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Neuren Pharmaceuticals Limited
Contents
Corporate Directory
Chief Executive’s Report
Directors’ Report
Corporate Governance Statement
Financial Statements
Statements of Comprehensive Income
Statements of Financial Position
Statements of Changes in Equity
Statements of Cash Flows
Notes to the Financial Statements
Independent Auditors’ Report
Additional Information
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The Board of Directors is pleased to present
the Annual Report of Neuren Pharmaceuticals
Limited for the year ended 31 December 2011,
authorised by it on 27 March 2012.
For, and on behalf of, the Board
Dr Robin Congreve
Chairman
Dr Trevor Scott
Director
27 March 2012
Company
Neuren Pharmaceuticals Limited
ARBN 111 496 130
Corporate Head Office
Level 2, 57 Wellington Street,
Freemans Bay, Auckland, New Zealand
Tel: +64 9 3700 200
Australian Registered Office
Level 13, 122 Arthur Street,
North Sydney, NSW 2060, Australia
Tel: +61 2 9956 8500
Directors
Dr Robin Congreve
Mr Bruce Hancox
Dr John Holaday
Dr Graeme Howie
Dr Trevor Scott
Dr Douglas Wilson
Company Secretary
Mr Robert Waring
Auditors
PricewaterhouseCoopers
188 Quay Street
Private Bag 92162
Auckland, New Zealand
Share Registry
Link Market Services Limited
Level 9, 333 Collins Street
Melbourne, Victoria 3000
Australia
Tel: +61 3 9615 9800
Fax: +61 3 9615 9900
Stock Exchange Listing
ASX Limited
ASX Code: NEU
Website
www.neurenpharma.com
Neuren Pharmaceuticals Limited
Chief Executive’s Report
Neuren again made excellent progress in the development of our key assets in 2011. Foremost among the
Company’s accomplishments were securing our financial position through 2013 and significant progress in
diversification of the NNZ-2566 franchise. Major milestones included:
• Raising NZ$11 million in new capital through a rights issue and placement of shares, adding two
new cornerstone investors and closing the year with cash of NZ$9.8m
• Retiring all outstanding convertible notes and terminating the funding agreement with SpringTree
Special Opportunities Fund
• Completing Cohorts 1 and 2 of the Phase II trial of NNZ-2566 in moderate to severe traumatic brain
injury
• Obtaining FDA approval for implementation of Exception from Informed Consent in the NNZ-2566
Phase II trial
• Completing preclinical and manufacturing development for the NNZ-2566 oral formulation
• Receiving FDA approval for a new IND to test an oral formulation of NNZ-2566 in patients with mild
TBI or concussion
• Advancing the NNZ-2566 Rett Syndrome program through collaborations with leading experts and
academic partners
Filing an application with the FDA for Orphan Disease designation for NNZ-2566 in Rett Syndrome
•
• Developing and submitting protocols and supporting documentation for a pre-IND meeting with the
FDA to seek agreement for a Phase II trial in Rett Syndrome
NNZ-2566 Development Program
As additional scientific evidence of the therapeutic potential of NNZ-2566 in multiple indications has
emerged and its excellent safety profile continues to be supported, Neuren has committed to expanding the
scope of the program. These efforts benefit from substantial leverage on investments by the Company and
ongoing support from the US Army. At the end of 2010, the NNZ-2566 program was based on a single IND
for the clinical trial of the intravenous formulation in moderate to severe traumatic brain injury (TBI) and a
preclinical development program to advance an oral formulation. Today, the NNZ-2566 franchise includes
four INDs enabling three well-advanced clinical development programs:
• NNZ-2566 intravenous for moderate to severe TBI
• NNZ-2566 oral for mild TBI/concussion
• NNZ-2566 oral for Rett Syndrome and other autism spectrum disorders.
NNZ-2566 intravenous for moderate to severe TBI
INTREPID-2566 is a Phase II clinical trial in patients admitted to trauma centres with moderate to severe TBI.
The trial involves three cohorts with the dose increased following completion of the preceding cohort and
review by the Data and Safety Monitoring Committee (DSMC). The first two cohorts of 30 patients each
were completed during 2011. The third cohort of 200 patients is underway. To date, NNZ-2566 appears to
be well-tolerated. The serious adverse events (SAEs) reported among study subjects have been typical for
critically injured patients and the mortality rate is substantially below that reported in comparable trials.
The study is presently being conducted with a requirement for informed consent by a Legally Authorized
Representative (LAR) while implementation of the new protocol under Exception from Informed Consent
(EFIC) proceeds. EFIC requires a complex and time-consuming process of community consultation and
public disclosure at each participating site. The plans for this process are approved by the site’s Institutional
Review Board (IRB) prior to initiation and final protocol review occurs when the process has been
completed. Implementation of the EFIC process is proceeding well with two sites having completed the
community consultation and public disclosure campaigns with IRB approval. As each site IRB approves the
EFIC study, documentation is submitted to the FDA as well as to the US Army’s Human Research Protection
Office. Because the trial is largely funded by the US Army, it also must approve implementation at each site.
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Neuren Pharmaceuticals Limited
During the course of the trial, enrolment has been a continuing challenge. This tends to be the case with
most TBI trials in which, because of the acute nature of the injury, eligible patients cannot be recruited in
advance. Inclusion of females, expansion of the age range, EFIC and bringing on additional sites represent
our core strategies to improve the pace of enrolment. Implementation of these measures requires time,
however, and progress has been slower than anticipated. We remain confident that the approaches outlined
will improve enrolment and will update our estimate of time to complete the study following evaluation of
the performance of new and original sites under the revised protocol. Cost implications are minimal as the
direct costs of the trial are covered by funding from the US Army.
NNZ-2566 oral for mild TBI/concussion
As previously disclosed, an aqueous (water-based) formulation has been selected for the oral formulation of
NNZ-2566. During 2011, the Company was able to capitalize on the advantages that an aqueous formulation
provides with respect to development time and cost to advance the project through the entire preclinical
development process. Drug product manufacturing was simplified by using the same lyophilized powder
produced for the intravenous formulation. Stability studies confirmed that, when reconstituted with water,
the product is stable for at least five days which will make providing it for patients in the Phase II trial in
concussion less cumbersome. The bridging toxicology study confirmed that NNZ-2566 oral is safe and well-
tolerated at doses well above those expected to be used in the Phase I and II trials. The IND for NNZ-2566
oral in concussion was approved by the FDA in December 2011 and the first of four cohorts of healthy
volunteers in the Phase I safety and pharmacokinetics study has been completed. There have been no
adverse events reported during the follow-up period specified in the protocol.
Concussion represents a serious public health problem and a very large market with more than 800,000
patients admitted to emergency departments each year in the US alone. With more than 70% of military TBI
classified as mild, it also is a very high priority for the US Army which has provided US$2.9 million in
additional funding to support the oral development program.
A Phase II clinical trial in patients with concussion is planned to start in the second half of 2012. The trial will
be led by physicians and scientists from the University of Pittsburgh Sports Medicine Concussion (UPMC)
Program. The UPMC program, established in 2000, is the largest clinical service and research program
focused on the diagnosis, evaluation and management of concussion in athletes. The program’s
internationally known team of clinicians and researchers are world leaders in the study of neurocognitive
effects of concussion and development of better methods to evaluate recovery.
As part of the program, baseline neurocognitive assessments have been completed on thousands of people,
predominantly athletes, who will be the pool of potential patients for the study. Because we will know the
degree of impairment induced by the injury compared to pre-injury status, each patient will essentially serve
as his or her own control, allowing us to use return to baseline as the primary efficacy endpoint, rather than
attempting to measure performance against population-based normative data. This methodology will allow
us to use a smaller sample size to achieve the desired power and precision. In addition to neurocognitive
performance, efficacy endpoints will include vestibular function (a measure of balance) and other post-
concussion symptoms. The UPMC investigators estimate that enrolment and follow-up of approximately
200 patients will be completed within one year.
NNZ-2566 oral for Rett Syndrome and other autism spectrum disorders
Rett Syndrome (RTT) is a severe neurodevelopmental disorder caused by mutations in an X-linked gene
designated MECP2. It occurs in approximately 1 in every 10,000 females and is considered one of the
autism spectrum disorders. Children born with the mutation develop normally in the first 6-18 months then
experience a precipitous decline in cognitive, behavioural and physical function with most patients becoming
profoundly disabled by early childhood. Patients’ status tends to stabilize by puberty but most are left with
severe disability and many have seizures, heart rhythm and digestive problems as well as skeletal
abnormalities. There is no approved treatment.
At a cellular level, the MECP2 mutations that cause RTT result in significant deficits in connectivity between
neurons. Dendrites, the branching projections of neurons that provide the electrochemical signals
necessary for communication between neurons, are typically shorter and less dense than in normal cells and
the strength of the signals is diminished. In a mouse model of Rett Syndrome, NNZ-2566 increased the
length and branching of dendrites and also enhanced signal transmission as measured by long-term
potentiation, one of the important cellular mechanisms underlying learning and memory. RTT also is
associated with activation of microglia, a type of immune cell present in the brain, which can lead to
increased inflammation and damage to nerve cells. NNZ-2566 has been shown in multiple animal models to
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Neuren Pharmaceuticals Limited
reduce inflammation (by blocking up-regulation of inflammatory cytokines) and resulting cell death
(apoptosis).
Part of the rationale for targeting RTT also derives from studies conducted by researchers at MIT1 who found
that (1-3)IGF-1 or glypromate, the parent molecule of NNZ-2566, is effective in the same mouse model in
which NNZ-2566 showed benefit. On the basis of that work, a Phase I/II trial of IGF-1, the molecule from
which glypromate is derived, in patients with Rett Syndrome is ongoing at Children’s Hospital in Boston,
Massachusetts. The trial is sponsored by the International Rett Syndrome Foundation and Autism Speaks,
two of the leading non-profit research and advocacy organizations supporting research in Rett Syndrome.
Unlike IGF-1, NNZ-2566 readily crosses the blood brain barrier to reach the brain and will also be
administered orally rather than by injection. The Company believes that, for a drug to effectively control the
symptoms of Rett Syndrome, it will have to be administered continuously, probably for life, and that an oral
product offers significant advantages for caregivers over an injectable.
Working with Autism Therapeutics Ltd (UK), a group with substantial expertise in drug development and
clinical trials for autism spectrum disorders, and academic collaborators, clinical trial protocols have been
developed for two Phase II clinical trials in Rett Syndrome – one in adolescent and adult patients and one in
pediatric patients. These were submitted along with supporting documentation to the FDA in a request for a
pre-IND meeting to seek agreement with the FDA concerning trial design. The meeting has been granted
and scheduled for May 2012. We also filed a request for Orphan Drug designation for NNZ-2566 in Rett
Syndrome in December 2011 and plan to request Fast Track designation following approval of the IND.
Pending completion of the Phase I trial and approval by the FDA, the Phase II trials will be conducted at the
Texas Children’s Hospital and Baylor College of Medicine in Houston, Texas under the leadership of Drs.
Daniel Glaze and Jeffrey Neul, Director and Assistant Director, respectively, of the Blue Bird Circle Rett
Center, one of the world’s leading centres for research and treatment of Rett Syndrome and other
neurodevelopmental disorders. Neuren plans to conduct the trial in adolescent and adult patients first and
intends to initiate enrolment in late 2012. We believe that, if the Phase II trials are positive, it will be possible
to progress directly into Phase III trials.
Motiva®
Motiva®, or nefiracetam, is a small molecule originally developed by Daiichi Pharmaceuticals to which
Neuren obtained rights via acquisition of Hamilton Pharmaceuticals. Motiva® has shown efficacy in a range
of neuropsychiatric outcomes in six Phase II and III trials in post-stroke patients. In a Phase IIb trial in
patients with post-stroke depression conducted in the US and Canada under a US IND, a very significant
effect was observed in patients who also were diagnosed with apathy using the validated Apathy Scale
(51.1% of patients)2 . The trial was the first randomised, placebo-controlled study to show a significant effect
of a pharmacologic intervention on apathy. The most severely depressed patients also showed a significant
improvement in depressive symptoms although the effect across all patients was not statistically
significant3. Motiva® has been tested in over 1,700 patients in Phase I, II and III trials in Japan, the US and
Canada and has an excellent safety profile.
