Neuren Pharmaceuticals - Qualitative Analysis

www.neurenpharma.com 

Products and Pipeline

Motiva™ (nefiracetam) (100%)

Motiva™, a novel cyclic (GABA) derivative, is being developed by Neuren for neuropsychiatric and neurocognitive symptoms of stroke and other acute and chronic neurological disorders including Parkinson’s disease and Alzheimer’s disease.

Motiva™ is currently in late Phase 2 clinical development.

To date, seven clinical trials in humans have been conducted in Japan, the US and Canada in post-stroke patients. The clinical trials confirmed the safety of Motiva™ and showed that Motiva™ improved neuropsychiatric symptoms (apathy or abulia), cognitive function (via the Symbol Digit Modality Test, a measure of frontal lobe function) and activities of daily living (as measured by the Functional Independence Measure).

NNZ-2566 (100%)

Neuren recently announced the enrolment of the second cohort in the INTREPID-2566 traumatic brain injury (TBI) trial has been completed. Review of safety data by the Data Safety and Monitoring Committee has been finalized and the third cohort has been opened for enrolment.

There were no Serious Adverse Events (SAEs) in Cohort 2 patients reported as being drug-related. As part of Cohort 3, implementation of the protocol approved under Exception from Informed Consent (EFIC) provisions is in progress.

EFIC facilitates study execution by allowing enrolment of patients for whom it is not possible to obtain informed consent from a legally authorized representative. EFIC is restricted to situations in which the condition is life threatening, immediate treatment is required and there is no alternative treatment available. The first phase of EFIC implementation is a program of community consultation and public disclosure at each participating site to inform the community and seek feedback on the trial. This process is well underway.

Neuren is also developing an oral form of NNZ-2566 to treat patients who have had a concussion, a milder type of head injury than the TBI being targeted with the intravenous (IV) form of the drug. Concussions are more than four times as common as moderate or severe TBI, frequently occurring in people participating in sports and as a result of falls and motor vehicle accidents.

The oral version of NNZ-2566 is a liquid produced by dissolving the same powder used to make the IV form in a water-based solution. The additional toxicology and pharmacokinetic studies in animals that are required to initiate human trials have been completed and showed the oral form to be safe with minimal side effects.

Preparations for a Phase I safety and pharmacokinetic study in healthy volunteers have been finalized and the study to be undertaken in Australia is planned for early 2012. A Phase II trial in concussion patients is expected to start in mid-2012.

In addition to concussion, the Company has begun development of the oral form of NNZ-2566 for Rett Syndrome, a very severe, physically disabling disease and is considered one of the autism spectrum disorders.

There is no approved drug for Rett Syndrome which occurs in approximately 1 of 10,000 female children worldwide. Preliminary results with NNZ-2566 in an animal model of Rett Syndrome were promising. A Phase IIa protocol to establish proof of principle in Rett Syndrome patients has been developed. Neuren plan to file an IND for the Rett Syndrome study in the second half of 2012 and to initiate the clinical trial in late 2012. The Company believes that Rett Syndrome will qualify for Orphan Disease and Fast Track designation under US FDA regulations.





www.breastcancercure.org.nz

TFF antibodies - Neuren (75%) The Breast Cancer Research Trust NZ (25%)

Perseis Therapeutics is developing therapies against Trefoil Factors (TFF-1 and TFF-3) and Growth Hormone for the treatment of breast and other cancers. Perseis Therapeutics was established by Neuren Pharmaceuticals and the Breast Cancer Research Trust, and is based in Auckland, New Zealand.

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.

From among a large number of monoclonal antibodies generated at three separate institutions in Australia, Singapore and China as well as screening against a phage display library of fully human antibody fragments, Perseis has now selected three fully human monoclonal antibodies that will be evaluated in animal models of cancer to validate the proof of concept of targeting TFFs as a cancer therapy.

Production of sufficient quantities of the antibodies for the in vivo studies is underway with results
from the studies expected around the end of the year.


Perseis Therapeutics (Perseis) is a drug development company with a focus on novel monoclonal antibody based therapeutics for the treatment of cancer. The antibodies are inhibitors of factors involved in controlling cancer cell growth, migration and resistance to chemotherapy drugs. These antibodies are of particular interest as potential anti-cancer therapeutics and re-sensitisation agents. Results to date strengthen the clinical correlation between both Growth Hormone and two TFF (treefoil factors) proteins with Breast Cancer.

