Clinuvel Pharmaceuticals
Annual Report 2024

Plain-text annual report

CLINUVEL PHARMACEUTICALS LTD A.B.N. 88 089 644 119 1. Reporting period: 1 July 2023 to 30 June 2024. Previous corresponding period: 1 July 2022 to 30 June 2023. 2. Results for announcement to the market. Percentage change to 2024 Amount (A$) 2.1 Revenues from ordinary activities. Increased 13% To 88,178,308 2.2 Profit from ordinary activities before tax attributable to members. Profit has increased 11% To 50,678,978 2.3 Net profit for the period attributable to members. Profit has increased 16% To 35,636,359 2.4 A fully franked final dividend of $0.05 per ordinary share has been declared. 2.5 Record date for determining entitlements for the final dividend: 6 September 2024. 2.6 The CLINUVEL PHARMACEUTICALS LTD audited Annual Report for the year ended 30 June 2024 accompanies this announcement. Additional Appendix 4E disclosure requirements, including the Operating and Financial Review for an explanation of the figures reported above, are in the Directors’ Report of the attached Annual Report. Where applicable, the Annual Report includes information per items 3 to 14 below: 3. Refer to the Attachment to Appendix 4E for the Statement of Profit and Other Comprehensive Income together with notes to the statement. 4. Refer to the Attachment to Appendix 4E for the Statement of Financial Position together with notes to the statement. 5. Refer to the Attachment to Appendix 4E for the Statement of Cash Flows together with notes to the statement. 6. Refer to the Attachment to Appendix 4E for the Statement of Changes in Equity together with notes to the statement. 7. The Directors have declared a fully franked final dividend of $0.05 per ordinary share to be paid on 20 September 2024. 8. No dividend reinvestment plan. 9. Net Tangible Assets per Security for Year Ended Net Tangible Assets per Security for Year Ended 30 June 2024: $4.015 30 June 2023: $3.290 10. The control of entities which had control gained or lost: N/A 11. Associates and joint venture entities: N/A 12. No other significant information. 13. Foreign entities: Australian Accounting Standards used. CLINUVEL, INC. (USA), CLINUVEL (UK) LTD (UK), CLINUVEL AG (Switzerland), CLINUVEL SINGAPORE PTE LTD (Singapore), VALLAURIX PTE LTD (Singapore), CLINUVEL EUROPE LIMITED (Ireland), VALLAURIX MC SARL (Monaco). 14. COMMENTARY OF RESULTS: Commentary in respect of the financial results is provided in the Operating and Financial Review of the attached Annual Report. P H A R M A C E U T I C A L S LTD ANNUAL REPORT 2024 “When we build, let us think that we build forever.” John Ruskin Plans 2025 and beyond Financials Advocacy Chair’s letter Vision Mission Values Investor Relations Program Management Board Managing Director’s letter The role of melanocortins Pharmaceutical products Photocosmetic products Operational overview CONTENTS Mission, Vision & Values ……………………………………… 6 The Role of Melanocortins in Human Biology …………… 10 Key Achievements ………………………………………… 14 Advocacy of Key Opinion Leaders ………………………… 16 Financial Highlights………………………………………… 18 Sustainability ……………………………………………… 20 Chair's Letter………………………………………………… 26 Management and Board …………………………………… 30 Managing Director's Letter ………………………………… 42 Operating & Financial Review……………………………… 50 1. Distribution of SCENESSE® 2. Pharmaceutical Product Development and Clinical Programs 3. PhotoCosmetic Products 4. Financial Review Plans 2025 and Beyond …………………………………… 66 Investor Relations Program  ……………………………… 72 The Photomedicine Foundation…………………………… 76 Directors’ Report …………………………………………… 79 Remuneration Report ……………………………………… 87 Statement of Profit and Other Comprehensive Income … 116 Statement of Financial Position…………………………… 117 Statement of Cash Flows…………………………………… 118 Statement of Changes in Equity…………………………… 119 Notes to and Forming Part of the Financial Statements… 120 Consolidated Entity Disclosure Statement  ……………… 146 Directors’ Declaration ……………………………………… 147 Independent Auditor's Report …………………………… 148 Auditor's Independence Declaration……………………… 151 Shareholder Information…………………………………… 152 Market Performance………………………………………… 156 Glossary……………………………………………………… 158 BUILDING A MELANOCORTIN HOUSE CLINUVEL's mission is to translate its accumulated technology and expertise on the melanocortin family of hormones to wider audiences with unmet needs through the development of solutions for conditions of skin and brain. We are building a melanocortin house and employing an integrated business model to add incremental value to the Company and become a sustainable, diversified pharmaceutical group of international significance. ANNUAL REPORT 2024 CLINUVEL PHARMACEUTICALS LTD 5 4 MISSION D EL IVERIN G I NNOVAT I V E SO LU T I O NS FOR U N M E T PAT I E NT A ND HEA LT H C A R E NE E DS. VISION TH E CLIN UVE L GROUP WORKS TO TRA N SL ATE SCIE N TIFIC CON CE PTS A N D BRE A KTH ROUGH S IN TO COM M E RCIA L PROD UCTS TO PRE VE N T OR TRE AT ACUTE A N D CH RON IC M E D ICA L CON D ITION S WH E RE N O A LTE RN ATIVE S E XIST. WE A RE D E TE RM IN E D IN OUR D E SIRE TO E XCE L IN SCIE N TIFIC RE SE A RCH A ND D E VE LOPM E N T, BUILD IN G ON OUR GLOBAL E XPE RTISE TO D E LIVE R LON GITUD IN AL CA RE A N D N OVE L PROD UCTS FOR PATIE N TS A N D CON SUM E RS. TH E CLIN UVE L GROUP PUTS ITS PE OPL E A N D E N VIRON M E N T A S CE N TRA L TO TH E GROUP'S WORKIN G PRACTICE . CLIN UVE L FOCUSE S ITS RE SE A RCH A N D D E VE LOPM E N T ON H E A LTH CA RE PROBLE M S N OT YE T A D D RE SSE D , A IM ING TO D E LIVE R IN N OVATIVE M E D ICA L A N D H E A LTH CA RE SOLUTION S. ANNUAL REPORT 2024 CLINUVEL PHARMACEUTICALS LTD 6 7 VALUES T HE CL IN UVE L G R O U P PL E DG E S TO AD HERE TO A PR I NC I PA L SE T O F VA LU E S W HICH REF L ECT H OW W E O PE RAT E A ND IN T ERACT W I T H E AC H OT H E R W H I L E EXPAN D I NG O U R B USI NE SS. People & Environment We work for those who have no alternatives: patients, physicians, and individuals at-risk. We are selective with whom we work, and invest time in the talent we employ. We aspire to create an environment where professionals are able to develop and grow. We aim to present skilled talent with early opportunities, responsibilities, and accountability as part of training the next generation. We strive to build international teams and operate on the basis of gender and ethnic equality. We wish to set an example of excellence in our industry. Approach We aim to be innovative in our approach and find solutions for unique, complex and previously neglected healthcare problems. We are determined to remain leaders in our fields of expertise and be creative and diligent in our endeavours. We admit errors, recognise our shortfalls, evaluate, analyse and learn to implement new findings. In improving ourselves we strive to enhance the lives and quality of life of those we serve. We aim not to become complacent and recognise that success can only come from the identification and mastering of obstacles. Our staff embrace optimism and retain focus. Technology We create, develop, advance, and offer pharmaceutical and healthcare products which are driven by medical need, consumer demand, and a lack of available solutions. Our technologies aim to add value beyond existing offerings. We acknowledge that new technologies require regulatory environments to be primed and markets to be prepared for achieving widespread acceptance and adoption. Knowledge Building & Sharing Our expertise spans the fields of optical physics, the interaction of light and human biology, and the potential of melanocortin drugs in acute care and life-threatening conditions. We specialise in skin and brain disorders. We are proficient in our understanding of acute, rare, and complex disorders. We advance our ideas and concepts and translate them into effective and practical solutions. We aim to grow our know-how continuously and establish a learned community. Collaboratively we seek to excel in a multifaceted field to arrive at scientific breakthroughs. Respect & Appreciation We are conscious of the privilege to be productive during our professional lives. We appreciate the significance of being able to function in good health and we value this gift every day. We aim to be sincere in our approach and represent data and facts. We act respectfully and do not harm others. We value our colleagues and co-workers and cherish diversity, equality, respect and harmony. We are passionate towards our objectives and share empathy and compassion for all those we work to serve. ANNUAL REPORT 2024 CLINUVEL PHARMACEUTICALS LTD 8 9 What are melanocortins? Melanocortins are a group of small protein hormones derived from proopiomelanocortin (POMC). These hormones modulate physiological activity in the body by binding with specific melanocortin receptors (MCRs) on cells across the body. Five MCRs have been identified: MC1R—MC5R. POMC, the precursor molecule to all naturally occurring melanocortins, is widely expressed throughout the human body, although has very little biological THE ROLE OF MELANOCORTINS IN HUMAN BIOLOGY Proopiomelanocortin (POMC) 241 Amino Acids ACTH 24 / 39 Amino Acids ꞵ-lipotropin 91 Amino Acids MSH 13 Amino Acids  14 Amino Acids ɣlipotropin 58 Amino Acids ꞵ-endorphin 31 Amino Acids  13 Amino Acids ꞵ-MSH 22 Amino Acids ɣMSH 11 Amino Acids activity. Cleaving POMC into smaller peptides produces melanocortins which are able to bind to receptors on cells and exert their effects. Since these peptides are tissue specific, the body can control the release of specific melanocortins from specific tissues to generate a biologically relevant effect. The key POMC-derived peptides are α-MSH, beta-MSH, gamma-MSH and ACTH. All share a key sequence of four amino acids (-HFRW-) which allow them to bind to the various melanocortin receptors. α-MSH – the natural hormone of which afamelanotide is an analogue – is formed from the cleaving of ACTH and known to play a role in cells across the human body. Perhaps best known in humans is the role of α-MSH in dermal pigmentation: epidermal keratinocytes produce and release α-MSH in response to UV radiation exposure, with α-MSH then binding to MC1R on melanocytes to activate the synthesise of melanin. This process is known as melanogenesis. α-MSH is involved in a wide range of other functions in the body, including Melanocortin peptides, ACTH and α- β- γ-MSH derive from post-translational processing of POMC, which is also the precursor for opioid peptides and CLIP (corticotropin-like intermediate lobe peptide) PITUITARY GLAND HYPOTHALAMUS MCRs 1/4/5 MCRs 1/3/4/5 VASCULAR SYSTEM MCRs 1/4 HEART MCRs 1/4 LIVER MCRs 1/4 INTESTINES MCRs 1/3/4/5 GONADS MCRs FEMALE 4 MALE 1/4/5 ADRENAL GLANDS MCRs 1/4/5 KIDNEYS MCRs 1/3/4 M C 1R TISSUE EXPRESSION ANTI-INFLAMMATORY CELLS HAIR FOLLICLE MELANOMA CELLS MELANOCYTES PERIAQUEDUCTAL GREY PITUITARY SKIN GLANDS TESTES FUNCTION INFLAMMATION PIGMENTATION AGONIST α-MSH M C 2R TISSUE EXPRESSION ADIPOCYTES ADRENAL CORTEX SKIN FUNCTION STEROIDOGENESIS AGONIST ACTH M C 3R TISSUE EXPRESSION BRAIN GUT HEART PLACENTA TESTES FUNCTION ENERGY HOMEOSTASIS SEXUAL BEHAVIOUR AGONIST α- β- AND γ-MSH M C 4R TISSUE EXPRESSION ADIPOCYTES BRAIN FUNCTION APPETITE REGULATION AGONIST α- AND β-MSH, ACTH M C 5R TISSUE EXPRESSION ADIPOSE TISSUE ADRENAL GLANDS BRAIN EXOCRINE TISSUES KIDNEYS LEUCOCYTES LUNG LYMPH NODES MAMMARY GLANDS MUSCLES OVARIES SKELETAL TESTES UTERUS FUNCTION EXOCRINE FUNCTION AGONIST α-MSH, ACTH M ELA N OCO RT IN FAM ILY ANNUAL REPORT 2024 CLINUVEL PHARMACEUTICALS LTD 11 10 MC5R MC5R functions are still being researched, although evidence suggests that MC5R plays a key role in governing immune reaction and DNA repair, immunomodulation, anti‑inflammation, energy homeostasis, reproductive system functions, and exocrine gland secretion. ACTH is the primary effector hormone mediating the HPA (hypothalamo‑pituitary-adreno) axis, which regulates a wide range of biological systems to meet day‑to‑day metabolic needs of the body. Released from the anterior pituitary gland, ACTH binds to MC2R on the adrenal glands, leading to release of the glucocorticoid cortisol. ACTH also binds to, and activates, all five known human melanocortin receptors, regulating immunomodulatory and neuroprotective activity. β-MSH and γ-MSH are cleaved from the C-terminal and N-terminal ends of POMC, respectively. In humans β-MSH is thought to play a critical role in the regulation of body weight in humans via ERYTHROPOIETIC PROTOPORPHYRIA (EPP) A rare metabolic disorder of the haem biosynthesis pathway that causes severe, phototoxic reactions to visible and UV light. SCENESSE®, afamelanotide – MC1R Stimulates the production of eumelanin to provide systemic photoprotection from exposure to light and resulting protoporphyrin IX (PPIX) photoexcitation. This prevents phototoxicity in EPP, which is a result of a deficiency of the enzyme ferrochelatase (FECH) which causes PPIX accumulation in the body and skin. VARIEGATE PORPHYRIA (VP) A rare metabolic disorder of the haem biosynthesis pathway that causes both phototoxicity and acute attacks. SCENESSE®, afamelanotide – MC1R Stimulates the production of eumelanin to provide systemic photoprotection from exposure to light and resulting PPIX photoexcitation. This prevents phototoxicity in VP, which is a result of defects in the enzyme protoporphyrinogen oxidase (PPOX), which cause protoporphyrinogen IX accumulation (then oxidised to PPIX) in the body and skin. VITILIGO A skin condition (believed to be auto-immune) resulting in a loss of pigment in the skin, causing profound psychological and social impact. SCENESSE®, afamelanotide – MC1R Stimulates melanocytes to produce eumelanin, which in conjunction with NB‑UVB results in melanocyte stem cell maturation and migration into vitiligo lesions, resulting in lesion repigmentation. XERODERMA PIGMENTOSUM (XP) A rare genetic disorder which impairs the body's ability to repair DNA damaged by exposure to light; leads to extreme risk of skin cancer. SCENESSE®, afamelanotide – MC1R Protects the skin from UV damage via multiple mechanisms, including the direct effects of increased melanin levels in the skin, antioxidative pathways and enhanced UV radiation repair mechanisms. INFANTILE SPASMS (IS) A rare and serious seizure disorder in infants and young children, which can lead to developmental delay and epilepsy in later life. NEURACTHEL®, ACTH – MC2R, MC3R, MC4R Exerts antiepileptic properties through a combination of MC2R- activated steroidogenesis and MC3R/MC4R-mediated anti-inflammation in the central nervous system. ARTERIAL ISCHAEMIC STROKE (AIS) An acute life-threatening neurological dysfunction following a blockage of arterial blood flow. PRÉNUMBRA®, afamelanotide – MC1R, MC3R, MC4R Thought and evaluated on its supportive role in the reperfusion of brain tissue via vasodilatory effects, in addition to exerting anti-inflammatory effects and anti-oxidative effects within tissue affected by the stroke, potentially improving post‑stroke recovery. MULTIPLE SCLEROSIS (MS) An auto-immune condition of the central nervous system which leads to impaired neurological function, including motor function. NEURACTHEL®, ACTH Exerts immunomodulation by inhibiting the inflammatory effects of immune cells in the central nervous system, and generates an anti- inflammatory effect by reducing production of pro-inflammatory cytokines and inhibiting the activation of nuclear factor (NF)‑κB, the master driver of inflammation. PARKINSON'S DISEASE (PD) A progressive neurodegenerative condition characterised by the death of dopaminergic neurons in the substantia nigra, accompanied by accumulation of alpha- synuclein (Lewy bodies). PRÉNUMBRA®, afamelanotide – MC1R Generates neuroprotective effects via attenuation of α-synuclein-induced dopaminergic neurotoxicity, as well as upregulating anti- inflammatory, anti-oxidative, and DNA repair pathways in a way which could slow disease progression. CLI N UVE L'S FOCUS ON CO N DI T I O N S O F S K I N A N D B RA I N CLINUVEL's areas of interest are summarised below, highlighting the melanocortin technology applied for each condition, the target MCR, and the mode of action that provides the therapeutic treatment of the condition. its effect on the hypothalamus, while γ-MSH is thought to regulate sodium balance and blood pressure through action on MC3R in the brain and kidneys. Melanocortin Receptors MCRs are found on cells across the body. Their known distribution and functions are illustrated on page 11. MC1R MC1R is well-known for mediating adaptive tanning in human skin, although its activation also leads to regulation of a range of other effects, including anti-inflammation, DNA repair and immunomodulation. In addition to melanocytes and keratinocytes in the skin, MC1R is present on cells across wide range of tissues including the liver, brain and adrenal gland. MC2R MC2R, uniquely for the MCR group, can be bound to and activated only by ACTH. MC2R is predominantly found in the adrenal glands where its action leads to cortisol release as part of the HPA axis, although like MC1R it is also present in a wide range of tissues, including skin, adipocytes, and bone. MC3R MC3R functions include regulation of energy homeostasis, autonomic functions, feeding behaviours, and anti-inflammation. MC3R is normally expressed in the brain, immune cells, placenta, heart, thymus, gut and the eye. MC4R MC4R has a broad range of functions that include energy homeostasis, feeding behaviour, thermogenesis, sexual function, cardiovascular function, anti-inflammatory, neuroprotection and pigmentation. MC4R is normally expressed in the brain, autonomic nervous system, spinal cord, immune cells, and the eye. ɑ-MSH afamelanotide [Nle4, D-Phe7]-ɑ-MSH Ac-SER TYR SER MET GLU HIS L-PHE ARG TRP GLY LYS PRO VAL-NH2 Ac-SER TYR SER NLE GLU HIS D-PHE ARG TRP GLY LYS PRO VAL-NH2 1 2 3 4 5 6 7 8 9 10 11 12 13 Afamelanotide is an analogue of the naturally occuring α-MSH. Amino acids 4 and 7 in the chain are replaced, enhancing the MCR1 binding and signalling mechanisms. The peer review articles relevant to this feature are listed at https://www.clinuvel.com/refs-melano-ar24/ inflammatory response, regulation of sexual behaviour, thermoregulation, and exocrine secretion. MC5R is expressed ubiquitously in peripheral tissues including adrenal glands, liver, kidney, lung, lymph nodes, thymus, spleen, mammary glands, testis, ovary, uterus, skin, and exocrine glands. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 12 13 KEY ACHIEVEMENTS CLIN UVEL CON T IN U ED ITS A DVA NC E TOW A R D S A DIV ERSIF IED B IOP HARM AC E U T I C A L IN THE J U N E 20 24 F IN AN C I A L Y E A R F IN AN C IAL PE R FO R M AN C E • Growth in revenues • Controlled increase in expenses • Eighth consecutive annual profit • Seventh consecutive annual dividend declared • Continued increase in cash reserves M E LAN O CO RT IN PR O D U CT PO RT FO L IO • PRÉNUMBRA® in use in clinic for stroke patients • NEURACTHEL® development continued ST E ADY PR O G R E SS S C E N E SS E ® ACC E SS IN E PP • Increased patients, treatment centres and frequency of dosage • Partnership commenced with Valentech Pharma in Latin America • Adolescent study CUV052 expanded and underway AFAM E LAN OTI DE IN T HE C L IN IC • VP – Phase II study CUV040 completed; European Orphan Drug Designation (ODD) granted • DNA Repair – CUV151 in healthy volunteers completed; CUV152 and CUV156 continue; European ODD granted for XP • Vitiligo – recruitment Phase III study CUV105 commenced • AIS – Phase II study CUV803 underway • Parkinson's – clinical program CUV901 announced PHOTO CO S M ETI CS • Continued formulation work at the Singapore Research, Development & Innovation Centre • Increased awareness of audiences of the need for photoprotection • Prelaunch of CYACÊLLE Radiant R E AC HIN G M ORE IN V E STO RS A N D N E W AU D IE N C ES • Broadening of communications • Novel use of social media • Informative investor briefings • Increased analyst coverage CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 14 15 Day 134 – 7 implants, 39 NB-UVB sessions Day 0 – baseline Case study on use of afamelodtide in vitiligo - presented to American Academy of Dermatology, March 2024. ADVOCACY OF KEY OPINION LEADERS K EY OPIN ION L EAD ERS S P E A K A B O U T T HE BE N EF ITS OF AFAM EL A NOT I D E “Afamelanotide is a convincing enriching, sometimes off‑label, treatment option that physicians should take advantage of, however in diseases beyond EPP the further studies on a larger group of patients with long‑term efficacy evaluation should be considered.” “This study highlights a dramatic clinical benefit of afamelanotide in relation to light tolerance and QoL in protoporphyria” “…afamelanotide was safe, well tolerated and showed possible reduction in infarct core volume in our safety and feasibility study involving small sample of AIS patients. Potent MSH analogues such as afamelanotide have high therapeutic potential in AIS. Further large, randomized studies are required.” “Afamelanotide has revolutionized my life. With whispers of this treatment in the pipeline for so long, I am delighted that it has been made available in my lifetime.” Polańska, A., Wegner, J., Nutbohm, P., Staubach, P., Żaba, R., Dańczak-Pazdrowska, A., & Jenerowicz, D. (2024). Afamelanotide in protoporphyria and other skin diseases: A review. Advances in Dermatology and Allergology, 41(2), 149–154. Leaf, R. K. (2004). Afamelanotide for Treatment of the Protoporphyrias: Impact on Quality of Life and Laboratory Parameters in a US Cohort. Life, 14(6), 689. Stanislaus, V., Kam, A., Murphy, L., Wolgen, P., Walker, G., Bilbao, P., & Cloud, G. C. (2023). A feasibility and safety study of afamelanotide in acute stroke patients—An open label, proof of concept, phase IIa clinical trial. BMC Neurology, 23(1), 281. O’Reilly, M., McGuire, V. A., & Dawe, R. S. (2024). Erythropoietic protoporphyria and afamelanotide: A patient's perspective. Clinical and Experimental Dermatology, 49(2), 186–187. ANNUAL REPORT 2024 CLINUVEL PHARMACEUTICALS LTD 17 16 FINANCIAL HIGHLIGHTS ST RO N G P ERFORM AN CE CO NT I NU E D: E I G H T H CO NSE CU T I V E ANN UA L P ROF IT W IT H G ROW T H I N R E V E NU E S A ND CA S H RES ER VES A$0.72 E AR NI NG S PER S HA R E A$0.05 D IV ID E N D PE R S HAR E 18% R ET U R N ON EQU I TY NIL D E BT Total Expenses Total Revenues, Interest and Other income 48.5 2021 22.7 67 2022 32.7 83 2023 37.4 95.3 44.6 33.9 2020 22.4 2024 RE VE NUES & EX PEN S ES (A$m) Growth of revenues and expenses were 15% and 19%, respectively in FY2024. Over the eight years since commencement of commercial operations, the compound annual growth rate for revenues is 38% and 20% for expenses. Before Tax After Tax 2023 45.6 30.6 2022 34.3 20.9 2021 25.7 24.7 2020 11.5 15.1 2024 50.7 35.6 NE T P ROFIT (A$m) The Company continued to maintain a range of key indicators of high performance in FY2024 Net profit increased before tax and after tax by 11% to A$50.7 million and 16% to A$35.6 million, respectively. FY2024 marks the eighth consecutive year of profit. 2020 9.5 81.5 2021 9.8 108.6 2022 18.4 143.9 2023 29.1 193.7 Assets Liabilities 2024 28.1 231.1 ASS E TS & L IAB IL IT IE S (A$m) The balance sheet strengthened again in FY2024, with an increase of 23% in net assets. 2023 156.8 2024 183.9 2022 121.5 2021 82.7 2020 66.7 C AS H R E S E RV E S (A$m) Cash reserves increased strongly by 17% to A$183.9 million which enables the self- financing of the Group's expansion initiatives with a buffer to absorb adverse fluctuations in the operating environment. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 18 19 ENVIRONMENTAL CONSCIOUS OF OUR WORLD SOCIAL FAIRNESS AND EQUITY GOVERNANCE RESPONSIBILITY AND COMPLIANCE CLINUVEL VALUES Recognise climate change Energy management Safe and responsible materials handling No adverse impact on global objectives Supplier standards Honesty and integrity Corporate governance Compliance Ethics Supplier standards Human rights Freedom of association Equal opportunity Value diversity Work-life balance Training and education Supplier standards E S G F RAM E WO R K SUSTAINABILITY SUSTA INAB IL ITY EN CAPS U L AT E S C L I NUV E L'S RE S PON S IB L E AP P ROACH TO T H E M A NAG E M E NT OF EN VIRON M EN TAL , S OC I A L A ND G OV E R NA NC E ( E S G) RIS KS . B U IL D IN G ON T H E DE TA I L E D E SG STAT EMEN T CON TAIN ED IN T H E 2 0 2 3 A NNUA L RE PORT, W E S U M M ARIS E H E R E , C L I NUV E L'S A PPROAC H AN D P RACT ICE S, A ND HOW WE M EAS U RE T HE P R O G R E SS ACHIEVED IN F Y 2 02 4. CLI NUVEL'S ESG A P PROACH & PRACTI CES GENERAL DETAIL Responsible corporate citizenship The ESG Framework covers environmental, social and governance practices and policies, underpinned by the Company's values Adhere to the United Nations (UN) Global Compact ten principles of sustainability The ten principles cover human rights (2), labour (4), environment (3) and anti‑corruption (1) (see diagram and tables on pages 22–25) We assess our activities have low direct environmental impact A range of qualitative policies support minimisation of resource use and waste (refer to page 23) Aligned with UN Sustainable Development Goals The Company distributes a quality-assured product with a positive safety record assisting the quality of life of patients with no other treatment options Social practices and policies consistent with the tenets of the UN Global Compact We champion equal opportunity, diversity, inclusion and people development - refer to social measures on page 24 Active management by Executives and governance by the Board Executives accountable to report monthly to the Board on ESG issues in their area of responsibility Reviews of key suppliers undertaken on their ESG practices Initiated 1 July 2023; reviews completed to date are acceptable to the Company CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 20 21 ANTI-CORRUPTION 10 Businesses should work against corruption in all its forms, including extortion and bribery HUMAN RIGHTS 1 Businesses should support and respect the protection of internationally proclaimed human rights 2 Make sure that they are not complicit in human rights abuses ENVIRONMENT 7 Businesses should support a precautionary approach to environmental challenges 8 Undertake initiatives to promote greater environmental responsibility 9 Encourage the development and diffusion of environmentally friendly technologies LABOUR STANDARDS 3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining 4 The elimination of all forms of forced and compulsory labour 5 The effective abolition of child labour 6 The elimination of discrimination in respect of employment and occupation The Ten Principles of the UN Global Compact are derived from the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption. UN GLO B A L CO M PACT TEN P RINCIP LE S OF S USTA I N A BI LI TY ENVI R O NMENT KEY AREAS HOW WE MEASURE PROGRESS Conscious of the human impact on the environment Follow UN Global Compact definition of sustainability We assess the Company's direct environmental impact as low • Less than 100 employees as of 30 June 2024 • Product manufacturing outsourced A range of qualitative measures are in place to minimise resource use and waste • Responsible product packaging • Responsible waste management and materials handling in the laboratory • Electronic over paper files – Investor Relations use QR codes for presentations • Split home / office working week • Executive approval required for travel Environmental and climate targets not set Targets will be appropriate as the scale of activities increase and planned regulatory reporting applies ANNUAL REPORT 2024 CLINUVEL PHARMACEUTICALS LTD 23 22 GOVER NA NCE SOCI AL KEY AREAS HOW WE MEASURE PROGRESS Responsible corporate citizenship • Safety record of SCENESSE® (afamelanotide 16mg) in over 16,000 administrations to EPP patients • Regular pharmacovigilance reporting of patient experience to regulators Clinical testing involving humans, as required to obtain regulatory approval of pharmaceutical products • Adhere to OECD Testing Guidelines and principles of Good Laboratory Practices • Privacy of study participants maintained • Ethics committees approve studies • PhotoCosmetic products tested on humans only Clinical testing involving non-humans • Adhere to OECD Replacement, Reduction and Refinement Principles • Laboratories used meet international standards and certifications Facilitate a safe working environment • CLINUVEL's premsies are high quality and designed to enable active interation and collaboration Facilitate a positive working environment • Competitive performance-based remuneration and employment benefits • HR policies support employee well-being, with leave for illness, including stress and post-menopausal care, maternity, paternity and family care Respect human rights • Support freedom of association and binary / non-binary designation Equal opportunity and people development • Policy of no tolerance in relation to discrimination • Focus on career development through Individual Development Plans (all employees) and advanced development through the CLINUVEL Academy Leader in diversity – refer FY2024 metrics • Gender: Female / Male quotient (%): All employees (69/31%); Executives (Top seven excluding MD 57/43%); and Board (including MD 60/40%) • Nationalities: 30 • Linguistics: 63% of employees speak more than one language • Age: Generation Z (born 1997-2012) 19%; Generation Y, Millennials (1981- 1996) 58%; Generation X (1965-1980) 19%; Baby Boomers (1946-1964) 4% • Tenure: % of total employees; Up to 2 years 59%; +2 and up to 5 years 25%; +5 and up to 10 years 8%; Over 10 years 8% KEY AREAS HOW WE MEASURE PROGRESS General Board oversight Diligence actively maintained Monthly reporting to Board Achieved FY2024 HR Policies Govern behaviours and have supported positive, productive relationships in FY2024 Code of Conduct and Corporate Values Emphasise honesty and integrity; Nil breaches reported FY2024 Bribery & Corruption Policy prohibits illicit behaviour No instances of identified corruption in FY2024 Whistleblower Policy No reports or need to protect against reprisals in FY2024 Public disclosure of payments to health professionals Practised in all jurisdictions; signatory of Disclosure UK CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 24 25 • In the US, we extended reimbursement of the cost of treatment to US veterans and their families and continued the expansion of Specialty Centers from over 50 to 85, as we head towards 120 centers by the end of 2025. This network is being put in place to treat both EPP and vitiligo patients, ahead of the completion of clinical studies on vitiligo. • In vitiligo, we formed an expert medical panel, commenced the recruitment of patients for the Phase III study CUV105 in October 2023, and in March 2024 saw positive results experienced by a new patient presented at the American Academy of Dermatology. • In DNA Repair, we provided readouts for CUV151 showing afamelanotide reduced DNA damage in a healthy population and continued the studies on XP. • The CUV803 study looking to address arterial ischaemic stroke is also ongoing. • We announced Parkinson's disease in June as a new indication with a Phase IIa study, CUV901 commencing later this calendar year, involving 6 patients receiving 11 doses of afamelanotide over a study period of 56 days. • In June we initiated a soft launch of CYACÊLLE Radiant, a new polychromatic product providing photoprotection that paves the way for the melanocortin product Dear Shareholders Focus on the Mission I was pleased to assume the role of Chair of the CLINUVEL Group mid- way through the 2024 financial year, a year marked by our ongoing focus to advance a range of initiatives to build a house of melanocortin based treatments for long-term sustainability. Our expertise in targeted receptor melanocortins is being applied to conditions of the skin and brain which have unmet medical needs. We are also translating this technology into PhotoCosmetic products for people in the general population to benefit from photoprotection, DNA repair and re-pigmentation (bronzing). Achievements FY2024 Let's review the year and the advances made across the range of initiatives: • The distribution of SCENESSE® for EPP continued to grow in terms of number of patients, prescribing doctors, and centres administering treatment. • We commenced a partnership with Valentech, enabling important access to treat EPP patients in Latin America, but ceased our partnership in China, until greater certainty over IP protection prevails. • We expanded the CUV052 study to n=28, covering adolescent and adult patients >50 kg in weight to support the submission for the label expansion of SCENESSE® for adolescent EPP patients. range under development for the preservation and bronzing of the skin. Our strong financial performance continued with increased revenues, profit, and net cash inflow achieved for the eighth consecutive financial year. We are pleased with the 15% growth in revenues and ongoing prudent management of expenses achieved in FY2024. Cash reserves* accumulated further this year from $156.8 million to $183.9 million and enable us to finance organic expansion, the share buy-back program, and the flexibility to manage external events and circumstances. The Board was proud to declare a A$95.3m REV ENUES & I N COM E 18% R O E A$0.72 EPS A$35.6m P R OFI T A$183.9m CASH RESERVES* CHAIR'S LETTER Vitiligo case study presented to the American Academy of Dermatology CYACÊLLE Radiant *Cash reserves as stated in a non-IFRS measure CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 26 27 seventh consecutive annual dividend to shareholders, which will be paid to shareholders in September. People We have thoughtfully increased staff numbers in recent years to support the expansion of the Group. We are fortunate to have attracted well-credentialed professionals in a highly competitive international labour market to advance CLINUVEL's objectives over the past years. The Executive management team has changed and expanded in FY2024. We were pleased to re-engage Dr Emilie Rodenburger in the position of Director, Global Clinical Affairs in April. As of 1 July 2024, Mr Peter Vaughan took over as Chief Financial Officer (CFO) from Mr Darren Keamy, CLINUVEL's leading finance executive for 19 years. We thank Darren very much for his dedicated service to the Company and wish him well as he takes a well- earned sabbatical. In August 2024, we appointed Ms Claire Newstead-Sinclair as Company Secretary (CS). Previously this role was undertaken by Mr Keamy, but the Board decided that the CFO and CS roles should be separate, particularly as the complexity and breadth of the business has increased. Reflecting this, the CS role will assume responsibility for the risk management of environmental, social and governance risks as part of the Company's drive to responsible sustainability. We welcome Dr Rodenburger and Mr Vaughan to the Executive management team to help collectively advance our strategic initiatives. I am also pleased that we secured a one-year extension to the services of Dr Wolgen as Managing Director (MD) and Chief Executive Officer (CEO) to 30 June 2026, providing the assurance of the continuity and advancement of our wide-ranging initiatives under his leadership. This now enables the Board to follow a process of putting longer- term succession in place. Board We acknowledge the service of Mr Willem Blijdorp, who served just over four years as Chair. As the new Chair, I instigated a full Governance Review and Board Strategy Review guided by experienced external consultants. These have been completed and have been valuable in the Board's operations. Since my appointment as Chair on 1 January, I have been actively overseeing the recruitment of new Non- Executive Directors to the Board. We aim to formalise the recruitment of two to three Non-Executive Directors to the Board in the coming months, following an international search. There have been no adverse issues from a governance perspective over the past year, further extending CLINUVEL's record of operating at the highest ethical and professional standard. I am sincerely grateful to my fellow Board members for their support and effort over the past year and thank all CLINUVELLIANS for their steadfast focus on the objectives of the Company. Shareholders We actively engage shareholders on their views of the Company and take them into account in our decisions and communications. Let me provide you a few examples: • Last October, ex-Chair Willem Blijdorp together with investor relations spoke to shareholders in Australia, New Zealand, Europe and the USA and their feedback is reflected in the extension of the CEO's contract to June 2026, mentioned above. • The Capital Markets Briefing in May in Sydney was a good opportunity for me as a newly elected Chair to talk to institutional investors and I was pleased with their understanding of the depth and promise of the pipeline. • I have also received correspondence from many shareholders and exchanged views on the Company and its progress. Despite the strong financial performance of the Company, the commercial progress of SCENESSE® and the potential of the pipeline, CLINUVEL's market value was lower in the past year. This is below what we regard as fair value, and given the sufficiency of cash reserves, we implemented a share buy- back program in March to provide some support to the share price. Many shareholders expressed their appreciation of this initiative. It is important that the Company's course remains steady and focused on our objectives. At this year's Annual General Meeting, I am looking for shareholders to support the uninterrupted direction of the Company to execute our diversification initiatives. The risk of disruption will not be in the interests of shareholders. Outlook Looking to the future, we are actively executing our vision of a strategic house of melanocortins, maintaining focus on the commercial efforts in EPP, and investing to drive pipeline initiatives. These encompass the drug products, PRÉNUMBRA® and NEURACTHEL®, clinical programs in vitiligo, variegate porphyria, DNA Repair, stroke and Parkinson's, and the development of a range of PhotoCosmetic products. CLINUVEL is on the path to transform its operating and financial profile through expanded product offerings for unmet needs. All stakeholders can see the incremental value being built. For example, the first few years of treatment of vitiligo has the potential to generate significant revenues. This is also the case for the distribution of NEURACTHEL® and shareholders have also recognised the potential of our PhotoCosmetic product range. For investors, the rationale for their investment in CLINUVEL is compelling as we strive to advance the strategic priorities to fruition over the coming years. I wish all stakeholders good health and look forward with you to the advancement of our objectives in the 2025 financial year and beyond. Professor Jeffrey Rosenfeld Chair CLINUVEL Group CORPORATE GOVERNANCE CLINUVEL PHARMACEUTICALS LTD and its Board are committed to establishing and achieving the highest standards of corporate govern- ance. The Company's Corporate Governance Statement for the year ending 30 June 2024, based on the Australian Securities Exchange Corporate Governance Council's (ASXCGC) Corporate Governance Principles and Recommendations, 4th Edition, can be found on our website at https://www.clinuvel.com/clinuvel/company-overview/corporate-governance. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 28 29 MANAGEMENT TEN E XECU T IVES , IN CLU D I NG T H E M A NAG I NG DIRECTOR, CON ST IT U T E T H E E X E CU T I V E MA NAGEM EN T T EAM OF CL I NUV E L . Malcolm Bull Head of Australian Operations and Investor Relations Joined 2019 BEc (Hons, University of Adelaide) MEc (Monash University) Mr Malcolm Bull joined CLINUVEL in January 2019 and initially built out the Company's investor relations program with a focus on analyst and Australian institutional engagement. Recognising the need for greater operational support in Australia amidst the COVID-19 pandemic, Mr Bull's role with CLINUVEL evolved in 2021 to the remit of Head of Australian Operations and Investor Relations. Previously an economist within the Australian Federal Government and private sector, Mr Bull then spent more than two decades in banking across credit, business development and strategy, and relationship management, working with Commonwealth Bank of Australia, Bank of Western Australia, National Australia Bank, and ANZ. This included time in general management for ANZ in the Philippines and as part of the Victorian state management team for CBA Corporate. Mr Bull has managed to attract six sell-side analysts since his arrival and increased institutional ownership of CLINUVEL from 25% to 35% of issued capital. Antonella Colucci VP, Commercial Affairs Joined 2011 MA (European Studies and Global Affairs, Catholic University of the Sacred Heart) MA (Modern Languages, IULM Milan) Mrs Antonella Colucci is responsible for commercial matters ex-North America while working closely with the US team to ensure continuity of business. Having spent many years working within the medical industry in Italy, Mrs Colucci was instrumental in the expansion of CLINUVEL's Italian 648/96 program and subsequent Swiss special access scheme. These two programs – which facilitated subsidised reimbursement of the drug prior to its marketing authorisation – provided CLINUVEL with commercial proof-of-concept for SCENESSE® and laid the foundations for Mrs Colucci to lead the Company's successful commercial activities since 2016. With responsibilities across pricing, compliance, and distribution, Mrs Colucci is currently focused on expanding the Company's commercial reach in both new and existing regions. “The investor relations team loves telling CLINUVEL's dynamic story to stakeholders, particularly assisting new shareholders to discover the long-term incremental value being built.” “The positive impact of SCENESSE ® on the lives of EPP patients spurs my team every day to work to extend its use to new patients.” As Managing Director, Dr Wolgen sees his role as the conductor of the orchestra – keeping rhythm and discipline while ensuring the best possible ensemble is in place to do justice to the ‘score’. As the complexity of the business increases, it is imperative to have the right people in place for the multitude of tasks ahead, and the executive team is expected to grow accordingly. The executive team has and will become more visible as they communicate their activities and outcomes to stakeholders. ANNUAL REPORT 2024 CLINUVEL PHARMACEUTICALS LTD 31 30 Darren Keamy CFO & Company Secretary Joined 2005 – to 1 July 2024 BComm (Accounting, La Trobe University) CPA GradDip Applied Corporate Governance (Governance Institute of Australia) Mr Keamy held the dual role of Chief Financial Officer and Company Secretary from 2005 to 1 July 2024. For 19 years, he ensured the Company operated with a high level of financial discipline while maintaining a strong focus on governance and compliance. From early in his time with CLINUVEL, Mr Keamy was responsible for maintaining strict controls to enable the Company to achieve profitability and reinvest in long-term growth. As the business evolved, Mr Keamy oversaw the addition of new entities and structures to both enable commercial sales as well as maintain tax efficiencies. Mr Keamy provided counsel to the Board across his role as well as maintaining corporate governance structures for the Group and leading global compliance. A qualified CPA, Mr Keamy previously held roles with global packaging specialists Amcor in Australia, as well as Salomon Smith Barney (now part of Citigroup) and Superdrug Stores in the UK. Reflecting the complexities of the business, the Chief Financial Officer and Company Secretary roles have now been separated. Dr Rose Quadbeck-Diel Snr VP Regulatory Affairs Joined 2012 BSc (Nutrition, Justus Liebig-Universität) PhD (Biochemistry, Johann-Wolfgang Goethe-University) Having spent over 30 years in global regulatory affairs and quality assurance in large and mid-sized pharmaceutical entities in Germany and Switzerland – including Baxter Oncology, Asta Medica, and Mundipharma – Dr Rose Quadbeck-Diel ensures CLINUVEL is compliant with, and able to adapt to, a changing regulatory landscape. In her time with CLINUVEL this has included navigating marketing authorisation filings and compliance, shaping the Company's Brexit response, and implementing new European regulatory initiatives such as the falsified medicines regulations. In recent years Dr Quadbeck-Diel has worked to expand CLINUVEL's regulatory team to prepare long-term regulatory projects and new marketing filings. “I am proud to have played a leading role as CFO and Company Secretary, in CLINUVEL's progression from an R&D based enterprise to a profitable commercial operation, expanding for the future.” “It is satisfying to meet the challenge to gain marketing authorisations and subsequently, to meet all of the regulatory re- porting requirements to maintain them.” Lachlan Hay Chief Operations Officer Joined 2007 BA (Media Comms, University of Melbourne) MA (International Relations, Freie Universität Berlin) As Director of Global Operations, Mr Lachlan Hay supports the executive and senior management teams as well as maintaining responsibility for the delivery of key business objectives. Having joined the business in a corporate communications role in Australia, Mr Hay then assumed roles in Europe and Asia. He was the first General Manager of the UK business, overseeing the introduction of SCENESSE® into European markets since 2016, and assumed a broader operational position in response to the needs of the business. On 1 July 2024, Mr Hay assumed the position of Chief Operations Officer, providing him more responsibilities. He is also completing his law degree (LLM). Dr Azza Hamila Head of Quality Assurance and Drug Safety Joined 2015 BPharm (University Claude Bernard) MPharm (University Paris Descartes) Dr Azza Hamila has played a central role in CLINUVEL's commercial scale-up, establishing new internal standards in GxP, with a focus on manufacturing, distribution, and pharmacovigilance. Her work has enabled the Company to achieve long-standing compliance, giving authorities comfort that CLINUVEL conforms to strict international regulations and can maintain the licences necessary to perform critical manufacturing and distribution functions in-house. Dr Hamila's position encompasses both Responsible Person and Qualified Person roles in various jurisdictions within the quality management system, as well as being responsible for supplier management and patient safety. She has previously held quality assurance roles with Orphan Europe (Recordati), Sanofi Aventis, and Roche before joining CLINUVEL in 2015. “We pride ourselves on vigilance to quality and the standards that are essential to ensure the smooth performance of the business.” “Managing the strate- gic expansion and daily operations of this interna- tional biopharmaceutical group provides our teams an ongoing professional challenge.” CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 32 33 Dr Dennis Wright Chief Scientific Officer Joined 2005 BPharm (University of Sydney) MSc (University of Sydney) PhD (University of Sydney) GradCert Health Economics (Monash University) Dr Dennis Wright has been at the core of the Company's clinical program and regulatory affairs for nearly two decades in the role of Chief Scientific Officer. A pharmacist with a PhD in xenobiotic metabolism, Dr Wright has a pharmaceutical career spanning more than 40 years with Nicholas Kiwi, Faulding/Mayne, CSL and CLINUVEL. During this time, he worked across basic and clinical research, regulatory affairs, pharmacovigilance, business development, in-licensing, and marketing. It is from this diverse background that he has led CLINUVEL's late-stage clinical development program for EPP as well as steering successful regulatory filings for SCENESSE® in Europe, the USA, Australia, and Israel. His role has extended in recent years to facilitate new clinical programs for afamelanotide as well as overseeing new product development and scientific affairs. Peter Vaughan Chief Financial Officer Joined April 2024 BBus (Acc) (Swinburne University) Snr. Exec. MBA (Melbourne University – Business School) Member, Institute of Chartered Accountants ANZ GAICD, AGIA Cert. Climate Change: Financial Risks and Opportunities (Imperial College, London) Mr Peter Vaughan joined CLINUVEL in April 2024 and assumed the Chief Financial Officer role on 1 July 2024. Mr Vaughan has over 20 years of experience in listed and unlisted companies in Australia, the USA, Europe, and Asia. Most recently with Toys “R” Us ANZ Limited as a strategic financial advisor, he has previously held CFO and Company Secretary roles at Titomic (ASX:TTT), Immuron (ASX:IMC, NASDAQ:IMRN), Amaero (ASX:A3D) and Respiri (ASX:RSH), among others. He has led capital raisings, M&A and licensing deals within life science companies, as well as the dual listing of two Australian companies on the Nasdaq (Immuron Limited and Prima Biomed Limited (now Immutep)). Mr Vaughan is a Chartered Accountant, with a BBus (Accounting) from the Swinburne University of Technology and a Senior Executive MBA from Melbourne Business School. He is also a member of Australian Institute of Company Directors and Governance Institute of Australia. “Applying melanocortin products to treat indications of the skin and brain with unmet needs is exciting. This mission underlies everything we do in the clinical and scientific area of the business.” “I’m excited to join the high performing CLINUVEL team, and lead the disciplined financial stewardship as we build the foundations of new revenue streams for future growth.” Dr Linda Teng Director of North American Operations Joined 2007 BPharm (National Taiwan University) Doctor of Health Administration (Medical University of South Carolina) As Director of North American Operations, Dr Linda Teng has established the Company's commercial presence, building a network of Specialty Centers and commercial programs enabling EPP patients to receive treatment in both the USA and Canada. With a background in clinical pharmacy and clinical pharmaceutical development – at BioMarin and for more than 16 years at CLINUVEL – Dr Teng also heads the vitiligo program in North America. The US team has grown quickly over the past 18 months to incorporate new functions, including patient support and in-house counsel, adding complexity but greater bandwidth to the operations under Dr Teng's purview. Dr Emilie Rodenburger Director, Global Clinical Affairs Joined April 2024 PharmD (Paris Descartes University, France) MSc (Paris-Sud University, France) Dr Emilie Rodenburger rejoined CLINUVEL in April 2024 as Director Clinical Affairs. Returning to CLINUVEL after four years with Roche in senior clinical roles, Dr Rodenburger oversees CLINUVEL's global clinical program, evaluating melanocortin based drugs for a range of disorders of the skin and brain. Her immediate focus will be to ensure full enrolment and analyses of the CUV105 study of SCENESSE® in vitiligo (loss of pigmentation). A pharmacist (PharmD) with a master's degree in cancer biology, Dr Rodenburger previously worked with the CLINUVEL Group for over a decade in clinical development roles in Australia, the USA and Europe. During this time, she led the Company's first vitiligo trials as well as being one of two clinical managers completing the EPP program resulting in the successful approval and commercialisation of SCENESSE® as the first systemic photoprotective therapy. “I am thrilled to re-join CLINUVEL and advance its expanded clinical programs, particularly in vitiligo.” “Since April 2020, we’ve built a strong foundation with EPP in the US. Now, we’re excited to expand our treatment to vitiligo and other unmet needs.” CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 34 35 BOARD SU MMMARIES OF T HE S KIL LS A ND E X PE R I E NC E O F THE CLINUVEL B OARD Background Prof Rosenfeld is an internationally recognised neurosurgeon with extensive experience in senior healthcare and medical research executive roles and a distinguished and decorated career in the Australian Army. He is a retired Major General and a former Surgeon General, Australian Defence Force- Reserves. He has served on eight deployments to Rwanda, Iraq, Solomon Islands, Bougainville and East Timor. He was the Founding Director of Monash University Institute of Medical Engineering (MIME)-Melbourne. He is developing a bionic vision device to restore vision in people without eyesight, and he is also a leader in brain injury research. Prof Rosenfeld was Director of Neurosurgery at the Alfred Hospital for fifteen years, concurrently holding Professor and Head of the Department of Surgery at Monash University for nine years. Prof Rosenfeld is active in many community organisations and champions various charitable causes. Prof Rosenfeld has been an active volunteer for the Australian-Aid funded Pacific Islands Project which transfers clinical skills and knowledge to healthcare professionals in Papua New Guinea, Fiji and the Solomon Islands. In 2018, Prof Rosenfeld was awarded the Companion of the Order of Australia, which is Australia's highest civilian honour, the Meritorious Service Medal of the United States of America in 2017 and Officer in the Order of the British Empire in 2013. Prof Rosenfeld became an Emeritus Professor at Monash University in January 2021. Non-Executive Director, AC, OBE, MBBS, MS, MD, FRACS Appointed 26 November 2019, Chair since 1 January 2024 Relevant Skills • lifetime experience in providing healthcare • clinical research and development • board and committee oversight and governance • leadership and management