Announcement PDF PharmAust Limited Appendix 4E Preliminary final report 1. Company details Name of entity: ABN: Reporting period: Previous period: PharmAust Limited 35 094 006 023 For the year ended 30 June 2024 For the year ended 30 June 2023 2. Results for announcement to the market 30 June 2024 30 June 2023 $ $ Revenues from ordinary activities Change $ Change % 866,181 949,576 (83,395) (9%) (Loss) from ordinary activities after tax attributable to the owners of PharmAust Limited (7,673,153) (6,211,560) (1,461,593) 24% (Loss) for the year attributable to the owners of PharmAust Limited (7,673,153) (6,211,560) (1,461,593) 24% Dividends There were no dividends paid, recommended or declared during the current financial period. Operating Results The loss for the consolidated entity after providing for income tax amounted to $7,673,153 (30 June 2023: $6,211,560). Financial Position The net assets of the consolidated entity were $10,228,243 as at 30 June 2024 (30 June 2023: $3,889,135). 3. Significant Changes in State of Affairs A review of events during the reporting period can be found in the review of operations. 30 June 2024 30 June 2023 Cents Cents Net tangible assets per ordinary security 2.30 4. Control gained over entities The consolidated entity did not gain control over any entity. 5. Loss of control over entities Name of entities (or group of entities) Epichem Pty Ltd Epichem OHD Pty Ltd Date control lost 31 July 2023 6. Dividends Current period There were no dividends paid, recommended or declared during the current financial period. 0.53 PharmAust Limited Appendix 4E Preliminary final report Previous period There were no dividends paid, recommended or declared during the previous financial period. 7. Details of associates and joint venture entities The company has no associates or joint venture entities. 8. Status of Audit The 30 June 2024 financial report and accompanying notes for PharmAust Limited have been audited and attached to the Appendix 4E. 9. Attachments Details of attachments (if any): The Annual Report of PharmAust Limited for the year ended 30 June 2024 is attached. 10. Signed Signed ___________________________ Date: 30 August 2024 PharmAust Limited ABN 35 094 006 023 Annual Report - 30 June 2024 PharmAust Limited Corporate directory 30 June 2024 Directors Mr Sergio Duchini (Non-Executive Chairman) Dr Michael Thurn (Managing Director and Chief Executive Officer) Mr Marcus Hughes (Non-Executive Director) Dr Katie MacFarlane (Non-Executive Director) Company secretary Mr Stefan Ross Registered office and Principal place Level 4 of business 96-100 Albert Road South Melbourne VIC 3205 Tel: +61 3 9692 7222 Share register Computershare Investor Services Pty Limited Level 11, 172 St George’s Terrace Perth, Western Australia 6000 Auditor RSM Australia Partners Level 32 Exchange Tower 2 The Esplanade Perth, Western Australia 6000 Stock exchange listing PharmAust Ltd shares are listed on the Australian Securities Exchange (ASX code: PAA) Australian Securities Exchange Central Park 152-158 St Georges Terrace Perth, Western Australia 6000 1 PharmAust Limited Contents 30 June 2024 Chairman's letter Directors' report Auditor's independence declaration Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Consolidated entity disclosure statement Directors' declaration Independent auditor's report to the members of PharmAust Limited Shareholder information 2 3 5 30 31 32 33 34 35 62 63 64 68 PharmAust Limited Chairman's letter 30 June 2024 Dear Shareholder, On behalf of the Board of Directors, it is my privilege to present PharmAust Limited’s Annual Report for the 2024 (FY24) Financial Year. FY24 has been a transformative year for our company, marked by strategic realignment, significant clinical advancements with our lead investigational product, monepantel (MPL), engagement with the world’s key drug regulatory body, the United States (US) Food and Drug Administration (FDA), new institutional investment and robust financial support from our existing shareholders. MPL has demonstrated substantial potential in treating Amyotrophic Lateral Sclerosis (ALS), the most common form of motor neurone disease. A pivotal moment this year was the successful completion of our Phase 1 MEND Study in December 2023, which delivered very promising safety and preliminary efficacy results. Notably, the Phase 1 MEND study indicated that when compared to matched controls from the PRO-ACT natural history database, MPL slowed the progression of disease by 39%. These findings were independently presented by Berry Consultants at the European Network to Cure ALS (ENCALS) annual meeting in Stockholm, the premier European ALS conference. Building on the success of the Phase 1 MEND study, we commenced the Open-Label Extension (OLE) Study, which reached full enrolment by Q4 FY24. Conducted at Calvary Health Care Bethlehem in Melbourne and Macquarie University in Sydney, this study