Just off the NNZ-2591 call with Jon and Liza. A recording of the call will be available later today.

While the call was 45 minutes long, most of the time was on Q&A, many of a general nature - the usual questions - and many trying to prise answers where Jon was playing a straight bat.

There was a bit of further colour, from my perspective.

• Firstly, Jon sees the outcome of the FDA meeting as very positive. He believe's $NEU has followed an aggressive approach to developing NNZ-2591 and that it is paying off. Tellingly, he said he was relieved there had been no curve balls at the FDA meeting, stating that this happens sometimes.
• While not giving any specifics on the endpoint discussion, he said that we shouldn't be surprised that there was some further iteration required. This is because the endpoints are not PMS endpoints, and that there are a large number of positive endpoints to choose from. (Contrast with Rett, where there were only a few positive endpoiints.) He did say that the discussion with the FDA did lead to some important alignment around endpoints, subject to FDA seeing the further requested information.
• While he wouldn't saying anything specific on timing, he did say 1) the further information requested by the FDA already exists 2) it won't require a meeting and can be dealt with via correspondence, 3) there has already been some further engagement and 4) he is hopeful the landing on endpoints might be agreed "before the end of the year".

On the Phase 3, the details as to number of patients and timeline would ultimately depend on the endpoint outcome. Therefore he wasn't prepared to set any expectations. That said, he reminded everyone that there had been 188 patients in the Rett trial, and that the time from kicking off the trial to concluding it was 2 years. It is clear that he expects a similar scale and timeline for NNZ2591.

(My notes: So, in the success case, if the trial starts in early CY2025, runs for two years, is approved in 6 months, then NNZ2591 would see an earliest launch in late 2027 or 2028.)

On manufacturing, Jon confirmed that they have work well underway with a new manufacturer for the Phase 3, with the aim that this manufacturer would support commercial launch. Jon said that manufacturing is "not on the critical path".

On strategy, Jon made clear that $NEU's plan is to go it alone for Phase 3, to maximise the value captured for $NEU shareholders. But it is clear that the strategy for the commercial phase is still undecided, although the default would be to license to a commercial partner, given that to become a commercial sales pharma company means building signfiicant capabilities that the company does not have today. Jon didn't rule that out, being open to what investors want.

Finally, on the current underperforming SP, Jon made clear that this was due to DAYBUE sales, with the disappointment following the $ACAD 2024 sales downgrade. However, he stated that there was a lot of upside for DAYBUE, both in the US, with potential Canada approval before year end, and EU submission in 2025. This accords with my own analysis - the market is largely pricing $NEU on DAYBUE and is yet to ascribe material value to NNZ-2591. And with the continuing steady progression on the latter, therein lies the opportunity.

My Assessment: Today's news was as good as we might have hoped for. Given the complexity and multiplicity of positive endpoints from Phase 2, it was to be expected that some further correspondence with the FDA on endpoints would be required. On NNZ-2591, there will be ongoing newsflow as follows:

• Agreement on endpoints (before end 2024?)
• Phase 3 Plan: timeline, details (number of patients), costing and commencement of Phase 3
• Phase 3 Kicked Off

Further down the track, there is also EoP2 FDA discussion and forward process for PH.

Next Key Milestone: Acadia Q3 Sales numbers for DAYBUE at beginning of Nov.

Disc: Held in RL and SM

and FWIW this is what JP Morgan had to say in their update

Progressing to its first Phase 3 trial – update to NNZ-2591 in Phelan-McDermid syndrome

Neuren will progress NNZ-2591 to a Phase 3 trial for Phelan-McDermid syndrome (PMS) patients, following a positive End of Phase 2 meeting with the FDA last month. Agreement was made on the Phase 3 trial to be “single-randomised, double-blinded, placebo-controlled trial” with the same treatment period and age range as the Phase 2. What’s left is the decision on which primary endpoint(s) will be in the Phase 3. While no timetable was provided, we expect it will be no issue to collate the extra data required (from the Phase 2 trial) for the FDA. As such, we are hopeful the final construction of the Phase 3 trial will be made by the end of the year for recruitment to commence in early 2025. We retain our Overweight on Neuren, PT $23.

• Outcome of FDA meeting largely as expected. Neuren reported a “constructive” end of Phase 2 meeting with the FDA last month with alignment on many aspects of the Phase 3 trial for the Phelan-McDermid syndrome (PMS) patient group. This Phase 3 design will be a “single-randomised, double-blinded, placebo-controlled trial” targeted at patients aged 3 to 12 years spanning over 13 weeks – the same age range and treatment period as the Phase 2 trial.

• Decision of efficacy endpoint(s) still pending. No Phase 3 clinical trials have been performed with PMS patients. As such, there is an ongoing discussion between Neuren and the FDA as the final efficacy endpoints are decided. We expect it will be either CGI-I (Clinical Global Impression of Improvement) or CIC (Caregiver Overall Impression of Change) as the primary efficacy endpoint, or both as co-primary endpoints. Management detailed a “collaborative” effort with the FDA and so we are optimistic these details will emerge soon, without the need for a formal meeting process. There has been no change to the existing cost guidance of US$50-100m per disease indication, and we expect further details (patient size, number of sites) to emerge once the endpoints are confirmed.

• Looking forward. This event marks a progressive step for Neuren becoming a Phase 3 company. We look to hear of updates for NNZ-2591 in other neurodevelopmental diseases which have reported Phase 2 results, namely Pitt-Hopkins and Angelman syndrome, alongside any newer indications it may be exploring. Looking ahead for Daybue, we expect to hear of the Canadian approval by the end of the year and an application submission for Europe in 1Q25. Retain Overweight

DISC: Held in RL & SM