In April 2009 the Breast Cancer Research Trust invested $1.2m (25%) in Perseis as seed investors with Neuren Pharmaceuticals Limited.


In May 2011 we had a major breakthrough whereby 3 key Antibodies have shown to strongly inhibit breast (and stomach) cancers in the laboratory. Each has the potential to stop breast cancer in its tracks, in a type that affects the majority of sufferers (up to 68%).

Antibodies of this particular type (fully human) typically result in shorter and less expensive drug development, and have a reduced risk of sufferers’ reactions to residual murine proteins in the finished drug product – all of which means a CURE faster and with less side effects.

We have already begun discussions with global pharmaceutical companies about the next steps based on results from the in vivo studies. They recognize the significance of the breakthrough and have shown strong interest in pursuing it.

Neuren's technology portfolio is based on a combination of two important components:

The self-protective molecules produced by the brain in response to injury of the nervous system

* The critical period of hours to days over which damaged nerves slowly die, but may be rescued by appropriate therapeutic intervention.

Neuren’s scientists were among the first to discover and then apply knowledge of these components as the basis for drug design.

The compounds under development by Neuren have application to acute brain injuries such as those associated with stroke, cardiopulmonary bypass surgery and traumatic brain injury as well as to chronic neurodegenerative conditions such as Alzheimer's disease, Parkinson's disease and multiple sclerosis.

Progressive neuronal loss is a feature of chronic neurodegenerative diseases, which appear to resemble the acute diseases in many respects. Neuren believes that chronic therapy with its small molecule compounds is likely to slow the progress and decrease the symptoms of these diseases.

Neuronal (or nerve cell) rescue involves the use of a therapeutic agent to prevent disease or injury of parts of the nervous system that may be under threat. Neuronal rescue represents a major opportunity for the development of new therapies. In the past, the treatment of neurological disorders has been targeted at symptoms; however, as the understanding of brain injury has increased, new approaches to treatment are emerging.

The first phase of brain cell death (primary necrosis) is at the time of injury and is immediate. The second phase of secondary necrosis occurs over hours or days by a process called programmed cell death or ‘apoptosis’. During this phase, there is the possibility of rescuing cells that would otherwise die.

Patents

Neuroprotection - WO/ 2000/013650
Functional proteomics using double phage display screening - WO/ 2002/046754
Anti-GPE antibodies, their uses, and analytical methods for GPE128 - WO/ 2002/074245
Regulation of weight - WO/ 2002/076208
GPE analogs - WO/ 2002/016408
Treatment of demyelinating diseases - WO/ 2002/030447 and WO/ 2002/0304471
GPE analogs and peptidomimetics - WO/ 2002/094856
Neuroprotection and/or neurorestoration via the neural Activin Type IIb receptor - WO/ 2003/000281
Use of Insulin-Like Growth Factor I for promoting remyelination of axons - WO/ 2003/049761
Somatogenic therapy using a 20kda placental growth hormone variant - WO/ 2005/018659
Neuroprotective bicyclic compounds and methods for their use137 - WO/ 2005/023815
Neuroprotective effects of gly-pro-glu following intravenous infusion - WO/ 2005/042000
GPE and G-2MePE, caffeine and alkanol for treatment of CNS injury - WO/ 2005/097161
Non-diabetogenic therapy using a 20kda placental growth hormone variant - WO/ 2006/012525
Trefoil factors and methods of treating proliferation disorders using same - WO/ 2006/069253
Method for treating apathy syndrome - WO/ 2006/113937
Analogs of glycyl-prolyl-glutamate - WO/ 2006/127702
Oral formulations of glycyl-2-methylprolyl-glutamate - WO/ 2007/106555
Infusion pump - WO/ 2007/119178
Conformation-specific antibodies that bind trefoil factors and methods of treating cancers and proliferation disorders using same - WO/ 2008/042435
Cyclic glycyl-2-allyl proline improves cognitive performance in impaired animals - WO/ 2008/063311
Conformation specific antibodies that bind trefoil factors - WO/ 2009/147530
Cyclic glycyl-2-allyl proline and its use in treatment of peripheral neuropathy - WO/ 2011/037644
Neuroprotective macrocyclic compounds and methods for their use - WO/ 2004/084809
New peptide antagonists at glutamate and NMDA receptors - WO/ 1994/026301
Composition and methods to improve neural outcome - WO/ 1995/017204
Regulation of neural enzymes - WO/ 1998/014202
Neuronal rescue agent - WO/ 1999/015192
Regulation of tyrosine hydroxylase - WO/ 1999/065509