Apathy is a dysmotivational syndrome that manifests as a lack of interest, feeling, emotion or concern.
Symptoms include diminished initiation and poor persistence of activity, lack of interest, indifference, low
social engagement and blunted emotional responses. Although apathy has long been documented in the
medical literature, due to accelerating research in the 1990s, it is now becoming widely recognized as a
common neuropsychiatric disorder distinguishable from cognitive disorders such as dementia and mood
disorders such as depression in much the same way that depression and anxiety have become diagnosable
and pharmacologically addressable disorders. Apathy frequently occurs in patients who have had a stroke or
traumatic brain injury as well as in those with chronic progressive neurodegenerative conditions such as
Alzheimer’s and Parkinson’s disease. Apathy also complicates a broad range of other CNS conditions
including depression, schizophrenia, brain tumors and infection. Taken together, it has been estimated that
Apathy Syndrome affects some 10 million people in the US alone.
A Phase II trial of Motiva® in 122 patients with post-stroke apathy is underway. The study is funded by a
grant from the National Health and Medical Research Council to Prof. Sergio Starkstein, MD, PhD, Winthrop
Professor and Head of the Neuropsychiatry Unit at Fremantle Hospital, Perth. Patients are being actively
screened and recruited. In mid-2011, a second clinical centre in Western Australia initiated patient screening
1 Tropea et al. Partial reversal of Rett Syndrome-like symptoms in MeCP2 mutant mice. Proceedings of the National
Academy of Sciences 2009.
2 Robinson et al. Double-blind treatment of apathy in patients with post-stroke depression using nefiracetam. Journal of
Neuropsychiatry and Clinical Neurosciences 2009.
3 Robinson et al. Double-blind randomized treatment of post-stroke depression using nefiracetam. Journal of
Neuropsychiatry and Clinical Neurosciences 2008.
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Neuren Pharmaceuticals Limited
as well. Approximately 100 patients have been recruited and are being followed to determine whether they
develop apathy that meets the criterion for randomisation. To date, 10 patients have completed dosing. An
interim analysis is planned for later this year. Neuren is not incurring any costs associated with the conduct
of the trial. If this study confirms the robust effect of Motiva® on post-stroke apathy, the Company believes
that it will have an opportunity to enter into a beneficial commercial partnership to complete the pivotal trials
necessary for registration of the drug for that indication.
Perseis Cancer Research Program
The Trefoil Factor (TFF) program targeting breast and other cancers was assigned to Perseis Therapeutics, a
Neuren subsidiary jointly established with the New Zealand Breast Cancer Research Trust (BCRT) in 2009.
With initial funding of NZ$1.18 million from the BCRT, Perseis initiated a program to develop and test
monoclonal antibodies against TFF-1 and TFF-3. Trefoil Factors are estrogen-regulated proteins secreted by
cancer cells that act as growth factors in a number of cancers, promoting growth and spread of tumours.
TFF-1 is expressed in up to 68% of breast cancers and its expression is negatively associated with survival in
patients with metastatic disease. TFF-3 is strongly associated with tamoxifen resistance and inhibition of
TFF-3 has been shown to be effective in treating tamoxifen resistant breast cancer cells in culture. Among
patients treated with tamoxifen, survival is highly correlated with the level of TFF-3 expression. Tamoxifen is
a widely used drug that blocks the growth-promoting effects of estrogen and is the world’s leading
hormonal drug for the treatment of breast cancer. Between 25% and 35% of women who take tamoxifen to
prevent the recurrence of breast cancer fail to respond to the drug. This phenomenon creates a significant
need and opportunity for a product that can reduce or prevent tamoxifen resistance.
As previously announced, in 2011 Perseis selected three lead anti-TFF-1 antibodies for evaluation in an
animal (xenograft) model of human breast cancer. The antibodies were selected from a library of fully human
antibody fragments owned by the University of California at San Francisco. The process of producing the
monoclonal antibodies took longer than expected which delayed initiation of the study, however the
xenograft studies are underway with final results expected by May 2012.
Intellectual Property
From the beginning of 2011 until the end of the reporting period, the following issued patents were added to
our patent portfolio:
• U.S. Patent No. 7,863,304, issued on 4 January 2011, entitled Analogs of GPE. The patent covers
the compositions of matter and methods of use of NNZ-2624 and NNZ-2552 as well as
pharmaceutical compositions comprising the compounds and methods of protecting neural cells
from death or degeneration.
• U.S. Patent No. 7,887,839 issued on 15 Feb 2011 entitled Oral Formulations of Glycyl-2 Methyl
Prolyl-L-Glutamate. The patent covers a broad scope of claims for various oral formulations of NNZ-
2566.
• U.S. Patent No. 8,013,170 entitled Substituted Pyrrolo[1,2-D][1,4]-Diazonines and Treatment of Brain
Damage issued 6 September 2011. The claims cover the formula of a macrocyclic compound NNZ-
2599. Neuren’s proprietary macrocyclics are neuroprotective compounds characterized by the
presence of a large cyclic structure that results in increased metabolic stability and greater protease
resistance.
•
•
Japanese Patent No. 2006-525,396 granted 4 October 2011 entitled Bicyclic Compounds and
Methods for Their Use in Neuroprotection. Its claims cover the composition of: NNZ-2591, NNZ-
2621 and NNZ-2622.
U.S. Patent No. 8,067,425 issued 29 Nov 2011, entitled Bicyclic Compounds and Methods for Their
Use in Neuroprotection. The patent covers NNZ-2591 as well as pharmaceutical compositions
containing it.
In addition, the following patent applications were published in the course of the reporting period:
• U.S. Patent Application No. 12/903,844 entitled Cognitive Enhancement and Cognitive Therapy
Using Glycyl-L-2-Methylprolyl-L-Glutamic Acid published on 12 May 2011 (Pub. No. US
2011/0112033). The application covers therapeutic uses of NNZ-2566 to treat cognitive or memory
disorders.
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Neuren Pharmaceuticals Limited
• U.S. Patent Application No. 13/043,215 entitled Cyclic Glycyl-2-Allyl Proline Improves Cognitive
Performance in Impaired Animals published on 18 August 2011 (Pub. No. US 2011/0201614). The
application covers methods for therapeutic use of NNZ-2591 to treat cognitive disorders as well as
manufacture of medicaments useful for their treatment.
• U.S. Patent Application No. 12/891,280 entitled Cyclic G-2-Allyl Proline and Its Use in Treatment of
Peripheral Neuropathy published on 3 March 2011 (Pub. No. US 2011/0052531). The application
covers methods for therapeutic use of NNZ-2591 to treat peripheral neuropathies and manufacture
of medicaments that are useful for treatment of such conditions.
Financial Position
Following the rights issue and private placements undertaken in 2011, the Group ended the year with cash
balances of NZ$9,844,000 (2010: NZ$1,956,000) which are expected to provide funding through 2013.
Interest income of NZ$174,000 was significantly higher in 2011 compared to 2010 due to the higher average
cash balance. Grant income of NZ$4,150,000 in 2011 largely related to funding for the NNZ-2566 Phase II
trial from the US Army to cover direct costs, and the reduction from 2010 matched the reduced direct costs.
Research & development costs incurred by the Group largely relate to NNZ-2566 Phase II trial costs
denominated in US dollars. The year on year decrease in research & development costs was as a result of a
15% average strengthening of the NZ dollar against the US dollar throughout 2011, and NNZ-2566 drug
product manufacturing runs conducted in 2010 which were not repeated in 2011. Other changes in
operating costs included a reduction in patent costs as a result of patent portfolio rationalisation in prior
years, an increase of NZ$806,000 in the non-cash expense related to the issue of options to employees,
directors and consultants during 2011, and foreign exchange gains largely arising on Australian dollar cash
balances from the rights issue and private placements conducted in the year.
Mr Larry Glass
Chief Executive Officer
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Neuren Pharmaceuticals Limited
Directors’ Report
Principal Activities
Neuren Pharmaceuticals Limited (Neuren or the Company, and its subsidiaries, or the Group) is a publicly
listed biopharmaceutical company focusing on the development of drugs for neurological disorders,
metabolism and cancer. The drugs target acute indications of brain injury such as cognitive impairment
resulting from traumatic brain injury, psychiatric symptoms of stroke, as well as chronic conditions such as
Parkinson’s and Alzheimer’s diseases.
Neuren has three lead candidates; Motiva® and NNZ-2566 presently in clinical development to treat four
different neurological conditions, and NNZ-2591 in preclinical development for Parkinson’s disease dementia
and other chronic neurodegenerative conditions. The Group has operations in New Zealand and the United
States.
Performance Overview
During 2011 patient recruitment continued in the Phase II trials for two of Neuren’s lead candidates; NNZ-
2566 and Motiva®. A Phase I safety study for oral administration of NNZ-2566 also commenced in 2011
beginning the programme of clinical trials for the use of NNZ-2566 in concussion and Rett Syndrome.
Funding for the NNZ-2566 Phase I and II trials and oral development continues to be provided by the US
Army, with a further NZ$4 million received in the year. The Motiva® trial is being undertaken by Prof. Sergio
Starkstein, MD, PhD at Fremantle Hospital, Perth, and is funded by a grant from the National Health and
Medical Research Council (Australia) directly to the principal investigator. Neuren’s subsidiary Perseis also
continued to develop its monoclonal antibodies against breast cancer and by year end in vivo testing had
been initiated.
Neuren’s operations for 2011 are described further in the Chief Executive’s Report on pages 1 to 5.
All amounts are shown in New Zealand dollars unless otherwise stated.
The Group’s net loss for the year ended 31 December 2011 was $6,232,000 (2010: $6,573,000). The detailed
financial statements are presented on pages 14 to 32.
The net deficit per share for 2011 was $0.01 (2010: $0.02) based on 764,781,209 weighted average number
of shares outstanding (2010: 384,916,420).
No ordinary share dividends were paid in the year and the Directors recommend none for the year.
Directors
Dr Robin Congreve, LLM, PhD (Chairman)
Dr Congreve was for many years a partner in Russell McVeagh McKenzie Bartleet & Co specialising in
taxation and business law. He was subsequently on the Boards of or chaired a number of public and private
companies including NZ Railways Corporation, BNZ, Comalco NZ Limited, Lion Nathan Limited and TruTest
Limited. He is a principal of Oceania & Eastern Group, a New Zealand private equity group which has
provided private equity funding to both Neuren's predecessor companies, NeuronZ and EndocrinZ. Dr
Congreve was founding Chairman of the Auckland Medical School Foundation which led to the formation of
NeuronZ within the University of Auckland and subsequently to the introduction of private equity into that
company and EndocrinZ.
Dr Trevor Scott, MNZM, LLD (Hon), BCom, FCA, FNZIM, DF Inst D (Non-Executive Director)
Dr Scott is founder of T.D. Scott and Co., an accountancy and consulting firm, which he formed in 1988. He
is an experienced advisor to companies across a variety of industries. Dr Scott serves on numerous
corporate boards and is chairman of several, including Mercy Hospital Dunedin Limited and Arthur Barnett
Limited. He is also a director of Argosy Property Trust Limited (formerly ING Property Trust Limited) which is
listed on the New Zealand Stock Exchange.
Dr Douglas Wilson, MB, ChB, PhD (Non-Executive Director)
Dr Wilson was originally a medical academic with postgraduate experience in Auckland, London, Oxford and
Walter and Eliza Hall Institute, Melbourne. He then spent many years in the international pharmaceutical
industry, firstly as Senior Vice-President for Boehringer Ingelheim USA. Dr Wilson was responsible for all
drugs and clinical development and all interactions with the FDA. He then carried these responsibilities
worldwide at Boehringer Ingelheim Head Office in Germany. He has overseen multiple drugs at all phases of
development including bringing many drugs successfully to the market in the USA. Dr Wilson is now a
consultant to the biotechnology sector.
