Improving lives through innovation Nyrada Inc (ASX:NYR) ABRN 625 401 818 Annual report For the year ended 30 June 2023
ANNUAL REPORT FY23 3 Nyrada Overview Our vision To become a high growth pharmaceutical discovery and development company specialising in early-stage drug development of novel treatments. Our strategy To develop treatments for diseases where there is an unmet clinical need, or where current treatments are suboptimal, and to monetise the value of these treatments through advancing highly optimised drug candidates towards out-licensing. Advancing our strategy Delivering upon our vision and strategy through our current two lead drug candidates: a PKSK9 inhibitor for cholesterol lowering and a TRPC ion channel blocker for secondary brain injury treatment.
NYRADA INC (ASX:NYR) 4 Nyrada Overview Drug development programs Nyrada is developing novel, high value small molecule drugs: Upcoming catalysts Cholesterol Lowering Program Brain Injury Program Identification of alternative PCSK9 inhibitor candidates. Preclinical assessment of alternative target PCSK9 inhibitor candidate. Phase 1 in-human study. Walter Reed (US) Army Institute of Research Traumatic Brain Injury efficacy study. Drug Candidate Indication Aim Target Market NYX-1492 (PCSK9i) Oral PCSK9 inhibitor CholesterolLowering Best-in-class small molecule drug to disrupt and broaden the class in cardiovascular management, offering the convenience of a pill >18M patients (US)1 NYR-BI03 TRPC 3/6/7 blocker Brain Injury First-in-class treatment to prevent secondary brain injury and reduce disability following moderate-severe TBI, concussion, or stroke ~5.5M patients/ year (globally)2
ANNUAL REPORT FY23 5 Corporate Directory Board of Directors John Moore Peter Marks (resigned 1 August 2022) Rüdiger Weseloh Marcus Frampton Christopher Cox Ian Dixon Gisela Mautner (appointed 1 August 2022) Company Secretary David Franks Registered office in Australia and principal place of business Suite 2, Level 3 828 Pacific Highway Gordon, NSW 2072 Australia Tel: +61 2 9498 3390 Registered office in place of incorporation 1209 Orange Street Wilmington, Delaware 19801 United States of America Share/CDI Registry Automic Pty Ltd Level 5, 126 Phillip Street Sydney, NSW 2000 Australia Auditor William Buck Audit (Vic) Pty Ltd Level 20, 181 William Street Melbourne, VIC 3000 Australia Stock exchange listing Nyrada Inc. instruments registered for trade on the Australian Securities Exchange are CHESS Depositary Interests (CDIs). One CDI is equivalent to one Share, being Class A Common Stock. ASX Code NYR Website www.nyrada.com
NYRADA INC (ASX:NYR) 6 Contents Chair’s letter 7 CEO report 10 Directors’ report 13 Auditor’s independence declaration 32 Independent Auditor’s Report 33 Consolidated statement of profit or loss and other comprehensive income 38 Consolidated statement of financial position 39 Consolidated statement of changes in equity 40 Consolidated statement of cash flows 41 Notes to the consolidated financial statements 42 Directors’ declaration 57 Shareholder information 58
ANNUAL REPORT FY23 7 Chair’s Letter Dear Fellow Shareholders, On behalf of the Board and Company, it is with pleasure that I present to you Nyrada’s Annual Report for the financial year ended 30 June 2023. Please permit me to provide you some context around our performance and our prospects. You will know that success and perseverance are two sides of the same coin. The great Thomas Edison, inventor of the light bulb and one of the founders of the General Electric company, was once asked by a journalist “How did it feel to fail 1,000 times?” Edison’s reply was that "I didn't fail 1,000 times. The light bulb was an invention with 1,000 steps." This is the history of every consequential human invention – a cycle of trial followed by setback followed by trial until ultimately triumph. The just concluded 2023 financial year was another challenging one for capital markets and for the biotechnology sector globally. It was also a frustrating year for the Company and no doubt for you, our shareholders. But each twist and turn moves us closer to our destination – to create economic and social value through developing treatments for diseases where there is an unmet clinical need, or where current treatments are suboptimal. Nyrada is well placed to achieve its goals. We operate in one of the best places in the world to develop drugs in a low-cost way. Australia has strong and stable legal and regulatory environment. It produces talented and gifted scientists from a world class university system. The government operates a supportive Research and Development (R&D) rebate scheme. We are also blessed with a number of non-balance sheet assets. We have a talented and focused team, a team of six which continues to achieve significant operating leverage. Our scientific advisory board is world class, and our governing board counts seasoned, globally experienced industry executives who are engaged and aligned. These are important force multipliers. We have the components necessary to succeed. Looking forward, the team remains focused on developing a PCSK9 inhibitor for cholesterol lowering and a TRPC ion channel blocker for secondary brain injury treatment. These drugs target indications where there is an unmet clinical need, or where current treatments are suboptimal. Importantly also, the markets for these drugs benefit from four thematic tailwinds: • lifestyle and dietary changes leading in increased incidence of high cholesterol, • greater awareness of the costs and consequence of brain injury from the sporting and combat fields, • increasing incidence and expanding awareness of the need for better treatment options, and • demographics and particularly an aging population. Important progress in developing these two lead drug candidates has been made. For our cholesterol lowering drug candidate, one of the 11 mandatory safety and toxicology studies unfortunately showed an adverse signal. As a result, Nyrada will not be proceeding with NYX-1492 (PCSK9i) into human clinical trials for PCSK9 inhibition. Notwithstanding, the scientific team is keenly investigating next steps, specifically to identify alternative PCSK9 inhibitor candidates, structurally differentiated fromNYX-1492. “We continue to develop treatments for diseases where there is an unmet clinical need, or where current treatments are suboptimal. The team remains focused on developing a PCSK9 inhibitor for cholesterol lowering and a TRPC ion channel blocker for secondary brain injury treatment.”