allows patients who completed the Phase 1 MEND Study to continue to receive benefit from treatment with MPL. The OLE study will provide important long-term safety and efficacy data, important in determining MPL’s potential as a viable treatment for ALS. In May, the US FDA granted PharmAust Orphan Drug Designation (ODD) for MPL for the treatment of ALS. The ODD entitles PharmAust to receive greater support and guidance from the US FDA and provides important financial incentives such as tax credits, grants, and seven years of market exclusivity, significantly enhancing MPL’s commercial potential. Our focus has shifted to the design of our pivotal registration adaptive Phase 2/3 clinical trial. Following a successful PreInvestigational New Drug (IND) meeting with the US FDA earlier in the year we have a clear understanding of critical design features for this study to ensure we can be considered for accelerated approval. After the year end, MPL was accepted into the prestigious HEALEY ALS Platform Trial (HEALEY) conducted by the Massachusetts General Hospital in partnership with the Northeast ALS (NEALS) consortium in the US. Inclusion in the HEALEY trial provides independent validation by global ALS experts of MPL's potential as an ALS treatment. The innovative platform trial is a large-scale collaboration across 70+ clinical sites in the US to evaluate several drug candidates simultaneously. MPL’s inclusion in this trial is a significant step towards FDA approval, enhances PharmAust’s visibility within the ALS research community and is a critical advancement in our mission to offer a viable treatment for ALS. This inclusion not only enhances patient access but also reduces study costs and accelerates timelines, underscoring our commitment to advancing MPL through the clinical pipeline. The trial is set to commence in the second half of CY 2024. PharmAust has been active in presenting our clinical results and progress at key global and domestic symposiums, engaging with patient communities and stakeholders. In addition to our presence at the ENCALS annual meeting, we participated in the 34th International Symposium on ALS/MND in Basel and the 2nd Australian and New Zealand MND Research Symposium in Wollongong. Parallel to our clinical achievements, we have made significant strides in our manufacturing capabilities, ensuring a consistent and high-quality supply of MPL for our clinical trial programs and laying the foundations towards supporting regulatory approval and ultimately a successful and timely product launch. These developments reflect our growing confidence in MPL and have prompted a thorough review of our operations. The refreshed Board determined in May 2024 that the optimal path to creating strong shareholder returns lies in strategically focusing on the development and commercialisation of MPL for ALS. Consequently, our other programs in veterinary products and oncology have been deprioritised. MPL’s unique mechanism of action, as a potent and safe inhibitor of the mTOR pathway—central to neuronal degeneration— also opens a range of future possibilities for PharmAust, including potential applications in Parkinson’s disease, Huntington disease and Alzheimer’s disease. Our refreshed strategy positions PharmAust to capitalise on the significant opportunities within the neurodegenerative disease market, projected to grow from USD 55.12 billion in 2024 to USD 77.82 billion by 2029. To support this strategy, we further strengthened our Board with the addition of new members who bring extensive experience in governance, finance, pharmaceutical drug development, and commercialisation. 3 PharmAust Limited Chairman's letter 30 June 2024 During FY24, we welcomed Mr. Marcus Hughes, an experienced ASX-listed tax and finance director, and Dr. Katie MacFarlane, a US pharmaceutical executive, as Non-executive Directors. I was honoured to join PharmAust as Non-executive Chairman, and we were pleased to appoint Dr. Michael Thurn, our Chief Executive Officer, to the Board as Managing Director. The new Board has undertaken a full root and branch review of the organisation. We have reviewed and reset our finance function, our investor relationship and marketing advisors, Company Secretarial support and legal advisors. The review extended to a complete governance review and reset, to ensure full compliance with Corporations Law, ASX listing requirements and industry best practice. We engaged independent external remuneration experts to undertake a complete review and benchmarking of Executive and Non-Executive Director remuneration, including short- and long-term executive incentives. Our purpose was to ensure our remuneration framework was aligned to our purpose, to our strategy, to delivering shareholder value, and is transparent and simplified. The new remuneration framework will be detailed to all Shareholders at the Annual General Meeting (AGM). We extend