J E F F R E Y R O S E N F E L D AC , OBE CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 36 37 Background Mrs Shanahan is a pioneer in the Australian finance community. The first female stockbroker, Mrs Shanahan has also spent more than two decades working and investing in medical R&D and commercialisation. She is currently a non-executive director of Phoslock Water Solutions Ltd. Mrs Shanahan is also a non-executive director of DMP Asset Management Ltd and SG Hiscock Ltd, a director of the Kimberly Foundation of Australia Ltd, and Chair of the Aikenhead Centre for Medical Discovery in Melbourne. In 2021, Mrs Shanahan was recognised as an Officer in the General Division of the Order of Australia. Previously Mrs Shanahan was a member of the Australian Stock Exchange and an executive director of a stockbroking firm, a fund management company and an actuarial company. Until 2017, she was Chair of St Vincent's Medical Research Institute. Mrs Shanahan was formerly Chair of Challenger Listed Investments Ltd, the reporting entity for four ASX listed firms and formerly a non-executive director of Bell Financial Group (ASX: BFG) and Challenger Limited (ASX: CGF). Mrs Shanahan has also served and Chaired various Audit and Risk Committees throughout her career, including Challenger Financial Services Group Ltd, Bell Financial Group, Victoria University, JM Financial Group Ltd, SA Water, AWB International Ltd, BT Financial Group and V/Line Passenger. Mrs Shanahan joined CLINUVEL in 2007 and was Non- Executive Chair of the Board from late 2007 until July 2010. Her depth of experience across global markets and medical research provides significant value to the current Board and Group. Non-Executive Director, BComm, FAICD, ASIA Appointed 6 February 2007 Relevant Skills • research & development in life sciences • capital market understanding • executive management • experienced in listed company directorships Background Under Dr Wolgen's leadership, a long-term strategy for CLINUVEL was devised. The lead product SCENESSE® was reformulated, its medical application identified, European marketing authorisation was obtained in 2014 and systems were established to self-distribute the prescriptive product in the European Economic Area from June 2016. Dr Wolgen oversaw the submission of the scientific dossier to the US Food & Drug Administration (FDA) under a New Drug Application, which was approved in October 2019. First treatment of US patients commenced in April 2020 through a controlled distribution system set up by the Company. SCENESSE® is the world's first systemic photoprotective drug to have completed a clinical trial program and obtain marketing authorisation in two major markets. Dr Wolgen has been instrumental in the Company's corporate turnaround, rebuilding a share register of long-term professional and institutional investors. He led CLINUVEL to attract more than AU$110 million in investments, and his international contacts and network contribute to the strategic support CLINUVEL enjoys globally. Under his tenure a business model was adopted to develop and launch SCENESSE®, guiding the Group through a complex pharmaceutical product development program. His overall business execution and exact financial management is viewed as exemplary within the life sciences industry and the funding strategy he led is considered different and unique within the sector. He is currently leading the Group's expansion, both based on organic and inorganic strategies. His focus has been to establish a professional management team executing corporate objectives of establishing a sustainable, and profitable group diversified from its core pharmaceutical base, to cosmetics and other services within an integrated model. Dr Wolgen's long track record speaks to a strongly focussed, competitive and conscientious professional who is known to persevere in meeting challenging business objectives. He holds an MBA from Columbia University, NY. Trained as a craniofacial surgeon, Dr Wolgen obtained his MD from the University of Utrecht, the Netherlands. Chief Executive Officer, MBA, MD Appointed to Board 1 October 2005, appointed Chief Executive Officer 28 November 2005 Relevant Skills • pharmaceutical R&D, commercialisation • clinical expertise • commercial & entrepreneurial outlook • executive management, corporate turnarounds • finance and capital markets • experienced in listed company directorships B R E N DA S HAN AHAN AO P HI L I PP E WOLG EN CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 38 39 Background Mrs Smith manages an established consultancy business, providing advisory services to a range of healthcare organisations, investors and boards of directors. She has led a distinguished career, serving for 14 years as Chief Executive Officer of The Princess Grace Hospital, London, and 11 years as the Chief Executive Officer of The Portland Hospital for Women and Children, London. Mrs Smith's specific expertise is in the implementation of operational strategies within complex and acute care environments, and in the interaction with healthcare authorities and UK regulators. Her most recent role was as the Chief Executive Officer of the Independent Doctors Federation, a membership organisation representing practising physicians within the UK independent healthcare sector. Her past experience Is now successfully translating into a diverse portfolio with non-executive director appointments. She is currently Board Chair of The Evewell Group Ltd which operates fully integrated medical centres of excellence dedicated to caring for, and protecting, all aspects of fertility and gynaecological health. Mrs Smith is also a Director of HCA Hope Fund UK, a charity providing financial aid and resources to its healthcare worker members to help them start rebuilding after an extended illness, injury, environmental disasters, or other extraordinary situations. In the face of the ever-changing healthcare market Mrs Smith fosters first class relationships with a wide range of healthcare stakeholders to provide care of excellence to patients. Non-Executive Director, Dipl ClinRisk Appointed 23 September 2019 Relevant Skills • executive healthcare management • leadership and strategy setting in complex environments • risk management and governance • customer relations Background Dr Agersborg is a clinical endocrinologist with diverse and extensive practice experience in Pennsylvania and New Jersey, USA. She is Board Certified in both Internal Medicine and Endocrinology, Diabetes & Metabolism and holds specific expertise on the class of melanocortins. Her career has included inpatient, outpatient, and hospitalist positions across a number of prominent medical institutions. She is an Associate Professor of Medicine, teaching medical students and residents in endocrinology. Dr Agersborg had an extensive career in managing commercial sales & distribution at Wyeth Pharmaceuticals (formerly Ayerst Laboratories). Dr Agersborg has played an integral role in setting the CLINUVEL Group's US regulatory and commercial strategy, resulting in the US FDA's approval of SCENESSE® in October 2019 and the subsequent market launch in 2020. Non-Executive Director, MD Appointed 29 January 2018 Relevant Skills • pharmaceutical research & development, commercialisation • relevant knowledge on melanocortins, clinical expertise • commercial knowhow in US pharmaceuticals • general management • experience in private company directorships S US AN ( S U E ) S M IT H KAR E N AG ERS BORG CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 40 41 increased the pace of development of treatments for vitiligo, DNA repair, stroke, porphyrias, Parkinson’s disease and other healthcare products. We have achieved our primary goal, which was ensuring that both patients and early investors benefit from these actions. Now we find ourselves in the secondary stage of financing this project, as this letter explains. I will share the rationale behind our approach to finance, development and expansion over the last 12 months. Unexpectedly, this period has been overshadowed by the tragic loss in August of our esteemed colleague and a dedicated supporter of CLINUVEL, Professor Marcus Maurer, Chair of the Dermatology Department at Berlin’s renowned Charité University Hospital. I would like to pay tribute to Marcus, taking the moment to express my longstanding admiration for a person who was larger-than-life, optimistic, light-hearted and always stood above the matter. I only wish I had done this during his lifetime. Dear Shareholders, Success in biopharmaceuticals involves exploring unchartered territories while working out an attitude to risk. It is a balancing act that requires a team with a certain disposition who have a clear philosophy to follow. Our core technology has been fined-tuned over the space of 43 years. To put our industry in context, in that time three companies have abandoned their attempts to clinically develop melanocortin technology. That is to say, our scientists, physicians and managers have faced daunting challenges in their efforts to turn chemical novelty into economic reality. And yet, they have achieved that goal. Today, CLINUVEL is comprised of a global team that works cohesively across seven locations. These individuals devote their time and energy to build a profitable group that solves healthcare problems, while striving to become a global brand. That is the mission we have set ourselves and which we have an unwavering commitment to fulfil. Now to the future: how and when to propel the Company towards the next phase of growth and valuation? One of our core beliefs is that many minds working together will solve problems related to melanocortin technologies more quickly. Technology is subordinate to the calibre of staff. My main priority has been to position CLINUVEL among the handful of biopharmaceutical companies that are financially independent. Less than 9% of such firms make money and we are one of them. Unfettered by fundraising constraints, we have Marcus was one of the first physicians I contacted back in 2004, as part of lengthy diligence on CLINUVEL (at the time, Epitan). Marcus immediately understood the potential of SCENESSE® in treating EPP and various photodermatoses. He accompanied our managers to Germany’s BfArM, the European Medicines Agency, and reimbursement authorities (GBA, GKV), and spoke about afamelanotide at numerous conferences. Not only was Marcus one of the most ethical professionals one could meet, but he also radiated charisma and demonstrated an innate compassion for patients and staff alike. He was, he is, a luminous being. One very occasionally meets someone who makes an immediate impact, leaves an indelible impression and whose energy makes collaborating joyful and exciting. Marcus was this very person. He leaves behind his partner and three children, and his departure from this world leaves us with an ineffable void. Our clinical research with Charité must continue in his name, that is the way Marcus had wanted it. CLINUVEL’s work will stand on his shoulders, a giant in dermatology. Risk Management & Efficiencies The past year reminded us once again of the steep development and financial risks posed by the relatively high number of Complete Response Letters issued by the FDA, as well as the many drugs that leading insurance companies rejected, owing to concerns about new molecular entities (NMEs). It is worth noting that developing and commercialising novel hormones for untreated diseases—as CLINUVEL has chosen to do—is a MANAGING DIRECTOR'S LETTER In memory of Professor Marcus Maurer “a revolutionary thinker in dermatology, an inspiration and statue of optimism for all who had met Marcus” CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 42 43 positions to suit the brightest individuals. To increase retention and incentives for long careers at the Company, we established the CLINUVEL Academy in 2024. The initiative offers eligible managers a structured training program, post- graduate education, and advanced learning opportunities, in return for long-term service. The Next Phase of Growth: 2024–2026 For the last decade, our financial planning has been centred around establishing a Group that remains at the vanguard of pharmaceutical development, giving shape to the next set of melanocortin technologies. To make this a reality, we came up with a business model in which longer-term development would be self-financed. Now with our melanocortin portfolio (SCENESSE®, PRÉNUMBRA®, NEURACTHEL®) and the PhotoCosmetics ranges (CYACÊLLE® and CYACÊLLE® RADIANT), we are on the cusp of translating peptide technologies to help a host of rare or untreated diseases; realising a future of new delivery methods; and reformulating our technology to suit consumer healthcare. by diversifying its pipeline early on, would have left CLINUVEL dependent on equity investors or debt financing. We estimate this would have diluted shareholders’ ownership of CLINUVEL by more than 1,600% (assuming we would have secured funding at all). So, we took a different path. Once management and majority shareholders agreed to aim for economic sovereignty, we focused our resources on limiting drug development and set out to self-distribute our lead product, SCENESSE®. Thanks to this strategy, CLINUVEL’s financial metrics have strengthened year-on-year. Our robust balance-sheet has enabled us to seize promising growth opportunities by developing our portfolio of melanocortin technologies and pursing new ventures which will result in new revenue streams. In parallel to our attention to risk, we have sought operational efficiencies. We first set annual agendas, aligning all parts of the business and establishing key performance indicators for staff. These included working in cross-functional teams to cross-pollinate expertise; assigning To combat this trend, we are on a perpetual search for the next generation of technical and business talent. The Group continually conducts interviews to identify promising candidates and shape much riskier endeavour than it is for biosimilars, radiopharmaceuticals, generics, diagnostics, devices and managed care. All medical technologies and services developed by listed life-science companies will eventually be collated in a life-science index. On closer inspection however, these distinct businesses are incomparable in such a pared-back format, owing to their differing objectives and risk profiles. Dotmatics, an analysis firm that aggregates biochemical and clinical data, recently revealed that the costs of drug development have surpassed US$1.5 billion over the last decade. Meanwhile regulatory and commercial success rates remain steady, at less than 10%. Higher spending does not guarantee fixed results. I felt strongly that CLINUVEL, as a leading specialist in developing NMEs, needed to be insulated from operational and financial risks, particularly given increased volatility in global markets. Managing the Company’s development in a conventional manner, with less focus to funding requirements and We are embracing novel thinking on financial systems, distribution networks, artificial intelligence, branding activities, social media, broader ambassadors’ communication and ERP, distribution, and market access. We are preparing the Company to integrate new skills in engineering, bio-analytics, and formulation development, while also diversifying our offering and markets by targeting both pharmaceutical and consumer healthcare. Over the last year, we have increased the number of trained and accredited North American Specialty Centres from 67 to 87 (with two now active in Canada), in anticipation of entering the North American vitiligo market. We aim to add another 33 such centres by the end of 2025. These centres will prescribe SCENESSE®, according to the conditions of the drug’s use for vitiligo patients who have lost pigmentation in their skin, and in many cases, their identity. Dr Linda Teng has done a remarkable job of converting sceptical physicians in North America into keen followers and long-term prescribers, thanks to years of persistence by her team. regional responsibilities; and integrating research & development and innovation output. Over the last year, we rolled out a multi-weighted model to guide clinical and regulatory decision-making. The aim was to provide our managers with a blueprint to secure efficacy and commercial viability of new drug candidates. The model aims to save considerable sums by avoiding costly clinical and regulatory programmes which do not meet the commercial criteria down the line. New systems will be added in 2025 too. ERP¹, CRM² systems, eQMS³ and intelligence platforms will ensure that data and information are readily available across the Group. At CLINUVEL, we all understand the need to deliver results and meet deadlines. Those who embrace the Group culture, being enthusiastic and motivated to solve problems, build a meaningful career. At the same time, we are swimming against tides in the post-pandemic labour market. Recruitment agencies such as Randstad report up to a 30% turnover in pharmaceuticals, a number that raises concerns about the retention of key knowledge. 15% GROW TH YOY SCEN ESSE® P R É N U M BRA ® N E U RACT HE L ® CYAC Ê L L E ® M 1 M 2 CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 44 45 Against these achievements, how do we measure the eighth consecutive year of growth in earnings, a continuum carefully planned to facilitate our ambitions? We have built up a hefty vault of cash—currently A$183.9m in cash reserves, an increase of 17% the past financial year—and an annual compounded growth rate over seven years of 34%. This enables us to more rapidly able to integrate new technologies and companies. We are always on the lookout for acquisition opportunities when the time is right and when we can sufficiently mitigate integration risk. This would continue the Group’s expansion and subsequent growth of the management team. Investor & Public Relations, Communications New Australian institutions have purchased over 3% in aggregate of CLINUVEL’s shares (CUV) over the last 12 months. Existing institutional investors also increased their holdings over the same period, taking institutional ownership of CUV to 35% of issued capital. Retail stakeholders (including high-net-worth individuals and family offices) also expanded their stake, to Across the Atlantic, Mrs Antonella Colucci has successfully headed European and Swiss market access, distribution, and logistics. Over 90% of patients continue treatment with SCENESSE® and the therapy is in demand. Patients express high levels of satisfaction and report an improved quality of life, as two new papers illustrate: “Afamelanotide for Treatment of the Protoporphyrias: Impact on Quality of Life and Laboratory Parameters in a US Cohort” from Massachusetts General Hospital; and “Association of quality of life measures with afamelanotide treatment in patients with erythropoietic protoporphyria and x-linked protoporphyria: A retrospective cohort study”, from Henry Ford Hospital in Detroit. Our patient registry makes these studies possible. It contains uninterrupted follow-up data on patients worldwide which in turn, fuels the growth in the number of centres, prescribers, patients and treatments administered. This makes more doctors and patients aware of the therapy’s long-term benefits. 40% of issued capital. We are buoyed by our supporters’ optimism. One high-net-worth investor in the United States recently grew their holdings to one million shares, or 2% of issued capital. Given the ebullient interest in North America, we have recruited our first investor relations manager for this market, Mr Myles Clouston, who is an experienced analytics expert in the life sciences sector. In October 2023 we welcomed Bell Potter, one of Australia’s largest financial advisory firms, commencing research on the Company for their client base which spans individuals, institutions and corporations. This was followed by Morgans Financial and Morningstar initiating coverage a month later. Mr Malcolm Bull, who leads our Investor Relations (IR) efforts, has attracted six sell-side analysts and acts as the point of liaison with our new Australian institutional investors. Our consumer-facing communications have also progressed in leaps and bounds. This year we made a first low- cost foray into social media, engaging specialised ambassadors with their We are focusing on raising brand awareness ahead of the launch of the M1 and M2 lines in 2026, transdermal formulations containing melanocortins. These will be a world first. The Annual Meeting of the American Academy of Dermatology in Orlando next spring presents another opportunity to promote the Company’s industry- defining technologies and bold moves into consumer skincare. We look forward to seeing you there. One of the year’s digital highlights was the event in February hosted by Ms Stefani Germanotta (whom you may know as Lady Gaga) and Mr Michael Polansky at their home in Los Angeles. At this star-studded, intimate evening we presented CLINUVEL’s pioneering technology and future ambitions to Silicon Valley’s investor community and professionals in the entertainment industry. The night yielded dazzling results. Content from the evening reached 3.4m people in the days following the event, boosted by Ms Germanotta’s influential profile and mega-influencers own histories of solar damage and skin cancers to raise awareness of the first PhotoCosmetic product CYACÊLLE®. We also recruited our first professional writer, a journalist formerly of The Economist, to create content and opinion pieces for targeted online audiences. A strategic goal remains to deliver articles and engaging, relevant content in digital formats. In the next 24 months, we intend to identify additional influential ambassadors (CUVAs) who can share the CLINUVEL story. We started the CUVIPs program, engaging intriguing personalities with a public profile and communicating our story with their “followers” in both the virtual and digital worlds. Bringing novel healthcare products to a consumer market requires a long runway. Time and patience are key. Two aims drive our global branding campaign: first, a desire to achieve household name recognition within the next two years. Second, to make CLINUVEL known as a brand synonymous with world-leading innovation in both photomedicine and PhotoCosmetics. such as Ms Dylan Mulvaney. It was proof that a combination of high- profile events, curated social-media campaigns and broader exposure outside pharmaceutical circles will launch CLINUVEL into new, valuable conversations. From here onwards, it is about repetition of messages and having a presence at key global events. Collaboration Post-pandemic By now, the world has endured seven million deaths from COVID-19 and a total of 776 million confirmed cases (refer World Health Organisation), with many more undocumented. Among other things, the pandemic created seismic shifts in working habits. By Q1 2023 we were well adapted to a new reality of Zoom calls at kitchen tables. After this new-found freedom, it was clear that we would not revert to the pre-pandemic norm of five days in the office per week. We posed ourselves two questions: how to maintain productivity and where would work suffer without daily interactions? A year on, we have settled into a new rhythm. Teams working in offices tend to come in two or three times a week, in line with the CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 46 47 global average for the post-pandemic workplace. CLINUVEL staff who require a physical laboratory have no option other than to attend full time, however. I believe that tempting professionals back the office will require employers to rethink their offer to workers. This will entail disrupting the former notion of “office” and presenting an entirely novel concept to staff. Flexibility is essential: commuting outside peak traffic; state- of-the-art facilities that include wellness and meditation rooms; a nursery for children; and cooking facilities. In sum, creating an environment of privilege may incentivise valued staff back to the office. In Britain, we took advantage of a depressed commercial real-estate market to purchase a highly-valued office close to London. Once the refit of our premises is complete, we anticipate that the Britain-based team will reevaluate the inconvenience of leaving home, considering the benefits offered at the new facilities. Research & Development, Innovation Direct investment in research, development and innovation amounts to more than 40% of our net profits. Our Board and senior personnel are acutely aware of the risks associated with innovating melanocortins. And yet, we are confident that it is a gamble worth taking. It would pay off handsomely, in the shape of the competitive position that CLINUVEL would attain at the end of successfully developing a drug for untreated diseases. A case-in-point is the market for porphyria, a new venture that has generated returns on equity of more than 24% on average since we started commercialising. We have invested resources into the VALLAURIX Singapore team this year, adding new skills, new capital expenditures and new analytical methods with an eye to advancing three pharmaceutical products and the three PhotoCosmetic lines. We are continuously evaluating whether these investments in melanocortin-based technologies increase long-term value, or whether the funds would be more usefully spent elsewhere. Time versus output remains a critical metric of how we assess resource allocation. Thus far, we are compelled to develop the next melanocortin products, serving unmet, lucrative markets. Finally, in February this year we launched the Photomedicine Foundation, an important, worthy initiative which donates the fruits of R&D to underprivileged communities. African patients with xeroderma pigmentosum will receive treatment and skin-protecting PhotoCosmetics funded by the Foundation. We will focus on patients with darker skin, children and those handicapped by light. Board and Management Composition We acknowledge the contributions of Willem Blijdorp, who served nine years as a Board member and four years as Chairman. He gave commercial input at critical moments in CLINUVEL’s history. His business acumen and wider commercial views are missed. I also wish to thank Andrew Likierman for serving during an interim period, and for kindly providing his financial views when they were needed. As this letter goes to print, we are poised to welcome new members who will bring diverse skills to the Board. Across the Group, our priority is building a team with complementary experience and skills. We are also committed to achieving gender parity and increasing ethnic diversity. Our current ratio of female to male employees is 69:31. We are striving to maintain a minimum of 40% female representation on the Board (the current make-up is 60:40 