R&D

* TBI is the second leading cause of death and disability in combat; >70% mild


* Army Medical Research and Materiel Command (USAMRMC) is the lead US agency involved in TBI R&D


* Acute TBI research focuses on two goals: neuroprotection andprevention of post-injury seizures


* Army has extensive capabilities in preclinical R&D, clinical development and regulatory affairs


* Collaborative R&D Agreement funded by Neuren since 2004; Army focused on pharmacology, MOA


* Funding of the NNZ-2566 program has resulted from competitive, peer-reviewed grant applications

Preclinical research directly informs clinical trial design

Neuroprotection in multiple models:
- Bolus dosing + infusion enhances efficacy and extends therapeutic time window
* Bolus dosing and infusion in Phase II trial

Anti-seizure actions against non-convulsive and convulsive seizures:
- Dose-dependent effect, reduced injury severity and reduced mortality
* Continuous EEG in Phase II trial

Mechanism of action studies:
- Inhibits inflammatory cytokine and pro-apoptotic expression up to 3 days post-injury
- Normalizes pro-and anti-apoptotic gene expression
* Dosing for 72 hours post-injury
* Biomarker testing in Phase II trial

Neurofunctional studies:
- Improved neurofunctional/neurocognitive performance in animal models at 28 days
* Neuropsychological endpoints in Phase II trial

TBI regulatory strategy

Approach to FDA Pathway:

* Any validated endpoint plus a functional measure is approvable


* Prevention of post-injury seizures is approvable alone

* No a prioristandard for magnitude of effect; must be “clinically meaningful”

* Acceptability of exploratory endpoints

* Exception from Informed Consent for Emergency Research (EFIC)


Planning for a Single Pivotal Phase III

* Negotiate Special Protocol Assessment at the end of Phase II meeting

* Fast Track designation facilitates communication with FDA

* Phase II designed and powered to deliver definitive results across multiple, approvable endpoints

* All non-clinical and CMC activities for pivotal trial will be completed prior to end of Phase II

* Preclinical and clinical data from intravenous formulation driving development of oral form for mild TBI and other indications

Phase II Protocol Designed to Deliver Definitive Data
•
Double-blind, placebo controlled, rising dose
•
260 acute, non-penetrating TBI patients (Glasgow Coma Scale 4-12)
•
Patients 16-75 years old
•
Randomized 2:1 drug to placebo
•
Administration of drug within 8 hours of injury (6 hours under EFIC)
•
20 mg/kg bolus (10-min infusion) followed by 1, 3 or 6 mg/kg/hr infusion for 72 hrs (30, 30 and 200 patients, respectively).
•
Endpoints
1. Safety
2. Pharmacokinetics
3. Efficacy
a) Functional outcomes: Glasgow Outcome Scale-Extended (GOS-E)*; Mayo-Portland Adaptability Index; neuropyschological measures; mood
b) Biological effects: Seizures detected by continuous EEG; serum biomarkers of neuronal, glial and axonal cell damage; intracranial pressure

Efficacy endpoints directly correlate with molecular, physiological and behavioral findings in multiple animal models

(Outcomes marked in red are approvable endpoints)


Motiva®(nefiracetam)

A Novel Compound with Broad Neurobehavioral Potential
Double-Blind Treatment of Apathy in Patients with PoststrokeDepression Using Nefiracetam (Robert G. Robinson, M.D., Ricardo E. Jorge, M.D., Kathleen Clarence-Smith, M.D., Ph.D., Sergio Starkstein, M.D.) (The Journal of Neuropsychiatry and Clinical Neurosciences 2009; 21:144 –151)

“In conclusion, apathy has received increasing attention because of its effect on emotion, behavior, and cognitive function. The current study is the first randomized double-blind treatment trial to be conducted among a large group of stroke patients with coexistent apathy and depression, and our results suggest that nefiracetam may be an effective treatment for this clinically important condition.”