NYRADA INC (ASX:NYR) 8 Our brain injury program too had a minor setback, but one which opened the door to a better lit pathway. While undertaking GLP studies for NYR-BI02, the Company’s brain injury program candidate, it was determined that it was a potent blocker of canonical transient receptor potential (TRPC) ion channels. However, NYR-BI02 demonstrated a sub-optimal safety profile for continuous dosing in patients. Following a review, the Company identified NYR-BI03, a closely related analogue of NYR-BI02, had a superior safety profile for continuous intravenous dosing. This, coupled with superior potency on TRPC ion channel targets, guided the Company to select NYR-BI03 as its new lead brain injury drug candidate. NYR-BI03 will also be used for preclinical efficacy testing in the Walter Reed Army Institute of Research (WRAIR) Traumatic Brain Injury (TBI) model, and separately in a Contract Research Organisation (CRO) stroke model. As Edison counselled “Just because something doesn't do what you planned it to do doesn't mean it's useless.” The Board and I are heartened with what Nyrada achieved last financial year and how we are positioned for the current financial year. The Board and I continue to work with the management team to help make the Company great. Nyrada’s imminent evolution to a clinical drug development company will be a key inflection point for the Company. In conclusion, I would like to extend my thanks to all shareholders for your ongoing support which has allowed us to continue to strive towards our vision to become a high growth pharmaceutical discovery and development company specialising in early-stage drug development of novel treatments. As previously advised, Peter Marks retired from the Board after supporting the Company through its IPO and first years as a public company. I again thank Peter for his contribution. Peter was succeeded in August 2022 by Dr Gisela Mautner. Dr Mautner is currently the Chief Executive Officer and Managing Director of Noxopharm Limited (ASX:NOX) which is a large shareholder in Nyrada. She has been a wonderful addition to the board bringing extensive leadership experience in global pharmaceutical organisations. I also take this opportunity to thank James Bonnar and the whole Nyrada team for making significant progress. I wish to additionally acknowledge the ongoing support of our Scientific Advisory Board (SAB), whose members have a sound record in determining the best path forward. As part of the ongoing evolution of the Company, Professors David Burke and Gilles Lambert will be retiring from the SAB and we thank them for their contribution over the years. I repeat the Board’s gratitude to you, our shareholders, for your support of Nyrada. It is an honour to lead your Board and represent your interests. Our future is before us. John Moore Non-Executive Chair “The Board and I continue to work with the Nyrada management team to help make the Company great. Our success is testament to the significant energies invested by our talented team. Nyrada’s imminent evolution to a clinical drug development company will be a key inflection point for the Company.”
NYRADA INC (ASX:NYR) 10 CEO Report Dear Fellow Shareholders, It is my pleasure again to provide to you with this update on Nyrada’s results and operations for the 2023 financial year. I wish to thank all shareholders for your ongoing support. Our drug development programs remain focused on areas of substantial unmet clinical need where few if any, effective or well-tolerated therapies exist. The Nyrada team and I are firmly committed to our strategy and success of the Company. Every day we work and strive to find solutions to important health issues for patients that are underserved by existing treatments available. Through this patient focus, we also aim to create value for our investors and broader stakeholders. This is the strategic foundation upon which our Cholesterol Lowering and Brain Injury programs sit, with the work put in during the 2023 year setting us up for a stronger 2024. The target markets for these programs are significant and growing. Cholesterol Lowering Program 2023 was a very active year for the Company’s cholesterol lowering program. All necessary formulation work, toxicology, safety, and pharmacology studies were undertaken for NYX-1492 (PCSK9i), the Company’s cholesterol-lowering PCSK9 inhibitor drug candidate. Early into the 28-day in vivo Good Laboratory Practice (GLP) toxicology study, the Company was encouraged by preliminary results. However, late in June 2023, the Company was advised of an adverse signal in one of the 11 required studies. This finding occurred in a small number of animals which were otherwise healthy and was only detected following microscopic analysis. Consequently, it was concluded that NYX-1492 will not be advanced into clinical development for cholesterol management. Such setbacks, whilst unfortunate and frustrating, are ultimately a normal part of the scientific discovery process. The Company is currently screening alternative PCSK9 inhibitor candidates that preclude the identified toxicity issue and are structurally differentiated from NYX-1492. Nyrada remains committed to developing an oral small molecule PCSK9 inhibitor drug. The market opportunity is significant and underserved with current injectable treatments that are both expensive and inconvenient. Accelerated by demographic, lifestyle, and dietary changes, the market size for statins, the most common current treatment for cholesterol lowering reached US$14.9 billion in 20221 and is expected to reach US$22.2 billion by 20302. Brain Injury Program Our brain injury program continues to show great promise. The market size for secondary brain injury treatments is difficult to accurately quantify because there are no products available. Nyrada’s candidate drug is a novel treatment and pioneering in this sense. However, it is estimated that some 2.8 million persons in the US experience sport and recreation related traumatic brain injury (TBI) annually, while globally 15 million people suffer a stroke every year. The opportunities to reduce the long-term consequences of stroke or TBI are significant. “This is the strategic foundation upon which our Cholesterol Lowering and Brain Injury programs sit, with the work put in during the 2023 year setting us up for a stronger 2024. The target markets for these programs are significant and growing.” 1. https://www.imarcgroup.com/statin-market#:~:text=Market%20Overview%3A,3.2%25%20during%202023%2D2028. 2. https://www.databridgemarketresearch.com/reports/global-statin-market