our sincere thanks to departing Board members Dr. Roger Aston, Mr. Robert Bishop, Dr. Thomas Duthy, Mr Neville Bassett and Mr. Sam Wright for their valuable contributions during their tenures. Our strategic realignment has been met with strong support from our shareholders, enabling us to raise approximately $A22M via an institutional placement and Share Purchase Plan (SPP) during the financial year to advance our pre-clinical and clinical development and commercial strategy for MPL. On behalf of the Board and management team, I extend our deepest gratitude to our shareholders for their unwavering support and welcome new institutional and sophisticated investors to our journey. FY24 has been a year of remarkable progress and strategic refinement for PharmAust. We are confident that our focused approach, combined with the significant clinical advancements in MPL, positions us to become a leader in the development of treatments for neurodegenerative diseases. As we look ahead, the coming year promises to be exciting as we initiate the HEALEY trial with MPL and report further results from the OLE Study. We look forward to continuing this journey together and will keep you updated on our progress. Yours sincerely, Sergio Duchini Chairman, PharmAust Limited 4 PharmAust Limited Directors' report 30 June 2024 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity' or 'Group') consisting of PharmAust Ltd (referred to hereafter as the 'Company' or 'parent entity' or 'PharmAust') and the entities it controlled at the end of, or during, the year ended 30 June 2024. Directors The following persons were directors of PharmAust Ltd during the whole of the financial year and up to the date of this report, unless otherwise stated: Mr Sergio Duchini Dr Michael Thurn Mr Marcus Hughes Dr Katie MacFarlane Dr Roger Aston Robert Bishop Sam Wright Neville Bassett Mr John Clark Non-Executive Chairman (appointed on 17 May 2024) Managing Director and Chief Executive Officer (appointed as Chief Executive Officer (CEO) on 1 September 2023, resigned as CEO on 23 April 2024 and re-appointed as Managing Director and CEO on 31 May 2024) Non-Executive Director (appointed on 9 May 2024) Non-Executive Director (appointed on 17 June 2024) Executive Chairman (resigned on 9 May 2024) Executive Director (resigned on 9 May 2024) Non-Executive Director & Company Secretary (appointed as interim Chairman on 9 May 2024 and resigned as Director and Company Secretary on 16 May 2024) Non-Executive Director (resigned on 13 May 2024) Chief Operating Officer (appointed as Managing Director on 9 May 2024 and ceased his role as Managing Director on 31 May 2024, transitioning to the role of Chief Operating Officer (COO) on 31 May 2024, upon Dr Michael Thurn’s appointment as the new CEO and Managing Director) Principal activities The principal continuing activities constituted by PharmAust Limited and the entities it controlled during the year were to develop its own drug discovery intellectual property for the treatment of different types of cancers and neurological diseases. Operating Results The results of the consolidated entity for the year ended 30 June 2024 was a loss, after income tax expense of $7,673,153 (30 June 2023: loss of $6,211,560). Financial Position The net assets of the consolidated entity were $10,228,243 as at 30 June 2024 (30 June 2023: $3,889,135). Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Review of operations PharmAust is a clinical-stage biotechnology company developing therapeutics for neurodegenerative diseases. It is focused on developing Monepantel (MPL) for the treatment of amyotrophic lateral sclerosis (ALS), the major form of motor neurone disease (MND). MPL has been shown to have a positive effect on the clearance of intracellular pathological proteins associated with the development of ALS. It works by increasing the recycling and removal of excessive, aggregated or abnormal proteins through a universal cellular process known as autophagy, leading to a reduction in the amount of neuroaxonal damage. During the financial year, PharmAust engaged with the United States (US) Food and Drug Administration regarding the development pathway for MPL to achieve regulatory approval via a Pre-Investigational New Drug (IND) meeting and was successful in being granted an Orphan Drug Designation (ODD) from the US FDA. These achievements were anchored by the positive safety and preliminary efficacy results in the Phase 1 MEND study in patients with ALS. These encouraging results prompted the company to strategically focus its resources on a single pivotal registration Phase 2/3 study in ALS to further advance the development of MPL towards accelerated approval. PharmAust Limited is listed on the Australian Securities Exchange (ASX Code: PAA). Clinical Trials and Research Milestones FDA Outlines Accelerated Approval Pathway for Monepantel for ALS After a productive Pre-IND meeting