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Neuren Pharmaceuticals Limited
Dr Graeme Howie, BSc (Hons), PhD (Non-Executive Director)
Dr Howie has over 27 years of management experience in the international pharmaceutical industry with a
strong and diverse background in research and development, product development, manufacturing and
commercial fields. His most recent experience is in recombinant biotech product development and was until
December 2004 a senior executive at Pfizer Inc., based in New York. Dr Howie has extensive international
experience in technical and commercial due diligence activities, including in-licensing. He also led and was
responsible for new delivery route feasibility studies on human growth hormone and has been responsible
for the development and registration of various products throughout the USA, Europe, Australia and Asia.
Dr John Holaday, PhD (Non-Executive Director)
Dr Holaday, a veteran life-science entrepreneur, has built five public and private biopharmaceutical
companies over the past 21 years and raised more than US$450 million in capital. Dr Holaday founded
EntreMed in 1992 and served as its Chairman, President and CEO until his retirement in 2003 and was the
co-founder, director, Scientific Director and SVP of Medicis Pharmaceutical Corporation. He was the founder
and Chief of the Neuropharmacology Branch at the Walter Reed Army Institute of Research for 21 years. Dr
Holaday has received numerous honours and awards, including induction into Ernst and Young’s
Entrepreneur of the Year 2006 Hall of Fame. He holds over 60 U.S. and foreign patents, has published more
than 200 scientific articles and reviews, and edited five books. He is currently CEO of QRxPharma, a listed
specialty pharmaceutical company specialising in pain and CNS diseases.
Mr Bruce Hancox, BCom (Non-Executive Director)
Mr Hancox joined the Neuren Board in March 2012. Mr Hancox has had a long and distinguished career in
business in New Zealand and Australia. He was for many years involved with Brierley Investments Limited
as General Manager, Group Chief Executive and Chairman. He also served as a director of many Brierley
subsidiaries in New Zealand, Australia and the United States. Mr Hancox became an Australian resident in
2006. Since then he has pursued various private investment interests and has been a director of and
consultant to a number of companies. He has acted as advisor on a number of takeover situations. In 2007
he was appointed to the board of Australian listed company Retail Food Group Limited and became its
Chairman in 2011.
Interests Register
The Company is required to maintain an interests register in which particulars of certain transactions and
matters involving Directors must be recorded. Details of the entries in this register for each of the Directors
are as follows:
Dr R L Congreve
Dr Congreve is a director of Oceania & Eastern Biotech Limited, EndocrinZ Founders Limited, and Hazardous
Investments Limited, all shareholders of the Company. Dr Congreve does not have any other interests
considered to cause any potential conflict of interests.
Dr T D Scott
Dr Scott is a director of Centralo Limited, a shareholder of the Company, and Essex Castle Limited, a
nominee company. Dr Scott is also the chairman of Mercy Hospital Dunedin Limited which also operates in
the biotechnology/pharmaceutical industry. Dr Scott does not have any other interests considered to cause
any potential conflict of interests.
Dr J D Wilson
Dr Wilson was appointed a director of Phylogica Limited, a Perth, Australia, based biopharmaceutical drug
discovery company, in March 2008. Dr Wilson does not have any other disclosed interests considered to
cause any potential conflict of interests.
Dr G B Howie
Dr Howie does not have any interests considered to cause any potential conflict of interests.
Dr J Holaday
Dr Holaday is CEO of QRxPharma, a listed specialty pharmaceutical company specialising in pain and CNS
diseases. Dr Holaday does not have any other interests considered to cause any potential conflict of
interests.
Mr B Hancox
Mr Hancox does not have any interests considered to cause any potential conflict of interests.
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Neuren Pharmaceuticals Limited
The details of each Director’s relevant interests in securities of the Company are disclosed in the “Other
Information” section of this Annual Report.
Information used by Directors
During the year the Board received no notices from Directors of the Company requesting to use Company
information received in their capacity as Directors, which would not otherwise have been available to them.
Indemnification and Insurance of Directors and Officers
Neuren has arranged Directors and Officers Liability Insurance that provides that generally Directors and
Officers will incur no monetary loss as a result of actions undertaken by them as Directors and Officers. The
insurance does not cover liabilities arising from criminal activities or deliberate or reckless acts or omissions.
Remuneration of Directors
Dr Robin Congreve (Chairman)
Dr John Holaday
Dr Graeme Howie
Dr Trevor Scott
Dr Doug Wilson
Directors’
Fees
2011
$’000
60
Other
Remuneration
2011
$’000
40
Directors’
Fees
2010
$’000
60
Other
Remuneration
2010
$’000
40
35
35
40
35
-
-
20
-
35
35
40
35
-
-
20
-
Details regarding Share Option Plan awards to directors in accordance with approvals sought under ASX
Listing Rule 10.14 are set out under “Additional Information” on page 35 of this Annual Report.
Executive Remuneration
The number of employees, not being directors of the Company, who received remuneration and benefits
above $100,000 per annum, is as follows:
2011
$’000
2010
$’000
$110,000 - $119,999
$120,000 - $129,999
$130,000 - $139,999
$140,000 - $149,999
$160,000 - $169,999
$170,000 - $179,999
$200,000 - $209,999
$210,000 - $219,999
$240,000 - $249,999
$300,000 - $309,999
$380,000 - $389,999
-
1
-
-
1
-
-
1
1
-
1
1
-
1
1
-
1
1
-
-
1
-
Donations
The Company made no donations during the year (2010: nil).
Auditors
PricewaterhouseCoopers are the auditors of the Company. Audit fees in relation to the annual and interim
financial statements were $47,000 (2010: $51,000). During 2011 PricewaterhouseCoopers also received
$1,000 (2010: $8,600) in relation to other financial advice and services.
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Neuren Pharmaceuticals Limited
Corporate Governance Statement
The Directors have adopted practices and procedures for the good corporate governance of the Company.
These practices and procedures establish the framework of how the Directors carry out their duties and
discharge their obligations. The Company has adopted appropriate policies and practices as provided by the
ASX Listing Rules and the Corporate Governance Principles and Recommendations issued by the ASX
Corporate Governance Council (“Council”) in March 2003, revised in August 2007 (2nd edition) and amended
in June 2010 which are as follows:
Principle 1.
Principle 2.
Principle 3.
Principle 4.
Principle 5.
Principle 6.
Principle 7.
Principle 8.
Lay solid foundations for management and oversight
Structure the Board to add value
Promote ethical and responsible decision-making
Safeguard integrity in financial reporting
Make timely and balanced disclosure
Respect the rights of shareholders
Recognise and manage risk
Remunerate fairly and responsibly
Neuren’s corporate governance practices were fully compliant with the Council’s best practice
recommendations apart from the following recommendations:
Recommendation 2.4: The Board should establish a nomination committee
The Board has previously considered establishing a Nomination Committee, however due to the small
number of Directors the Board considers it more efficient for the selection and appointment of Directors
to be considered by the Board itself. It is the Board’s policy to determine the terms and conditions
relating to the appointment and retirement of non-executive Directors on a case by case basis and in
conformity with the requirements of the Listing Rules. The Board may also engage an external
consultant where appropriate to identify and assess suitable candidates who meet the Board’s
specifications.
Recommendation 3.2: The Board should establish a policy concerning diversity (including gender
diversity)
The Board has considered establishing a diversity policy, however due to the small number and low
turnover of employees within the Group and the legislative framework regarding employment matters
within which the Group operates, a separate formal diversity policy has not been adopted. The Group
does not discriminate on the basis of age, ethnicity or gender in any employment matters, and when a
position becomes vacant the Group seeks to employ the best candidate available for the position.
Recruitment agencies are used to assist with identifying and assessing candidates. The Group presently
employs nine people with a number of different cultural backgrounds, of which five are women, and
two of them hold senior executive positions. In addition, at board level, there are presently eight
directors (including subsidiary appointments) of which one is a woman.
Role of the Board
The Board is responsible for the overall corporate governance of the Company. The Board acts on behalf of
and is accountable to the shareholders. The Board seeks to identify the expectations of shareholders as well
as other regulatory and ethical expectations and obligations. The Board is responsible for identifying areas of
significant business risk and ensuring mechanisms are in place to manage those risks adequately. In
addition, the Board sets the overall strategic goals and objectives, and monitors achievement of goals.
The Board appoints the Chief Executive Officer and the responsibility for the operation and administration of
the Company has been delegated to the Chief Executive Officer and senior management. The Board ensures
this team is appropriately qualified to discharge their responsibilities and reviews the performance of the
Chief Executive Officer annually against agreed objectives. This performance review was conducted in early
2011 and 2012. The Chief Executive Officer is responsible for reviewing annually the performance of senior
management.
The Board ensures management’s objectives and activities are aligned with the expectations and risks
identified by the Board through a number of mechanisms including the following:
•
•
establishment of the overall strategic direction and leadership of the Company;
approving and monitoring the implementation by management of the Company’s strategic plan to
achieve those objectives;
reviewing performance against its stated objectives, by receiving regular management reports on
business situation, opportunities and risks;
•
9
Neuren Pharmaceuticals Limited
• monitoring and review of the Company’s controls and systems including those concerned with
regulatory matters to ensure statutory compliance and the highest ethical standards; and
review and adoption of the annual budget and monitoring the results against stated targets.
•
The Board reviews its corporate strategy and financial targets in terms of shareholder expectations,
performance and potential in the interests of creating long-term value for shareholders.
The Board considers corporate governance to be an important element of its responsibilities. It meets
regularly throughout the year.
Board Composition
The Company must have between 3 and 9 Directors. The independence and tenure of each Director at the
date of this report is as follows:
Director
Position
Independence
Term in Office
Dr Robin Congreve
Dr John Holaday
Dr Graeme Howie
Dr Trevor Scott
Dr Doug Wilson
Chairman – Non-executive director
Non-executive director
Non-executive director
Non-executive director
Non-executive director
Independent
Independent
Independent
Independent
Independent
10
2
7
9
8
Mr Bruce Hancox was appointed to the board as an independent and non-executive director on 6 March
2012.
The Board’s composition, performance, and the independence of Directors are regularly reviewed by the
Chairman and lead independent director, Dr Scott, to ensure that the Board has the appropriate mix of
independence, expertise and experience. The Board has previously considered establishing a Nomination
Committee, however due to the small number of Directors the Board considers it more efficient for the
selection and appointment of Directors to be considered by the Board itself.
It is the Board’s policy to determine the terms and conditions relating to the appointment and retirement of
non-executive Directors on a case by case basis and in conformity with the requirements of the Listing
Rules. The Board may also engage an external consultant where appropriate to identify and assess suitable
candidates who meet the Board’s specifications.
The relevant skills, experience and expertise of each Board member are set out in the Directors’ Report.
For the purposes of the proper performance of their duties, Directors are entitled to seek independent
professional advice at the Company’s expense on prior approval of the Chairman.
Board Committees
It is the Board’s policy that Committees it has established should:
•
be entitled to obtain such resources and information from the Company including direct access to
employees of and advisers to the Company as it may require; and
operate in accordance with the terms of reference established by the Board.
•
Remuneration and Audit Committee
The Remuneration and Audit Committee must have a minimum of 2 non-executive directors. Currently the
Committee members are Dr Scott (Chair), Dr Congreve, Dr Holaday, and Mr Hancox. The Committee
operates under terms of reference approved by the Board. It is responsible for undertaking a broad review
of, ensuring compliance with, and making recommendations in respect of, the Company’s internal financial
controls, legal compliance obligations and remuneration policies. It is also responsible for:
•
review of audit assessment of the adequacy and effectiveness of internal controls over the Company’s
accounting and financial reporting systems, including controls over computerised systems;
review of the audit plans and recommendations of the external auditors;
evaluating the extent to which the planned scope of the audit can be relied upon to detect weaknesses
in internal control, fraud and other illegal acts;
review of the results of audits, any changes in accounting practices or policies and subsequent effects
on the financial statements and make recommendations to management where necessary and
appropriate;
review of the performance and fees of the external auditor;
audit of legal compliance including trade practices, corporations law, occupational health and safety and
environmental statutory compliance , and compliance with the Listing Rules of the ASX;
supervision of special investigations when requested by the Board;
•
•
•
•
•
•
10
Neuren Pharmaceuticals Limited
•
•
•
setting and reviewing compensation policies and practices of the Company;
setting and reviewing remuneration of the Directors, Chief Executive Officer and members of the
executive team; and
setting and reviewing the Company’s equity plans for employees and/or Directors.