female:male). Other measures of diversity are detailed in the feature on Sustainability in this Annual Report. At the same time, we are establishing a skills-based organisation where we employ and develop professionals who can meet both current and future objectives. These range from R&D to clinical, analytics, commercial, consumer health, branding and communications. In the meantime, succession planning for the executive team is progressing well. In July Mr Peter Vaughan replaced Mr Darren Keamy as Chief Financial Officer after 19 years at the Group; and new executives are being added to the team of ten, with Mr Lachlan Hay stepping up to the role of Chief Operations Officer on 1 July. The aim is to appoint a new Chief Executive Officer prior to my departure in June 2026, giving sufficient time for an orderly handover. The Company will continue its trajectory with new management in place by 2026. That presses us to realise all ambitions in less than 24 months. Summary This past year has been defined by exciting advances, supported by activities to consolidate and realise these strides forwards. CLINUVEL ranks among the few financially independent biopharmaceuticals on a solid growth trajectory. This has attracted numerous new investors to CLINUVEL, drawn by our fundamentals, long-term approach and risk management. To our delight, retail investors in Germany reached more than 1,900 in the past 12 months and their interest in the Company was warmly received during an over- subscribed meeting in Düsseldorf last March. German-speaking countries will receive further investor relations attention in the year ahead. We are bullish on the outlook for SCENESSE®. The market for the therapy is expanding year-on-year and insurers have already started to reimburse teenagers aged 15 and older. Eventually, we will add the adolescent population to our total pool of patients—a true milestone. With the new talent and specific skills that have entered the Company, we have also begun gearing up to enter the North American vitiligo market. This will reap significant rewards. The bold combination of pharmaceuticals and healthcare is already lending the Company global exposure. We have laid the foundations for developing, manufacturing and distributing the first PhotoCosmetic products, while preparing for the flagship M-lines. Of course, we remain aware that two distinct businesses compound risks. Yet we possess the funds to take calculated risks, and we are confident in our ability to succeed. Our leadership continues to evolve, protecting CLINUVEL’s core identity as we innovate. Of the executive team of ten, eight have been with the Company for more than 15 years, and we welcome a new tier of talented senior managers. We have seen the addition of Mr Benson Chao (Legal Counsel), Ms Claire Newstead-Sinclair (Company Secretary), Mr Vaughan (CFO), and the return of Dr Emilie Rodenburger (Director, Global Clinical Affairs). We are pleased to have Mr Clouston join us to build an IR program in the US; and Ms Marga Arrom-Bibiloni to lead the branding activities for the consumer healthcare branch of the business. There are many new prodigies and emerging stars within the Group. Our task is to design programmes for individuals destined to have a long and rewarding career with us, under the umbrella of the CLINUVEL Academy. I am convinced these investments are worthwhile and that they will pay off in the long-term. I look back at a year where a valuable team carried out quality and pharmacovigilance; regulatory; R&DI; clinical; finance and compliance; investor relations; public relations; a CBM team performed with creative talent; and strong general management. The avid reader and biopharma investor will also know that CLINUVEL only discloses a fraction of our activities, as it is not in our interest to feed competitors with valuable knowledge. With the bulk of our work below the surface, we look forward to the days when we can reveal our value accretive technologies to enter new markets, protected by intellectual property patents. The key objective for me now is to fulfil a life’s ambition: to leave behind a prosperous biopharmaceutical company, which houses unique individuals, talents and personalities collectively doing good for those who benefit from our medical innovations. The journey to realising this goal has brought with it humility, shared by all who are associated with CLINUVEL from new Board members to our experienced executive team. This is a robust foundation which we can build upon. That only leaves me to thank the CLINUVEL team for delivering great financials and you, for staying with us. Philippe Wolgen Managing Director CLINUVEL Group 1. Enterprise Resource Planning; 2. Customer Relationship Management; 3. Electronic Quality Management System CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 48 49 OPERATING & FINANCIAL REVIEW IN-HOUSE COMMERCIAL TEAM DIRECT DISTRIBUTION 2019–2024 5% new institutional investors attracted 15% 5% 5% R&D Pipeline Development Vitiligo CUV105 - 75% Recruitment DNA repair – Full Recruitment of XP CUV152-156 Stroke – Full Results in CUV803 New indication announced 20% 0% 0% 0% 5% General Management Initiatives Recruit Key Personnel in R&D Recruit Key Personnel in Operations Initiatives to expand/add value to Clinuvel 10% 2.5% 2.5% 2.5% TOTAL 100% 60% CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 96 97 v) Long-term retention KMP (except the MD) and all other employees are eligible to receive LTI in the form of PRs awarded for long-term service to the Group. The vesting period of the long-term service PRs is three years from grant date whereby risk of forfeiture exists until the last day of employment at the end of the 36 months. During the FY2024 financial year, only the Group’s CFO was eligible to receive retention awards, payable in cash and conditional to having remained employed at the last day of the respective employment terms. The Group CFO, Mr Darren Keamy, received a long-term retention award of $28,198 during the FY2024 financial period. i Long-term Incentives (PRs, equity awards) to KMP (excluding MD) KMP receive periodically receive equity awards in the form of PRs every four years assessed upon value-generating performance conditions. The most recent PRs were awarded to KMP in November 2019 and vested or expired in November 2023. As of 1 January 2024, newly employed KMP are annually awarded PRs on tenure of service set to secure retention for time served. In contrast, existing KMP were eligible to receive PRs with a vesting period of four years. For the CFO (Darren Keamy resigned 1 July 2024) and CSO, the relative percentage of LTIs are highlighted in the table below: Executive KMP # Performance Rights on Issue 1 July 2023 # Performance Rights Vested and Exercises # Performance Rights Lapsed and Expired Deemed Achieved at Vesting Date CSO 75,813 31,938 43,875 42% CFO 339,875 184,302 155,575 54.2% During the financial year ended 30 June 2024, a total of 216,240 of the potential 415,688 PRs issued to KMP in the 30 June 2022 financial year were deemed to have been achieved by 20 November 2023 and were subsequently converted to shares on 27 November 2023. No PRs were issued to KMP during the financial year ended 30 June 2024. ii Long-term incentives (PRs, equity awards) to MD PRs were last awarded to the MD in 2019 where at the 2019 AGM, shareholders approved the grant of 1,513,750 PR to the MD and these PRs were offered and granted to the MD, who accepted the offer on 26 August 2020. These PRs had a vesting period of up to four years from date of shareholder approval. Several of the performance conditions were deemed to have been achieved which amounted to an issuance of 301,125 shares (20%) with the remaining performance conditions not achieved by 20 November 2023 amounting to 1,212,625 PRs (80%) being forfeited and lapsed. As at 30 June 2024, the MD has no PRs outstanding. Whilst the employment agreement of the MD has been extended by one further year to 30 June 2026 (refer ASX announcement 28 June 2024), following advice from external remuneration consultants, proxy advisors, and counsel, the Remuneration Committee has deemed to not award the MD any new PRs or equity incentives beyond the expiry of the existing PRs in November 2023. Accordingly, the MD has not received any equity incentives in FY2024 and will currently not receive PRs in either of the next two financial years, FY2025 and FY2026. To secure the ongoing services of Dr Wolgen as MD for the extension period to 30 June 2026, the Committee implemented a Retention Payment, subject to Dr Wolgen remaining with the business through until 30 June 2026, may entitle him to receive a Retention Payment equivalent to 200% of FBR, subject to the executive satisfying certain conditions. Dr Wolgen will forfeit any entitlement to a Retention Payment where he resigns (for reasons other than fundamental change) or is terminated for cause but will retain the entitlement if his employment is terminated without cause or he resigns for fundamental change. 3) Benefits The Board strives to offer the Group’s employees competitive benefits comparable to pay scales within the country and region of residence. The total incentive package of an employee may include pension contributions, health insurance contributions, healthcare plans or private healthcare insurance, telephone and IT contributions as well as a laptop and professional software licenses, or other such benefits. Total incentive packages may differ between regions and market conditions at the time of entering an employment agreement. 4) Claw back provisions The Remuneration Committee adheres to a process of retaining the right to claw back and seek recovery of benefits paid to KMP if adverse activities or events have occurred which were detrimental to the Group resulting in financial loss or value. The Remuneration Committee may elect to claw back a previously provided retention award and / or LTI. The Board of Directors, in its discretionary capacity, may elect to reduce, cancel in part or in full, or pursue a claw process for incentives previously provided to any employee, including any former employees, where misconduct or adverse activities have occurred. If an employee of the Group has acted dishonestly or failed to act in a way that one would expect according to CLINUVEL’s Code of Conduct and corporate governance, the Board may decide to claw back and retrieve part or total of the retention award or equity provisions from the employee. E. EQUITY BASED AWARDS 1) Performance Rights: The Group has an ownership-based scheme not only for Directors and other executive KMP but also for employees and select consultants of the Company, which is designed to provide long-term incentives to deliver long-term value. All PRs that have been issued fall under two Performance Rights plans: a) the CLINUVEL Conditional Performance Rights Scheme (2009); and b) the CLINUVEL Performance Rights Plan (2014). i) Conditional Performance Rights Scheme (2009) The Conditional Performance Rights Scheme (2009) has been available to eligible employees of the Company. Any issue of rights to Directors requires shareholder approval in accordance with ASX Listing Rules. All rights are issued for nil consideration, have no voting rights, are not listed on the ASX and are non-tradeable (other than with prior written Board consent). They can be converted to ordinary shares at any time once all vesting conditions attached to the rights have been achieved. The Company may, at the sole discretion of the Board, determine that any shares exercised from vested PRs be acquired by a Plan Trustee and then, from time to time, transferred to participants to the Performance Rights Plan. Unless the PRs are granted with a shorter vesting period, PRs under this plan lapse after seven years from grant date. It is no longer intended to issue PRs under the 2009 Plan. As at 30 June 2024, 29,082 PRs issued under the 2009 Scheme remain unvested. ii) Performance Rights Plan (2014) The Performance Rights Plan (2014) is available to eligible persons of the Company. Any issue of rights to Directors requires shareholder approval in accordance with ASX Listing Rules. Any issue of rights to Directors requires shareholder approval in accordance with ASX Listing Rules by since 2020, the Company policy is for NED to not receive PRs or other equity securities in the Company. All rights are issued for nil consideration, have no voting rights, are not listed on the ASX and are non-tradeable (other than with prior written Board consent). They can be converted to ordinary shares at any time once all vesting conditions attached to the rights have been achieved. The Company may, at the sole discretion of the Board, determine that any shares exercised from vested PRs be acquired by a Plan Trustee and then, from time to time, transferred to participants to the Performance Rights Plan. Unless the PRs are granted with a shorter vesting period, PRs under this plan lapse after seven years from grant date. PRs are valued for financial reporting purposes only, using either a Monte Carlo simulation pricing model or a probability- adjusted binomial valuation pricing model and are represented as accounting values only in the financial statements. Holders of PRs may or may not receive a benefit from these amounts, either in the current or future reporting periods. The value of all PRs granted, exercised, and lapsed during the financial year is detailed in tables within this Remuneration Report. Of the 2,591,860 Performance Rights on issue on 1 July 2023 which had been previously issued under the 2014 Performance Rights Plan to both KMP and non-KMP employees, 716,932 (27.7%) PRs were deemed to have achieved the performance conditions by the 20 November 2023 vesting date and were exercised. 1,637,678 (63.2%) performance rights were deemed to have not achieved the performance criteria by the vesting date and lapsed. It indicates how the Committee has set performance conditions at maximum stretch. At the Company’s Annual General Meeting held on 31st October 2023, shareholders approved the renewal of the 2014 Performance Rights Plan for a further 3 years. Under the renewed plan, up to a maximum of 2.25% of the Company’s issued share capital may be issued as new PRs, though this maximum number is not intended to be a prediction of the actual number of securities to be issued by the Company under the Plan, as assessed from past conditions met. As at 30 June 2024, 237,250 PRs issued under the 2014 Performance Right Plan remain outstanding, of which an estimated 200,854 of the PRs (85%) are likely to achieve the underlying performance condition but will not vest until the end of their respective vesting dates if the employee is still employed at that time by the Company. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 98 99 F. REMUNERATION COMPONENTS BENCHMARKED Benchmarking the remuneration packages of KMP and management occurs annually through the selection of comparable international peer companies according to the selection criteria outlined below. In conjunction with remuneration consultants, external counsel, and taking into account feedback from proxy advisors, the Remuneration Committee arrives at a selection of comparable companies in setting the FBR and total incentive package for KMP, including the MD. A number of critical components underpin the remuneration practices of the Group whereby the benchmarking of its FBR and STI is compared against the pay scales of peer companies. It is considered critical for the Company’s remuneration structure to remain competitive against international benchmarks to attract and retain existing executive talent at the highest managerial calibre. The Board firmly acknowledges that it cannot limit its benchmarking and consequent setting of the level and structure of its executive remuneration against local Australian peer companies only. International publicly listed companies with the same or similar R&D and commercial risks, have been deemed the most appropriate comparable peer group measure given the Group generates all its revenues from Europe, North America and the Middle-East. In addition, over 82% of the total employees of the Group reside and are employed outside Australia. Accordingly, any remuneration benchmarking should also be compared against international pay-scales and practices. The selection criteria for these companies are broadly based on comparison of businesses and sectors: a) of similar complexity and innovative nature; b) of similar scope and scale; c) requiring highly technical and specialised skills; d) of similar value, reflected in market capitalisation; e) which have demonstrated similar progress in achieving business outcomes; and f) with a comparable risk profile. Selection criteria Commentary Bio-pharmaceuticals Bio-pharmaceutical development is regarded as comprising the highest R&D, clinical, regulatory, and commercial risk. Peers are selected internationally on comparable technologies. Platform technologies Preference is to select those companies which have translational technology, and or ability to utilise technology in multiple indications, and formulations. NME/NCE¹ New molecular, chemical entities bear the highest risk due to the novelty and lack of prior art. Peers are identified on the basis of comparable NME/NCE strategies. Revenue generating Comparison is drawn with independently operating and mature bio-pharmaceutical companies, which are debt free and not dependent on equity funding. Profitable Selected are the peers which are profitable and demonstrate a CAGR. Annual Growth Identified are bio-pharmaceutical companies which illustrate annual growth in pipeline and activities through self-funding. Longevity, tenure Benchmarked against executive management with a minimum tenure of 3 years, with a proven track record in the industry. Qualification, background Selection and benchmarking of management with dual or multiple academic qualifications, with a background in life sciences and proven track of operating in capital markets. Responsibility, risks Benchmarked against peer companies, where management bears executive responsibility and proven to manage operational, clinical, regulatory and financial risks longer term. ¹ New molecular or new chemical entity, indicating complexity and length of R&D During the year, the MD’s remuneration was benchmarked against 12 Australian and 22 US life science peer companies with different profiles, since there are few profitable bio-technology companies globally serving as a benchmark, (except for the mix of medical device, human and animal health prescriptive and over-the-counter pharmaceutical products, healthcare solutions and diagnostic focused companies) using the following criteria: The financial performance of the Company measured against this peer group ranks strongly on TSR, EPS and revenues growth, and ROE criteria. The Company ranks: • 10th amongst its peers for TSR performance over 7 years; • 8th among its peers for growth in earnings per share over 5 years; • 5th among its peers in the compound annual growth of total revenues over 7 years; and • 6th amongst its peers for ROE performance. Benchmarking Criteria Australian Companies US Companies Market Capitalisation: Between A$450 million and A$2.7 billion Between US$500 million and US$1.7 billion Industry Segment: Pharmaceutical, Biotech, Medical companies Biopharma companies CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 100 101 In comparing FY2024 KMP remuneration to the peer group remuneration for FY2023, the MD’s FBR was found to be positioned above the median level, whereas the overall remuneration package was below the median level. The Board considers the level of FBR to be appropriate, considering the long-term outperformance of the Company, the relatively unusually long-term tenure of the MD to lead the restructure of the Company since 2005, building a profitable and sustainable business, his deep knowledge of the targeted technologies, whilst delivering high shareholder returns. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 102 103 G. RELATIONSHIP BETWEEN REMUNERATION AND PERFORMANCE The Group has dedicated its resources to the ongoing research, development, and commercialisation of its unique and medically beneficial technology. The remuneration and incentive framework, which has been put in place by the Committee, has ensured executive personnel are remunerated such that they are focussed on both maximising short-term operating performance and long-term strategic growth leading to shareholder value. A mix of metrics are used to assess achievement of regulatory, development, commercial and operational outcomes, where financial metrics in isolation are not necessarily an appropriate measure of executive performance. Specifically, the Committee looks at relations between overall performance, strategic targets and progress of the Group, and overall shareholder returns. The table shows the development progress made during the year: CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 104 105 Analysis of CLINUVEL’s share price performance against main life science indices shows an equally positive outcome over the long-term (the past seven years). However, the Board is cognisant that there may not be a relation between CLINUVEL’s volume weighted average share price (VWAP) and performance of the Company, as has been frequently seen. This was the case in FY2024 as CLINUVEL’s share price declined by 14.5%, whilst the Company has grown and some recovery was evident in key biotech indices. The graphs below show the share price over the past year and seven years compared to key indices and the share price over the longer term with some of the key milestones that have been achieved. The Board believes the remuneration mix aligns the other executive KMP and MD to shareholder interest. The remuneration mix for 2023/24 is demonstrated in the table below. The Board intends to award PR, or LTIs, to the KMP (except the current MD) in the coming financial year. The current CFO is eligible to receive PRs at the end of the vesting period. H. NON-EXECUTIVE REMUNERATION The Board seeks an appropriate combination of skills, diversity, experience, attitude, and specific attributes to steward the Company’s success. The Remuneration Committee recommends to the Board individual NED fee levels to attract and retain those with the forementioned attributes, having regard to global employment market conditions and consultation with specialist remuneration consultants with experience in the healthcare and biotechnology industries. 1) Non-Executive Director Fees NED fees consist of base fees and committee fees and are inclusive of superannuation and all other contributions. There are no further retirement benefits. The fees are outlined in the table below: Annual NED fees (inclusive of superannuation): Board Fees Audit & Risk Committee Remuneration Committee Nomination Committee Chair 115,000 - - - Non-Executive Director 70,000 - - - Committee Chair - 15,000 15,000 - Committee Member - 5,000 5,000 - * The Chair of the Board is a member of all Committees but does not receive any additional Committee fees in addition to the base fee. ** The CEO does not receive Board fees for his membership as director. Under the Company’s Constitution, the maximum aggregate remuneration available for division among the NEDs is to be determined by the shareholders in a General Meeting and was set at $700,000 at the 2019 AGM. This amount (or some part of it) is to be allocated to NEDs as determined by the Board. The aggregate amount paid to NEDs for the year ended 30 June 2024 was $437,084 (2023: $495,000). 2) Non-Executive Director Long-Term Incentive – Equity Compensation Long-term equity remuneration was formerly provided to NEDs via the CLINUVEL Conditional Rights Plan and the Performance Rights Plan. Any issue of PRs to NEDs requires shareholder approval. It is not planned for NEDs to participate in long-term equity compensation plans. No NED holds PRs as of 30 June 2024. Position Fixed Remuneration STI Cash LTI Cash1 LTI Equity Managing Director 100% 46% of Base Salary None None Other Executive KMP CFO 100% 7% of Base Salary None None CSO 100% 7% of Base Salary None None CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 106 107 I. SERVICE AGREEMENTS Remuneration and other terms of employment for the MD and KMP are formalised by a service agreement determined by the Remuneration Committee and accepted by the Board of Directors. The agreement provides for FBR, STI, LTI, other benefits, and participation, when eligible, in the Group’s Performance Rights Plan. The MD makes recommendations to the Remuneration Committee on the service agreements entered into with other KMP, providing for base salary, incentives, other benefits and participation, when eligible, in the Group’s Performance Rights Plan. On appointment to the Board, all NEDs enter into a service agreement with the Company in the form of a letter of appointment which outlines the Board’s policies, the Director’s responsibilities, and compensation for holding office. On 28 June 2024, the service agreement for the MD, Dr Wolgen, was extended for one further year to 30 June 2026. Due to the resignation of Mr Keamy, effective from 1 July 2024, his service agreement for the roles of Company Secretary and CFO were not renewed beyond the 1 July 2024 expiration date. The details of the service agreements to the MD and KMP are: Name Dr Philippe Wolgen Dr Dennis Wright Duration of contract 24 months (terminating 30 June 2026) No fixed term Notice Period (from Company) 12 months 3 months Notice Period (from Managing Director) 12 months - Notice Period (from Executive KMP) - 3 months Termination Payment without Cause 12 months 3 months Termination Payment with Cause None None Contract End Date 30 June 2026 not applicable J. DETAILS OF REMUNERATION 1) KMP remuneration of the Company for the years ended 30 June 2024 and 30 June 2023 – Cash Based Benefits Year Gross Salary ³ Short Term Incentive Retention Award Other¹ Superannuati on/ Pension Fund Total (Excluding Share- Based Payments) $ $ $ $ $ $ Dr. P. J. Wolgen2 2024 1,765,068 941,046 - 283,454 - 2,989,568 2023 1,593,117 898,244 - 286,314 - 2,777,675 Mrs. B. M. Shanahan 2024 76,577 - - - 8,424 85,001 2023 76,923 - - - 8,077 85,000 Mr. W. A. Blijdorp 2024 82,083 - - - - 82,083 2023 115,000 - - - - 115,000 Dr. K. A. Agersborg 2024 75,000 - - - - 75,000 2023 75,000 - - - - 75,000 Mrs. S. E. Smith 2024 80,000 - - - - 80,000 2023 75,000 - - - - 75,000 Prof. J. V. Rosenfeld 2024 82,583 - - - 9,084 91,667 2023 67,874 - - - 7,126 75,000 Prof J. A. Likierman 2024 23,333 - - - - 23,333 2023 70,000 - - - - 70,000 Dr. D. J. Wright 2024 305,086 21,966 - - 27,399 354,451 2023 289,182 26,026 - - 25,292 340,500 Mr. D. M. Keamy 2024 361,594 26,035 30,736 - 27,399 445,764 2023 331,737 58,054 - - 25,292 415,083 Total 2024 2,851,324 989,047 30,736 283,454 72,305 4,226,867 2023 2,693,833 982,324 - 286,314 65,787 4,028,258 1. ‘Other’ includes health insurance, housing and other allowances that may be subject to fringe benefits tax. 2. Dr Wolgen’s salary is paid in Euro currency. 