with the US FDA in February, the Company now has a clear path toward accelerated 5 PharmAust Limited Directors' report 30 June 2024 and/or full approval for MPL in treating ALS. The FDA gave positive feedback on PharmAust’s proposed accelerated development program for MPL. They provided specific guidance on non-clinical and clinical pharmacology, clinical chemistry, and manufacturing controls. Notably, the FDA indicated that the proposed adaptive Phase 2/3 clinical study, based on the HEALEY ALS Platform Trial master protocol, could support accelerated approval of MPL if it shows substantial effectiveness and an adequate safety profile. Encouraging Results from the Phase 1 MEND Study The Phase 1 MEND Study was successfully completed in December 2023, with positive results reported for safety and preliminary efficacy of MPL in treating ALS. The study was funded by FightMND, an Australian charity devoted to finding effective treatments and ultimately a cure for MND. The study data showed that changes in ALS Functional Rating Scale-Revised (ALSFRS-R) scores for all 12 patients were not significantly different from baseline over 8 – 12 months treatment period, suggesting MPL slowed the rate of disease progression. This finding was supported by comparing patients treated with MPL to untreated matched-controls from the Pooled Resource Open-Access ALS Clinical Trials (PRO-ACT) natural history database. Treatment with MPL slowed the rate of disease progression by 39%, when compared to their untreated matched-controls. In addition, a survival probability analysis indicated that the probability of all 12 patients surviving without treatment with MPL are less than 0.1% (1 in 1,000) compared to their untreated matched-controls. These promising results were independently presented by Berry Consultants at the European Network to Cure ALS (ENCALS) annual meeting in Stockholm in June 2024. The ENCALS meeting, is the largest and most significant ALS conference in Europe. Berry Consultants highlighted the substantial survival benefit and reduced disease progression in patients treated with MPL, reinforcing the potential impact of MPL may have on the ALS therapeutic landscape. Open-Label Extension (OLE) Study Following the successful completion of the Phase 1 MEND study, all 12 patients opted to continue treatment with MPL under a compassionate-use program and then invited to participate in a 12-month Open-Label Extension (OLE) Study at Calvary Health Care Bethlehem in Melbourne and Macquarie University in Sydney. Both sites received Human Research Ethics Committee approval for the OLE in early 2024, and the study was fully enrolled by the end of the financial year. The OLE study enables the collection of long-term safety and efficacy data, further validating the potential of MPL as a treatment for ALS. The study aims to provide crucial insights into the sustained benefits of MPL in prolonging patient survival and improving quality of life, building on the promising results observed in the initial Phase 1 study. Updated survival data was reported in May for the OLE study. The analysis showed a statistically significant survival benefit for patients treated with MPL compared to their untreated matched-controls from the PRO-ACT database for patients with ALS. Treatment with MPL significantly (p=0.0022) reduced the risk of death by 91% when compared to PRO-ACT matchedcontrols. The study is ongoing and expects to report further survival data in late August 2024. Selection for the HEALEY ALS Platform Trial The strong clinical results demonstrated in the Phase 1 MEND study led to the selection of MPL for inclusion in the prestigious HEALEY ALS Platform Trial, providing independent validation of MPL's potential as an ALS treatment. The HEALEY ALS Platform Trial, a large-scale collaboration across 70+ clinical sites in the US, offers increased patient access, reduced study costs, and shorter study completion timelines. The MPL regimen of the HEALEY ALS Platform Trial is expected to commence enrolment in late 2024. Importantly, data from this single pivotal study could potentially lead to accelerated approval with the US FDA for MPL for the treatment of ALS in 2026. Orphan Drug Designation The request for ODD for MPL for the treatment of ALS was granted by the US FDA in May 2024, providing significant financial incentives, including tax credits and grants, and seven years of market exclusivity upon approval. These benefits significantly enhance the commercial potential of MPL. Additionally, PharmAust plans to submit an Orphan Medicinal Product Designation (OMPD) application to the European Medicines Agency (EMA) in FY25 to secure further regulatory and financial advantages in Europe. European Medicines Agency (EMA) SME Status In June 2024, PharmAust was granted Small and Medium-Sized Enterprise (SME) status by the EMA. This status entitles the company to receive regulatory fee