ANNUAL REPORT FY23 11 Shortly after the conclusion of the 2023 financial year, a research study on canonical transient receptor potential (TRPC) ion channel involvement in secondary brain injury, the target of Nyrada’s program, was published in the eminent journal Translational Stroke Research. Nyrada’s neuroscientist Dr. Jasneet Parmar was the lead author of this study with our Scientific Advisory Board Chair Gary Housley as co-author. Dr. Parmar recently presented on this study and on Nyrada’s brain injury program at the US Military Health System Research Symposium in Florida, US. This study showed that animals lacking the target TRPC ion channels were protected against expansion of a photothrombotic-induced stroke infarct in the days following injury. This is a validation of the pathophysiological role of TRPC ion channels in brain injury progression and the target of our therapeutic program. During the 2023 year, we also undertook GLP studies on NYR-BI02. Now completed, these studies showed NYR-BI02 was a potent blocker of TRPC ion channels, limiting excitotoxicity and secondary brain damage following a TBI or stroke. However, NYR-BI02 demonstrated a suboptimal safety profile for continuous dosing in patients with these conditions. Following a review, the team identified NYR-BI03, a closely related analogue of NYR-BI02, as having a superior safety profile for continuous intravenous dosing. This, coupled with superior potency on TRPC ion channel target, led to NYR-BI03’s selection as Nyrada’s new lead brain injury drug candidate. Nyrada continues to maintain a lean operating model with the vast proportion of resources allocated towards research and development. Notwithstanding, given current capital market conditions, further cost base optimisation decisions have been taken so to extend Nyrada’s funding runway. This includes the Board volunteering to halve their director fees for the time being. I take this opportunity to thank our eminent Scientific Advisory Board for their invaluable support, experience, and counsel. At the conclusion of the September quarter, Professors David Burke and Gilles Lambert will retire from their advisory duties at Nyrada. On behalf of the Company, I would like to thank them both for their dedicated service. They will remain available to consult to the Company should there be a future need. In conclusion, I extend my thanks to the Nyrada Board, led by John Moore, for sharing their expertise, support, and counsel. This advice and support has been invaluable. Together, we collectively continue to work to deliver on the strategy to build a great company that improves human outcomes and create value for our shareholders. Looking forward, I remain confident that Nyrada has the people, assets, and platforms to achieve our goals in developing therapies for the lowering of cholesterol and the treatment of brain injury. The markets for these treatments are significant and we are in an unique position considering our existing preclinical work to date and assets developed. I look forward to the opportunity to update you on our progress at our upcoming Annual General Meeting. James Bonnar Chief Executive Officer ““Looking forward, I remain confident that Nyrada has the people, assets, and platforms to achieve our goals in developing therapies for the lowering of cholesterol and the treatment of brain injury. The markets for these treatments are significant and we are in an unique position considering our existing preclinical work to date and assets developed.”
ANNUAL REPORT FY23 13 Directors’ Report The Directors present their report, together with the financial statements, on the Consolidated Entity (referred to hereafter as the 'Consolidated Entity') consisting of Nyrada Inc. (referred to hereafter as the 'Company' or 'Parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2023. Directors The following persons were directors of Nyrada Inc. during the whole of the financial year and up to the date of this report, unless otherwise stated: John Moore Non-Executive Chair Peter Marks Non-Executive Director (Resigned 1 August 2022) Rüdiger Weseloh Non-Executive Director Marcus Frampton Non-Executive Director Christopher Cox Non-Executive Director Ian Dixon Non-Executive Director Gisela Mautner Non-Executive Director (Appointed 1 August 2022) John Moore Non-Executive Chair, joined the Board in June 2019 John Moore currently serves as Chairman of Trialogics, a clinical trial informatics business, Chairman of Scientific Industries (SCND-OTCQB), a producer of laboratory instruments for the life sciences industry and Chairman of Cormetech, a manufacturer of environmental catalysts. John was CEO of Acorn Energy from 2006 to 2015, during which time the CoaLogix business was acquired for US$11 million and sold for US$101 million, and the Comverge business listed in the US before its sale to Constellation Energy. In 2002 he was a Partner and CEO of Edson Moore Healthcare Ventures and acquired for US$148 million a portfolio of sixteen drug delivery investments from Elan Pharmaceuticals. He is a graduate of Rutgers University, US. Interest in shares and options 358,423 shares and 3,600,000 unlisted options Special responsibilities Chair of the Board. Member of Audit & Risk Committee Member of Remuneration & Nomination Committee Directorship held in other listed entities (last 3 years) N/A