All members of the Committee meet at least twice during the year. In undertaking these tasks the
Remuneration and Audit Committee meets separately with management and external auditors where
required. The Committee also seeks assurances from the Chief Executive Officer and Chief Financial Officer
in respect of the accuracy and compliance of the Company’s annual and half-year financial statements and
effectiveness of the Company’s management of its material business risks.
Diversity
The Board has considered establishing a diversity policy, however due to the small number and low turnover
of employees within the Group and the legislative framework regarding employment matters within which
the Group operates, a separate formal diversity policy has not been adopted. The Group does not
discriminate on the basis of age, ethnicity or gender in any employment matters, and when a position
becomes vacant the Group seeks to employ the best candidate available for the position. Recruitment
agencies are used to assist with identifying and assessing candidates, however employee turnover is low
with the average term of employment currently at 6.0 years. The Group presently employs nine people with
a number of different cultural backgrounds, of which five are women, and two of them hold senior executive
positions. In addition, at board level, there are presently eight directors (including subsidiary appointments)
of which one is a woman.
Ethical Standards and Share Trading
The Company recognises the need for Directors and employees to observe the highest standards of
behaviour and business ethics when engaging in corporate activity or share trading.
The Constitution permits Directors to acquire shares in the Company. The Company’s share trading policy
prohibits Directors, executives and employees from acquiring or disposing of securities unless this occurs
during a 42 day period commencing 24 hours after the announcement to the ASX of the quarterly, half-yearly
and annual results and/or after the conclusion of the Company’s Annual General Meeting and provided that
the person is not in possession of price sensitive information and the trading is not for short-term or
speculative gain. Other trading may only occur with Board approval.
Continuous Disclosure
As a listed company, Neuren is required to comply with the continuous disclosure requirements as set out in
the ASX Listing Rules. The Company discloses to the ASX any information concerning the Company which a
reasonable person would expect to have a material effect on the price or value of securities of the Company,
unless certain exemptions from the obligation to disclose apply.
All relevant information provided to the ASX is also posted onto the Company’s corporate website
www.neurenpharma.com, in compliance with the continuous disclosure requirements of the Listing Rules.
Rights of Shareholders
The Board strives to communicate regularly and clearly with shareholders, the principal methods being
through the Company’s annual and half-year reports, and Company announcements posted on the
Company’s website. Shareholders are encouraged to attend and participate at general meetings, which the
Auditors are also invited to attend.
Identification and Management of Significant Business Risk
The Board has identified the significant areas of potential business and legal risk for the Company.
The identification, monitoring and, where appropriate, the reduction of significant risk to the Company are
monitored by the Board. The Board reviews and monitors the parameters under which such risks will be
managed.
The Board has identified the Company’s activities in conducting clinical trials on humans as a significant area
of risk. The Board has established policies and procedures to mitigate the risks involved in this area. These
include:
•
all clinical activities are covered by clinical trials insurance policies at levels of coverage deemed
acceptable by the Board and Chief Executive Officer;
all clinical trials and studies involving human subjects are overseen by an independent Data Safety and
Monitoring Committee (DSMC), the composition and charter for which are fully compliant with FDA and
ICH guidelines ;
•
11
Neuren Pharmaceuticals Limited
•
•
•
•
•
•
for clinical trials involving patients, a Clinical Advisory Board comprising board-certified experts in the
relevant clinical specialties and subspecialties provides advice and guidance to the CEO in the design
and implementation of trials from both ethical and safety perspectives;
for clinical trials conducted in the US, a Medical Monitor oversees pharmacovigilance and safety
reporting procedures and practices;
all emergent safety issues are immediately brought to the attention of the DSMC by the Medical
Monitor which has unilateral authority to unblind data and, if deemed necessary, to halt enrolment;
before any clinical trial is initiated, protocols are reviewed and approved by cognizant national regulatory
agencies (e.g., FDA, Med-Safe, Australian Therapeutic Goods Administration), a central Institutional
Review Board (IRB) and independent IRBs or Ethics Committees at each participating clinical centre
which are fully independent of Company management;
clinical operations management staff maintain current certification by the Association of Clinical
Research Professionals with respect to knowledge of and compliance with clinical research regulations
and guidelines and Good Clinical Practices; and
the Company employs a full-time Director of Quality Assurance and Regulatory Affairs to oversee
compliance with FDA/ICH guidelines for preclinical research, manufacturing and clinical trials. This
person reports directly to the CEO.
The Remuneration and Audit Committee also assists the Board in its monitoring of financial and operational
risk.
Remuneration
Neuren believes having highly skilled and motivated people will allow the organisation to best pursue its
mission and achieve its goals for the benefit of shareholders and stakeholders more broadly. The ability to
attract and retain the best people is critical to the Company’s future success. The Board believes
remuneration policies are a key part of ensuring this success.
The Remuneration and Audit Committee of the Board is responsible for determining and reviewing
compensation arrangements for the Directors, Chief Executive Officers and members of the executive team.
The Committee assesses the appropriateness of the nature and amount of emoluments on a periodic basis
by reference to relevant employment market conditions, with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality Board and executive team. To assist in achieving
these objectives, the Remuneration and Audit Committee links the nature and amount of executive
Directors’ and Officers’ emoluments to the Company’s performance.
Remuneration of Executives comprises base salary and an “at-risk” (bonus) component, the payment of
which is dependent upon individual, team and Company performance relative to specific targets. Executive
performance and remuneration is reviewed formally each year.
Long-term incentive arrangements have been provided by participation in a share option plan to ensure key
employees maintain a long-term interest in the growth and value of the Company.
Non-executive Director fees are determined by the Board within the aggregate limit for Directors’ fees
approved by shareholders. The current remuneration level for the Chair is $60,000 and for non-executive
Directors is $25,000 per year with an additional $10,000 for committee membership and $5,000 for
committee Chairs. Executive Directors do not receive Directors fees. Directors and Executives receive no
retirement allowances. New Zealand Companies Act disclosures with regard to Directors’ Fees and
Executives’ remuneration are set out in the Directors’ Report.
12
Neuren Pharmaceuticals Limited
Financial Statements
for the year ended 31 December 2011
13
Neuren Pharmaceuticals Limited
Statements of Comprehensive Income
for the year ended 31 December 2011
Consolidated
Parent
Notes
NZ$’000
2011
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
Revenue
- interest income
Other income - grants
Total revenue and other income
Depreciation and amortisation expense
Loss on disposal of intangible assets
Research and development costs
Patent costs
Share option compensation expense
Foreign exchange gain (loss)
Interest expense
Corporate and administrative costs
Loss before income tax
Income tax expense
Loss after income tax
4
5
174
174
4,150
4,324
(465)
-
(7,002)
(192)
(1,729)
299
(8)
(1,459)
(6,232)
-
(6,232)
52
52
6,122
6,174
(529)
(225)
(9,241)
(401)
(923)
(78)
(2)
(1,348)
(6,573)
-
(6,573)
166
166
-
166
(95)
-
(1,374)
(80)
(1,729)
315
(8)
(1,233)
(4,038)
-
(4,038)
34
34
-
34
(119)
(225)
(966)
(143)
(923)
(21)
(2)
(1,119)
(3,484)
-
(3,484)
Other comprehensive income (expense), net of tax
Exchange differences on translation of foreign operations
(70)
(317)
-
-
Total comprehensive loss
$
(6,302)
$
(6,890)
$
(4,038)
$
(3,484)
Profit (loss) after income tax attributable to:
Equity holders of the company
Minority interest
Total comprehensive loss attributable to:
Equity holders of the company
Minority interest
(6,113)
(119)
(6,445)
(128)
(4,038)
-
(3,484)
-
$
(6,232)
$
(6,573)
$
(4,038)
$
(3,484)
(6,183)
(119)
(6,762)
(128)
(4,038)
-
(3,484)
-
$
(6,302)
$
(6,890)
$
(4,038)
$
(3,484)
Basic and diluted loss per share
6
$
(0.01)
$
(0.02)
The notes on pages 18 to 32 form part of these financial statements
14
Neuren Pharmaceuticals Limited
Statements of Financial Position
as at 31 December 2011
ASSETS
Current assets:
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets:
Property, plant and equipment
Intangible assets
Investments in subsidiaries
Total non-current assets
TOTAL ASSETS
LIABILITIES AND EQUITY
Current liabilities:
Trade and other payables
Convertible note – short term
Lease incentive – short term
Total current liabilities
Non-current liabilities:
Lease incentive – long term
Total liabilities
EQUITY
Share capital
Other reserves
Accumulated deficit
Total equity attributable to equity holders
Minority interest in equity
Total equity
Consolidated
Parent
Notes
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
7
8
9
10
15
11
12
13
9,844
138
9,982
6
4,651
-
4,657
1,956
430
2,386
23
5,121
-
5,144
9,797
1,015
653
765
10,812
1,418
6
544
4,257
4,807
21
622
4,257
4,900
$
14,639
$
7,530
$
15,619
$
6,318
2,204
-
9
2,213
2,257
598
12
2,867
1,387
-
9
1,396
1,399
598
12
2,009
-
9
-
9
2,213
2,876
1,396
2,018
80,374
8,361
(76,250)
12,485
(59)
12,426
68,858
5,986
(70,137)
4,707
(53)
4,654
80,374
8,498
(74,649)
14,223
-
14,223
68,858
6,053
(70,611)
4,300
-
4,300
TOTAL LIABILITIES AND EQUITY
$
14,639
$
7,530
$
15,619
$
6,318
The notes on pages 18 to 32 form part of these financial statements
For and on behalf of the Board of Directors who authorised the issue of these financial statements on 27 March
2012.