3. Does not include movement in annual leave and long service leave provisions. For Mr Keamy and Dr Wright, the movement in their annual leave and long service leave entitlements was $22,519 accretive and $28,447 accretive respectively (year ending 30 June 2023: $11,206 accretive and $24,693 reduction respectively). For Dr Wolgen, the movement in his aggregate annual leave and long service leave entitlements for year ending 30 June 2024 decreased by $11,787 (2023: $232,054). CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 108 109 3) KMP remuneration of the Company for the years ended 30 June 2024 and 30 June 2023 – Non-Cash Benefits Share-based payments (accounting charge only)¹ Year Total (Excluding Share- Based Payments) Performance Rights (for accounting purposes only) Total (Including Share- Based Payments, for accounting purposes only) Performance- based $ $ $ % Dr. P. J. Wolgen 2024 2,989,568 752,844² 3,742,412 20% 2023 2,777,675 3,612,426 6,390,101 57% Mrs. B. M. Shanahan 2024 85,001 - 85,001 - 2023 85,000 - 85,000 - Mr. W. A. Blijdorp 2024 82,083 - 82,083 - 2023 115,000 - 115,000 - Dr. K. A. Agersborg 2024 75,000 - 75,000 - 2023 75,000 - 75,000 - Mrs. S. E. Smith 2024 80,000 - 80,000 - 2023 75,000 - 75,000 - Prof. J. V. Rosenfeld 2024 91,667 - 91,667 - 2023 75,000 - 75,000 - Prof J. A. Likierman 2024 23,333 - 23,333 - 2023 70,000 - 70,000 - Dr. D. J. Wright 2024 354,451 428,162 782,613 55% 2023 340,500 296,352 636,852 47% Mr. D. M. Keamy 2024 445,764 2,218,120 2,663,884 83% 2023 415,083 2,674,581 3,089,664 87% Total 2024 4,226,867 3,399,126 7,625,993 - 2023 4,028,258 6,583,359 10,611,617 - ¹As these values represent accounting values the KMP may or may not actually receive any benefit from these amounts, either in the current or future reporting periods. Any benefit obtained by the KMP is contingent upon the Company achieving certain performance conditions and the employee remaining in employment to a fixed date. The value of all PRs and share options granted, exercised and lapsed during the financial year is detailed in the following tables within the Remuneration Report. PRs were priced using either the Monte Carlo simulation pricing model or a binomial pricing model. The amount expensed each reporting period includes adjustments to the life-to-date expense of the grants based on the reassessed estimate of achieving non-market performance criteria. ² The value of the PRs assigned to the MD, as awarded on achieving 20% of the PRs granted at the AGM 2019. Dr Wolgen is no longer eligible for PR or any form of equity. 4) Remuneration Performance Rights holdings of KMP – 2024 Balance at Start of Year Issued as Compensation Exercised* Lapsed and Expired Balance at End of Year Perform Condition met, not exercisable until end Vesting Period* Directors Dr. P. J. Wolgen 1,513,750* - (301,125) (1,212,625) - - Mrs. B. M. Shanahan - - - - - - Mr. W. A. Blijdorp - - - - - - Dr. K. A. Agersborg - - - - - - Mrs. S. E. Smith - - - - - - Prof. J. V. Rosenfeld - - - - - - Prof. J. A. Likierman - - - - - - Other KMP Dr. D. J. Wright 93,938 - (31,938) (43,875) 18,125 - Mr. D.M. Keamy 347,235 - (184,302) (155,575) 7,358 - * A listing of the Performance Conditions for the Performance Rights vested and exercised are shown at section XXX. 5) Shares held by KMP The number of ordinary shares in the Company during the 2023/24 reporting period held by each of the Group’s KMP, including their related parties, is set out below: Year Ended 30 June 2024 Personnel Balance at Start of Year Granted as Remuneration Received on Exercise Other Changes Held at the End of Reporting Period Dr. P. J. Wolgen 3,122,247 - 301,125 1,850 3,425,222 Mrs. B. M. Shanahan 196,577 - - - 196,577 Mr. W. A. Blijdorp 1,743,118 - - - 1,743,118 Dr. K. A. Agersborg 5,500 - - - 5,500 Mrs. S. E. Smith 420 - - - 420 Prof. J. V. Rosenfeld 3,148 - - - 3,148 Prof. J. A. Likierman 1,000 - - (1,000) - Other KMP Dr. D. J. Wright 156,874 - 31,938 - 188,812 Mr. D. M. Keamy 178,588 - 184,302 - 362,890 6) Terms and conditions of each grant of rights affecting remuneration in the current or future reporting periods For each STI incentive and right(s) granted, the percentage of the available grant or STI that was paid or vested in the financial year, and the percentage forfeited due to unmet milestones (including service length), is set out below. STIs are paid in the year following the period of performance. Entity Number of Rights Granted Value per Right on Grant Date Class Grant Date Issue date Expiry Date Perform Condition met, not exercisable until end Vesting Period Exercisable Date CLINUVEL 7,500 $12.87 Ordinary 05/05/2022 05/05/2022 20/12/2024 - 20/12/2024 CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 110 111 7) Remuneration details of Equity Incentives (Performance Rights) 8) Remuneration details of cash incentives Loans to Directors and Executives No loans were granted to Directors or executives for the years ended 30 June 2024 and 30 June 2023. Signed in accordance with a resolution of the Board of Directors pursuant to s.298(2) of The Corporations Act 2001. Equity Incentives (Performance Rights) Name Year Granted Latest Year of Vesting Vested in Year Lapsed & Forfeited in Year Max Value of Right at Grant Date Yet to Vest Dr. P. J. Wolgen - - - - Mrs. B. M. Shanahan - - - - - Mr. W. A. Blijdorp - - - - - Dr. K. A. Agersborg - - - - - Mrs. S. E. Smith - - - - - Prof. J. V. Rosenfeld - - - - - Prof J. A. Likierman - - - - - Other KMP Dr. D. J. Wright 2011/12 no limitation - - $12,853 Mr. D. M. Keamy 2011/12 no limitation - - $5,219 On exercise, each PR entitles the KMP to one fully paid ordinary share in the Company. The share price of the Company at the time of exercise is not known. The minimum value of unvested PRs is $Nil. The exercise price for the PRs granted between in 2010/11 was $Nil. Cash Incentives Name Max Potential Opportunity (%) STI Awarded (%)* STI Forfeited (%) Total Granted ($) Dr. P. J. Wolgen 100% 53% 47% 941,046 Dr. D. J. Wright 9% 80% 20% 21,966 Mr. D. M. Keamy 20.5% 35% 65% 26,035 * For the MD, the STI Awarded in the functional currency on his base salary was 60.0% K. DETAILS OF PERFORMANCE RIGHTS 1) Managing Director Performance Rights Vested on 20 November 2023 Details of Performance Rights issued to Managing Director Performance Condition Met Number of Rights Vested PC1 Performance Rights granted to Managing Director – 450,000 Executive management and staff succeeding in steering the Company to a: (i) Market capitalisation of a minimum A$1,700,000,000 - as measured by a minimum of 15 trading days during the vesting period - 10% of the performance rights under PC1 shall vest,  45,000 (ii) Market capitalisation of a minimum A$2,100,000,000 - as measured by a minimum of 15 trading days during the vesting period - 15% of the performance rights under PC1 shall vest, X - (iii) Market capitalisation of a minimum A$2,700,000,000 - as measured by a minimum of 15 trading days during the vesting period - 25% of the performance rights under PC1 shall vest, X - (iv) Market capitalisation of a minimum A$5,000,000,000 - as measured by a minimum of 15 trading days during the vesting period - 25% of the performance rights under PC1 shall vest, X - (v) Market capitalisation of a minimum A$7,500,000,000 - as measured by a minimum of 15 trading days during the vesting period - 25% of the performance rights under PC1 shall vest. X - Only in case of a recession in the country of the Company’s primary market exchange (recession defined by a contraction of gross domestic product for 2 consecutive quarters) when the Company’s market capitalisation may be adversely impacted by conditions outside management control, that the market capitalisation targets defined in PC1 (i) to (v) above will be replaced by the following performance targets: (i) The Company’s growth in share price outperforms either the Nasdaq Biotech Index or ASX Healthcare Index for 1 quarter - after the country has entered a recession - by more than 3.0%, 10% of the performance rights under PC1 shall vest, (ii) The Company’s growth in share price outperforms either the Nasdaq Biotech Index or ASX Healthcare Index for 1 quarter - after the country has entered a recession - by more than 4.0%, 15% of the performance rights under PC1 shall vest, (iii) The Company’s growth in share price outperforms either the Nasdaq Biotech Index or ASX Healthcare Index for 1 quarter - after the country has entered a recession - by more than 5.0%, 25% of the performance rights under PC1 shall vest, (iv) The Company’s growth in share price outperforms either the Nasdaq Biotech Index or ASX Healthcare Index for 1 quarter - after the country has entered a recession - by more than 7.0%, 25% of the performance rights under PC1 shall vest, (v) The Company’s growth in share price outperforms either the Nasdaq Biotech Index or ASX Healthcare Index for 1 quarter - after the country has entered a recession - by more than 9.0%, 25% of the performance rights under PC1 shall vest. When the country of the Company’s primary market exchange is no longer in recession, this performance condition reverts back to the original market capitalisation conditions. PC2 Performance Rights granted to Managing Director – 105,000 (i) Upon quarterly reporting of A$60 million in cash and cash equivalents* held for 2 consecutive quarters, 15% of PC2 shall vest,  15,750 (ii) Upon quarterly reporting of A$70 million in cash and cash equivalents* held for 2 consecutive quarters, a further 20% of PC2 shall vest,  21,000 (iii) Upon quarterly reporting of A$80 million in cash and cash equivalents* held for 2 consecutive quarters, a further 30% of PC2 shall vest,  31,500 (iv) Upon quarterly reporting of more than A$150 million in cash and cash equivalents* held for 2 consecutive quarters, a further 35% of PC2 will be achieved.  36,750 * The Board ad Remuneration Committee deemed Cash and Cash Equivalents to pertain to cash assets of the business held in Cash and Cash Equivalents together with Cash Held in Term Deposits. Dividends paid out during the vesting period shall be added back to the calculation of the cash reserves. At any time during the vesting period, the ratio between cash and cash equivalents internally generated from the Company’s operations and any debt and/or equity financing which increases cash and cash equivalents must be at minimum 2:3 ratio for any of the 5 performance targets under PC2 to be achieved. PC3 Performance Rights granted to Managing Director – 105,000 Successful acquisition of a business entity, defined by: (i) The acquired entity must have generated sales revenue within 6 months of transaction, 50% of PC3 shall vest, X - (ii) CUV Group becomes or remains profitable within 3 years (plus variability of one year) of transaction as measured by two successive quarters reporting profitability of the two or more combined entities, 50% of PC3 shall vest. X - For PC3 to be achieved, the acquisition must be considered synergistic to the Company’s business operations at the time of acquisition. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 112 113 PC4 Performance Rights granted to Managing Director – 87,500 (i) Upon receipt of first US revenues under the US post-marketing authorization for SCENESSE®, 34% of PC4 shall vest,  29,750 (ii) US revenues in year 3 to exceed revenues by a minimum of 10% in year 2, a further 33% of PC4 shall vest,  28,875 (iii) US revenues greater than US$10,000,000 in a 12-month period leads to vesting of 33% of PC4.  28,875 PC5 Performance Rights granted to Managing Director – 175,000 (i) Market launch of first non-pharmaceutical (‘OTC’) product(s) line developed by the VALLAURIX subsidiary entity, 15% of PC5 shall vest, X - (ii) Total revenues from OTC product lines developed by the VALLAURIX subsidiary entity achieving greater than A$250,000 in accumulated gross sales, a further 30% of PC5 shall vest, X - (iii) First topical melanogenic formulation to be used either in animal or in human testing, a further 25% of PC5 shall vest, X - (iv) Upon the completion of the first clinical study of a SCENESSE® paediatric formulation (being the completion of a final clinical study report), a further 30% of PC5 shall vest. X - PC6 Performance Rights granted to Managing Director – 262,500 (i) Upon start (being the closure of recruitment period) of a Phase IIb vitiligo study in North America, 20% of PC6 shall vest,  5,500 (10.5% of full target) (ii) Upon disclosure to the securities exchange of the results to the Phase IIb vitiligo study in North America, 20% of PC6 shall vest, X - (iii) After the completion of the Phase IIb vitiligo study in North America and prior to the subsequent Phase IIb/III study, upon holding a Type-C meeting (FDA) and acceptance of study protocol for the Phase IIb/III vitiligo study in North America, a further 20% of PC6 shall vest, X - (iv) Upon start (being the closure of recruitment period) of the subsequent Phase IIb/III vitiligo study in North America, a further 20% of PC6 shall vest, X - (v) Upon disclosure to the securities exchange of the results to the subsequent Phase IIb/III vitiligo study in North America, 20% of PC6 shall vest. X - PC7 Performance Rights granted to Managing Director – 212,500 (i) Upon the regulatory submission to either of EMA, FDA, TGA, PMDA and Swissmedic to approve SCENESSE® or any other molecule or product enhancing the pharmaceutical product line-only offerings of the Company, 25% of PC7 shall vest, X - (i) Upon the regulatory approval by either of EMA, FDA, TGA, PMDA and Swissmedic of SCENESSE® or any other molecule constituting a successful evaluation of a scientific dossier, a further 75% of PC7 shall vest. X - PC8 Performance Rights granted to Managing Director – 116,250 (i) The Board to use its discretion to award performance rights depending on the extraordinary nature of the corporate event(s) achieved and the significant impact on the Company's value. It is not certain that these performance rights will be issued during the fixed term of the Conditional Rights Plan, and hence these need to be regarded as a reserve pool enabling the Company to grant in the event of exceptional and unexpected performances which was unanticipated at the time of business planning.  58,125 (50% of full target) These corporate events shall include, but are not limited to, business generation in new markets without the Company engaging in merger and acquisition activity. Total Performance Rights Vested and Exercised by Managing Director 301,125 – END OF AUDITED REMUNERATION REPORT – Shares Provided Upon Exercise of Rights Details of Shares issued during the financial year as a result of exercise of rights Unissued shares under option Auditor’s Independence Declaration The auditor’s independence declaration as required by s.307C of the Corporations Act 2001 is included on page 151 of this Annual Report, and forms part of this Directors’ Report. Proceedings On Behalf Of the Company No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not party to any such proceedings during the year. Dr. Philippe Wolgen, MBA, MD Director Dated this 29th day of August, 2024 Entity Number of shares issued Issue Price for Shares Class CLINUVEL PHARMACEUTICALS LTD 716,932 Nil$ Ordinary Entity Number of Shares under Rights Exercise Price Class Expiry Date CLINUVEL PHARMACEUTICALS LTD 266,332 Nil$ Ordinary Upon achievement of specific performance and time-based milestones or upon cessation of employment Total as at date of Directors Report 266,332 CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 114 115 Statement of Profit and Other Comprehensive Income for the year ended 30 June 2024 Consolidated Entity 2024 2023 $ $ Revenues Commercial sales of goods 19 81,218,146 72,179,047 Sales reimbursements 19 6,960,162 6,142,271 Total revenues 88,178,308 78,321,318 Interest income 7,324,871 3,905,856 Total interest income 7,324,871 3,905,856 Other income Unrealised (loss)/gain on restating foreign currency balances and currencies held (745,764) 659,901 Government grants and other income 562,936 23,817 Realised foreign currency (loss)/ gain on transactions (14,614) 79,364 Total other income (loss) (197,442) 763,082 Total revenues, interest and other income 95,305,737 82,990,256 Expenses Personnel-related 18,917,924 13,576,951 Share-based payments 6,107,272 8,989,788 Materials and related expenses 5,201,364 12,063,281 Finance, corporate and general 4,454,292 3,192,713 Commercial distribution 3,638,897 3,145,355 Clinical and non-clinical development 2,348,296 1,268,456 Communication, branding and marketing 2,180,489 749,769 Legal, insurance and IP 1,743,050 1,323,383 Depreciation and amortisation 1,142,326 789,408 Changes in inventories of raw materials, work in progress and finished goods (1,107,151) (7,687,571) Total expenses 44,626,759 37,411,533 Profit before income tax 50,678,978 45,578,723 Income tax Current 3(a) 15,532,461 16,382,733 Deferred 3(a) (489,842) (1,408,576) Income tax expense 3(a) 15,042,619 14,974,157 Operating profit after income tax 15(b) 35,636,359 30,604,566 Net profit for the year 35,636,359 30,604,566 Other comprehensive income Items that may be re-classified subsequently to profit or loss Exchange differences of foreign exchange translation of foreign operations 138,945 (1,454,160) Other comprehensive loss for the period, net of income tax 138,945 (1,454,160) Total comprehensive income for the period 35,775,304 29,150,406 Basic earnings per share - cents per share 14 71.5 61.9 Diluted earnings per share - cents per share 14 69.8 59.1 The accompanying notes form part of these financial statements. Statement of Financial Position as at 30 June 2024 Consolidated Entity Note 2024 2023 Restated $ $ Current assets Cash and cash equivalents 1(e) and 15(a) 35,200,751 31,893,021 Cash held in term deposits 1(f) 148,667,720 124,920,516 Trade and other receivables 4 26,238,297 22,214,646 Inventories 5 10,626,613 9,519,462 Other current assets 1,330,461 1,070,153 Total current assets 222,063,842 189,617,798 Non-current assets Property, plant and equipment 6 6,982,337 2,017,861 Right-Of-Use assets 7 737,788 833,326 Intangible asset 185,030 185,030 Deferred tax assets 3(c) 1,020,344 1,059,541 Lease bonds 134,208 - Total non-current assets 9,059,707 4,095,758 Total assets 231,123,549 193,713,556 Current liabilities Trade and other payables 9 7,109,053 7,649,572 Income tax payables 15,851,385 16,094,178 Provisions 10 1,881,898 1,450,120 Lease liabilities 7 369,861 300,843 Total current liabilities 25,212,197 25,494,713 Non-current liabilities Deferred tax liabilities 3(d) 2,226,104 2,757,516 Lease liabilities 7 509,923 699,022 Provisions 10 163,959 131,162 Total non-current liabilities 2,899,986 3,587,700 Total liabilities 28,112,183 29,082,413 Net assets 203,011,366 164,631,143 Equity Contributed equity 11 168,802,368 151,849,375 Reserves 12 4,245,371 22,556,044 Retained earnings/(accumulated losses) 29,963,627 (9,774,276) Total equity 203,011,366 164,631,143 The accompanying notes form part of these financial statements. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 116 117 Statement of Cash Flows for the Year Ended 30 June 2024 Consolidated Entity Note 2024 2023 Restated $ $ Cash flows from operating activities Receipts from customers 84,020,937 74,877,720 Payments to suppliers and employees (39,749,125) (33,230,793) Income taxes paid (15,648,111) (7,744,922) Interest received 7,633,046 2,727,126 Government grants 344,394 22,009 GST and VAT refunds 244,147 260,923 Proceeds from insurance claims 208,594 - Net cash provided by operating activities 15(b) 37,053,882 36,912,063 Cash flows from investing activities Investments in cash held in term deposits (23,457,711) (30,820,516) Payments for property, plant and equipment (5,576,215) (1,027,532) Net cash used in investing activities (29,033,926) (31,848,048) Cash flows from financing activities Issuance of shares related to employee share schemes 4,155,010 - Payments related to employee share schemes (4,155,010) - Dividends paid (2,470,227) (1,976,414) Payments for share buy back (754,236) - Payments of lease liabilities (347,344) (263,718) Net cash used in financing activities (3,571,807) (2,240,132) Net increase in cash held 4,448,149 2,823,883 Cash and cash equivalents at beginning of the year 31,893,021 27,409,282 Effects of exchange rate changes on foreign currency held (1,140,419) 1,659,856 Cash and cash equivalents at end of the year 15(a) 35,200,751 31,893,021 The accompanying notes form part of these financial statements. Statement of Changes in Equity for the Year Ended 30 June 2024 Share Capital Performance Rights Reserve Foreign Currency Translation Reserve Retained Earnings/ (Accumulated Losses) Total Equity $ $ $ $ $ Balance at 30 June 2022 151,849,375 10,380,258 1,731,838 (38,402,428) 125,559,043 Employee share-based payment options - 8,989,788 - - 8,989,788 Dividends paid - - - (1,976,414) (1,976,414) Exercise of performance rights under share-based payment - - - - - Transactions with owners 151,849,375 19,370,046 1,731,838 (40,378,842) 132,572,417 Profit for the year - - - 30,604,566 30,604,566 Other comprehensive income: Exchange differences of foreign exchange translation of foreign operations - - 1,454,160 - 1,454,160 Total other comprehensive income - - 1,454,160 - 1,454,160 Balance at 30 June 2023 151,849,375 19,370,046 3,185,998 (9,774,276) 164,631,143 Exercise of performance rights under share-based payment 17,707,229 (17,707,229) - - - Lapsed, forfeited rights - (6,571,771) - 6,571,771 - Employee share-based payment options - 6,107,272 - - 6,107,272 Share buy back (754,236) - - - (754,236) Dividends paid - - - (2,470,227) (2,470,227) Transactions with owners 168,802,368 1,198,318 3,185,998 (5,672,732) 167,513,952 Profit for the year 35,636,359 35,636,359 Other comprehensive income: Exchange differences of foreign exchange translation of foreign operations - - (138,945) - (138,945) Total other comprehensive income - - (138,945) - (138,945) Balance at 30 June 2024 168,802,368 1,198,318 3,047,053 29,963,627 203,011,366 CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 118 119 Notes To And Forming Part Of The Financial Statements For The Year Ended 30 June 2024 1. Summary Of Other Potentially Material Accounting Policies This note provides a list of other potentially material accounting policies adopted in the preparation of these consolidated financial statements to the extent they have not already been disclosed in the other notes below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the group consisting of CLINUVEL PHARMACEUTICALS LTD and its subsidiaries. a) Basis Of Preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Compliance with Australian Accounting Standards ensures the consolidated financial statements and notes of the consolidated entity complies with International Financial Reporting Standards (“IFRS”). CLINUVEL PHARMACEUTICALS LTD is a for-profit entity for the purposes of reporting under Australian Accounting Standards. The financial report has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where stated, current valuations of financial assets. Cost is based on the fair values of the consideration given in exchange for assets. The material accounting policies have been consistently applied, unless otherwise stated. Both the functional and presentation currency of the Group and its Australian controlled entities is Australian dollars. The functional currency of certain non-Australian controlled entities is not Australian dollars. As a result, the results of these entities are translated to Australian dollars for presentation in the CLINUVEL PHARMACEUTICALS LTD financial report. In applying Australian Accounting Standards management must make judgements regarding carrying values of assets and liabilities that are not readily apparent from other sources. Assumptions and estimates are based on historical experience and any other factors that are believed reasonable in light of the relevant circumstances. These estimates are reviewed on an ongoing basis and revised in those periods to which the revision directly affects. All material accounting policies are chosen to ensure the resulting financial information satisfies the concepts of relevance and reliability. b) Principles Of Consolidation The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the consolidated entity, being the Company (the parent entity) and its subsidiaries as defined in Australian Accounting Standard Board (AASB) 10. Consistent material accounting policies are employed in the preparation and presentation of the consolidated financial statements. The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity. In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the consolidated entity are eliminated in full. All the Group’s subsidiaries are wholly-owned. There are no longer non-controlling interests with ownership interests in any of the Group’s subsidiaries. c) Going Concern The financial statements of the consolidated entity have been prepared on a going concern basis. The consolidated entity’s operations are subject to risk factors that could materially impact the financial performance and position of the consolidated entity. d) Income Tax Current Tax Current tax is calculated by reference to the amount of income tax payable or recoverable in respect of the taxable profit or loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantially enacted by reporting date. Current tax for current and prior periods is recognised as a liability to the extent it is unpaid. Deferred Tax Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and corresponding tax base of those items. In principle, deferred tax liabilities are recognised on all taxable differences. Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is probable that sufficient unused tax losses and tax offsets can be utilised by future taxable profits. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affect neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the consolidated entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantially enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/consolidated entity intends to settle its current tax assets and liabilities on a net basis. Tax Consolidation The Company and its wholly-owned Australian entities are part of a tax-consolidation group under Australian taxation law. CLINUVEL PHARMACEUTICALS LTD is the head entity of the tax-consolidation group. Current And Deferred Tax For The Period Current and deferred tax is recognised as an expense or income in the Statement of Profit or Loss and Other Comprehensive Income, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or discount on acquisition. A deferred tax asset has been recognised as at 30 June 2024 and 30 June 2023 after management judgement was applied to assess whether its unused tax losses and tax offsets could be utilised by future taxable profits. It was determined: • The consolidated entity has experienced consecutive years of profitability and revenue growth; • An increase to consolidated entity revenues are expected in the near term from making SCENESSE® available in the USA and UK; • Whilst internal targets continue to expect ongoing profitability in the near term, there is uncertainty around expected future taxable income in the longer term as part of the business strategy to expand the Company. Private Tax Ruling During the 2024 financial year, Clinuvel applied for, and received, a Private Tax Ruling from the Australian Taxation Office (ATO) to affirm its entitlement to deduct an amount under section 8-1 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997) for irretrievable cash contributions it makes to CPU Share Plans Pty Limited (the Trustee) of the Clinuvel Pharmaceuticals Limited Employee Share Plan Warehouse Trust (the Trust) to fund the subscription for, or acquisition on- CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 120 121 market of, fully paid ordinary shares in the Company (Shares), to satisfy employee share scheme (ESS) interests issued pursuant to the 2014 Performance Rights Plan as updated in September 2023 and renewed by the Company’s shareholders at the 2023 Annual General Meeting. e) Cash and Cash Equivalents Cash and cash equivalents comprise of cash on hand and at call deposits held with banks or financial institutions. The cash at bank amounts earns floating rates based on daily bank account interest rates. The carrying amounts of cash and cash equivalents represent fair value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. f) Cash Held in Term Deposits Cash held in term deposits include cash in term deposits with banks or financial institutions. The Company’s policy is to place surplus cash in term deposits to earn competitive interest income while maintaining liquidity. As of 30 June 2024, the term deposits are readily convertible to cash upon Clinuvel providing 31 days’ prior notice to the institution following which a market-related rate reduction to the interest payable for the early withdrawal is applied. The average effective interest rate on cash held in term deposits was 5.28% (2023: 3.33%). These deposits have an average maturity date of 251 days (2023: 252 days). Reclassification of comparative amounts The Group has restated its consolidated Statement of Financial Position as at 30 June 2023 to reclassify cash term deposits with maturity dates beyond 90 days from their acquisition date, from cash and cash equivalents to cash held in term deposits. This is after a review of its accounting policy and how it is applied to term deposits considered readily convertible to a known amount of cash and subject to an insignificant risk of changes in value. The accounting treatment has been changed by reclassifying each of the affected financial statement line items for the prior period as follows: Statement of Financial Position (extract) 30 June 2023 Increase/(Decrease) 30 June 2023 (Restated) Cash and cash equivalents 156,813,537 (124,920,516) 31,893,021 Cash held in term deposits - 124,920,516 124,920,516 Total assets 193,713,556 - 193,713,556 The comparative amount for the consolidated Statement of Cash Flows for the year ended 30 June 2023 has been restated to present the movement of cash into cash in term deposits as a net cash flow from investing activity. The treatment has been changed by reclassifying each of the affected financial statement line items for the prior period as follows: Statement of Cash Flows (extract) 30 June 2023 Increase/ (Decrease) 30 June 2023 (Restated) Investments in cash held in term deposits - (30,820,516) (30,820,516) Net cash used in investing activities (1,027,532) (30,820,516) (31,848,048) Net increase in cash held 33,644,399 (30,820,516) 2,823,883 Cash and cash equivalents at beginning of the year 121,509,282 (94,100,000) 27,409,282 Effects of exchange rate changes on foreign currency held 1,659,856 - 1,659,856 Cash and cash equivalents at end of the year 156,813,537 (124,920,516) 31,893,021 g) Inventories Raw materials, work in progress and finished goods are stated at the lower of cost or net realisable value. Cost comprises, direct material and labour. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. h) Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition. Building is depreciated using the straight-line method over the estimated useful lives of assets up to 50 years. Land is not depreciated. Plant and equipment depreciation is calculated on diminishing value so as to write off the net cost of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period and adjusted if appropriate. An asset’s carrying amount is written off immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The following percentages are used in the calculation of depreciation: • Computers and software: 40% • Leasehold improvement: 40% • All other assets: 7.5% to 33.3% Gains and losses on disposal of assets are determined by comparing proceeds upon disposal with the asset’s carrying amount. These are included in the Profit or Loss. i) Leases The Group considers whether a contract is, or contains, a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition, the Group assesses whether the contract meets three key evaluations which are whether: • the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group; • the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; or • the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use. At lease commencement date, the Group recognises right-of-use assets and lease liabilities on the balance sheet. The right- of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use assets or the end of the lease term which is currently between two to six years. Instead of performing an impairment review on the right-of-use assets at the date of initial application, the Group has relied on its historic assessment as to whether leases were onerous immediately before the date of initial application of AASB 16. The Group also assesses the right-of-use assets for impairment when such indicators exist. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term. j) Investments And Other Financial Assets Recognition And Derecognition Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expired. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 122 123 Classification And Initial Measurement Of Financial Assets Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable). Financial Assets At Amortised Cost Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVPL): • they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and • the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding. After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this category of financial instruments. Impairment Of Financial Assets - Trade And Other Receivables The Group makes use of a simplified approach in accounting for trade and other receivables and records the loss allowance at the amount equal to the expected lifetime credit losses. In using this practical expedient, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses. The Group assess impairment of trade receivables on a collective basis as they possess credit risk characteristics based on the days past due. Classification And Measurement of Financial Liabilities The Group’s financial liabilities include trade and other payables. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments). All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income. k) Impairment Of Assets At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specified to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the Profit or Loss immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in the Profit or Loss immediately. l) Payables Trade payables and other accounts payable are recognised when the consolidated entity becomes obliged to make future payments resulting from the purchase of goods and services, incurred prior to the end of the financial year. m) Employee Benefits Provision is made for benefits accruing to employees in respect of wages and salaries, retention payment, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably. Provisions made in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of services provided by employees up to reporting date. The discount rate used to estimate future cash flows is per the Australian high quality corporate bond rates. n) Provisions Provisions are recognised when a present obligation to the future sacrifice of economic benefits becomes probable, and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received, and the amount of the receivable can be measured reliably. o) Share Capital Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received. p) Earnings Per Share Basic Earnings Per Share Basic earnings per share is determined by dividing net profit after income tax attributable to members of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. Diluted Earnings Per Share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. q) Revenue And Other Income Revenue Arises From The Sale Of SCENESSE® Implants The Group’s revenue from contracts with customers arise from the commercial sales of goods and sales reimbursements. Commercial sales of goods are the commercial sales of SCENESSE® implants in Europe and USA. Sales reimbursements are the distribution of SCENESSE® under special access reimbursement schemes. The special access reimbursement scheme provides for the import and supply of an unapproved therapeutic good to patients, often on a case-by-case basis. To determine whether to recognise revenue, the Group follows a five-step process: a) Identifying supply conditions laid down in a contract with a customer; b) identifying the performance obligations; CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 124 125 c) determining the transaction price; d) allocating the transaction price to the performance obligations; and e) recognising revenue when/as performance obligation(s) are satisfied. Based on the above revenue recognition process and the nature of all revenue streams from contracts with customers, the Group recognises revenues as earned from commercial sales of goods and sales reimbursements (constrained by variable considerations, which include return and rebates) when performance obligations are satisfied at a point in time, which is when control of the goods passes to the customer or generally upon receipt of shipment, at an amount that reflects the consideration to which the Group expects to be entitled in exchange for the goods. Due to patients seeking treatment in the spring, summer and autumn months, there remains a seasonal demand for SCENESSE®. As such, fluctuations caused by seasonal demand impact the cash flows to the Group’s operations. Note 19 provides additional disclosures disaggregating revenue by geographical markets. Interest Interest income is recognised on a proportional basis that takes into account the effective yield on the financial asset. Government R&D Tax Incentive The Company formerly received other income through a refundable tax offset as part of the Australian government R&D tax incentive program. Other income would be recognised when it has been established that the conditions of the tax incentive have been met and that the expected amount of tax incentive can be reliably measured. Government Grant Government grants represent the Research Incentive Scheme for Companies provided by the Singapore Economic Development Board, along with the Job Growth Incentive and Progressive Wage Credit Scheme Payout from Singaporean government. Government grants are recognised in the financial statements at their fair values when there is a reasonable assurance that the Consolidated Entity will comply with the requirements and that the grant will be received. r) Research And Development Expenditure Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. An intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following is demonstrated: • the technical feasibility of completing the intangible asset so that it will be available for use or sale; • the intention to complete the intangible asset and use or sell it; • the ability to use or sell the intangible asset; • how the intangible asset will generate probable future economic benefits; • the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and • the ability to measure reliably the expenditure attributable to the intangible asset during its development. The consolidated entity uses its critical judgement in continually assessing whether development expenditures meet the recognition criteria of an intangible asset. Whilst at the end of the financial year the consolidated entity had received European and US regulatory approval and launched a European and US product the above criteria have not been fully satisfied to support the recognition and generation of an internally generated intangible asset. s) Comparatives Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosure. t) Foreign Currency Transactions And Balances All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Exchange differences are recognised in profit or loss in the period in which they arise as defined in AASB 121. Foreign subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows: • At the spot rate at reporting date for assets and liabilities; and • At average monthly exchange rates for income and expenses. Resulting differences are recognised within equity in a foreign currency translation reserve. u) Share-Based Payment Transactions Benefits are provided to employees of the Group in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (“equity-settled transactions”). The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value of conditional performance rights is measured by a Monte Carlo simulation pricing model for those performance rights with market capitalisation hurdles and either a binomial or a trinomial model for those performance rights not linked to the price of the shares of CLINUVEL PHARMACEUTICALS LTD (“non-market vesting conditions”). It is determined at grant date and expensed on a straight-line basis over the vesting period. In valuing equity- settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of CLINUVEL PHARMACEUTICALS LTD (“market conditions”). The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“vesting date"). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the Group, will ultimately vest. This opinion is formed based on the best available information at reporting date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share. v) Critical Accounting Estimates And Judgement The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key Estimates – Share-Based Payments Transactions The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using either a Monte Carlo simulation pricing model for market conditions, or a Binomial Options Valuation pricing model for non-market conditions, using the assumptions detailed in Note 21. The total expense is brought to account over the vesting period which for some instruments requires the group to form judgements associated with the timing and probability of vesting conditions. Key Judgements – Trade Debtors In applying the Group’s accounting policy to trade debtors, significant judgement is involved in assessing the expected credit loss of trade debtors amounts. The Group uses ageing of trade debtors and use judgement to assess the expected credit loss of trade debtors taking into account historical loss experience and other forward-looking factors specific to the debtors and the economic environment. The value of trade debtors is included in Note 4. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 126 127 Key Judgements – Tax Losses Given the Company’s and each individual entity’s history of losses, the Group has recognised a deferred tax asset with regard to unused tax losses and other temporary differences. The Directors have determined the Group will generate sufficient taxable income against which the unused tax losses and other temporary differences can be utilised. The value of tax losses both recognised and not recognised is included in Note 3. Uncertainty Over Income Tax Treatments The Group assesses whether it is ‘probable’ that a taxation authority will accept an uncertain tax treatment. This assessment takes into account that, for certain jurisdictions in which the Group operates, a local tax authority may seek to open a group’s books as far back as inception of the group. Where it is probable, the Group has determined tax balances consistently with the tax treatment used or planned to be used in its income tax filings. Where the Group has determined that it is not probable that the taxation authority will accept an uncertain tax treatment, the most likely amount or the expected value has been used in determining taxable balances (depending on which method is expected to better predict the resolution of the uncertainty). w) Segment Reporting A segment is a component of the consolidated entity that earns revenues or incurs expenses whose results are regularly reviewed by the chief operating decision makers and for which discrete financial information is prepared. The Group has identified its operating segments based on the internal reports that are reviewed and used by the Chief Executive Officer (the Chief Operating Decision Maker) in assessing performance and in determining the allocation of resources. The consolidated entity has formed four Divisions – Pharmaceuticals, Healthcare Solutions, Communications Branding & Marketing, and Manufacturing but operates in a single operating segment, being the biopharmaceutical sector, and the majority of its activities continue to be concentrated on researching, developing and commercialising a sole asset in the biopharmaceutical sector, being its leading drug candidate. Accordingly, the consolidated entity has one operating segment within the definition of AASB 8. The Group’s consolidated total assets are the total reportable assets of the operating segment. The Group has established entities in more than one geographical area. The non-current assets that are not held within Australia are immaterial to the Group. The revenues earned from external customers by geographical location is detailed in Note 19. The Group has one operating segment within the definition of AASB 8 Operating Segments. x) New Australian Accounting Standards Issued But Not Yet Effective The Group has not adopted any new accounting standards or interpretations that are issued but not yet effective. The Group is yet to undertake a detailed assessment of the impact of any new accounting standards or interpretation. However, based on the Group’s preliminary assessment, new accounting standards or interpretations are not expected to have a material impact on the transactions and balances recognised in the consolidated financial statements for the year ended 30 June 2024. 2. Profit/(Loss) From Continuing Operations Consolidated Entity Profit/(loss) before income tax includes the following specific expenses 2024 2023 Employee benefits expense 17,861,812 12,960,543 Depreciation on property, plant & equipment 753,184 397,260 Operating lease expense – minimum lease payments 339,011 306,830 Amortisation of right-of-use assets 331,932 343,642 Bank charges 41,562 38,671 3. Income Tax Expense Consolidated Entity 2024 2023 $ $ (a) Income tax expense Current 15,532,461 16,382,733 Deferred (489,842) (1,408,576) Income tax expense 15,042,619 14,974,157 Deferred tax included in income tax benefit comprises: Decrease/(Increase) in deferred tax assets (110,542) 497,571 Increase/(Decrease) in deferred tax liabilities (379,300) 911,005 (489,842) 1,408,576 (b) Numerical Profit before income tax expense 50,678,977 45,578,723 Tax at the statutory tax rates of 30% in 2023 and 2022 15,203,693 13,673,617 Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Other non-deductible (deductible) expenses for tax purposes (161,074) 71,075 Non-deductible share-based payments - 1,229,465 Income tax expense 15,042,619 14,974,157 Tax losses not recognised Unused tax losses for which no deferred tax asset has been recognised 18,301,957 18,899,558 (c) Deferred tax assets Carry forward tax losses 856,768 1,011,871 Intangibles 572,581 553,282 Provisions 256,668 233,280 Accrued Expenses 225,869 61,700 Lease liabilities 71,804 10,642 1,983,690 1,870,775 Reconciliation to the Statement of Financial Position Total deferred tax assets 1,983,690 1,870,775 Set-off of deferred tax liabilities that are expected to reverse in the same period (963,346) (811,234) 1,020,344 1,059,541 Movements Opening balance 1,870,775 1,346,074 Carry forward tax losses (155,103) 630,821 Intangibles 19,299 39,813 Lease liabilities 61,162 (23,314) Accrued Expenses 164,169 (84,030) Provisions 23,388 (38,589) 1,983,690 1,870,775 (d) Deferred tax liabilities Unrealised foreign exchange gains (2,744,331) (3,142,445) Accrued income (339,133) (420,888) Right-of-use assets (124,435) (10,108) Intangibles 18,449 4,691 (3,189,450) (3,568,750) Reconciliation to the Statement of Financial Position Total deferred tax liabilities (3,189,450) (3,568,750) Set-off of deferred tax assets that are expected to reverse in the same period 963,346 811,234 (2,226,104) (2,757,516) Movements Opening balance (3,568,750) (4,479,755) Unrealised foreign exchange gains 398,113 1,096,011 Right-of-use assets (114,327) 23,167 Accrued income 81,756 (202,247) Intangibles 13,758 (5,926) (3,189,450) (3,568,750) Deferred tax assets include US deferred tax assets that cannot be offset with Australian deferred tax liabilities.The tax rates used in this report are the Australian corporate tax rate of 30% in 2024 and 2023, income tax rate of 21% for US entity in 2024 and 2023 and income tax rate of 25% for UK entity in 2024 and 2023. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 128 129 4. Trade and Other Receivables Consolidated Entity 2024 2023 $ $ Current Trade debtors 25,162,556 20,807,909 Interest receivables 1,130,444 1,438,696 Sundry debtors 94,803 134,199 Expected credit losses (149,506) (166,158) Total 26,238,297 22,214,646 Trade debtors are recognised initially at the amount of consideration that is unconditional, when they are recognised at fair value. They are subsequently measured at amortised cost using the effective interest method and due to their short-term nature their carrying amount is considered to be the same as their fair value. A provision for expected credit losses (ECL) is recognised based on the difference between the contractual cashflows due in accordance with the contract and all the cash flows that the Group expects to receive. The Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. As at 30 June 2024, the Group had a provision for expected credit loss of $149,506 (2023 $166,158) Consolidated Entity 2024 2023 $ $ Opening balance as at 1 July (166,158) - Reversal of/(provision for) expected credit losses 16,652 (166,158) Closing balance as at 30 June 2024 (149,506) (166,158) 5. Inventories Consolidated Entity 2024 2023 $ $ Current Raw materials – at cost 571,169 514,812 Provision for obsolescence – raw materials - (51,655) Work in progress – at cost 7,026,835 7,466,396 Finished goods – at cost 3,028,609 1,589,909 Total 10,626,613 9,519,462 A provision for obsolescence of $51,655 was written off in 2024 (2023 : $108,057) 6. Property, Plant and Equipment Consolidated Entity 2024 2023 $ $ Land 347,744 - Building At cost 4,620,025 - Less: accumulated depreciation (76,327) - Sub-total 4,543,698 - Plant and equipment At cost 1,849,823 1,487,388 Less: accumulated depreciation (758,157) (490,012) Sub-total 1,091,666 997,376 Furniture and fittings At cost 92,293 45,603 Less: accumulated depreciation (35,639) (26,387) Sub-total 56,654 19,216 Leasehold improvements At cost 1,987,000 1,888,048 Less: accumulated amortisation (1,044,425) (886,779) Sub-total 942,575 1,001,269 Total property, plant and equipment 6,982,337 2,017,861 Movements in Carrying Amounts – Property, Plant and Equipment Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the financial year. Consolidated Entity Land Building Plant And Equipment Furniture And Fittings Leasehold Improvements Total $ $ $ $ Carrying amount at 30 June 2022 - - 946,245 19,360 575,097 1,540,702 Additions - - 197,898 3,668 634,675 836,241 Disposals - - - - - - Depreciation written back on disposals - - - - - - Depreciations expense - - (146,767) (3,812) (208,503) (359,082) Carrying amount at 30 June 2023 - - 997,376 19,216 1,001,269 2,017,861 Additions 347,744 4,620,025 379,071 46,690 98,951 5,492,481 Disposals - - (16,635) - - (16,635) Depreciation written back on disposals - - 14,133 - - 14,133 Depreciations expense - (76,327) (282,279) (9,252) (157,645) (525,503) Carrying amount at 30 June 2024 347,744 4,543,698 1,091,666 56,654 942,575 6,982,337 CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 130 131 7. Right-of-Use Assets and Lease Liabilities Consolidated Entity 2024 2023 $ $ Right-of-use assets At cost 1,762,660 1,782,946 Less: accumulated depreciation (1,024,872) (949,620) Total right-of-use assets 737,788 833,326 Movements in Carrying Amounts – Right-Of-Use Assets Movements in the carrying amounts for right-of-use assets between the beginning and the end of the financial year. Consolidated Entity Right-of-use Assets $ Carrying amount at 30 June 2022 1,159,642 Additions 7,052 Amortisation (343,642) Currency translation differences 10,274 Carrying amount at 30 June 2023 833,326 Additions 284,945 Disposals (52,682) Amortisation (331,932) Currency translation differences 4,131 Carrying amount at 30 June 2024 737,788 Consolidated Entity 2024 2023 $ $ Lease liabilities Lease liabilities - Current 369,861 300,843 Lease liabilities - Non-current 509,923 699,022 Total lease liabilities 879,784 999,865 Lease liability is measured at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental average borrowing rate of 6.26 % in 2024 and 6.4% in 2023. 8. Interests in Subsidiaries Name of Entity Type of Entity Ownership Interest Country of Incorporation 2024 2023 Parent entity CLINUVEL PHARMACEUTICALS LTD Body Corporate - - Australia Controlled entities A.C.N. 108 768 896 PTY LTD Body Corporate 100% 100% Australia CLINUVEL (UK) LTD Body Corporate 100% 100% United Kingdom CLINUVEL, INC. Body Corporate 100% 100% United States of America CLINUVEL AG Body Corporate 100% 100% Switzerland CLINUVEL SINGAPORE PTE LTD Body Corporate 100% 100% Singapore VALLAURIX PTE LTD Body Corporate 100% 100% Singapore CLINUVEL EUROPE LIMITED Body Corporate 100% 100% Ireland VALLAURIX MC SARL Body Corporate 100% 100% Monaco 9. Trade and Other Payables Consolidated Entity 2024 2023 $ $ Current Unsecured trade creditors 2,345,436 2,791,672 Sundry creditors and accrued expenses 4,763,617 4,857,900 Total 7,109,053 7,649,572 (a) Aggregate amounts payable to: Directors and Director-related entities 952,653 910,574 (b) Australian dollar equivalents of amounts payable in foreign currencies not effectively hedged and included in Trade and Sundry creditors: British Pounds 85,880 - Canadian dollars 3,750 16,791 Other 603 - Total 90,233 16,791 For an analysis of the sensitivity of trade and other payables to foreign currency risk refer to Note 20. (c) Terms and conditions: Trade and sundry creditors are non-interest bearing and normally settled on 30 day terms. 