NYRADA INC (ASX:NYR) 14 Christopher Cox Non-Executive Director, joined the Board in November 2019 Christopher Cox is a Co-Founder and has been a Managing Partner of Population Health Partners since April 2020. Additionally, Chris is a retired Partner of Cadwalader, Wickersham& Taft LLP (New York) a position he held from January 2012. He remains a Senior Attorney of the firm. Previously the Chairman of Cadwalader’s Corporate Department and a member of its Management Committee, Chris advised clients on a wide array of corporate and financial matters, including mergers and acquisitions and restructurings, spin-offs, joint ventures, IP monetisation’s and other complex financing transactions. From February 2016 to March 2019, Chris was seconded to The Medicines Company, a global biopharmaceutical company, where he served as Executive Vice President and Chief Corporate Development Officer and was responsible for business development and strategy. Before January 2012, Chris was a partner at Cahill Gordon & Reindel LLP in New York. Chris also serves as the Chief Executive Officer of Symphony Capital Holdings, LLC, a private investment holding company with interests in biotechnology, network security and entertainment. Interest in shares and options 1,425,000 shares and 1,800,000 unlisted options Special responsibilities Chair of Remuneration & Nomination Committee Directorship held in other listed entities (last 3 years) N/A Marcus Frampton Non-Executive Director, joined the Board in June 2019 Marcus Frampton currently serves as the Chief Investment Officer of the Alaska Permanent Fund Corporation (APFC), the US$77 billion sovereign wealth fund for the State of Alaska. Marcus manages the investment team at APFC and leads all investment decisions related to APFC’s investment portfolio within the guidelines established by APFC’s Board of Trustees. Before joining the APFC in 2012, Marcus held positions ranging from Investment Banking Analyst & Associate at Lehman Brothers (2002-2005), to private equity investing at PCG Capital Partners (2005-2010), and acted as an executive of a private equity-backed portfolio company at LPL Financial (2010-2012). In addition to his duties at the APFC, Marcus is also a shareholder and sits on the board of directors of Scientific Industries, Inc., a leading manufacturer of laboratory equipment and the owner of intellectual property related to bioprocessing systems. Marcus graduated from UCLA with a Bachelor’s degree in BusinessEconomics and a Minor in Accounting. Interest in shares and options 245,075 shares and 1,800,000 unlisted options Special responsibilities Chair of Audit & Risk Committee Directorship held in other listed entities (last 3 years) N/A
ANNUAL REPORT FY23 15 Rüdiger Weseloh Ph.D. Non-Executive Director, joined the Board in June 2019 Rüdiger Weseloh is an Executive Director of Business Development at EMD Serono, Inc, Rockland, MA, USA., where over a period of 17 years he has led more than 80 transactions for the health care division of its parent company Merck KGaA, Darmstadt, Germany. Completed deals across the drug development value chain were in the fields of Oncology, Rheumatology, Neurodegenerative diseases, and Fertility. Before joining Merck KGaA, Rüdiger spent 5 years as a Biotech/Pharma Equity Analyst, at Gontard & Metallbank AG, Frankfurt, and Sal. Oppenheim, Cologne/Frankfurt, as well as 3 years as a Postdoc at the Max-PlanckInstitute for Experimental Medicine in Goettingen. He has a university diploma in Biochemistry from the University of Hannover and a PhD in Molecular Neurobiology, obtained at the Center for Molecular Neurobiology in Hamburg. Rüdiger also served 5 years on the Supervisory Board of Cytotools AG, Freiburg, Germany. Interest in shares and options 100,000 shares and 1,800,000 unlisted options Special responsibilities N/A Directorship held in other listed entities (last 3 years) N/A Ian Dixon Ph.D. Non-Executive Director, joined the Board in September 2020. Dr Dixon has a PhD in biomedical engineering from Monash University, an MBA from Swinburne University and professional engineering qualifications. He is also a co-inventor of Nyrada’s patented drug NYX-330 to treat hypercholesterolemia and atherosclerosis. Dr Dixon brings to the Board an extensive technical and entrepreneurial background in founding, building and running technology-based companies, in recognising the potential commercial value of early-stage drug development, and in understanding the challenges involved in drug development. In 2011, Dr Dixon co-founded Cynata Inc, now a subsidiary of ASX-listed Cynata Therapeutics Ltd (ASX-CYP), a company progressing the commercialisation what has become the Cymerus stem cell therapy to treat various medical conditions including osteoarthritis, ARDS and critical limb ischemia. Also a founder director of genetic medicines company Exopharm Ltd (ASX-EX1) in 2013 and during the last three years Dr Dixon has served as a director of the following listed companies: Medigard Ltd (ASX-MGZ); Noxopharm Ltd:(ASX-NOX). Interest in shares and options 10,114,033 shares, 5,999,400 Performance Shares and 1,800,000 unlisted options Special responsibilities Member of Audit & Risk Committee Member of Remuneration & Nomination Committee Directorship held in other listed entities (last 3 years) Exopharm Limited (ASX:EX1) – current Medigard Limited (ASX:MGZ) – resigned on 16 April 2021 Noxopharm Limited (ASX:NOX) – resigned on 31 August 2020