Dr Robin Congreve
Chairman
Dr Trevor Scott
Director
15
Neuren Pharmaceuticals Limited
Statements of Changes in Equity
for the year ended 31 December 2011
Consolidated
Share
Option
Reserve
NZ$’000
Foreign
Currency
Translation
Reserve
NZ$’000
Total
Attributable
to Equity
Holders
NZ$’000
Accumulated
Deficit
NZ$’000
Share
Capital
NZ$’000
Minority
Interest
NZ$’000
Total
Equity
NZ$’000
Equity as at 1 January 2010
$ 69,344
$ 3,351
$
250
$
(63,692)
$ 9,253
$
(175)
$ 9,078
Shares issued on conversion of notes
Share issue costs expensed
1,759
(466)
Share option grants for services
(1,779)
2,702
1,759
(466)
923
Minority interest issued in subsidiary
-
250
1,759
(466)
923
250
Comprehensive loss for the year
(317)
(6,445)
(6,762)
(128)
(6,890)
Equity as at 31 December 2010
$ 68,858
$ 6,053
$
(67)
$
(70,137)
$ 4,707
$
(53)
$ 4,654
Shares issued in private placements
Shares issued in rights issue
Shares issued on option exercise
Shares issued on conversion of notes
Share issue costs expensed
6,330
4,774
311
928
(111)
Share option grants for services
(716)
2,445
Minority interest issued in subsidiary
Comprehensive loss for the year
6,330
4,774
311
928
(111)
1,729
-
113
6,330
4,774
311
928
(111)
1,729
113
(70)
(6,113)
(6,183)
(119)
(6,302)
Equity as at 31 December 2011
$ 80,374
$ 8,498
$
(137)
$
(76,250)
$ 12,485
$
(59)
$ 12,426
Parent
Share
Option
Reserve
NZ$’000
Foreign
Currency
Translation
Reserve
NZ$’000
Total
Attributable
to Equity
Holders
NZ$’000
Accumulated
Deficit
NZ$’000
Share
Capital
NZ$’000
Equity as at 1 January 2010
$ 69,344
$ 3,351
$
-
$
(67,127)
$ 5,568
Shares issued on conversion of notes
Share issue costs expensed
1,759
(466)
Share option grants for services
(1,779)
2,702
1,759
(466)
923
Comprehensive loss for the year
(3,484)
(3,484)
Equity as at 31 December 2010
$ 68,858
$ 6,053
$
-
$
(70,611)
$ 4,300
Shares issued in private placements
Shares issued in rights issue
Shares issued on option exercise
Shares issued on conversion of notes
Share issue costs expensed
6,330
4,774
311
928
(111)
Share option grants for services
(716)
2,445
6,330
4,774
311
928
(111)
1,729
Comprehensive loss for the year
(4,038)
(4,038)
Equity as at 31 December 2011
$ 80,374
$ 8,498
$
-
$
(74,649)
$ 14,223
The notes on pages 18 to 32 form part of these financial statements
16
Neuren Pharmaceuticals Limited
Statements of Cash Flows
for the year ended 31 December 2011
Cash flows from operating activities:
Receipts from grants
Interest received
GST refunded
Interest paid
Payments to employees
Payments to other suppliers
Consolidated
Parent
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
4,150
174
57
-
(1,545)
(6,948)
6,410
52
138
(2)
(1,254)
(9,129)
-
165
67
-
(1,398)
(1,311)
288
34
112
(2)
(1,068)
(2,486)
Net cash used in operating activities
(4,112)
(3,785)
(2,477)
(3,122)
Cash flows from investing activities:
Purchase of property, plant and equipment
Advance (to) from subsidiaries
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from the issue of shares
Proceeds from the exercise of options
Proceeds from the issue of convertible notes
Proceeds from minority interest
Repayment of equipment financing
Payment of share issue expenses
(2)
-
(2)
11,104
311
316
113
-
(113)
(7)
-
(7)
-
-
1,835
250
(11)
(478)
(2)
(303)
(305)
11,104
311
316
-
-
(113)
Net cash provided from financing activities
11,731
1,596
11,618
Net (decrease) increase in cash
Effect of exchange rate changes on cash balances
Cash at the beginning of the year
7,617
271
1,956
(2,196)
(80)
4,232
8,836
308
653
(7)
738
731
-
-
1,835
-
(11)
(478)
1,346
(1,045)
3
1,695
Cash at the end of the year
$
9,844
$
1,956
$
9,797
$
653
Reconciliation with loss after income tax:
Loss after income tax
$
(6,232)
$
(6,573)
$
(4,038)
$
(3,484)
Non-cash items requiring adjustment:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Convertible note interest
Loss on disposal of intangible assets
Share option compensation expense
Foreign exchange (gain) loss
Lease incentive amortisation
Changes in working capital:
Trade and other receivables
Trade and other payables
19
446
8
-
1,729
(299)
(12)
282
(53)
36
493
-
225
923
78
(12)
1,817
(772)
17
78
8
-
1,729
(315)
(12)
33
86
-
225
923
21
(12)
-
56
308
(1,222)
Net cash used in operating activities
$
(4,112)
$
(3,785)
$
(2,477)
$
(3,122)
The notes on pages 18 to 32 form part of these financial statements
17
Neuren Pharmaceuticals Limited
Notes to the Financial Statements
for the year ended 31 December 2011
1. Nature of business
Neuren Pharmaceuticals Limited (Neuren or the Company, and its subsidiaries, or the Group) is a publicly listed
biopharmaceutical company focusing on the development of drugs for neurological disorders, metabolism and
cancer. The drugs target acute indications of brain injury such as cognitive impairment resulting from cardiac
surgery and traumatic brain injury, psychiatric symptoms of stroke, as well as chronic conditions such as
Parkinson’s and Alzheimer’s diseases.
Neuren has three lead candidates; Motiva™ and NNZ-2566 presently in clinical development to treat a range of
acute and chronic neurological conditions, and NNZ-2591 in preclinical development for Parkinson’s disease
dementia and other chronic neurodegenerative conditions. The Group has operations in New Zealand and the
United States.
The Company is a limited liability company incorporated and domiciled in New Zealand. The address of its
registered office in New Zealand is level 2, 57 Wellington Street, Auckland, and in Australia Level 13, 122 Arthur
Street, North Sydney. Neuren has its primary listing on the Australian Securities Exchange (ASX code: NEU).
These consolidated financial statements have been approved for issue by the Board of Directors on 27 March 2012.
Inherent Uncertainties
• There are inherent uncertainties associated with assessing the carrying value of the acquired intellectual
property. The ultimate realisation of the carrying values of intellectual property totalling $4,651,000 (after
amortisation) is dependent on the Company and Group successfully developing its products, on licensing the
products, or divesting the intellectual property so that it generates future economic benefits to the Company.
• The Group’s research and development activities involve inherent risks. These risks include, among others:
dependence on, and the Group’s ability to retain key personnel; the Group’s ability to protect its intellectual
property and prevent other companies from using the technology; the Group’s business is based on novel and
unproven technology; the Group’s ability to sufficiently complete the clinical trials process; and technological
developments by the Group’s competitors may render its products obsolete.
• The Company has a business plan which will require a high level of expenditure until product revenue streams
are established and therefore expects to continue to incur additional net losses until then. In the future, the
Company will need to raise further financing through other public or private equity financings, collaborations or
other arrangements with corporate sources, or other sources of financing to fund operations. There can be no
assurance that such additional financing, if available, can be obtained on terms reasonable to the Company. In
the event the Company is unable to raise additional capital, future operations will need to be curtailed or
discontinued.
2. Summary of significant accounting policies
These general-purpose financial statements are for the year ended 31 December 2011 and have been prepared in
accordance with and comply with generally accepted accounting practice in New Zealand, International Financial
Reporting Standards, New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and other
applicable Financial Reporting Standards as appropriate for profit-oriented entities.
(a) Basis of preparation
Entities Reporting
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Group as at 31
December 2011 and the results of all subsidiaries for the year then ended. Neuren Pharmaceuticals Limited and its
subsidiaries, which are designated as profit-oriented entities for financial reporting purposes, together are referred
to in these financial statements as the Group.
The financial statements of the ‘Parent’ are for the Company as a separate legal entity.
Statutory Base
Neuren is registered under the New Zealand Companies Act 1993 and is an issuer in terms of the New Zealand
Securities Act 1978. Neuren is also registered as a foreign company under the Australian Corporations Act 2001.
These financial statements have been prepared in accordance with the requirements of the Financial Reporting Act
1993 and the Companies Act 1993.
Historical cost convention
These financial statements have been prepared under the historical cost convention as modified by certain policies
below.
Critical accounting estimates
18
Neuren Pharmaceuticals Limited
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires the
Company to exercise its judgement in the process of applying the Company’s accounting policies such as in
relation to impairment, if any, of intangible assets set out in note 10. Actual results may differ from those
estimates.
Changes in accounting policies
There were no changes in accounting policies in the year ended 31 December 2011.
(b) Principles of Consolidation
Subsidiaries
Subsidiaries are all those entities over which the Company has the power to govern the financial and operating
policies, generally accompanying a shareholding of more than one-half of the voting rights.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of
an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange. Costs attributable to the acquisition are expensed as incurred. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the Group’s share
of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of
the net assets of the subsidiary acquired, the difference is recognised directly in the comprehensive income
statement.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Company.
(c) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Chief Executive Officer.
(d) Foreign Currency Translation
(i) Functional and Presentation Currency
Items included in the financial statements of each of the Group’s operations are measured using the currency that
best reflects the economic substance of the underlying events and circumstances relevant to that operation
(”functional currency”). The Consolidated and Parent financial statements are presented in New Zealand dollars,
which is the Group’s presentation currency.
(ii) Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the comprehensive income statement, except when deferred in equity as qualifying
cash flow hedges and qualifying net investment hedges.
(iii) Foreign Operations
The results and financial position of foreign entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
• assets and liabilities for each statement of financial position presented are translated at the closing rate at the
date of that statement of financial position;
• income and expenses for each comprehensive income statement are translated at average exchange rates; and
• all resulting exchange differences are recognised as a separate component of equity.
Exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and
other currency instruments designated as hedges of such investments, are taken to shareholders’ equity.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and translated at the closing rate.
(e) Revenue recognition
Grants
Grants received are recognised in the comprehensive income statement when the requirements under the grant
agreement have been met. Any grants for which the requirements under the grant agreement have not been
completed are carried as liabilities until all the conditions have been fulfilled.
Out-licensing and royalty revenue
Out-licensing and royalty revenue comprises income generated from technology out-licensing and research and
development collaboration agreements. Where licensing agreements include non-refundable milestone income,
revenue is recognised on achieving the milestones. If any milestone income is creditable against royalty payments
19
Neuren Pharmaceuticals Limited
then it is deferred and released to the comprehensive income statement over the period in which the royalties
would otherwise be receivable. Royalty income relating to the sale by a licensee of licensed product is recognised
on an accruals basis in accordance with the substance of the relevant agreement and based on the receipt from
the licensee of the relevant information to enable calculation of the royalty due.
Contract research
Where science projects are recognised on an individual project basis and span more than one year, the percentage
of completion method is used to determine the appropriate amount of revenue to recognise in a given year over
the life of the project. Contract revenue is recognised when earned and non-refundable and when there are no
future obligations pursuant to the revenue, in accordance with the contract terms. The full amount of an
anticipated loss, including that relating to future work on the contract, is recognised as soon as it is foreseen.
Interest income
Interest income is recognised on a time-proportion basis using the effective interest method.
(f) Research and development
Research costs include direct and directly attributable overhead expenses for drug discovery, research and pre-
clinical and clinical trials. Research costs are expensed as incurred.
When a project reaches the stage where it is reasonably certain that future expenditure can be recovered through
the process or products produced, development expenditure is recognised as a development asset when:
•
•
•
•
a product or process is clearly defined and the costs attributable to the product or process can be
identified separately and measured reliably;
the technical feasibility of the product or process can be demonstrated;
the existence of a market for the product or process can be demonstrated and the Company intends to
produce and market the product or process;
adequate resources exist, or their availability can be reasonably demonstrated to complete the project
and market the product or process.
In such cases the asset is amortised from the commencement of commercial production of the product to which it
relates on a straight-line basis over the years of expected benefit. Research and development costs are otherwise
expensed as incurred.
(g) Income tax
The income tax expense for the period is the tax payable on the period’s taxable income or loss using tax rates
enacted at the balance sheet date and adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when
the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively
enacted at the balance sheet date. The relevant tax rates are applied to the cumulative amounts of deductible and
taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain
temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is
recognised in relation to these temporary differences if they arose in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
in equity.
(h) Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified
as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are
charged to the comprehensive income statement on a straight-line basis over the period of the lease.
Impairment of non-financial assets
(i)
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment.
Assets that are subject to amortisation are reviewed whenever events or changes in circumstances indicate that
the carrying amount of the assets may not be recoverable. The carrying amount of a long-lived asset is considered
impaired when the recoverable amount from such asset is less than its carrying value. In that event, a loss is
recognised in the comprehensive income statement based on the amount by which the carrying amount exceeds
the fair market value less costs to sell of the long-lived asset. Fair market value is determined using the anticipated
cash flows discounted at a rate commensurate with the risk involved.
20
Neuren Pharmaceuticals Limited
(j) Goods and services tax (GST)
The financial statements have been prepared so that all components are presented exclusive of GST. All items in
the statement of financial position are presented net of GST, with the exception of receivables and payables, which
include GST invoiced.
Intellectual property
(k)
Costs in relation to protection and maintenance of intellectual property are expensed as incurred unless the project
has yet to be recognised as commenced, in which case the expense is deferred and recognised as contract work
in progress until the revenues and costs associated with the project are recognised.
(l) Cash and cash equivalents
Cash and cash equivalents comprises cash and demand deposits held with established financial institutions and
highly liquid investments, which are readily convertible into cash and have maturities of three months or less that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(m) Accounts receivable
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision
for doubtful debts.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are
written off. A provision for doubtful receivables is established when there is objective evidence that the Group will
not be able to collect all amounts due according to the original terms of receivables.
(n) Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. All other repairs and maintenance are charged to the comprehensive
income statement during the financial period in which they are incurred.