10. Provisions Consolidated Entity 2024 2023 $ $ Current Employee benefits 1,881,898 1,450,120 Total 1,881,898 1,450,120 Non-current Employee benefits 84,721 56,573 Other provisions 79,238 74,589 Total 163,959 131,162 CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 132 133 11. Contributed Equity (a) Issued And Paid Up Capital Consolidated Entity 2024 2023 $ $ 50,077,780 fully paid ordinary shares (2023: 49,410,338) 168,802,368 151,849,375 Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. The Company does not have a limited amount of authorised capital and issued shares do not have a par value. (b) Movements In Ordinary Share Capital Consolidated Entity 2024 2023 No. $ No. $ At the beginning of the financial year 49,410,338 151,849,375 49,410,338 151,849,375 Issued during the year - - - - Conditional rights issues and transferred from conditional rights reserve 716,932 17,707,229 - - Share buy back1 (49,490) (754,236) - - Less: transaction costs - - - - Balance at the end of the financial year 50,077,780 168,802,368 49,410,338 151,849,375 1 During the year ended 30 June 2024, shares purchased under the share buy back program were cancelled. (c) Conditional Performance Rights During the year the following conditional performance rights were exercised, resulting in the issue of fully paid ordinary shares: Expiry date Exercise Price Number of Securities Upon achievement of various performance milestones Nil$ 716,932 As at 30 June 2023, the year the following conditional performance rights existed which if exercised, resulting in the issue of fully paid ordinary shares: Expiry date Exercise Price Number of Conditional Rights Upon achievement of various performance milestones Nil$ 266,332 12. Reserves Consolidated Entity 2024 2023 $ $ Conditional Performance Rights reserve: Balance at the beginning of period 19,370,046 10,380,258 Share-based payment 6,107,272 8,989,788 Transfer to share capital (17,707,229) - Lapsed, forfeited rights (6,571,771) - Balance at the end of period 1,198,318 19,370,046 The Conditional Performance Rights reserve arises on the grant of conditional performance rights to eligible employees under the Conditional Performance Rights Plan. Amounts are transferred out of the reserve and into issued capital when the rights are exercised and to retained earnings when rights lapse. Foreign currency translation reserve: Balance at the beginning of period 3,185,998 1,731,838 Translating foreign subsidiary to current rate at reporting date (138,945) 1,454,160 Balance at the end of period 3,047,053 3,185,998 Total reserves 4,245,371 22,556,044 13. Short-Term Lease Commitments Consolidated Entity 2024 2023 $ $ Operating lease commitments Non-cancellable operating leases contracted for but not capitalised under AASB 16 as they are short-term and are payable as follows: not later than 1 year 66,942 43,207 later than 1 year but not later than 5 years - 1,350 Total 66,942 44,557 Operating leases comprises commitments for limited license agreement of furnished office accommodation and office equipment The limited license agreement has no contingent rental clauses and contains renewal options. 14. Earnings Per Share (EPS) Consolidated Entity 2024 2023 $ $ (a) Basic earnings per share (cents per share) 71.5 61.9 (a) Diluted earnings per share (cents per share) 69.8 59.1 (b) The Weighted Average Number of Ordinary Shares (WANOS) used in the calculation of basic earnings per share 49,834,035 49,410,338 (b) Weighted average number of performance rights on issue in respect of share based payments during the year 1,192,679 2,405,659 (b) The Weighted Average Number of Ordinary Shares (WANOS) used in the calculation of diluted earnings per share 51,026,713 51,815,997 (c) The numerator used in the calculation of basic earnings per share ($) 35,636,359 30,604,566 There have been no other transactions involving ordinary shares or potential ordinary shares that would significantly change the number of ordinary shares outstanding between the reporting date and the date of the completion of this financial report. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 134 135 15. Cash Flow Information Consolidated Entity 2024 2023 Restated $ $ (a) Reconciliation of cash Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows: Cash at bank 18,102,718 22,883,205 Cash on hand 1,818 774 Deposits on call 16,874,047 617,759 Term deposits - 8,025,800 Security bonds 222,168 365,483 Total cash and cash equivalents 35,200,751 31,893,021 (b) Reconciliation of cash flows from operating activities with operating profit (loss) Operating profit after income tax 35,636,359 30,604,566 Non cash flows in operating profit after income tax: Executive share option expense 6,107,272 8,989,788 Exchange rate effect on foreign currencies held 808,148 (1,659,855) Depreciation expense on property, plant & equipment 753,184 397,260 Amortisation expense on right-of-use assets 331,932 343,642 Unrealised loss (gain) on foreign exchange translation (138,945) 1,454,160 Changes in assets and liabilities: (Increase)/decrease in receivables (4,023,652) (6,012,709) (Increase)/decrease in inventories (1,107,151) (7,687,571) (Increase)/decrease in other current assets (260,308) (30,700) (Increase)/decrease in deferred tax assets 39,197 (577,941) (Increase)/decrease in lease bonds (134,208) - Increase/(decrease) in payables (648,316) 4,514,552 Increase/(decrease) in income tax payables (242,793) 8,814,729 Increase/(decrease) in provisions 464,574 (1,380,093) Increase/(decrease) in deferred tax liabilities (531,411) (857,765) Net cash used in operating activities 37,053,882 36,912,063 Cash at bank earns floating rates based on daily bank deposit rates. The carrying amounts of cash and cash equivalents represent fair value. 16. Key Management Personnel Consolidated Entity 2024 2023 $ $ Short-term employee benefits 4,123,825 3,962,471 Post-employment benefits 72,306 65,787 Long-term benefits 30,736 - Share-based payments 3,399,126 6,583,359 Total 7,625,993 10,611,617 No loans or other transactions existed with key management personnel. 17. Auditor’s Remuneration Consolidated Entity 2024 2023 $ $ Amounts received or due and receivable by Grant Thornton Audit Pty Ltd for: Audit services and review 249,126 246,154 Total 249,126 246,154 18. Related Party Disclosures Wholly-Owned Group Transactions Loans The loan receivable by CLINUVEL PHARMACEUTICALS LTD from A.C.N. 108 768 896 Pty Ltd is non-interest bearing. A provision for non-recovery has been raised in the accounts of CLINUVEL PHARMACEUTICALS LTD where a deficiency in net assets exists in A.C.N. 108 768 896 Pty Ltd. On 1 July 2022, CLINUVEL PHARMACEUTICALS LTD issued a Deed of Loan Forgiveness to A.C.N. 108 768 896 Pty Ltd. The loan to A.C.N. 108 768 896 Pty Ltd as at 30 June 2024 is $Nil (2023: $Nil). The loan receivable by CLINUVEL PHARMACEUTICALS LTD from CLINUVEL, INC. is interest bearing at average of 5.81% in 2024 and was 4.6% in 2023. Repayment of the loan has commenced upon commercialisation of the Company’s drug candidate. A provision for non-recovery has been raised in the accounts of CLINUVEL PHARMACEUTICALS LTD where a deficiency in net assets exists in CLINUVEL, INC. The loan to CLINUVEL, INC. as at 30 June 2024 is $20,499,042 (2023: $21,681,805). The loan receivable by CLINUVEL PHARMACEUTICALS LTD from CLINUVEL AG is non-interest bearing. Repayment of the loan will commence upon commercialisation of the Company’s drug candidate. A provision for non-recovery has been raised in the accounts of CLINUVEL PHARMACEUTICALS LTD where a deficiency in net assets exists in CLINUVEL AG. During the 2023 financial year, CLINUVEL PHARMACEUTICALS LTD entered into a Deed of Loan Forgiveness to CLINUVEL AG effective 1 July 2022. The loan to CLINUVEL AG as at 30 June 2024 is $91,828 (2023: $188,531). The loan receivable by CLINUVEL PHARMACEUTICALS LTD from CLINUVEL SINGAPORE PTE LTD is non-interest bearing. Repayment of the loan will commence upon commercialisation of the Company’s drug candidate. A provision for non-recovery has been raised in the accounts of CLINUVEL PHARMACEUTICALS LTD where a deficiency in net assets exists in CLINUVEL SINGAPORE PTE LTD. The loan to CLINUVEL SINGAPORE PTE LTD as at 30 June 2024 is $503,705 (2023: $625,133). The loan receivable by CLINUVEL PHARMACEUTICALS LTD from CLINUVEL (UK) is interest bearing at average of 5.81% in 2024 and was 4.6% in 2023. Repayment of the loan will commence upon commercialisation of the Company’s drug candidate. A provision for non-recovery has been raised in the accounts of CLINUVEL PHARMACEUTICALS LTD where a deficiency in net assets exists in CLINUVEL (UK) LTD. The loan to CLINUVEL (UK) LTD as at 30 June 2024 is $3,753,911 (2023: $2,053,783). The loan receivable by CLINUVEL PHARMACEUTICALS LTD from VALLAURIX PTE LTD is non-interest bearing. Repayment of the loan will commence upon commercialisation of VALLAURIX PTE LTD’s product(s). A provision for non-recovery has been raised in the accounts of CLINUVEL PHARMACEUTICALS LTD where a deficiency in net assets exists in VALLAURIX PTE LTD. The loan to VALLAURIX PTE LTD as at 30 June 2024 is $13,333,126 (2023: $10,475,621). The loan receivable by (payable by) CLINUVEL PHARMACEUTICALS LTD from VALLAURIX MC SARL is non-interest bearing. Repayment of the loan will commence upon commercialisation of the Company’s drug candidate. A provision for non- recovery has been raised in the accounts of CLINUVEL PHARMACEUTICALS LTD where a deficiency in net assets exists in VALLAURIX MC SARL. The loan to VALLAURIX MC SARL as at 30 June 2024 is $5,208,319 (2023: $6,339,501). The loan receivable by CLINUVEL PHARMACEUTICALS LTD from CLINUVEL EUROPE LIMITED is non-interest bearing. Repayment of the loan will commence upon commercialisation of CLINUVEL EUROPE LIMITED’s product(s). A provision for non-recovery has been raised in the accounts of CLINUVEL PHARMACEUTICALS LTD where a deficiency in net assets exists in CLINUVEL EUROPE LIMITED. The loan to CLINUVEL EUROPE LIMITED as at 30 June 2024 is $9,205,322 (2023: $9,675,165). Foundation The Photomedicine Foundation (Foundation), a Not For Profit entity, was incorporated on 7 February 2024 under the State of California USA. The purpose of the Foundation is to support individuals affected by ultraviolet and visible light through access CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 136 137 to equipment, medical care, treatments or other means to improve the individual’s health. The Foundation is currently dormant and not actively engaged in any activities. Director Related And Key Management Personnel Transactions And Entities: There are no loan transactions and relationships in existence as at 30 June 2024 between Directors and the Company and its related entities. 19. Segment Information A segment is a component of the Group that earns revenues or incurs expenses whose results are regularly reviewed by the chief operating decision makers and for which discrete financial information is prepared. The Group has identified its operating segments based on the internal reports that are reviewed and used by the Chief Executive Officer (the chief operating decision maker) in assessing performance and in determining the allocation of resources. The Group operates in a single operating segment, being the biopharmaceutical sector, and the majority of its activities are concentrated on researching, developing and commercialising a sole asset, being its leading drug candidate. Accordingly, the Group’s consolidated total assets are the total reportable assets of the operating segment. The Group has established entities in more than one geographical area. The non-current assets that are not held within Australia are immaterial to the Group. The revenues earned from external customers by geographical location is detailed above. The Group has one operating segment within the definition of AASB 8 Operating Segments. The Group’s revenue disaggregated by primary geographical markets is as follows: FY2024 FY2023 Europe & USA Switzerland, Others Total Europe & USA Switzerland, Others Total ($’000) ($’000) ($’000) ($’000) ($’000) ($’000) Commercial sales of goods 81,218 - 81,218 72,179 - 72,179 Sales reimbursements 265 6,695 6,960 104 6,038 6,142 Total revenues 81,483 6,695 88,178 72,283 6,038 78,321 Total expenses (44,627) (37,412) Net profit before tax 50,679 45,579 Income tax (15,043) (14,974) Net profit after tax 35,636 30,605 Total asset 231,124 193,714 Total liability 28,112 29,082 The Group has a number of customers to which it provides its leading drug candidate. Two customers each comprise 12% of external total revenue (2023: Two customers each comprise 15% and 13% of external total revenue). 20. Financial Instruments CLINUVEL PHARMACEUTICALS LTD and consolidated entities have exposure to the following risks from its use in financial instruments: • Market Risk • Credit Risk • Liquidity Risk The Board of Directors oversees and reviews the effectiveness of the risk management systems implemented by management. The Board has assigned responsibility to the Audit and Risk committee to review and report back to the Board in relation to the Company’s risk management systems. a) Market Risk Market risk is the risk of changes to market prices of foreign exchange purchases, interest rates and/or equity prices resulting in a change in value of the financial instruments held by the consolidated entity. The objective to manage market risk is to ensure exposures are contained within acceptable parameters, to minimise costs and to stabilise existing assets. Foreign Currency Risk The consolidated entity is exposed to foreign currency risk on future commercial transactions and recognised assets and liabilities that are denominated in a currency other than the functional currency of each of the Group’s entities, primarily US dollars (USD), Euros (EUR), Swiss francs (CHF), Singapore dollars (SGD) and Great British pounds (GBP). The parent entity is exposed to the risk of its cash flows being adversely affected by movements in exchange rates that will increase the Australian dollar value of foreign currency payables. It is also exposed to the risk of movements in foreign currency exchange rates for those currencies which sales and reimbursement receipts are received. The consolidated entity’s policy of managing foreign currency risk is to hold foreign currencies equivalent to the cash outflow projected over minimum 30 days by the placement of market orders or have in place forward exchange contracts to achieve a target rate of exchange, with protection floors in the event of a depreciating Australian dollar exchange rate, to run for the time between recognising the exposure and the time of payment. In the event of an appreciating Australian dollar, the amount of foreign currency held is minimised at a level to only meet short-term obligations in order to maximise gains in an appreciating Australian currency. CLINUVEL does not engage in speculative transactions in its management of foreign currency risk. No forward exchange contracts had been entered into as at 30 June 2024 and as at 30 June 2023. The Consolidated Entities Exposure To Foreign Currency Risk At 30 June 2024 Consolidated Entity 2024 2023 Restated Cash and Cash Equivalents Cash Held In Term Deposits Trade Debtors and Other Assets Trade, Other Payables and Provisions TOTAL Cash and Cash Equivalents Cash Held In Term Deposits Trade Debtors and Other Assets Trade, Other Payables and Provisions TOTAL USD 1,600,443 20,000,000 9,213,442 (1,588,919) 29,224,966 3,516,211 8,500,000 7,719,647 (2,249,199) 17,486,659 EUR 4,907,251 - 6,755,698 (2,458,873) 9,204,076 7,658,588 2,000,000 5,157,824 (2,403,905) 12,412,507 SEK - - 971,172 - 971,172 - - - - - CHF 1,016,656 - 28,451 (122,923) 922,184 1,406,750 - - (93,231) 1,313,519 SGD 527,674 - 155,324 (272,159) 410,839 558,588 - - (241,557) 317,031 GBP 376,258 - 211,781 (574,237) 13,802 1,184,729 - - (396,064) 788,665 CAD - - - (3,433) (3,433) - - - (14,744) (14,744) BRL - - - (2,114) (2,114) - - - - - ILS - - - (89) (89) - - - - - Sensitivity Analysis During the financial year the Company had a principal foreign currency transaction risk exposure to the Euro currency. Assuming all other variables remain constant, a depreciation in the Australian dollar is advantageous to the consolidated entity as sales receipts received in Euro foreign currency allows for conversion to a higher amount of Australian dollars. For the consolidated entity, a 2.2% appreciation of the Australian dollar against the Euro currency would have decreased profit and loss and equity by $622,563 for the year ended 30 June 2024 (2023: $2,147,985 decrease), on the basis that all other variables remain constant. 2.2 % is considered representative of the market volatility in the Australian dollar/Euro rate for the period. For the consolidated entity, a depreciation of the Australian dollar against the Euro currency would have an equal but opposite effect to the above, on the basis that all other variables remain constant. The Group’s exposure to other foreign currency movements is not considered as material. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 138 139 Interest Rate Risk The consolidated entity holds fixed interest-bearing assets therefore exposure to interest rate risk exists. It does not hold interest bearing liabilities. The consolidated entity currently finances its operations through reserves of cash and liquid resources and does not have a borrowing requirement. In order to be protected from, and to take advantage of, interest rate movements it is the consolidated entity’s policy to place cash into term deposits and other financial assets at both fixed and variable (floating) rates. The Board monitors the movements in interest rates in combination with current cash requirements to ensure the mix and level of fixed and floating returns is in the best interests of the consolidated entity. Sensitivity Analysis For the consolidated entity, at 30 June 2024, if interest rates had changed by +/- 325 basis points from the year-end rates (a movement considered reflective of the level of interest rate movements throughout the course of the financial year), with effect from the beginning of the year, profit and equity would be $5,234,216 higher/lower (2023: $4,564,433 higher/lower). This analysis assumes all other variables are held constant. Price Risk CLINUVEL PHARMACEUTICALS LTD and its consolidated entities was formerly exposed to price risk in its investments in income securities classified in the Statement of Financial Position as held for trading. Neither the consolidated entity nor the parent is exposed to commodity price risk. b) Credit Risk Credit risk arises from the potential failure of counterparties to meet their contractual obligations, resulting in a loss to the consolidated entity. Credit risk in relation to the consolidated entity is the cash and cash equivalents deposited with banks, trade and other receivables. Exposure to credit risk in trade debtors is limited to over forty counterparties across German, Italian, Swiss, Dutch, US and other medical institutions who are reimbursed by government or private insurance payors. The maximum credit exposure is the carrying value of the cash and cash equivalents deposited with banks, trade and other debtors and foreign, wholly-owned subsidiaries. c) Liquidity Risk Liquidity risk is the risk the consolidated entity will not be able to meets its financial obligations when they fall due. It is the policy of the consolidated entity to ensure there is sufficient liquidity to meet is liabilities when due without incurring unnecessary loss or damage. The consolidated entity holds cash and cash equivalents in liquid markets. It does not hold financing facilities, overdrafts or borrowings. Fair Value Estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement for disclosure purposes. The fair value of financial instruments traded in active markets is based on quoted market prices at reporting date. The quoted market price for the consolidated entity is the bid price. For longer-term debt instruments held by the consolidated entity, dealer quotes are used to determine fair value. The consolidated entity formerly held investments in income securities classified in the Statement of Financial Position as held for trading. These financial instruments were traded in active markets and based on quoted market prices. The carrying value of trade payables is assumed to approximate their fair values due to their short-term nature. The consolidated entity manages its liquidity needs by carefully identifying expected operational expenses by month and ensuring sufficient cash is on hand, across appropriate currencies, in the day-to-day bank accounts for a minimum 30-day period. When further liquidity is required, the consolidated entity draws down on its cash under management to service future liquidity needs. Contractual Maturities Of Financial Liabilities As At 30 June 2024 Consolidated Entity 2024 2023 $ $ Trade and other payables Carrying amount 7,109,053 7,649,572 6 months or less 7,082,494 7,645,178 Greater than 6 months 26,559 4,394 Total 7,109,053 7,649,572 Lease liabilities Carrying amount 879,784 999,865 6 months or less 178,694 161,018 Greater than 6 months 701,090 838,847 Total 879,784 999,865 Capital Risk Management The consolidated entity’s equity is limited to shareholder contributions, supported by the cash inflows received from providing SCENESSE® to EPP patients under both the full cost special access reimbursement programs such as in Switzerland and Canada and from commercial sales currently in the European Economic Area and USA. Its capital management objectives are limited to ensuring the equity available to the Company will allow it to continue as a going concern and to realise adequate shareholder return by progressing in its developmental research of SCENESSE®, to file for successful marketing authorisation in new jurisdictions and achieving a status whereby revenues will consistently exceed expenditure. Contractual Maturities Of Financial Assets As At 30 June 2024 Consolidated Entity 2024 2023 Restated $ $ Cash and cash equivalents Carrying amount 35,200,751 31,893,021 6 months or less 35,200,751 31,893,021 Total 35,200,751 31,893,021 Cash held in term deposits Carrying amount 148,667,720 124,920,516 6 months or less 65,125,316 77,320,516 Greater than 6 months 83,542,404 47,600,000 Total 148,667,720 124,920,516 Other financial assets (includes trade and other receivables) Carrying amount 26,238,297 22,214,646 6 months or less 25,799,352 20,959,240 Greater than 6 months 438,945 1,255,406 Total 26,238,297 22,214,646 Cash at bank and cash held in term deposits earns floating rates based on daily bank deposit rates. The carrying amounts of cash and cash equivalents represent fair value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. 21. Share-Based Payments The consolidated entity has two conditional performance rights schemes which are ownership based for key management personnel and select consultants (including Directors) of the Company. The number of rights granted is subject to approval CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 140 141 by the Remuneration Committee. Rights currently have specific terms and conditions, being the achievement of performance and time-based milestones set by the Directors of the consolidated entity. Conditional Performance Rights Plan (2009) The Conditional Performance Rights Plan (2009) was available to eligible employees of the Company. Any issue of rights to executive Directors requires shareholder approval in accordance with ASX Listing Rules. All rights convert to one ordinary share of the consolidated entity are issued for nil consideration, have no voting rights, are non-transferable and are not listed on the ASX. They can be converted to ordinary shares at any time once the vesting conditions attached to the rights have been achieved, whereby they will be held by a Scheme Trustee on behalf of the eligible employee for up to seven years. The eligible employee can request for shares to be transferred from the Scheme Trust after seven years or at an earlier date if the eligible employee is no longer employed by the Company or all transfer restrictions are satisfied or waived by the Board in its discretion. The Company does not intend to issue further performance rights under the 2009 Plan. Performance Rights Plan (2014) The Performance Rights Plan (2014) is available to eligible persons of the Company. Any issue of rights to Directors requires shareholder approval in accordance with ASX Listing Rules. Any issue of rights to Directors requires shareholder approval in accordance with ASX Listing Rules. Since 2020, the Company policy is for NED to not receive PRs or other equity securities in the Company. All rights are issued for nil consideration, have no voting rights, are not listed on the ASX and are non-tradeable (other than with prior written Board consent). They can be converted to ordinary shares at any time once all vesting conditions attached to the rights have been achieved. The Company may, at the sole discretion of the Board, determine that any shares exercised from vested PRs be acquired by a Plan Trustee and then, from time to time, transferred to participants to the Performance Rights Plan. Unless the PRs are granted with a shorter vesting period, PRs under this plan lapse after seven years from grant date. PRs are valued for financial reporting purposes only, using either a Monte Carlo simulation pricing model or a probability- adjusted binomial valuation pricing model and are represented as accounting values only in the financial statements. Holders of PRs may or may not receive a benefit from these amounts, either in the current or future reporting periods. The value of all PRs granted, exercised and lapsed during the financial year is detailed in tables within this Remuneration Report. Of the 2,591,860 Performance Rights on issue on 1 July 2023 which had been previously issued under the 2014 Performance Rights Plan to both KMP and non-KMP employees, 716,932 (27.6%) PRs were deemed to have achieved the performance conditions by the 20 November 2023 vesting date and were exercised. 