NYRADA INC (ASX:NYR) 16 Peter Marks Non-Executive Director, joined the Board in August 2017, resigned 1 August 2022 Company Secretary - David Franks David is a Chartered Accountant, Fellow of the Financial Services Institute of Australia, Fellow of the Governance Institute of Australia, Justice of the Peace, Registered Tax Agent and holds a Bachelor of Economics (Finance and Accounting) from Macquarie University. With over 25 years in finance and governance (including company secretarial and corporate finance), David has been CFO, company secretary and director for numerous ASX listed and unlisted public and private companies, in a range of industries covering energy retailing, software as a service, transport, financial services, oil and gas / mineral exploration, technology, automotive, software development, wholesale distributions, retail, biotechnology and healthcare. He has acted in these capacities for Top 200 to small-cap companies listed on ASX, including for companies with OTC listings. David is also the Company Secretary of Noxopharm Limited. David was also a Non-Executive Director of Jcurve Solutions Limited (ASX:JCS) from 2014 to 2021 and a Director, Principal and shareholder of Automic Group Pty Ltd, a service provider to the Company. Principal activities Nyrada is a preclinical stage, drug discovery and development company, specialising in novel small molecule drugs to treat cardiovascular and neurological diseases. The Company’s two lead programs are focused on cholesterol-lowering and brain injury, each targetingmarket sectors of significant size and unmet clinical need. These programs are developing an oral, small molecule cholesterol-lowering drug, and a drug to reduce secondary brain damage following a stroke or traumatic brain injury (TBI). Nyrada is a Company incorporated in the state of Delaware, US and is listed on the Australian Securities Exchange (ASX: NYR). Significant changes in the state of affairs There were no significant changes in the state of affairs of the Consolidated Entity during the financial year. Gisela Mautner Non-executive Director, joined the Board 1 August 2022 Gisela is an international business leader with significant experience developing and launching new pharmaceutical products and delivering successful corporate strategies in highly competitive global markets. She is currently the CEO and Managing Director of Noxopharm Ltd (ASX:NOX). Gisela has held senior positions with Amgen, Bayer, Siemens Medical Solutions and Merck/MSD generating successful commercial and scientific outcomes. She is currently the Past-President of the Medical Affairs Professionals Association of Australasia (MAPA), a Fellow of the Australasian College of Physician Executives and a Member of the Australian Institute of Company Directors and the CEO Institute. She is also a Non-executive Director of a not-forprofit organisation. Gisela holds an MD from the Technical University of Munich, a PhD from the Ludwig Maximilian University, an MPH from Harvard University and an MBA from Northwestern University Chicago. Interest in shares and options N/A Special responsibilities N/A Directorship held in other listed entities (last 3 years) Noxopharm Limited (ASX:NOX) - current
ANNUAL REPORT FY23 17 Financial results The loss for the Consolidated Entity after providing for income tax amounted to $7,781,692 (30 June 2022: $3,959,661). The year ended 30 June 2023 operating results included the following: • Research and Development Tax Incentive refund of $1,309,407 relating to the accrued FY2023 refund (2022: $1,048,333 relating to the accrued FY2022 refund). • Research and development costs of $6,411,264 (FY2022: $1,835,072); • Corporate and administration expenses of $641,117 (FY2022: $699,653); • Share based payment expense of $541,214 (FY2022: $966,951); • Professional services expense of $409,523 (FY2022: $338,841); and • Employee benefits expense of $1,100,136 (FY2022: $1,000,030) The cash position as at 30 June 2023 was $3,708,761 (30 June 2022: $10,816,039). Review of operations During the financial year concluded 30 June 2023, Nyrada continued to advance its two lead drug development programs: • Cholesterol Lowering Program - an oral PCSK9 inhibitor drug for the management of high blood LDL-cholesterol levels in patients at risk of cardiovascular disease, where statin drugs are poorly tolerated or ineffective; and • Brain Injury Program - a TRPC channel blocking neuroprotectant drug to reduce the impact of secondary brain injury in patients following a stroke or traumatic brain injury, a sudden and external shock which can disrupt the normal functioning of the brain. Cholesterol Lowering Program Preclinical Studies During the 2023 financial year, Nyrada undertook Good Laboratory Practice (GLP) safety and toxicology studies of its cholesterol lowering PCSK9 inhibitor drug NYX-1492 (PCSK9i). These studies are required by regulators to assess the safety and tolerability of drug candidate prior to commencing in-human clinical trials. In late June 2023, however, the Company received news of an adverse signal in one of the 11 mandatory GLP safety and toxicology studies. The finding occurred in a small number of animals which were otherwise healthy and were only detected following microscopic analysis. Following consultation with the Contract Research Organisation (CRO) that performed the GLP studies, and a subsequent review by the Company’s Scientific Advisory Board (SAB), it was concluded that NYX-1492 will not be advanced into clinical development for cholesterol management. Nyrada has maintained its commitment to developing an oral small molecule PCSK9 inhibitor drug, developing a plan to assess alternative candidates that are structurally differentiated from NYX-1492. As part of this process, alternative candidates will be screened with a view to preclude the identified toxicity issue. No costs for the now deferred Phase I/IIa clinical trial were incurred. Brain Injury Program Preclinical Studies During the 2023 financial year, GLP studies on NYR-BI02 were undertaken. These studies showed that NYR-BI02 was a potent blocker of canonical transient receptor potential (TRPC) ion channels, limiting excitotoxicity and secondary brain damage following a traumatic brain injury (TBI) or stroke. However, NYR-BI02 demonstrated a sub-optimal safety profile for continuous dosing in patients with these conditions. Following review, NYR-BI03, a closely related analogue of NYR-BI02, was identified as having a superior safety profile for continuous intravenous dosing. This, coupled with superior potency on TRPC ion channel target, led to NYR-BI03’s selection as Nyrada’s new lead brain injury drug candidate. NYR-BI03 will also be the agent used for preclinical efficacy testing in the Walter Reed Army Institute of Research (WRAIR) TBI model, and separately in a CRO strokemodel. The strokemodel will be used to study the efficacy of NYR-BI03 in blocking three key channels (TRPC 3,6,7).