incentives and additional support from the EMA, streamlining regulatory engagement and 6 PharmAust Limited Directors' report 30 June 2024 advancing MPL's development for the treatment of neurodegenerative diseases. Manufacturing PharmAust has continued to advance its manufacturing capabilities to support the development and commercialization of MPL. Significant progress was made in the GMP manufacture campaign, with an engineering batch currently in progress. These efforts are critical to ensure a consistent and high-quality supply of MPL for both clinical trials and future market needs. The manufacturing process involves collaboration with several key partners, including Syngene International Ltd, a contract research, development, and manufacturing organization, and Catalent, a contract development and manufacturing organization (CDMO). These partnerships are essential in ensuring that MPL is produced to the highest standards required for clinical and commercial use. Focused & Refreshed Strategy Following the encouraging results from the Phase 1 MEND study, PharmAust strategically narrowed its focus and resources to concentrate on the development and commercialisation of MPL for the treatment of ALS and other neurodegenerative diseases. The program in veterinary oncology has subsequently been deprioritised. This shift is supported by MPL’s mechanism of action which involves turning on the natural cellular "cleaning process" known as autophagy by inhibiting the intracellular mTOR pathway. This mechanism of action opens the potential to pursue other neurodegenerative diseases, such as Parkinson's disease and Alzheimer's disease, in addition to ALS. Leadership Enhancements To implement this refreshed strategy, the company made several key changes to the Board with the appointment of Mr Sergio Duchini as Non-Executive Chairman, Mr Marcus Hughes and Dr Katie MacFarlane as Non-Executive Directors, and Dr Michael Thurn as Managing Director. Key executive leadership appointments were also made during the financial year, including Mr. John Clark as Chief Operating Officer, Dr. Nicky Wallis as Chief Scientific Officer, Dr. Herbert Brinkman as Head of Manufacturing, Dr. Carol Worth as Chemistry, Manufacturing, and Controls (CMC) Operations Manager, and Mr. Paul Field as Business Development Advisor. Additionally, experienced ASX-listed Company Secretary, Mr. Stefan Ross, joined the team. The company's headquarters were relocated to Melbourne to enhance operational efficiency and collaboration between the Board and management team. Scientific Advisory Board PharmAust formed its Scientific Advisory Board (SAB) during the year to provide strategic guidance on the development of MPL. The SAB members are internationally renowned experts in the fields and bring extensive experience in the development, regulation, and commercialisation of neurodegenerative products. The SAB includes Dr Sabrina Paganoni, co-Director of the Neurological Clinical Research Institute at the Massachusetts General Hospital and co-Principal Investigator of the HEALEY ALS Platform Trial; Prof Leonard van den Berg, Professor of Neurology at the University Medical Center Utrecht and Chairman of the European Network to Cure ALS (ENCALS); Dr Melanie Quintana, Director at Berry Consultants and lead statistical consultant to the HEALEY ALS Platform Trial; and Dr Christian Freitag, previously Chief Medical Officer at Dynacure and Azafaros, and the Medical Monitor on the Phase 1 MEND study. Strengthened Balance Sheet PharmAust conducted a number of successful capital raising activities throughout FY24, which are detailed in Note 16 of the Financial Statements. Subsequent to year end, the Company also completed a successful Share Purchase Plan which exceeded expectations, raising a $7.8million. As a result, PharmAust ended the financial year with a strong cash balance of $9.71 million at 30 June 2024, plus $1,011,554 in term deposits with a term to maturity of greater than 3 months. Conclusion FY24 was a transformative year for PharmAust, marked by significant regulatory progress, clinical trial advancements, strategic leadership changes, and robust support from shareholders. The company is well-positioned to become a world leader in developing MPL as an innovative treatment for ALS and potentially other neurodegenerative diseases. Risks and uncertainties PharmAust is subject to risks that are specific to the Group and its business activities, as well as general risks. Following are the significant risks and uncertainties relevant for current reporting period. 