Depreciation is determined principally using the straight-line method to allocate their cost, net of their residual
values, over their estimated useful lives, as follows:
Scientific equipment
Computer equipment
Office furniture, fixtures & fittings
Leasehold Improvements
4 years
2 years
4 years
Term of lease
(o) Intangible assets
Intellectual property
Acquired patents, trademarks and licences have finite useful lives and are carried at cost less accumulated
amortisation and impairment losses. Amortisation is calculated using the straight line method to allocate the cost
over the anticipated useful lives, which are aligned with the unexpired patent term or agreement over trademarks
and licences.
Acquired software
Acquired software licences are capitalised on the basis of the costs incurred to acquire and bring to use the
specific software. These costs are amortised over their estimated useful lives (two years).
(p) Borrowing Costs
Borrowing costs are expensed as incurred.
(q) Employee benefits
Wages and salaries and annual leave
Liabilities for wages and salaries, bonuses and annual leave expected to be settled within 12 months of the
reporting date are recognised in accrued liabilities in respect of employees’ services up to the reporting date and
are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating
sick leave are recognised when the leave is taken and measured at the rates paid or payable.
Share-based payments
Neuren operates an equity-settled share option plan and awards certain employees and consultants share options,
from time to time, on a discretionary basis. The fair value of the services received in exchange for the grant of the
options is recognised as an expense with a corresponding increase in other reserve equity over the vesting period.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options
at grant date. At each balance sheet date, the Company revises its estimates of the number of options that are
expected to vest and become exercisable. It recognises the impact of the revision of original estimates, if any, in
the comprehensive income statement, and a corresponding adjustment to equity over the remaining vesting
period.
The proceeds received net of any directly attributable transaction costs are credited to share capital when the
options are exercised.
21
Neuren Pharmaceuticals Limited
(r) Share issue costs
Costs associated with the issue of shares which are recognised in shareholders’ equity are treated as a reduction
of the amount collected per share.
(s) Financial instruments
Financial instruments recognised in the statement of financial position include cash and cash equivalents, trade
and other receivables and payables, equipment finance and convertible notes. The Company believes that the
amounts reported for financial instruments approximate fair value.
Although it is exposed to interest rate and foreign currency risks, the Company does not utilise derivative financial
instruments.
Financial assets: Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They are included in current assets, except for maturities greater than 12 months after the
balance sheet date. These are classified as non-current assets. The Group’s loans and receivables comprise ‘trade
and other receivables’ and cash and cash equivalents in the statement of financial position. Loans and receivables
are measured at amortised cost using the effective interest method less impairment.
Borrowings
Borrowings, which include convertible notes and equipment financing, are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently measured at amortised cost unless part of an effective
hedging relationship. Any difference between the proceeds (net of transaction costs) and the redemption amount
is recognised in the comprehensive income statement over the period of the borrowings using the effective
interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the balance sheet date.
(t) Earnings per share
Basic and diluted earnings per share are calculated by dividing the profit attributable to equity holders of the
Company by the weighted average number of ordinary shares outstanding during the period.
(u) Standards, interpretations and amendments to published standards that are not yet effective
Certain new standards, amendments and interpretations to existing standards have been published that are
mandatory for later periods and which the Group has not early adopted. The key items applicable to the Group are:
• NZ IFRS 9 Financial Instruments (mandatory for periods beginning on or after 1 January 2013) replaces the
multiple classification and measurements models
Instruments: Recognition and
in
measurements with a single model that has only two classification categories: amortised cost and fair value.
This will affect future financial statements through disclosure only.
IAS 39 Financial
• In May 2011 there were a number of minor amendments to NZ IFRS 10 Consolidated Financial Statements, NZ
IFRS 11 Joint Arrangements, NZ IFRS 12 Disclosure of Interests in other Entities and revised NZ IAS 27 Separate
Financial Statements and NZ IAS 28 Investments in Associates and Joint Ventures which are effective from 1
January 2013. The Group does not intend to adopt these new standards until the effective date.
• NZ IFRS 13 Fair Value Measurement was released in June 2011 and specifies fair value measurement and fair
value disclosures. The Group has yet to determine which, if any, of its current measurement techniques and
disclosures will be impacted. The Group does not intend to adopt the new standard before its effective date of
1 January 2013.
• An amendment to NZ IAS 1 Presentation of Financial Statements was issued in December 2011. The
amendment requires entities to separate items presented in other comprehensive income into two groups,
based on whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments).
This amendment will not affect the measurement of any items recognised in the balance sheet or the profit or
loss in the current period, and the Group intends to adopt the amended standard from 1 January 2013.
There are no other standards, amendments or interpretations to existing standards which have been issued, but
are not yet effective, which are expected to impact the Company or Group.
3. Segment information
(a) Description of Segments
The chief operating decision maker has been identified as the CEO, who reviews the business largely on a
geographic basis and assesses results from New Zealand and the USA separately. The information reviewed is
prepared in the same format as included in the financial statements.
22
Neuren Pharmaceuticals Limited
(b) Geographic Segments
Consolidated
Segment revenue
Segment result before minority interest
Segment assets
Segment liabilities
Acquisitions of property, plant and equipment, intangibles
and other non-current segment assets
Depreciation and amortisation expense
2011
2011
2011
2011
New Zealand
United States
Consolidation
Total Group
NZ$’000
NZ$’000
NZ$’000
NZ$’000
Adjustments
297
(4,468)
15,672
1,664
2
99
4,027
(1,764)
4,168
1,493
-
366
-
-
(5,201)
(944)
-
-
4,324
(6,232)
14,639
2,213
2
465
Consolidated
Segment revenue
Segment result before minority interest
Segment assets
Segment liabilities
Acquisitions of property, plant and equipment, intangibles
and other non-current segment assets
Depreciation and amortisation expense
Loss on disposal of intangible asset
2010
2010
2010
2010
New Zealand
United States
Consolidation
Total Group
NZ$’000
NZ$’000
NZ$’000
NZ$’000
Adjustments
111
(3,945)
6,523
2,121
7
124
225
6,063
(2,628)
5,999
1,490
-
405
-
-
-
(4,992)
(735)
-
-
-
6,174
(6,573)
7,530
2,876
7
529
225
4. Expenses
Consolidated
Parent
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
Loss before income tax includes the following specific expenses:
Depreciation – property, plant and equipment
8
6
3
2
19
446
446
47
-
1
48
1,567
833
2,400
205
720
175
19
6
9
2
36
493
493
51
8
1
60
1,324
923
2,247
205
-
171
8
4
3
2
17
78
78
43
-
1
44
1,421
833
2,254
205
720
175
19
3
9
2
33
86
86
43
8
1
52
1,137
923
2,060
205
-
171
Scientific equipment
Computer equipment
Fixtures and fittings
Leasehold improvements
Total depreciation
Amortisation – intangible assets
Intellectual property
Total amortisation
Remuneration of auditors
Audit fees
Advisory fees
Taxation fees
Total remuneration of auditors
Employee benefits expense
Salaries and wages
Share option compensation
Total employee benefits expense
Directors’ fees
Directors’ share option compensation
Lease expense
23
Neuren Pharmaceuticals Limited
5.
Income tax
Income tax expense
Current tax
Deferred tax
Income tax expense
Consolidated
Parent
2011
NZ$’000
2010
2011
NZ$’000
NZ$’000
2010
NZ$’000
-
-
-
-
-
-
-
-
-
-
-
-
Numerical reconciliation of income tax expense to prima
facie tax payable (receivable):
Loss before income tax
(6,232)
(6,573)
(4,038)
(3,484)
Tax at rates applicable in the respective countries
(1,983)
(2,273)
(1,130)
(1,045)
Tax effect of amounts not deductible (taxable) in calculating
taxable income:
Share option compensation
Other expenses not deductible for tax purposes
Foreign jurisdiction withholding tax
Under (over) provision in prior years
Deferred tax assets not recognised
Income tax expense
484
-
277
-
(1,499)
(1,996)
-
1,069
430
-
-
1,085
911
-
484
-
(646)
-
-
646
-
277
-
(768)
-
(2)
770
-
The weighted average applicable tax rate for New Zealand segments is 28% and for United States segments 41%
(2010: 30% and 41% respectively).
6. Earnings (loss) per share
Basic loss per share is based upon the weighted average number of outstanding ordinary shares. For the years
ended 31 December 2011 and 2010, the Company’s potentially dilutive ordinary share equivalents (being the
convertible notes set out in note 12 and the options over ordinary shares set out in note 13) have an anti-dilutive
effect on loss per share and, therefore, have not been included in determining the total weighted average number
of ordinary shares outstanding for the purpose of calculating diluted loss per share.
Consolidated
2011
NZ$’000
2010
NZ$’000
Profit (loss) after income tax attributable to equity holders
(6,113)
(6,445)
Weighted average shares outstanding (basic)
Weighted average shares outstanding (diluted)
764,781,209
384,916,420
764,781,209
384,916,420
Basic and diluted loss per share
($0.01)
($0.02)
7. Cash and cash equivalents
Cash
Demand and short-term deposits
8. Trade and other receivables
Trade receivables
Prepayments
Due from subsidiaries
Consolidated
Parent
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
38
9,806
9,844
200
1,756
1,956
29
9,768
9,797
91
562
653
Consolidated
Parent
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
24
114
-
138
56
374
-
430
24
47
944
1,015
29
41
695
765
24
Neuren Pharmaceuticals Limited
9. Property, plant and equipment
Parent
NZ$’000
NZ$’000
NZ$’000
NZ$’000
NZ$’000
Scientific
Equipment
Computer
Equipment
Fixtures
Leasehold
Total
& Fittings
Improvements
As at 1 January 2010
Cost
Accumulated depreciation
Net book value
Movements in the year ended
31 December 2010
Opening net book value
Additions
Depreciation
Disposals
Closing net book value
As at 31 December 2010
Cost
Accumulated depreciation
Net book value
Movements in the year ended
31 December 2011
Opening net book value
Additions
Depreciation
Disposals
Closing net book value
As at 31 December 2011
Cost
Accumulated depreciation
Net book value
100
(73)
27
27
-
(19)
-
8
100
(92)
8
8
-
(8)
-
-
100
(100)
-
68
(67)
1
1
7
(3)
-
5
75
(70)
5
5
2
(4)
-
3
77
(74)
3
43
(30)
13
13
-
(9)
-
4
43
(39)
4
4
-
(3)
-
1
43
(42)
1
10
(4)
6
6
-
(2)
-
4
10
(6)
4
4
-
(2)
-
2
10
(8)
2
221
(174)
47
47
7
(33)
-
21
228
(207)
21
21
2
(17)
-
6
230
(224)
6
In addition to the Parent’s property, plant and equipment noted above, the only other property, plant and
equipment within the Group was computer equipment with a cost of US$4,000 purchased in 2009 by the US based
subsidiary for use in the Phase II trial of NNZ-2566. Accumulated depreciation as at 31 December 2011 was
US$4,000 (2010: US$3,000) and the depreciation expense for the year ended 31 December 2011 was US$1,000
(2010: US$3,000).