NYRADA INC (ASX:NYR) 18 Subsequent to the close of the 2023 financial year, sufficient supply of the NYR-BI03 molecule was received to permit the commencement of GLP safety and toxicology studies. These studies are currently being undertaken. Subject to the successful conclusion of these GLP studies, Nyrada expects to commence a Phase I clinical study. TBI Efficacy Study and Stroke Model Study NYR-BI03 will also replace NYR-BI02 as the compound for preclinical efficacy testing in the WRAIR TBI model, and separately in a CRO stroke model. This work is expected to be conducted in the second half of this calendar year. Published Research Study Subsequent to the conclusion of the 2023 financial year, a research study led by Nyrada’s neuroscientist Dr. Jasneet Parmar was published in the journal Translational Stroke Research. This study assessed the impact of TRPC ion channel involvement in secondary brain injury. TRPC ion channel inhibition is the target of Nyrada’s brain injury program. Coauthored with SAB Chair and UNSW Scientia Professor Gary Housley, the study validated the pathophysiological role of TRPC ion channels in brain injury progression, showing that animals lacking the target TRPC ion channels were protected against expansion of a photothrombotic-induced stroke infarct in the days following injury. Dr. Parmar also presented on Nyrada’s brain injury program at the US Military Health System Research Symposium in midAugust 2023. Corporate Operations Nyrada continued to maintain lean corporate operations, prioritising capital allocation towards research and development (R&D). For the full 2023 financial year, in excess of 70% of net operating cash flow outflows were devoted for this purpose. Following the end of the 2023 financial year, the Company announced a review of operating costs and financial plans. As part of the review, the Nyrada Board of Directors voluntarily agreed to halve their director fees until further notice reducing the Company’s annualised operating outflows by approximately $0.3 million. Some other minor efficiencies have been achieved with an ongoing watch for further cost-reduction opportunities. At the conclusion of the September quarter, Professors David Burke and Gilles Lambert will retire from the Nyrada SAB. They remain available to consult to the Company should there be a future need. Board Changes In August 2022, Dr. Gisela Mautner was appointed to the Board as a non-executive director. Dr. Mautner is a medical doctor and brings over 20 years pharmaceutical industry experience encompassing all aspects of drug development, from clinical research through to product commercialisation. She is a seasoned senior leader, having held positions at MSD (Merck), Bayer and Amgen, where she successfully launched several new drugs in different therapeutic areas, including in cardiovascular diseases. In addition, Peter Marks retired from his role as a non-executive director on the Board to pursue a range of other interests, having supported Nyrada through its IPO and key first years as a listed company. Financial Position 2023 $ 2022 $ Cash and cash equivalents 3,708,761 10,816,039 Net assets / total equity 4,258,438 11,498,916 Contributed equity 25,320,332 25,320,332 Accumulated losses (27,216,732) (19,515,280) The Directors believe the Consolidated Entity is in a strong and stable financial position to expand its current operations.
ANNUAL REPORT FY23 19 Liquidity and capital resources Nyrada ended the financial year with cash of $3,708,761 and anticipates receiving an Research and Development tax incentive refund of $1,309,407 for FY2023 following 30 June 2023, thus further boosting capital resources. Matters subsequent to the end of the financial year No matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial years. Future developments, prospects, and business strategies Disclosure of information regarding likely developments in the operations of the Company in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Company. Information on future developments, prospects, and business strategies have only been referred to in the Chair’s Letter and CEO Report. For further information on the Company’s business strategies andmaterial risks, refer also to the Prospectus which is available on the Company website or ASX Announcements. Environmental regulation The Consolidated Entity is not subject to any significant environmental regulation under Australian Commonwealth or State law. Directors’ shareholdings In this section, reference is made to Share ownership. The instruments registered for trade on the Australian Securities Exchange are CHESS Depositary Interests (CDIs). One CDI is equivalent to one Share, being Class A Common Stock. The following table sets out each director’s relevant interest in shares, debentures, and rights or options in shares or Directors of the Company or a related body corporate as at the date of this report: Options Granted There were no options granted during the financial year. Share Number Options Number Performance Shares John Moore 358,423 3,600,000 - Rüdiger Weseloh 100,000 1,800,000 - Marcus Frampton 245,075 1,800,000 - Christopher Cox 1,425,000 1,800,000 - Ian Dixon 10,114,033 1,800,000 5,999,400 Gisela Mautner - - -
NYRADA INC (ASX:NYR) 20 Unissued Common Stock Details of unissued Common Stock, interests under option, and performance shares as at the date of this report are as follows: 1 Performance shares convert when specified milestones are achieved, these milestones are outlined in note 9 of the financial statements. 2 The exercise price is the higher of • 100% of the Fair Market Value (as defined in the Company’s Stock Incentive Plan) of the Shares on the date that Option is granted; and • an amount equal to 110% of the volume-weighted average price of the CDIs for the period of 10 trading days immediately prior to the date on which that Option vests. 3 The exercise price is the higher of • 100% of the Fair Market Value (as defined in the Company’s Stock Incentive Plan) of the Shares on the date that Option is granted; and • an amount equal to 120% of the volume-weighted average price of the CDIs for the period of 10 trading days immediately prior to the date on which that Option vests. The holders of these options and performance shares do not have the right to participate in any share issue or interest issue of the Company or of any other body corporate or registered scheme. Dividends There were no dividends paid, recommended, or declared during the current or previous financial year. Type of Security Number Exercise price Expiry date Performance shares 18,000,000 N/A1 25/11/2024 Unlisted options 8,000,000 0.20 30/06/2024 Unlisted options 4,000,000 0.22 16/01/2025 Unlisted options 4,000,000 TBC2 5 years from the vesting date Unlisted options 5,000,000 TBC2 5 years from the vesting date Unlisted options 5,000,000 TBC2 5 years from the vesting date Unlisted options 3,600,000 0.24 25/11/2023 Unlisted options 3,600,000 TBC3 25/11/2024 Unlisted options 3,600,000 TBC3 25/11/2025 Unlisted options 900,000 TBC3 3 years from the vesting date Unlisted options 4,000,000 0.40 29/06/2026 Unlisted options 2,000,000 0.60 29/06/2026 Unlisted options 2,000,000 0.90 29/06/2026 Unlisted options 1,200,000 TBC3 3 years from the vesting date Unlisted options 600,000 TBC3 18/01/2024 Unlisted options 600,000 TBC3 18/01/2025 Unlisted options 600,000 TBC3 18/01/2026
ANNUAL REPORT FY23 21 Indemnity and insurance of officers As permitted under Delaware law, Nyrada indemnifies its Directors and certain officers and is permitted to indemnify employees for certain events or occurrences that happen by reason of their relationship with, or position held at, Nyrada. The Company’s Certificate of Incorporation and Bylaws provide for the indemnification of its Directors, officers, employees and other agents to the maximum extent permitted by the Delaware General Corporation Law. Nyrada has entered into indemnification agreements with its Directors and certain officers to this effect, including the advancement of expenses incurred in legal proceedings to which the Director or officer was, or is threatened to be made, a party by reason of the fact that such Director or officer is or was a Director, officer, employee or agent of Nyrada, provided that such a Director or officer acted in good faith and in a manner that the Director or officer reasonably believed to be in, or not opposed to, the Company’s best interests. At present, there is no pending litigation or proceedings involving a Director or officer for which indemnification is sought, nor is the Company aware of any threatened litigation that may result in claims for indemnification. Nyrada maintains insurance policies that indemnify the Company’s Directors and officers against various liabilities that might be incurred by any Director or officer in his or her capacity as such. The premium paid has not been disclosed as it is subject to confidentiality provisions under the insurance policy. Indemnity and insurance of auditor The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity. Meetings of Directors The following table sets out the number of directors’ meetings (including meetings of committees of Directors) held during the financial year and the number of meetings attended by each director (while they were a Director or committee member). Proceedings on behalf of the Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. Board of Directors Audit & Risk Committee Remuneration & Nomination Committee Attended Held Attended Held Attended Held John Moore 7 7 2 2 1 1 Rüdiger Weseloh 7 7 - - - - Marcus Frampton 7 7 2 2 - - Christopher Cox 2 7 - - - 1 Ian Dixon 7 7 2 2 1 1 Gisela Mautner 7 7 - - - -