Efficacy data in stroke patients - 7 clinical trials


Developing antibodies for the treatment of breast and other cancers - Perseis Therapeutics

* Next milestone—in vivo efficacy of selected antibodies in breast and gastric cancer models

* Commercialisation strategy: partnership with in vivo proof of concept

* Recently selected lead antibodies are from the University of Queensland (UCSF library)


Management

Dr Robin Congreve, LLM, PhD (Chairman)
Dr Congreve was for many years a partner in Russell McVeagh 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 John Holaday, PhD (Non-Executive Director)
Dr Holaday has 40 years of experience as a scientist, executive manager of biotechnology and biopharmaceutical companies, and banker. He is currently CEO of QRxPharma, a listed specialty pharmaceutical company specializing in pain and CNS diseases. 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 honors 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.

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 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 ING Property Trust Limited which is listed on the New Zealand Stock Exchange.

Dr Douglas Wilson, MB, ChB, PhD (Director and Chief Medical Officer)
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.

Professor Margaret Brimble, MNZM, FRSNZ, FRACI, FNZIC, PhD (Medicinal Chemistry)
Professor Margaret Brimble is the Chair of Organic and Medicinal Chemistry at the University of Auckland. She has extensive experience in organic synthesis, particularly of complex, biologically active molecules. She won the 2004 Novartis Chemistry Award for outstanding contributions in natural products synthesis and the development of synthetic methodology. Professor Brimble is on the International Union of Pure and Applied Chemistry (IUPAC) Committee on organic synthesis, is President-elect of the International Society of Heterocyclic Chemistry (ISHC) and is member of the Academy Council of the Royal Society of New Zealand. She has published widely and received a number of awards for her scientific achievements.

Dr John E. Dillberger, Pharmacology, Toxicology (Consultant) DVM, PhD, Diplomate ACVP and ABT, Fellow IATP
Dr Dillberger has held positions of increasing responsibility at Marion Merrell Dow, GlaxoWellcome, and Triangle Pharmaceuticals. He has served as Head of US Pathology, Director of Safety Evaluation for US-Based Development Projects, and Worldwide Specialist in Oncology Drug Projects for GlaxoWellcome and as Director of Toxicology at Triangle Pharmaceuticals. Dr Dillberger has prepared safety evaluation packages for numerous clinical trial and marketing applications in the US and Europe, including the recent NDA for Coviracil® and CTD for ThelinÔ.

Persies Therapeutics

Dr Parmjot Bains MB ChB, M Phil (Cantab)
Dr Bains is the Chief Executive Officer of Perseis Therapeutics. Previously, she was the co-Chief Executive Officer of Neuren Pharmaceuticals. Dr Bains trained as a medical doctor, before moving on to work in Australia as a management consultant for McKinsey and Company, a global management consultancy. Prior to Neuren, she worked in senior management positions at Fonterra Cooperative Group, New Zealand's largest company, within their biotechnology and specialty ingredients businesses. Dr Bains brings a strong commercial and medical background to Perseis.

Professor Peter Lobie BMedSci, MB,BS (Hons), PhD, FRSNZ
Professor Peter Lobie is the inventor of the TFF and GH intellectual property that is being developed in Perseis, and is responsible for the overall science program in Perseis. Peter also heads the Liggins Institute's Molecular Endocrinology and Cancer Research group and is an international authority on molecular mechanisms of hormone action. In 2007, Professor Peter Lobie was appointed New Zealand's first Professor of Breast Cancer Research, funded by The Breast Cancer Research Trust. The purpose of the Chair is to build a team of researchers concentrating on research into breast cancer that may lead to treatments and prevention of the disease. In the past, Peter Lobie has worked at two of the world's most prestigious research centres: the Karolinska Institute in Stockholm, and the Institute of Molecular and Cell Biology in Singapore.

Hilary Lewis B Com, MBA
Hilary Lewis is the Chair for New Zealand of The Breast Cancer Research Trust. The goal of the Trust is to find a cure for Breast Cancer within the next decade. She is using her leadership, finance, IT and strategic management skills to achieving this goal. She brings these valuable skills and objectives to the Board of Perseis. Hilary is a qualified accountant,completed an MBA in 1994 and is a member of the NZ Institute of Directors. She is CEO - Australasia/CFO for Unimarket Ltd, a provider of e-procurement services. Previous to that she worked for House of Travel as e-commerce Director between 2004 and 2008, combining her passion for travel experiences with the online practicality of purchasing travel. She has also held a number of senior roles within finance and IT at Air New Zealand over 13 years.