1,611,678 (72.4%) performance rights were deemed to have not achieved the performance criteria by the vesting date and lapsed. At the Company’s Annual General Meeting held on 31st October 2023, shareholder approved the renewal of the 2014 Performance Rights Plan for a further 3 years. Under the renewed plan, up to a maximum of 2.25% of the Company’s issued share capital may be issued as new Performance Rights, though this maximum number is not intended to be a prediction of the actual number of securities to be issued by the Company under the Plan. As at 30 June 2024, 237,250 performance rights issued under the 2014 Performance Right Plan remain outstanding, of which and estimated 200,854 of the PRs (85%) are likely to achieve the underlying performance condition but will not vest until the end of their respecting vesting dates if the employee is still employed at that time by the Company. The Company, via its wholly owned subsidiary A.C.N. 108 768 896 Pty Ltd, previously acted as trustee for the 2009 Scheme Trust and the 2014 Plan Trust. The entity currently holds NIL shares (2023: NIL shares). The Following Share-Based Payment Arrangements Were In Existence At 30 June 2024 Performance Rights Series Number Grant date Expiry Date Exercise Price Fair Value at Grant Date Issued 16/09/2011 29,082 16/09/2011 The earlier of achievement of specific performance milestones and cessation of employment/ directorship $ Nil Between $0.55 and $0.72 Issued 5/05/2022 7,500 5/05/2022 20/12/2024 $ Nil $12.87 Issued 29/06/2023 94,500 29/06/2023 30/06/2025 $ Nil Between $9.16 & $14.26 * Issued 29/06/2023 135,250 29/06/2023 30/06/2026 $ Nil Between $9.16 & $14.26 * * these performance rights are a mixture of market and non-market conditions, the fair values applied to those performance rights expected to vest from the time of grant Holdings Of All Issued Conditional Performance Rights – 2024 Performance Rights Series Balance at Start of Year Granted as Compensation Exercised Expired & Lapsed Balance at End of Year Performance Condition Met, not exercisable until end Vest Period Performance Condition Not Met, not exercisable until end Vest Period Issued 16/09/2011 38,333 - - (9,251) 29,082 - 29,082 Issued 26/08/2020 1,513,750 - (301,125) (1,212,625) - - - Issued 24/12/2020 132,500 - (61,146) (71,354) - - - Issued 26/08/2021 682,360 - (354,661) (327,699) - - - Issued 05/05/2022 7,500 - - - 7,500 1,250 6,250 Issued 29/06/2023 255,750 - - (26,000) 229,750 184,271 45,479 Total 2,630,193 - (716,932) (1,646,929) 266,332 185,521 80,811 Weighted average exercise price $Nil $Nil $Nil $Nil $Nil $Nil $Nil For Performance Rights issued in 2011 Performance Rights were priced using either a binomial or trinomial pricing model. There is no limitation on the life of the right. Expected volatility of each right is based on the historical share price for the approximate length of time for the expected life of the rights. It is assumed that the consolidated entity will not pay any dividends during the life of the option, and the risk free rate used in the pricing model is assumed to be the yield on ranging from 1 year to 10 year Government bonds. The exercise conditions are non-marketable and a discount for lack of marketability was applied to the pricing model. For Performance Rights Issued in 2020 to 2023 Performance Rights were priced using either a Monte Carlo simulation pricing model for market conditions, or a Binomial Options Valuation pricing model for non-market conditions, taking into account factors specific to the Performance Rights Plan, such as the vesting period. For non-market conditions, the value of each performance right is multiplied by the number of performance rights expected to vest to arrive at a valuation. The performance rights expire the earlier of 7 years from date of grant of rights or at a pre-defined date. Expected volatility of each right is based on the historical share price for the approximate length of time for the expected life of the rights. The exercise conditions are non-marketable. For the Performance Rights issued on and after 24 December 2020, an illiquidity discount was applied to the pricing model. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 142 143 Holdings Of All Issued Conditional Performance Rights – 2023 Performance Rights Series Balance at Start of Year Granted as Compensation Exercised Expired & Lapsed Balance at End of Year Performance Condition Met, not exercisable until end Vest Period Performance Condition Not Met, not exercisable until end Vest Period Issued 16/09/2011 38,333 - - - 38,333 - 38,333 Issued 26/08/2020 1,513,750 - - - 1,513,750 227,000 1,286,750 Issued 24/12/2020 132,500 - - - 132,500 35,341 97,159 Issued 26/08/2021 731,924 - - (49,564) 682,360 156,090 526,270 Issued 05/05/2022 22,500 - - (15,000) 7,500 - 7,500 Issued 29/06/2023 - 255,750 - - 255,750 - 255,750 Total 2,439,007 255,750 - (64,564) 2,630,193 418,431 2,211,762 Weighted average exercise price $Nil $Nil $Nil $Nil $Nil $Nil $Nil For Performance Rights issued in 2011 Performance Rights were priced using either a binomial or trinomial pricing model. There is no limitation on the life of the right. Expected volatility of each right is based on the historical share price for the approximate length of time for the expected life of the rights. It is assumed that the consolidated entity will not pay any dividends during the life of the option, and the risk free rate used in the pricing model is assumed to be the yield on ranging from 1 year to 10 year Government bonds. The exercise conditions are non-marketable and a discount for lack of marketability was applied to the pricing model. For Performance Rights Issued in 2020 to 2023 Performance Rights were priced using either a Monte Carlo simulation pricing model for market conditions, or a Binomial Options Valuation pricing model for non-market conditions, taking into account factors specific to the Performance Rights Plan, such as the vesting period. For non-market conditions, the value of each performance right is multiplied by the number of performance rights expected to vest to arrive at a valuation. The performance rights expire the earlier of 7 years from date of grant of rights or at a pre-defined date. Expected volatility of each right is based on the historical share price for the approximate length of time for the expected life of the rights. The exercise conditions are non-marketable. For the Performance Rights issued on and after 24 December 2020, an illiquidity discount was applied to the pricing model. 22. CLINUVEL PHARMACEUTICALS LTD Parent Company Information CLINUVEL PHARMACEUTICALS LTD 2024 2023 $ $ Assets Current assets 184,283,878 152,351,411 Non-current assets 55,207,108 47,683,856 Total assets 239,490,986 200,035,267 Liabilities Current liabilities 18,960,091 19,899,692 Non-current liabilities 2,420,996 2,785,053 Total liabilities 21,381,087 22,684,745 Equity Issued equity 168,802,380 151,849,375 Share–based payments reserve 1,198,628 19,370,046 Accumulated losses 48,108,891 6,131,101 Total equity 218,109,899 177,350,522 Financial performance Net profit for the year 39,507,563 32,720,668 Total comprehensive income 39,507,563 32,720,668 a) Guarantees Entered Into By The Parent Entity The Parent entity provides certain financial guarantees to its subsidiaries. No liability is recognised in relation to this guarantee as the fair value of the guarantee is considered immaterial. These guarantees are related to the subsidiaries’ abilities to meet their obligations to their employees. The Parent entity provides financial commitments for certain subsidiaries for the amount necessary to enable those entities to meet their obligations as and when they fall due. b) Contingent Liability The Parent entity did not have any material contingent liabilities as at 30 June 2024 and 2023. c) Contractual Commitments For The Acquisition Of Property, Plant And Equipment The Parent entity did not have any material contractual commitments for the acquisition of property, plant and equipment as at 30 June 2024 and 2023. 23. Subsequent Events There have not been any matters financial in nature, other than reference to the financial statements that has arisen since the end of the financial year that has affected or could significantly affect the operations of the consolidated entity, other than: • On 28th August 2024, the Board of Directors declared a fully franked dividend of $0.05 per ordinary share; and 24. Additional Company Information CLINUVEL PHARMACEUTICALS LTD is a listed public company incorporated and operating in Australia. The Registered office is: Level 22, 535 Bourke Street Melbourne VIC 3000 Ph: (03) 9660 4900 CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 144 145 Consolidated Entity Disclosure Statement as at 30 June 2024 The Australian Government passed a Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Act 2024 such that the Corporations Act now requires Australian public companies to disclose the following information regarding each of its subsidiary entities in the annual financial reports for financial year commencing on or after 1 July 2023: Name of Entity Type of Entity Trustee Partner or Participant in JV % of Share Capital Place of business/ Country of incorporation Australian resident or foreign resident Foreign jurisdiction(s) of foreign residents Parent entity CLINUVEL PHARMACEUTICALS LTD Body Corporate - 100% Australia Australia Australia Controlled entities A.C.N. 108 768 896 PTY LTD Body Corporate - 100% Australia Australia Australia CLINUVEL (UK) LTD Body Corporate - 100% United Kingdom Foreign United Kingdom CLINUVEL, INC. Body Corporate - 100% United States of America Foreign United States of America CLINUVEL AG Body Corporate - 100% Switzerland Foreign Switzerland CLINUVEL SINGAPORE PTE LTD Body Corporate - 100% Singapore Foreign Singapore VALLAURIX PTE LTD Body Corporate - 100% Singapore Foreign Singapore CLINUVEL EUROPE LIMITED Body Corporate - 100% Ireland Foreign Ireland VALLAURIX MC SARL Body Corporate - 100% Monaco Foreign Monaco Consolidated Entity Disclosure Statement – Basis of preparation Basis of Preparation This Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and includes required information for each entity that was part of the consolidated entity as at the end of the financial year. Consolidated entity This CEDS includes only those entities consolidated as at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements (AASB10). Determination of Tax Residency Section 295 (3A) of the Corporations Act 2001 defines tax residency as having the meaning in the Income Tax Assessment Act 1997. The determination of tax residency involves judgment as there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. In determining tax residency, the consolidated entity has applied the following interpretations: • Australian tax residency The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax Commisioner’s public guidance. • Foreign tax residency Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in its determination of tax residency to ensure applicable foreign tax legislation has been complied with. DIRECTORS’ DECLARATION In the opinion of the Directors: 1) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2024 and of its performance for the year ended on that date; b) complying with Accounting Standards; and c) complying with International Financial Reporting Standards as disclosed in Note 1. 2) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 3) the audited remuneration disclosures set out in pages 87 to 114 of the Directors’ Report comply with Section 300A of the Corporations Act 2001. 4) this declaration is made in accordance with a resolution of the Board of Directors. The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by Section 295A of the Corporations Act 2001. 5) the consolidated entity disclosure statement on page 146 is true and correct. The Company was not party to any such proceedings during the year. Dr. Philippe Wolgen, MBA, MD Director Dated this 29th day of August, 2024 CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 146 147 Grant Thornton Audit Pty Ltd Level 22 Tower 5 Collins Square 727 Collins Street Melbourne VIC 3008 GPO Box 4736 Melbourne VIC 3001 T +61 3 8320 2222 www.grantthornton.com.au ACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the Members of Clinuvel Pharmaceuticals Limited Report on the audit of the financial report Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Opinion We have audited the financial report of Clinuvel Pharmaceuticals Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance for the year ended on that date; and b complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Grant Thornton Audit Pty Ltd Key audit matter How our audit addressed the key audit matter Share-Based Payments (Note 21) The Group has material share-based payment arrangements in place for key management and employees, with the expense for the year being $6,107,272 (2023: $8,989,788). These arrangements include a combination of both market and non-market conditions, with the expense being incurred during the year being heavily impacted by the probabilities determined by management of the specific performance milestones being met, which contain a high degree of judgement. Under AASB 2 Share-Based Payments, management are required to value the performance rights and assess the expected vesting date for achievements of the milestones. This area is a key audit matter due to the degree of judgement required in valuing the performance rights, as well as determining estimates of the vesting dates, relating to both the probability and likely timing of achieving specific non-market conditions. Our procedures included, amongst others: For newly issued performance rights: • Reviewing the relevant agreements to obtain an understanding of the contractual nature of the share-based payment arrangements; • Obtaining management's option valuations and associated share-based payment support; • Utilising our internal valuation specialist to review the valuation performed by management’s expert; • Reviewing management’s determination of fair value of the share-based payments issued, considering the appropriateness of the valuation model used and assessing the valuation inputs; and • Holding discussions with management to understand the share-based payment arrangements in place. For both newly issued and existing performance rights: • Evaluating management’s assessment of the likelihood of meeting the performance conditions attached to the share-based payments; • Assessing the allocation of the share-based payment expense over the relevant vesting period (and the appropriateness of the vesting period); • Evaluating management’s forecasts to validate consistency of vesting dates for performance milestones; • Determining whether performance rights cancelled or lapsed during the year have been correctly accounted for; and • Assessing the adequacy of the disclosures in the financial report. Information other than the financial report and auditor’s report thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2024 but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 148 149 Grant Thornton Audit Pty Ltd Responsibilities of the Directors for the financial report The directors of the Company are responsible for the preparation of: a) the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 (other than the consolidated entity disclosure statement); and b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of: i. the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ii. the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole, is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This description forms part of our auditor’s report. Report on the remuneration report Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Grant Thornton Audit Pty Ltd Chartered Accountants M A Cunningham Partner – Audit & Assurance Melbourne, 29 August 2024 Opinion on the remuneration report We have audited the Remuneration Report included in pages 87 to 114 of the Directors’ report for the year ended 30 June 2024. In our opinion, the Remuneration Report of Clinuvel Pharmaceuticals Limited, for the year 30 June 2024 complies with section 300A of the Corporations Act 2001. Grant Thornton Audit Pty Ltd Level 22 Tower 5 Collins Square 727 Collins Street Melbourne VIC 3008 GPO Box 4736 Melbourne VIC 3001 T +61 3 8320 2222 www.grantthornton.com.au ACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. Auditor’s Independence Declaration To the Directors of Clinuvel Pharmaceuticals Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Clinuvel Pharmaceuticals Limited for the year ended 30 June 2024, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b no contraventions of any applicable code of professional conduct in relation to the audit. Grant Thornton Audit Pty Ltd Chartered Accountants M A Cunningham Partner – Audit & Assurance Melbourne, 29 August 2024 CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 150 151 SHAREHOLDER INFORMATION AS AT 15 AU G UST 20 24 Additional information as at 15 August 2024 required by the Australian Securities Exchange not shown elsewhere in this report is as follows: 1 – SHA REHOLDIN G a. DISTRIBUTION OF SHAREHOLDER NUMBERS Ordinary fully paid shares Category (size of holding) Total holders Units % Of issued capital 1-1,000 4,282 1,273,323 2.54 1,001-5,000 1,024 2,336,641 4.67 5,001-10,000 160 1,188,167 2.37 10,001-100,000 170 4,316,697 8.62 100,001 & Over 26 40,962,952 81.80 Total 5,662 50,077,780 100.00 b. SHAREHOLDINGS HELD IN LESS THAN MARKETABLE PARCELS Total Minimum parcel size Holders Units Minimum $500.00 parcel at $13.96 per unit 36 627 11,049 c. SUBSTANTIAL SHAREHOLDINGS Name No. Ordinary shares & American Depository Receipts The Bank of New York Mellon Corporation1 4,296,472 Dr Philippe Wolgen2 3,425,222 Ender 1 LLC3 2,340,824 1. As disclosed in substantial holder notice dated 24 May 2022. 2. As disclosed in director's interest notice dated 27 November 2023. Actual shareholding on 15 August 2024 is 3,425,222. 3. As disclosed in substantial holder notice dated 16 September 2013. Actual shareholding on 15 August 2024 is 2,590,824. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 152 153 2 – COM PA N Y SECRETA RY The name of the Company Secretary is: Claire Newstead-Sinclair 3 – REGISTERED OFFICE The principle registered office in Australia is: Level 22, 535 Bourke Street Melbourne, VIC 3000, Australia Telephone: +61 3 9660 4900 Fax: +61 3 9660 4999 Email: mail@clinuvel.com Website: https://www.clinuvel.com 4 – REGISTER OF SECU RITIES Computershare Investor Services Pty Ltd Yarra Falls, 453 Johnston St, Abbotsford, VIC 3067, Australia Telephone: +61 3 9415 4000 5 – AUSTRA LIA N SECU RITIES EXCHA N GE LIMITED Quotation has been granted for all the ordinary shares on all Member Exchanges of the Australian Securities Exchange Limited (ASX): • ASX: CUV. The Company's shares are also traded on: • Börse Frankfurt, Germany, under the code UR9; and • Over-the-Counter Market, USA, as a Level 1, American Depositary Receipt (ADR), under the code CLVLY. Each ADR of the Company is equivalent to one ordinary share of the Company, as traded on the ASX. The Bank of New York Mellon is the depositary bank. 6 – RESTRICTED SECU RITIES Restricted securities on issue at 30 June, 2024: Nil. 7 – DIRECTORY Non-Executive Chair Prof. Jeffrey Rosenfeld. Non-Executive Directors Brenda Shanahan, Dr Karen Agersborg, Susan Smith. Managing Director And Chief Executive Officer Dr Philippe Wolgen. Chief Scientific Officer Dr Dennis Wright. Chief Financial Officer Peter Vaughan. Auditor Grant Thornton Audit Pty Ltd Collins Square, Tower 5, Level 22, 727 Collins Street, Melbourne, VIC 3008, Australia Bankers National Australia Bank (NAB) Western Branch, 460 Collins St, Melbourne, VIC 3000, Australia J. P. Morgan Chase & Co. (JPM) 85 Castlereagh Street, Sydney, NSW 2000, Australia Legal Counsel Arnold Bloch Leibler Level 21, 333 Collins St, Melbourne, VIC 3000, Australia Sidley Austin LLP Woolgate Exchange, 25 Basinghall Street, London, EC2V 5HA, United Kingdom IP Lawyer Dipl.-Ing Peter Farago Baadestr 3, Munich 80, Germany 8 – A N N UA L GEN ERA L MEET IN G CLINUVEL PHARMACEUTICALS LTD (“Company”) provides notice for its 2024 Annual General Meeting (AGM) of shareholders, which is scheduled to take place on Wednesday 16 October 2024 commencing at 10.00 am (AEDT). The Notice of Meeting will be lodged with the ASX no later than Friday 13 September 2024. Details in relation to the AGM, including shareholder participation, will be included in the Notice of Meeting and accompanying materials. In accordance with ASX Listing Rule 3.13.1, the Closing Date for receipt of Director nominations is Thursday 5 September 2024. d. VOTING RIGHTS The voting rights attaching to each class of equity securities are set out below: Ordinary shares: Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. Performance rights: Performance Rights have no voting rights. e. LARGEST SHAREHOLDERS Position Name Number of ordinary fully paid shares held % held of issued ordinary capital 1. HSBC Custody Nominees (Australia) Ltd 10,225,972 20.42 2. BNP Paribas Nominees Pty Ltd ACF (Clearstream) 5,685,193 11.35 3. BNP Paribas Nominees Pty Ltd 4,988,645 9.96 4. J P Morgan Nominees Australia Pty Limited 3,629,550 7.25 5. Dr Philippe Jacques Wolgen 3,425,222 6.84 6. Citicorp Nominees Pty Limited 3,416,310 6.82 7. Ender 1 LLC 2,590,824 5.17 8. BNP Paribas Nominees Pty Ltd (IB AU Noms Retail Client) 2,207,904 4.41 9. HSBC Custody Nominees (Australia) Ltd A/C2 922,480 1.84 10. Emilino Group Pty Ltd (Emilino Super Fund) 601,447 1.20 11. National Nominees Limited 548,778 1.10 12. Mr Darren Michael Keamy 362,890 0.72 13. Dr Mark Edwin Badcock 346,772 0.69 14. Mr David William Trevorrow 229,600 0.46 15. BNP Paribas Nominees Pty Ltd (Agency Lending A/C) 229,044 0.46 16. Dr Dennis Wright 188,812 0.38 17. Mr David John Lewis 185,000 0.37 18. Mr Trent Sheldon Redding 177,370 0.35 19. Rusty Hammer Pty Ltd (Archipelago Holdings SF A/C) 150,722 0.30 20. Mr Simon John Bown 146,000 0.29 Totals: Top 20 holders of ordinary fully paid shares (total) 40,258,535 80.39 Total remaining holders balance 9,819,245 19.61 CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 154 155 2023 2024 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN 5 10 15 20 25 30 ASX:CUV – Share Price (A$) 200,000 300,000 400,000 600,000 500,000 2023 2024 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN ASX:CUV – Daily Trading Volume (No.) MARKET PERFORMANCE CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 156 157 Subcutaneous Underneath the skin. Sustained release/controlled-release Process whereby a drug is released from a formulation over a period of time. Therapeutic Goods Administration (TGA) Australia's regulatory agency for medicinal products and devices. Ultraviolet (UV) radiation Part of the electromagnetic spectrum at wavelengths below 400 nanometers, also called the invisible portion of light. There are three sub-types of UV: UVC <280 nm; UVB 280–320 nm; UVA 320–400 nm. GLOSSARY Alpha-melanocyte stimulating hormone (α-MSH) A peptide hormone which activates or stimulates the production and release of (eu)melanin in the skin (melanogenesis). Dermatocosmetics Specially formulated products designed to assist skin health with a focus on anti-ageing, and repair and regeneration of the skin. Dermatocosmetics combine a dermatological action to treat the skin and a cosmetic action to cleanse, moisturise, and alter the appearance of an individual's skin. European Medicines Agency (EMA) The decentralised body of the European Union regulating medical drugs and devices. Eumelanin A black or brown pigment mainly concerned with the protection of the skin by absorbing incoming UV radiation. This protective ability warrants melanin to be termed a photoprotectant (a substance capable of providing protection against radiation from the sun). α-msh acts specifically to stimulate (eu)melanin synthesis. Food and Drug Administration (FDA) The USA's regulatory agency for food, tobacco, medicines, and medical devices. High Energy Visible (HEV) light A particularly high-frequency, high- energy light in the blue/violet band, ranging from 400 nm to 480 nm in the visible light spectrum. HEV generates oxidative stress, accelerates skin ageing and increases hyperpigmentation. Melanin The dark pigment synthesised by melanocytes; responsible for skin pigmentation. Melanocortins Melanocortins are a group of peptide hormones, consisting of adrenocorticotropin hormone (ACTH), α-melanocyte stimulating hormone (α-MSH), beta-melanocyte-stimulating hormone (β-MSH), and gamma- melanocyte-stimulating hormone (γ-MSH) which are derived from proopiomelanocortin (POMC) in the pituitary gland. Melanocortin receptors Melanocortins exert their effects by binding to and activating melanocortin receptors, a family of five (MC1R to MC5R) seven-transmembrane g-protein coupled receptors (GPCRS) that affect different body functions. The receptors are widespread throughout the body, exhibiting myriad ligand affinities, tissue and cell distribution, and downstream effects. Melanogenesis The process whereby melanin is produced in the body. Narrowband Ultraviolet B (NB-UVB) phototherapy Therapy which utilises an ultraviolet B light source to activate melanin in vitiliginous lesions of the skin. Phase I The first trials of a new drug candidate in humans, phase I trials are designed to evaluate how a new drug candidate should be administered, to identify the highest tolerable dose and to evaluate the way the body absorbs, metabolises and eliminates the drug. Phase II A phase II trial is designed to continue to test the safety of the drug candidate, and begins to evaluate whether, and how well, the new drug candidate works (efficacy). Phase II trials often involve larger numbers of patients. Phase IIb/phase III Advanced-stage clinical trials that should conclusively demonstrate how well a therapy based on a drug candidate works. Phase III trials can be longer and typically much larger than phase II trials, and frequently involve multiple test sites. The goal is statistically determining whether a therapy clinically improves the health of patients undergoing treatment while remaining safe and well tolerated. Pharmacodynamics The study of the time course of a drug's actions in the body. Pharmacokinetics The part of pharmacology that studies the release and availability of a molecule and drug in the human body. PhotoCosmetics CLINUVEL's product range of dermatocosmetics. Photodermatoses Photodermatoses are a variety of skin conditions that develop as a result of exposure to ultraviolet radiation or visible light. Photoprotection Protection from light and ultraviolet radiation. Melanin provides natural photoprotection to skin, whilst sunscreens provide artificial photoprotection. CLINUVEL PHARMACEUTICALS LTD ANNUAL REPORT 2024 158 159 “Each new situation requires a new architecture.” Jean Nouvel CLINUVEL PHARMACEUTICALS LTD 160 CLIN UV EL. COM © Copyright CLINUVEL PHARMACEUTICALS LTD 2024

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