:NEU) is preparing for a pivotal phase three trial in the US for a potential treatment of Phelan-McDermid syndrome (PMS), following a positive meeting with the FDA. Jon Pilcher states that this trial marks a groundbreaking step as no previous phase three trials for PMS exist. Neuren is ready to replicate the promising results of the phase two trial, and anticipates starting patient recruitment and site identification to commence next year.

Jon highlights that Neuren's revenue is buoyed by royalty payments from sales of a drug for Rett syndrome, despite recent share price setbacks. Acadia's last quarterly report shows a revenue run rate exceeding $300 million USD and expectations for Canadian and European approval are high. This financial success is crucial for funding future developments like the NZ 2591 program.

Neuren (ASX:NEU) has seen significant financial growth, reporting more than $200 million USD in the bank and foreseeing further income from royalties and milestone payments. Jon maintains that even though phase three's preparation is costly, the financial impact will be manageable, keeping the company financially robust.

Full unedited transcript:

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Also at. Today, Neuron Pharmaceuticals is gearing up for a key phase three trial in the United States. After a positive meeting with the US FDA. So the trial will be testing neurons potential new treatment for McDermid syndrome, aka PMS, a rare condition with no approved medication. So let's get the details. Pleased to welcome neuron CEO John Pilcher back to the program. John, welcome. Thank you so much for joining us once again today. So this has come up following a phase two trial for this, um, NZ 2591 program. So you're calling it a positive meeting with the FDA. How so. Yeah. So this is a really important meeting. Um, and a phase two meeting is the gateway to be able to move into phase three. Uh, and, you know, you mentioned there's no treatment for McDermott syndrome. In fact, there's never been a phase three trial for

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McDermid syndrome. There has never been a proposal for a phase three trial before. So really this was breaking new ground not just for Nurin, but for the FDA as well. So with that context, we're absolutely delighted with the outcome, which is effectively that what we need to do is repeat what we did in phase two. So it's a 13 week study with the same dose as phase two. Um, so really, you know, the risk is greatly reduced from that point of view. It's always much better if you're repeating phase two rather than doing something quite different. So we're delighted with all of that was a very collaborative meeting. Um, there's massive unmet need in the McDermott syndrome, and FDA are acutely aware of that and want to do something about it as well. So really pleased with the outcome. There's one loose end that we need to tie up. So, uh, we need to supply a little bit more information to the FDA about the the way we're going to measure efficacy in the trial. So the endpoints so in phase two we used a lot of different efficacy endpoints. We had a lot of discussion at the meeting and after the meeting

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about which of these endpoints to use as the primary endpoint, we need to supply a little bit more information to FDA before they'll agree to that. Once we've got that, we can then move in and looking forward to start the trial. Okay. So how long do you think that might take?

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Yeah, there's, uh, there's no prescribed time. And we're sort of in FDA's hands a little bit, but we're trying to move as fast as we possibly can. And as I said, you know, we've had a very collaborative approach to date from the agency. So I'm hopeful that they will also, you know, try and clear that as fast as they can. What else has to be done? I mean, do you have to, you know, if phase three will be the next step? Let's presume it is. Do you have to, you know, still recruit the patients? Do you have to find the sites? Do you have to get service providers like all those logistical things as well? Yeah, absolutely. So there's a huge amount of work going on in that regard now and has been for the last few months. So yeah, we're very well advanced in um in a, in um appointing the various service providers. And it's just not just one it's a, it's a bunch of them. Um, we're starting to identify the sites in the US that we want to use. Uh, we're also manufacturing the drug. We're well into the campaign to manufacture the drug to be ready for to start. So, yeah, you're right. There's a

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huge amount of work to prepare to start the trial. This FDA interaction is critical and it gives you the green light. But but all of that other stuff is, you know, just as important. I mean, we're and we're, you know, well into that and highly focused on that now. Um, okay. And again, I know that it's frustrating when somebody like me continues to ask timeline, but I think for investors, they're always curious to know what the next catalyst is. So the phase three trial could start 2025 early 2025. Yeah. Yeah, definitely next year as,

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uh, until we get this agreement and end points, I can't give any, any, uh, you know, more definitive than that, but absolutely, we want to start as quickly as we can. That's why we're doing all these preparations? So certainly it'll be starting next year.

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Um, and then you're right. We've got to enroll the patients and then they've got to go through their treatment, um, before you, before you can get the results. Um, but there's a load of other stuff happening within you. And, I mean, as you will remember as well. So it's not it's not all about this. There's maybe our first drug in Rett syndrome, and there's other indications of this drug. So there's a huge amount of news coming, you know, during that period. So yeah. And so um, debut obviously still driving revenue via royalty program. Any update on sales and how things are going there?

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Uh, so, look, we, um, we think it's a great outcome so far. I mean, the run rate, uh, when Acadia reported the last quarter is more than 300 million USD per annum already, and it's still the first full year of sales. So great outcome. I think, um, expectations are built to a huge level before that last quarter and the last quarter disappointed people a little. So in Acadia adjusted their guidance. So we've been hit share price wise by that. But we still think that all the metrics are looking good. There's a huge amount of upside. Not just in the United States, but then in other jurisdictions. They were hoping for Canada approval before the end of the year and filing in Europe in the first quarter of next year. So we think, you know, debut story is a long way to run. And you're right, we're getting royalties and milestone payments with no cost coming to us. Um, if you know this current year, we should very, um, very easily clear the first sales milestone hurdle, which will deliver us 50 million USD, is just a one off milestone payment. So, so

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debut is incredibly important because it gives us a financial foundation to then be able to make the absolute most out of 2091 for for shareholders. Yeah. And that's what I was going to ask. So how are you traveling with operating expenses? Obviously this is, um, a very expensive road that you travel. I mean, very worthwhile when the drugs are approved, if effective. But, um, you know, I know that last year, operating expenses in the first half were higher than expected because of the amount of R&D spend. Um,

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yeah. So, look, I think, you know, last year we had our maiden profit, which went from 0 to $153 million, which just showed the power of the revenue coming from debut, having no cost attached to it because it goes straight to the bottom line. Um, that's left us with more than $200 million in the bank and then with royalties and that milestone payment I mentioned all coming in as well. So that's going to grow. Um, the amount of cost in this year for phase three is going to be modest because whilst there's all these preparations going on, really the big, big cost will start next year. So so we're in an incredibly strong position. Um, I haven't talked about what the financials might look like next year yet, but we're going to have a very, very strong current year. Again, you know that 50 million USD will be part of our revenue this year. So, um, yeah, you know, in a great position financially.