10. Intangible assets
Consolidated
As at 1 January 2010
Cost
Accumulated amortisation
Net book value
Movements in the year ended 31 December 2010
Opening net book value
Amortisation
Loss on disposal
Exchange differences
Closing net book value
As at 31 December 2010
Cost
Accumulated amortisation
Net book value
Movements in the year ended 31 December 2011
Opening net book value
Amortisation
Exchange differences
Closing net book value
As at 31 December 2011
Cost
Accumulated amortisation
Net book value
25
Intellectual
Property
NZ$’000
Acquired
Software
Total
NZ$’000
NZ$’000
7,660
(1,507)
6,153
6,153
(493)
(225)
(314)
5,121
6,873
(1,752)
5,121
5,121
(446)
(24)
4,651
6,856
(2,205)
4,651
35
(35)
-
-
-
-
-
-
35
(35)
-
-
-
-
-
-
-
-
7,695
(1,542)
6,153
6,153
(493)
(225)
(314)
5,121
6,908
(1,787)
5,121
5,121
(446)
(24)
4,651
6,856
(2,205)
4,651
Neuren Pharmaceuticals Limited
Parent
As at 1 January 2010
Cost
Accumulated amortisation
Net book value
Movements in the year ended 31 December 2010
Opening net book value
Amortisation
Loss on disposal
Closing net book value
As at 31 December 2010
Cost
Accumulated amortisation
Net book value
Movements in the year ended 31 December 2011
Opening net book value
Amortisation
Closing net book value
As at 31 December 2011
Cost
Accumulated amortisation
Net book value
11. Trade and other payables
Trade payables
Accruals
Employee benefits
Due to subsidiaries
12. Borrowings
Consolidated and Parent
Non-interest bearing
Convertible notes
- short term
Intellectual
Property
NZ$’000
Acquired
Software
Total
NZ$’000
NZ$’000
1,556
(623)
933
933
(86)
(225)
622
1,167
(545)
622
622
(78)
544
1,167
(623)
544
35
(35)
-
-
-
-
35
(35)
-
-
-
-
-
-
-
1,591
(658)
933
933
(86)
(225)
622
1,202
(580)
622
622
(78)
544
1,167
(623)
544
Consolidated
Parent
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
1,596
346
262
-
2,204
1,753
250
254
-
2,257
807
318
262
-
855
250
253
41
1,387
1,399
2011
NZ$’000
2010
NZ$’000
-
-
598
598
At 31 December 2010 two convertible notes were outstanding with principal amounts of A$60,000 and A$400,000,
and maturity dates of 19 January 2011 and 18 November 2011 respectively.
The principal terms of the notes were:
(a) They were unsecured and did not bear interest unless the Company elected to repay them in cash;
(b) The notes, or part thereof, convert to new ordinary shares in the Company determined by dividing the
principal amount, or part thereof to be converted, by the lesser of:
(i) 130% of the average of the Volume Weighted Average Prices per share of the Company’s
ordinary shares quoted on the ASX (“VWAPs”) for the twenty (20) business days immediately
prior to 18 November 2009; and
(ii) between 85 and 90% of the lowest of the VWAPs during the twenty (20) business days
immediately prior to the conversion;
(c) The ordinary shares issued upon conversion of a note will rank equally in all respects with the then
existing ordinary shares on issue;
(d) The notes did not carry any voting rights at meetings of shareholders of Neuren, and had no rights of
participation in any rights issue undertaken by Neuren prior to conversion of the notes.
The convertible loan agreement under which the above convertible notes were issued provided for convertible note
funding until December 2011. At 31 December 2010 a minimum of A$720,000 remained available for draw down in
monthly tranches of A$60,000. Pursuant to the convertible loan agreement, the Company issued for no value
13,000,000 ordinary shares as collateral for funding under the agreement.
26
Neuren Pharmaceuticals Limited
On 4 May 2011 the convertible loan agreement was terminated, and in conjunction with this, proceeds due to the
Company of A$184,600 on subscription of the previously issued collateral shares were set-off against amounts due
by the Company on outstanding convertible notes before their conversion into 20,844,444 ordinary shares in June
2011.
13. Share capital
Consolidated and Parent
Issued share capital
2011
Shares
2010
Shares
2011
2010
NZ$’000
NZ$’000
Ordinary shares on issue at beginning of year
Shares issued in private placements
Shares issued in rights Issue
Shares issued on conversion of notes
Shares issued on option exercise
Share issue expenses – cash issue costs
Share issue expenses – fair value of options granted
424,764,802
384,092,211
293,484,412
39,273,507
14,249,493
-
-
352,247,451
-
-
72,517,351
-
-
-
68,858
6,330
4,774
928
311
(111)
(716)
69,344
-
-
1,759
-
(466)
(1,779)
1,155,864,425
424,764,802
80,374
68,858
(a) Ordinary Shares
The ordinary shares have no par value and all ordinary shares are fully paid-up and rank equally as to dividends and
liquidation, with one vote attached to each fully paid ordinary share.
(b) Share Options
2011 option grants
From the beginning of the year until termination in May 2011 of the convertible loan agreement described in note
12, the Company granted 39,273,507 options in conjunction with monthly conversions and final conversion on
termination of convertible notes under the facility. The options have a term of 4 years from their grant date and are
exercisable into ordinary shares on a one-for-one basis with exercise prices ranging from A$0.0146 to A$0.0163 per
share.
2010 and prior grants
Throughout 2010 the Company granted 72,517,351 options in conjunction with monthly conversions of convertible
notes under the facility described in note 12. The options have a term of 4 years from their grant date and are
exercisable into ordinary shares on a one-for-one basis with exercise prices ranging from A$0.0163 to A$0.0337 per
share. 14,249,493 of these options were exercised on 7 November 2011 for cash proceeds of A$240,000.
On 23 December 2009 the Company granted 40,306,174 options (“December 2009 Placement Options”) in
conjunction with a private placement on that date. The options are exercisable into ordinary shares on a one-for-
one basis with an exercise price of A$0.0457 per share. The options expire on 23 December 2013.
On 4 December 2009 the Company granted 4,629,630 options (“December 2009 Conversion Options”) in
conjunction with partial conversion of a convertible note. The options are exercisable into ordinary shares on a one-
for-one basis with an exercise price of A$0.0389 per share. The options expire on 4 December 2013.
On 18 November 2009 the Company granted 20,000,000 options (“November 2009 Options”) in conjunction with
obtaining a convertible loan facility. The options are exercisable into ordinary shares on a one-for-one basis with an
exercise price of A$0.0445 per share. The options expire on 18 November 2013.
On 30 September 2008 the Company granted 750,000 options (“September 2008 Options”) for underwriting
services. The options are exercisable into ordinary shares on a one-for-one basis with an exercise price of A$0.15
per share. The options expired on 30 September 2010.
On 26 February 2008 the Company granted 3,000,000 options (“January 2008 Options”) for future consulting
services related to capital raising and financing activities. The options are exercisable into ordinary shares on a one-
for-one basis with an exercise price of A$0.25 per share. The options expired on 7 February 2011.
The above options were otherwise issued on terms and conditions not materially different to those of the Share
Option Plan described below.
27
Neuren Pharmaceuticals Limited
Share Option Plan
The Company has established a Share Option Plan to assist in the retention and motivation of senior employees of,
and certain consultants to, the Company (“Participants”). Under the Share Option Plan, options may be offered to
Participants by the Remuneration and Audit Committee. The maximum number of options to be issued and
outstanding under the Share Option Plan is 15% of the issued ordinary shares of the Company at any time. No
payment is required for the grant of options under the Share Option Plan. Each option is an option to subscribe in
cash for one ordinary share, but does not carry any right to vote. Upon the exercise of an option by a Participant,
each ordinary share issued will rank equally with other ordinary shares of the Company. Options granted under the
Share Option Plan generally vest over three years service by the Participant and lapse five years after grant date. At
31 December 2011 there were 138 million options outstanding under the Share Option Plan (2010: 26 million).
Movements in the number of share options are as follows:
Consolidated and Parent
Outstanding at 1 January 2010
Granted
Expired
Outstanding at 31 December 2010
Granted
Exercised
Expired
Weighted
Average
Exercise Price
(NZ$)
$
$
$
$
$
$
$
0.074
0.032
0.340
0.048
0.029
0.022
0.325
Options
70,005,804
98,517,351
(2,070,000)
166,453,155
161,273,507
(14,249,493)
(3,000,000)
Weighted
Average
Exercise Price
(NZ$)
Exercisable
70,005,804
$
0.074
166,453,155
$
0.048
Outstanding at 31 December 2011
310,477,169
$
0.036
235,810,505
$
0.038
The weighted average remaining contractual life of outstanding share options is as follows:
Consolidated and Parent
Options
2011
Weighted Average
Remaining
Contract Life
(years)
Exercise price range
A$0.15 – A$0.25
A$0. 0377 – A$0.0457
A$0. 0130 – A$0.0337
-
119,935,804
190,541,365
310,477,169
-
3.3
3.5
3.4
2010
Weighted Average
Remaining
Contract Life
(years)
0.2
2.9
3.7
3.4
Options
3,000,000
64,935,804
98,517,351
166,453,155
The weighted average assessed fair value of options granted during the year determined using the Black-Scholes
valuation model was NZ$0.027 per option (2010: NZ$0.027). The significant weighted average inputs into the
model were a grant date share price of NZ$0.029 (2010: NZ$0.034), volatility of 130% (2010: 139%), dividend yield
of 0% (2010: 0%), an expected option life of 3.6 years (2010: 3.3 years), and an annual risk-free interest rate of
3.82% (2010: 4.26%). The expected price volatility was derived by analysing the historic volatility of the Company’s
shares since listing on the ASX.
28
Neuren Pharmaceuticals Limited
14. Deferred tax
Deferred tax asset (liability)
Amounts recognised in profit or loss
Provisions and accruals
Property, plant and equipment
Intangible assets
Tax losses
Unrecognised deferred tax assets
Deferred tax asset (liability)
Movements
Deferred tax asset (liability) at the beginning of the year
Credited (charged) to the income statement (note 5)
Impact of loss of shareholder continuity
Effect of change in tax rates
Expiry of tax losses
Exchange differences
Intra-group transfer
Change in unrecognised deferred tax assets
Deferred tax asset (liability) at the end of the year
Consolidated
Parent
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
324
9
(1,219)
20,818
19,932
(19,932)
-
-
430
-
(1,186)
(391)
(10)
-
1,157
-
64
12
(1,363)
22,376
21,089
(21,089)
-
-
911
568
-
-
(232)
-
(1,247)
-
64
9
(12)
16,440
16,501
(16,501)
-
-
646
-
(1,160)
(392)
-
-
906
-
64
12
(30)
17,361
17,407
(17,407)
-
-
770
568
-
-
-
(80)
(1,258)
-
Unrecognised tax losses of $8.2 million, $10.4 million, $14.0 million, $17.5 million, $4.4 million, $2.8 million and
$2.2 million expire in 2013, 2014, 2015, 2016, 2017, 2018 and 2019 respectively.
15. Subsidiaries
Investment in subsidiaries
(a)
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2(b).
Name of entity
Date of
Principal
incorporation activities
Interest
held
Domicile
AgVentures Limited
NeuroendocrinZ Limited
7 October 2003
Dormant
10 July 2002
Dormant
100%
100%
NZ
NZ
Neuren Pharmaceuticals Inc.
20 August 2002
US Based Office
100%
USA
Hamilton Pharmaceuticals Inc.
2 April 2004
Clinical research
100%
USA
Neuren Pharmaceuticals (Australia) Pty Ltd 9 November 2006
Dormant
100%
Australia
Perseis Therapeutics Limited
25 March 2009
Preclinical research
72.2% NZ
Amount due to (from)
Parent
2011
NZ$’000
2010
NZ$’000
-
-
22
742
-
180
-
-
(41)
689
-
6
All subsidiaries have a balance date of 31 December, except Perseis Therapeutics which has a 31 March year end.
16. Commitments and contingencies
(a) Operating leases
The following aggregate future non-cancellable minimum lease payments for premises have been committed to by
the Company, but not recognised in the financial statements. The Company’s premises commitment is for a four
year and four month lease commencing June 2008, with two two-year rights of renewal, followed by two five-year
rights of renewal, and three yearly rental reviews throughout.
Consolidated and Parent
Not later than one year
Later than one year and not later than five years
Later than five years
29
2011
NZ$’000
2010
NZ$’000
111
-
-
111
148
111
-
259
Neuren Pharmaceuticals Limited
(b) Legal claims
The Company has not entered into any collaborative arrangements and has no other significant legal contingencies
as at 31 December 2011.
(c) Capital commitments
The Company is not committed to the purchase of any property, plant or equipment as at 31 December 2011
(2010: nil).
17. Related party transactions
(a) Key management and personnel
The key management personnel include the directors of the Company, the CEO, and direct reports to the CEO
Compensation for this group was as follows:
Consolidated and Parent
Directors’ – fees and other short term benefits
– share option compensation
CEO and management – short-term benefits
– share option compensation
2011
NZ$’000
265
720
1,085
833
2,903
2010
NZ$’000
262
-
1,048
923
2,233
During 2011, in conjunction with the rights issue offer made by the Company, Dr Trevor Scott subscribed for and
was allotted 16,694,126 ordinary shares at NZ$0.017 per share.