Tony Moffat
Tony is the Acting CEO and Deputy Chair of The Breast Cancer Research Trust. Tony has a career of 25 years specialising in Sales, Marketing and General Management. He brings considerable experience, predominately from the travel and aviation industries and has lived and worked in markets across North Asia and most of Continental Europe. He has enjoyed senior Marketing, Regional and Group General Management roles with Air New Zealand, the House of Travel Group, and the Australian owned company, Stella Travel Services.

Mr Larry Glass, BA (Biology)
Mr Glass is the Chief Executive Officer of Neuren Pharmaceuticals and President US Operations. Mr Glass joined Neuren in early 2004 as the Executive Vice President, USA. He is a seasoned manager with more than 30 years in the life sciences industry. Before he joined Neuren, he worked as an independent consultant for a number of biotech companies in the US and internationally providing management, strategic and business development services. Prior to that, he was CEO of a contract research organisation that provided preclinical research and clinical trials support for major pharmaceutical and biotechnology companies and the US government. For a number of years, the CRO operated as a subsidiary of a NYSE-listed company and was subsequently sold to a European biopharmaceutical enterprise which was then acquired by Johnson & Johnson.

Partnerships

NNZ-2566
The US Army continues to be extremely supportive of the NNZ-2566 platform through funding of the Phase II TBI trial and also through additional funding provided for the NNZ-2566 oral development program.
US Army funding received to date: $23 Million

Motiva®
Funded by a grant to Prof. Sergio Starkstein, MD, PhD, Winthrop Professor and Head of the Neuropsychiatry Unit at Fremantle Hospital, Perth.

The grant was awarded by the National Health and Medical Research Council (Australia) and covers virtually all costs associated with the study. With funds from the recently completed financing, Neuren plan to initiate a parallel study in patients diagnosed with apathy with or without depression.

Cancer Research Programs
With initial funding of NZ$1.18 million from the BCRT and a NZ$250,000 grant, New Zealand subsidiary, Perseis have initiated a program to develop and test monoclonal antibodies against a range of cancers.

A successful round of financing via private placements and a rights issue was completed in August 2011. Neuren secured funding of approximately $8.8 million. The Company believes that these funds will cover all R&D and corporate operating expenses through 2013.
Financial Resources

Cash as at 30 September 2011: $11,352,000
6 Month cash burn to June 2011: $2,972,000


All information in this post was sourced from the following:

Neuren Pharmaceuticals

Perseis Therapeutics

Appendix 4C Sept 2011

Interim Report - June 2011

Clinical Trials Database - NNZ-2566

1. Completed - Safety Study of NNZ-2566 in Healthy Female Subjects Condition: Brain Injuries, Traumatic
Interventions: Drug: NNZ-2566; Drug: Placebo

2. Not yet recruiting - Safety Study of NNZ-2566 in Healthy Subjects, Following Oral Administration Condition: Brain Injuries, Traumatic
Interventions: Drug: NNZ-2566; Drug: Placebo

3. Not yet recruiting - Study of NNZ-2566 in Patients With Traumatic Brain Injury Under EFIC Condition: Brain Injuries
Intervention: Drug: NNZ-2566

4. Recruiting - Study of NNZ-2566 in Patients With Traumatic Brain Injury Condition: Brain Injuries
Intervention: Drug: NNZ-2566


Stuart Roberts / Bell Potter - Research Report - October 2011
* Bell Potter Securities holds 10 million Neuren options exercisable at 1.54 cents by 6 May 2014
* The Bell Potter Research Report is also available on the Neuren Pharmaceutical website

With all respect to research analyst Mr Roberts, while I find his research to be very thorough, I would challenge the following information provided on pg.37 of the report under the heading: "Risks"

RISKS - Stuart Roberts / Bell Potter
We see the main risk in Neuren as being clinical risk -that the current Phase II trials of Motiva and NNZ-2566 fail to meet their primary endpoints. A second risk is timing, with the potential for Neuren to not recruit for the trials at the pace at which we are expecting. A third risk is burn rate – Neuren has burned around A$650,000 per month since its 2005 IPO and raised A$52.5m in equity capital since that time. While the burn rate has been cut considerably since them – it now runs at around A$180,000 per month - It will probably have to raise more capital to fund later stage work on NNZ-2566 and the other elements of its pipeline.