NYRADA INC (ASX:NYR) 22 Non-audit services There were no non-audit services provided during the financial year by the auditor. In the event non-audit services are provided by the auditor, the Board has established procedures to ensure the provision of non-audit services is compatible with the general standard of independence for auditors. These include: • all non-audit services are reviewed and approved to ensure they do not impact the integrity and objectivity of the auditor; and • non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110 ‘Code of Ethics for Professional Accountants (including Independence Standards)’ issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing economic risks and rewards. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors' report. Presentation Currency The functional and presentation currency of the Company is Australian Dollars (AUD). The financial report is presented in AUD Dollars with all references to dollars, cents, or $’s in these financial statements presented in AUD currency, unless otherwise stated. Jurisdiction of Incorporation Nyrada is a company incorporated in the State of Delaware in the United States and registered in Australia as a foreign company. As a foreign company registered in Australia, Nyrada is subject to different reporting and regulatory regimes than Australian public companies. Corporate Governance Statement The Company's corporate governance statement is located at the Company's website: https://www.nyrada.com/site/About-Us/corporate-governance Business Risks (a) Uncertainty of clinical development There are numerous regulatory requirements to address before a drug candidate can progress into human studies, including review by a Human Research Ethics Committees (HREC). Further, there is no certainty that any of the drug candidates will receive that permission. The Group’s ability to commercialise its intellectual property is reliant on clinical data. Drug development is a highly risky business with a high failure rate. Only ~10% of drugs that enter Phase 1 achieve marketing approval by the US Food and Drug Administration (FDA). There are numerous reasons for this, mainly relating to low therapeutic benefit and unacceptable toxicity, with the drug’s preclinical data failing to predict those adverse outcomes. While the Group will conduct its clinical programs and eventual drug submissions on the advice of consultants experienced in clinical trial design and regulatory affairs, there is no certainty that the trial design will provide appropriate data or that the data will meet the regulator’s benchmark. This may require the Group to conduct further clinical studies, resulting in significant additional cost and delay. Once a drug enters the clinic, the final drug development path typically takes 8-10 years, depending on the indication and regulatory pathway. Any such clinical study would most likely be in a small number of human volunteers and be a pharmacokinetic/acute safety study using very low dosages of drug. The risk associated with a first-in-human study lies in the drug having an inappropriate pharmacokinetic profile such as being extensively metabolised and therefore inactivated or being eliminated from the body too quickly to provide a therapeutic benefit. Beyond conducting preclinical animal studies, there is no reliable way of predicting such adverse outcomes prior to testing in humans.
ANNUAL REPORT FY23 23 (b) Commercialisation The Group’s current business strategy is early-stage drug development, which may include a trade sale or license of its drug candidates to a third party with greater resources and expertise to undertake late-stage drug development, regulatory approvals, and sales and marketing. There is no certainty that any of the drug candidate will be of interest to such a third party or, if a drug candidate is of interest to such a third party, that terms can be negotiated that are commercially acceptable to the Group or will adequately realise the value of the drug candidate. (c) Additional capital requirements R&D activities require a high level of funding over a protracted period of time. However, additional development costs may arise during this period and the Company may require additional funding to meet its stated objectives or may decide to accelerate or diversify its activities within the same area The Company’s requirement for additional capital may be substantial and will depend on many factors, some of which are beyond the Company’s control, including: (1) slower than anticipated research progress; (2) the requirement to undertake additional research; (3) competing technological and market developments; (4) the cost of protecting the Company’s intellectual property. The Company will constantly evaluate data arising from its R&D activities that may indicate new uses for its products and allow the Company to file patents, thereby providing potential new development and partnering opportunities. Accordingly, the Company may alter its funding strategies to take advantage of such new opportunities if and when they present themselves. There is no assurance that the funding required by the Company from time to time to meet its business requirements and objectives will be available to it, on favourable terms or at all. To the extent available, any additional equity financing may dilute the holdings of existing shareholders and any debt financing may involve restrictions on the Company’s financing and operating activities. If the Company is unsuccessful in obtaining funds when required, it may be necessary for it to reduce the scope of its operations. (d) Intellectual property rights Obtaining, securing and maintaining the Group’s intellectual property rights is an integral part of securing potential value arising from conduct of the Group’s business. If patents are not granted, or if granted only for limited claims, the Group’s intellectual property may not be adequately protected and may be able to be copied or reproduced by third parties. The Group may not be able to achieve its objectives, to commercialise its products or to generate revenue or other returns. The Group has been granted patents in the US and Europe in relation to its Cholesterol Lowering Program and also has a provisional patent application under examination. The Company’s brain injury drug candidate will be the subject of a provisional patent application in due course. The patent position of biotechnology and pharmaceutical companies can be highly uncertain and frequently involves complex legal and factual questions. Accordingly, there can be no guarantee that the provisional patent applications will be successful and lead to granted patents or all of the claims in any application will be granted. Furthermore, should such applications be granted, there is no guarantee competitors will not develop technology to avoid those patents, or that third parties will not seek to claim an interest in the intellectual property with a view to seeking a commercial benefit from the Group. The Group has engaged patent attorneys to advise on its intellectual property strategy as it seeks to broaden the Group’s patent protection to enable it to guard its exclusivity, maintain an advantage over competitors and provide it with a basis for enforcement in the event of infringement, but there is no guarantee that this intellectual property strategy will be successful. There also can be no assurance employees, consultants or third parties will not breach their confidentiality obligations or not infringe or misappropriate the Group’s intellectual property. The Group seeks to mitigate the risk of unauthorised use of its intellectual property by limiting disclosure of sensitive material to particular employees, consultants and others on a need to know basis. Where appropriate, parties having potential access to such sensitive material will be required to provide written commitments to confidentiality and ownership of intellectual property.