7 PharmAust Limited Directors' report 30 June 2024 Future funding risks Whist the Group has a cash and cash equivalents balance of $9,714,109 plus $1,011,554 in term deposits with a term to maturity of greater than 3 months, and net assets of $10,228,243 and is able to continue on a going concern basis, there is risk that the Group may require substantial additional financing in the future to sufficiently fund the continued research, development and commercialisation of its products. As the Group is still in the R&D phase of activities it has the ability to control the level of its operations and hence the level of its expenditure over the next 12 months. Management are confident that they can reduce the level of expenditure in order to retain appropriate cash balances. Management remains very diligent in its ongoing monitoring of cash balances day by day. PharmAust’s ability to raise additional funds will be subject to, among other things, factors beyond the control of the Company and its Directors, including cyclical factors affecting the economy and share markets generally. If for any reason PharmAust was unable to raise future funds, its ability to achieve its milestones or continue future development / commercialisation of its products would be significantly affected. The Directors regularly review the spending pattern and ability to raise additional funding to ensure PharmAust’s ability to generate sufficient cash inflows to settle its creditors and other liabilities. In addition, PharmAust is eligible for certain government grants and R&D tax incentive payments. Commercialisation of key monepantel drug candidate The Company's future success depends in part on its ability to commercialise its key drug candidate, monepantel (MPL) as a therapeutic including in treating neurodegenerative diseases in humans, and any subsequent commercialisation of this drug candidate. Commercialisation of this and any other products may be reliant on the ability of the Company to effectively collaborate with a larger pharmaceutical or healthcare company, and the ability of the Company or collaborator to obtain access and reimbursement for MPL. No assurances can be given of the successful development and commercialisation of products that are being developed. Products derived from PharmAust’s research and development may be subject to numerous government regulatory approvals and controls throughout the world and these will affect both the timing and cost of bringing these products to the market. These risks are more likely when associated with early stage clinical products. Before obtaining regulatory approval for a product for a target indication, substantial evidence must be gathered in well-controlled clinical trials and, with respect to approval in the USA, to the satisfaction of the FDA that the product candidate is safe and effective for use for that target indication. Similar satisfaction must be achieved from specific regulatory authorities in every other country in which the product will be made available. The results from the preclinical and clinical trials completed for PharmAust's product candidates may not be replicated in future trials, or sufficient safety and efficacy may not be demonstrated to the extent required to obtain the requisite regulatory approvals for any product candidate. A key risk is that associated with PharmAust's strategy for FDA registration which requires trials that demonstrate efficacy and safety according to FDA issued guidance for new ALS therapeutics. Successful Phase 2/3 clinical trials demonstrating safety and efficacy will be required for the Company to obtain FDA approval of monepantel for marketing in the USA. Such trials can be expensive, time consuming and are subject to the risks of failure inherent in drug development such as delays in trial recruitment, failure to meet efficacy and safety end points, changes in trial protocol or changes in regulatory requirements. Additionally, such trials may be halted or delayed by the FDA or the relevant institutional review board. The Company will also require marketing approval for monepantel by the EMA and the Australian Therapeutic Goods Administration before it may be sold in Europe and Australia, respectively. Marketing approval will also be required by similar government regulatory agencies in other countries in which the product may be made available. There is no guarantee that the Company will receive marketing approval for monepantel or for future products that it may develop. Delays or failures in obtaining regulatory approval for monepantel will be likely to have a serious adverse effect on the value of the Company and have a consequent impact on its financial performance. Even following receipt of regulatory approval for monepantel, potentially costly follow-up or post-marketing clinical trials may be required as a condition of approval to further substantiate safety or efficacy, or to investigate specific issues of interest to the relevant regulatory authority. Monepantel will also be subject to ongoing FDA requirements governing the labelling, packaging, storage, advertising, promotion, including the FDA’s general prohibition against promoting products for unapproved or “off-label” uses, recordkeeping and submission