In challenging these 3 points provided in the report the following could also be taken into account:

1. Failure to meet primary endpoints in phaseII clinical trials for NNZ-2566?

* Any validated endpoint plus a functional measure is approvable
* Prevention of post-injury seizures is approvable alone
* No a prioristandard for magnitude of effect; must be “clinically meaningful”
* Acceptability of exploratory endpoints

2. Timing?

* Exception from Informed Consent for Emergency Research (EFIC)

As part of Cohort 3, implementation of the protocol approved under Exception from Informed Consent (EFIC) provisions is in progress. EFIC facilitates study execution by allowing enrolment of patients for whom it is not possible to obtain informed consent from a legally authorized representative. EFIC is restricted to situations in which the condition is life-threatening, immediate treatment is required and there is no alternative treatment available. The first phase of EFIC implementation is a program of community consultation and public disclosure at each participating site to inform the community and seek feedback on the trial. This process is well underway.

The following statement was also provided by Neuren's CEO, Mr Glass in the most recent market update:

"We are also gratified that the changes instituted in the study have improved the pace of enrolment and remain confident that enrolment will continue to accelerate in Cohort 3 with the inclusion of female as well as younger and older patients and as EFIC is implemented. Progress with the oral formulation has been excellent and we are excited about the new clinical programs that we believe will significantly increase the value of the NNZ-2566 franchise.”

3. Burn rate?

Research and development costs, which relate primarily to the NNZ-2566 Phase II trial, decreased from the comparative period due to the relatively lower ongoing patient recruitment and site management costs incurred this year compared to the higher start up costs incurred in the first half of 2010 ahead of the commencement of the trial.

NNZ-2566: TBI profile largely de-risked

Pharmacokinetics, lack of efficacy, animal toxicity, and adverse events in man are the leading causes of failure in drug development

Pharmacokinetics (39%)
* Blood-brain barrier penetration
* Linear pharmacokinetics (PK)
* Comparable PK in healthy volunteers and patients
* Oral bioavailability

Animal toxicity (11%)
* Safe and well-tolerated with good safety margin
* Reproductive toxicology - underway but no data yet?

Adverse effects in patients (10%)
* Drug appeared to be safe, well-tolerated in Cohort 1
* Safety at higher dose - to be determined ?
* Cardiovascular safety - low risk but no data yet?

Miscellaneous (5%)
* Manufacturing—fully validated; suitable for Phase III; simple oral formulation
* Regulatory—Fast Track; good relationship with FDA
* Intellectual property - key patents issued
* Staff and CRO resources - in place and working well

Commercial reasons (5%)
* Market competition—none now, limited in the future
* Reimbursement not expected to be an issue
* Strong partnering opportunities
* Financing - shareholders plus US Army

Lack of efficacy (30%)
* Mechanism of action—directly relevant to TBI pathology
* Preclinical efficacy - MOA addresses complex, post-injury cascade; dose-response in diverse brain injury models
* Clinical trial design—endpoints directly translated from preclinical findings; powered to detect approvable benefit

Orphan Disease model

TBI is not an orphan disease (incidence >200,000), but…
* Significant risk and cause of mortality and permanent disability
* No approved or effective therapy
* Significant unmet need
* Priority target for FDA, US Army and NIH

Regulatory flexibility
* Benefit-cost analysis in NDA review
* Tolerance for novel, exploratory endpoints
* No a priori standard for magnitude of effect

Limited risk of competition from big pharma
* Only a single course of therapy for each patient
* Specialized marketing and sales force required
* Expensive post-marketing surveillance

Significant attraction for potential partners
* Limited pricing pressure; little or no competition
* Small number of KOLs drive prescription practice among a small universe of prescribers
* Strong potential for other indications, including chronic conditions

The US Army continues to be extremely supportive of the NNZ-2566 platform through funding of the Phase II TBI trial noted above and also through additional funding provided for the NNZ-2566 oral development program.

On a final note I believe the market will soon have a better understanding for the importance the US Army places on the urgent need for Neuren's NNZ-2566 platform to treat their wounded soldiers, and one doesn't need to look very hard to see the support the US Army have long time established with the FDA