NYRADA INC (ASX:NYR) 24 (e) Third party intellectual property infringement claims The Group’s success depends, in part, on its ability to enforce and defend its intellectual property against third party challengers. The Group believes that the manner in which it proposes to conduct activities will minimise the risk of infringement upon another party’s patent rights. However, there can be no assurance that another party will not seek to claim a Group Company is infringing upon their rights. While the Group relies on the advice of its patent attorneys that its patent applications do not infringe third party patents, the Company is unable to state with certainty that another party will not claim its rights are infringed or, if litigation claiming that a Group Company is infringing the intellectual property rights of a third party is launched, what the result of any such litigation will be. While the Group is pursuing clinical development and commercialisation strategies that it believes will minimise the risk of patent infringement, there can be no certainty that there will not be action taken against a Group Company, although each Group Company is prepared to defend its position in a forthright manner if required. Further, there can be no guarantee that competitors will not seek to claim an interest in the intellectual property with a view to seeking a commercial benefit from the Group. If a third-party claims that a Group Company is infringing its intellectual property rights or commences litigation against that Group Company for infringement of patent or other intellectual property rights, the Group may incur significant costs defending such action, whether or not it ultimately prevails. Patent litigation in the pharmaceutical and biotechnology industry is typically expensive and any defence against any such action necessarily will divert the time of the Company’s Directors and other key personnel. This may, in turn, have a materially adverse effect on both the financial performance and future prospects of the Group. In addition, parties making claims against a Group Company may obtain injunctive or other relief to prevent that Group Company from further developing or commercialising its products. In the event that a successful claim of infringement is made out against a Group Company, it may be required to pay damages and obtain one or more licences from the prevailing third party. If it is not able to obtain these licences at a reasonable cost, if at all, it may suffer the loss of the prospective drug asset, which in turn may lead a Group Company to encounter delays and lose substantial resources while seeking to develop alternative product. (f) Risk of delay The Group may experience delays in achieving a number of critical milestones in the development of its drug candidates due to unforeseen delays in contracted works, non-performance or loss of contractors or delay in obtaining regulatory approvals from hospital ethics committees or government agencies for the conduct of preclinical and clinical studies. Any material delays may impact adversely upon the Group, including increasing anticipated costs. The Group also is dependent on its ability to secure sites and patients for the conduct of its clinical trial program. If the Group is unable to engage clinical trial site providers on commercially acceptable terms, or difficulties arise in procuring patients to fill the clinical trials, progress of the Group’s clinical program will be delayed. Required statements • Nyrada is not subject to chapters 6, 6A, and 6C of the Corporations Act 2001 dealing with the acquisition of its shares (including substantial holdings and takeovers). • The Company’s securities are not quoted on any exchange other than the ASX. • From the time of the Company’s admission to the ASX until 30 June 2023, the Company has used the cash and assets in a form readily convertible to cash, that it had at the time of admission, in a way that is consistent with its business objectives at that time. • Under the Delaware General Corporation Law, shares are generally freely transferable subject to restrictions imposed by US federal or state securities laws, by the Company’s certificate of incorporation or bylaws, or by an agreement signed with the holders of the shares at issue. The Company’s amended and restated Certificate of Incorporation and by-laws do not impose any specific restrictions on transfer. The Company’s CDIs were issued in reliance on the exemption from registration contained in Regulation S of the US Securities Act of 1933 (Securities Act) for offers that are made outside the US. Accordingly, the CDIs have not been, and will not be, registered under the Securities Act or the laws of any state or other jurisdiction in the US. • As a result of relying on the Regulation S exemption, the CDIs are ‘restricted securities’ under Rule 144 of the Securities Act. This means that you are unable to sell the CDIs into the US, or to a US person for the foreseeable future except in very limited circumstances after the expiration of a restricted period, unless the re-sale of the CDIs is registered under the Securities Act or an exemption is available. To enforce the above transfer restrictions, all CDIs issued bear a ‘FOR US’ designation on the ASX. This designation restricts any CDIs from being sold on the ASX to US persons. However, you are still able to freely transfer your CDIs on the ASX to any person other than a US person. In addition, hedging transactions with regard to the CDIs may only be conducted in accordance with the Securities Act.