(b) Subsidiaries
Interests in and amounts due from subsidiaries are set out in note 15. The Parent funds the activities of the
subsidiaries throughout the year through the intercompany accounts as needed. All amounts due between entities
in the Group are payable on demand and bear no interest. During the year ended 31 December 2011 the Parent
charged Perseis Therapeutics $50,000 (2010: $56,000) for monthly management and administrative services.
18. Events after balance date
As at the date of these financial statements there were no events arising since 31 December 2011 which require
disclosure.
19. Financial instruments and risk management
(a) Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade receivables
Total financial assets (loans and receivables classification)
Financial liabilities
Amortised cost:
Trade and other payables
Convertible notes
Total financial liabilities
Consolidated
Parent
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
9,844
24
9,868
2,204
-
2,204
1,956
56
2,012
2,257
598
2,855
9,797
24
9,821
1,387
-
1,387
653
29
682
1,399
598
1,997
(b) Risk management
The Company and its subsidiaries are subject to a number of financial risks which arise as a result of its activities.
Currency risk
During the normal course of business the Company and its subsidiaries enter into contracts with overseas
customers or suppliers or consultants that are denominated in foreign currency. As a result of these transactions
there is exposure to fluctuations in foreign exchange rates. The Company also has a net investment in a foreign
operation, whose net assets are exposed to foreign currency translation risk.
The Group does not utilise derivative financial instruments. It operates a policy of holding cash and cash
equivalents in the currency of estimated future supplier payments, however it does not designate formal hedges
and as such remains unhedged against foreign currency fluctuations. A foreign exchange gain of $299,000 is
included in results for the year ended 31 December 2011 (2010: $78,000 loss).
30
Neuren Pharmaceuticals Limited
The carrying amounts of foreign currency denominated assets and liabilities are as follows:
Assets
US dollars
Australian dollars
UK pounds
Liabilities
US dollars
Australian dollars
UK pounds
Consolidated
Parent
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
5,055
4,241
2
1,202
150
181
6,001
467
16
1,228
822
261
1,651
4,241
2
460
142
181
733
467
16
530
822
137
The following table details the Group's sensitivity to a 10% increase and decrease in each of the currencies noted
against the New Zealand dollar as at the reporting date.
Decrease (increase) in loss after income tax
10% strengthening of NZ dollar against:
US dollar
Australian dollar
UK pound
10% weakening of NZ dollar against:
US dollar
Australian dollar
UK pound
Consolidated
Parent
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
127
(372)
16
(155)
455
(20)
285
32
22
(348)
(39)
(27)
(108)
(373)
16
132
455
(20)
(18)
32
11
23
(39)
(13)
Foreign currency denominated transactions occur consistently throughout the year. In management's opinion, the
sensitivity analysis set out above is unrepresentative of the inherent foreign exchange risk as the year end
exposure does not reflect the exposure during the year.
Interest rate risk
The Company and the Group are exposed to interest rate risk as entities in the Group hold cash and cash
equivalents and borrow interest bearing funds.
The effective interest rates on financial assets are as follows:
Financial assets
Cash and cash equivalents
New Zealand dollar cash deposits
New Zealand dollar interest rate
US dollar cash deposits
US dollar interest rate
Australian dollar cash deposits
Australian dollar interest rate
Consolidated
Parent
2011
NZ$’000
2010
NZ$’000
2011
NZ$’000
2010
NZ$’000
4,666
3.1%
924
0.1%
4,216
3.6%
234
3.6%
1,080
0.9%
442
4.2%
4,666
3.1%
886
0.1%
4,216
3.6%
120
3.6%
-
-
442
4.2%
The Company and Group do not have any interest bearing financial liabilities. Trade and other receivables and
payables do not bear interest and are not interest rate sensitive.
The Company and Group’s interest bearing financial assets bear interest at overnight deposit rates and accordingly
any change in interest rates would have an immaterial effect on reported loss after tax. Similarly, the Company and
Group’s financial liabilities are not interest bearing, and accordingly a change in market interest rates would have
no effect on reported loss after tax.
31
Neuren Pharmaceuticals Limited
Credit risk
The Company and its subsidiaries incur credit risk from transactions with trade receivables and financial institutions
in the normal course of its business. The credit risk on financial assets of the Group, which have been recognised
in the statement of financial position, is the carrying amount, net of any allowance for doubtful debts.
The Company and its subsidiaries do not require any collateral or security to support transactions with financial
institutions. The counterparties used for banking and finance activities are financial institutions with high credit
ratings.
Liquidity risk
The Company and Group’s financial liabilities, comprising trade and other payables, are generally repayable within
1 – 2 months, and are managed together with capital risk as noted below.
Capital risk
The Company manages its capital to ensure that constituent entities are able to continue as a going concern. The
capital structure of the group consists of cash and cash equivalents, convertible notes and equity of the parent,
comprising issued capital, reserves and accumulated deficit.
32
Independent Auditors’ Report
to the shareholders of Neuren Pharmaceuticals Limited
Report on the Financial Statements
We have audited the financial statements of Neuren Pharmaceuticals Limited (the “Company”) and the Group on
pages 14 to 32, which comprise the statements of financial position as at 31 December 2011, the statements of
comprehensive income and statements of changes in equity and statements of cash flows for the year then ended, and
the notes to the financial statements that include a summary of significant accounting policies and other explanatory
information for both the Company and the Group. The Group comprises the Company and the entities it controlled at
31 December 2011 or from time to time during the financial year.
Directors’ Responsibility for the Financial Statements
The Directors are responsible for the preparation of these financial statements in accordance with generally accepted
accounting practice in New Zealand and that give a true and fair view of the matters to which they relate and for such
internal controls as the Directors determine are necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with International Standards on Auditing (New Zealand) and International Standards on Auditing.
These standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditors consider the internal controls relevant to the Company and the Group’s preparation of financial
statements that give a true and fair view of the matters to which they relate, in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company and the Group’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
We have no relationship with, or interests in, Neuren Pharmaceuticals Limited or any of its subsidiaries other than in
our capacities as auditors and tax consultants. These services have not impaired our independence as auditors of the
Company and the Group.
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 (9) 355 8000, F: +64 (9) 355 8001, www.pwc.com/nz
33
Opinion
In our opinion, the financial statements on pages 14 to 32:
(i)
(ii)
(iii)
comply with generally accepted accounting practice in New Zealand; and
comply with International Financial Reporting Standards; and
give a true and fair view of the financial position of the Company and the Group as at 31 December 2011,
and their financial performance and cash flows for the year then ended.
Report on Other Legal and Regulatory Requirements
We also report in accordance with Sections 16(1)(d) and 16(1)(e) of the Financial Reporting Act 1993. In relation to
our audit of the financial statements for the year ended 31 December 2011:
(i)
(ii)
we have obtained all the information and explanations that we have required; and
in our opinion, proper accounting records have been kept by the Company as far as appears from an
examination of those records.
Restriction on Distribution or Use
This report is made solely to the Company’s shareholders, as a body, in accordance with Section 205(1) of the
Companies Act 1993. Our audit work has been undertaken so that we might state to the Company’s shareholders
those matters which we are required to state to them in an auditors’ report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s shareholders, as a body, for our audit work, for this report or for the opinions we have formed.
Chartered Accountants, Auckland
27 March 2012
34
Neuren Pharmaceuticals Limited
Additional Information
Equity Securities Held by Directors as at 20 March 2012
Director
Direct
Indirect
Direct
Indirect
Interests in
Ordinary Shares
Interests in
Options
R L Congreve
T D Scott
J D Wilson
G B Howie
J Holaday
B A Hancox
-
-
-
50,000
-
-
22,386,224
33,388,252
135,000
55,000
-
-
20,000,000(1)
20,000,000(1)
5,000,000(1)
5,000,000(1)
5,000,000(1)
-
-
10,604,991
-
-
-
-
(1) In accordance with approval received from shareholders under ASX Listing Rule 10.14, the options noted were
issued under the Share Option Plan to directors on 26 October 2011. Each option is unlisted, has an exercise
price of A$0.0377 for one Neuren ordinary share, and expires after five years.
Shareholding
Each ordinary share is entitled to one vote when a poll is called; otherwise on a show of hands at a general
meeting every member present in person or by proxy has one vote.
The number of ordinary shareholdings held in less than marketable parcels at 20 March 2012 was 848, holding
5,815,824 ordinary shares.
The following information is presented based on share registry information processed up to and including 20
March 2012.
Distribution of Shareholders
Analysis of numbers of ordinary shares by size of holding:
Number of
Shareholders
Number of
Ordinary Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
145
273
254
926
671
2,269
28,338
1,045,811
2,146,279
42,905,318
1,109,738,679
1,155,864,425
Distribution of Optionholders
Analysis of numbers of options by size of holding:
Number of
Optionholders
Number of
Options
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
-
-
-
-
13
13
-
-
-
-
310,477,169
310,477,169
Substantial Security Holders who have notified the Company
as at 20 March 2012 are:
Number of
Ordinary Shares
Langley Alexander Walker (through Auckland Trust Company Limited in its
capacity as trustee)
National Nominees Ltd ACF Australian Ethical Smaller Companies Trust
228,322,986
68,716,436
There are no securities subject to escrow.
35
Neuren Pharmaceuticals Limited
Twenty Largest Holders of ordinary shares:
Auckland Trust Company Limited < Second Pacific Master Superannuation Fund>
UBS Nominees Pty Ltd
National Nominees Limited
Essex Castle Limited
K One W One Limited
HSBC Custody Nominees (Australia) Limited
HSBC Custody Nominees (Australia) Limited-GSCO ECA
Roxtrus Pty Limited
Mr Mladen Marusic
J P Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
Centralo Limited
Mr He Zhao
Mr Mladen Marusic
Oceania & Eastern Biotech Limited
Mr Robert Albert Boas
Merrill Lynch (Australia) Nominees Pty Limited
ABN Amro Clearing Sydney Nominees Pty Ltd
Pfizer Inc
Mr Craig William Manners
Number of
Ordinary
Shares
%
Holding
228,322,986
117,367,524
92,469,629
39,844,696
32,611,730
24,732,444
23,188,005
19,000,000
16,100,000
12,868,563
11,978,414
11,925,508
11,000,000
10,949,992
10,283,956
10,160,806
10,092,338
9,813,394
8,081,438
7,900,000
19.75
10.15
8.00
3.45
2.82
2.14
2.01
1.64
1.39
1.11
1.04
1.03
0.95
0.95
0.89
0.88
0.87
0.85
0.70
0.68
708,691,423
61.31
Australian Stock Exchange Disclosures
Neuren Pharmaceuticals Limited is incorporated in New Zealand under the Companies Act 1993.
The Company is not subject to Chapters 6, 6A, 6B and 6C of the Corporations Act, Australia, dealing with the
acquisition of shares (such as substantial holdings and takeovers).
Limitations on the acquisition of shares are imposed by the following New Zealand legislation: Companies Act
1993, Securities Act 1978, Securities Amendment Act 1988, Takeovers Act 1993, Overseas Investment Act 1973,
Commerce Act 1986 and various regulations and codes promulgated under such Acts.
Corporations Act, Australia - Directors’ declaration
The Directors of Neuren Pharmaceuticals Limited (“Neuren”) declare that:
1. The financial statements on pages 14 to 32 of Neuren and its subsidiaries for the year ended 31 December
2011 and the notes to those financial statements:
(a) comply with the accounting standards issued by the Institute of Chartered Accountants of New Zealand;
and
(b) give a true and fair view of the financial position as at 31 December 2011 and of the performance for the
year ended on that date of Neuren and its subsidiaries.
2.
In the Directors’ opinion there are reasonable grounds to believe that Neuren will be able to pay its debts as
and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors dated 27 March 2012.
On behalf of the Board
Dr Robin Congreve
Chairman
36
ANNUAL REPORT 2011
Neuren Pharmaceuticals Limited
ARBN 111 496 130
Level 2, 57 Wellington Street
Freemans Bay, Auckland
New Zealand
Tel: +64 9 3700 200
Email: enquiries@neurenpharma.com
www.neurenpharma.com