Hello, everyone. Thank you for joining CLINUVEL's Investor webinar today. I am Stella Mariss of Monsoon Communications. In today's webinar, CLINUVEL will share their half year results and operational highlights for the 6 months ended on 31st December 2024. Many have asked questions as you registered for the webinar, which may still be tabled during the session through the Q&A function. I will now hand over to Malcolm Bull, Head of Investor Relations, and Australian Operations to conduct the proceedings.

Thank you, Stella, and we do appreciate Monsoon Communications ongoing assistance in these presentations and welcome to the over 200 participants to the webinar. Joining me today is Peter Vaughan, Chief Financial Controller; and Lachlan Hay, our Chief Operations Officer. Before we discuss financial results and operational highlights, as Stella said, for the half year 31 December 2024, just a few formalities. First, our forward-looking statement. I don't expect you to read all this, but many of you will be familiar with this type of statement, and that is -- there is a number of risks that can materialize that can impact upon the plans of the company. And you should take those into account in your ongoing assessment of CLINUVEL. Second, all references to dollars are Australian dollars, the reporting currency of the company. And third, when comparisons are made in terms of change, they are to the corresponding period of the prior year of 2023. Now we posted a great set of numbers today, but I'm not going to steal the thunder of the Chief Financial Officer, and I'll invite Peter to overview the key achievements.

Thanks, Malcolm. Look, again, we've posted another fantastic result for this half year, strong underlying profit figures. And if we look at the numbers more closely, our sales grew by 10.5% to $36 million. Our total revenues grew by 21% to $43 million. We had expenses growth that was well contained to a modest 2% increase. Our profit before tax rose by 48% to just under $22 million, and our profit after tax increased by almost 30% to $14 million. We saw a 27% rise in earnings per share from $0.22 for the corresponding period to $0.28 per share for the current period. Our balance sheet strengthened with a 7% increase in net assets since June last year, and our cash reserves rose by 8% to $198 million.

Thanks, Peter. That's a beautiful set of numbers, but I'm going to get you to talk in a bit more detail on the components of revenues growth. Some of those trends in expenses. And then thirdly, the overall trend or long-term trend in profit, and I'll put up our favor slide right now to reference compensation.

Thanks, Malcolm. Our revenues are segregated by both commercial and special access scheme revenues, which, as I mentioned before, collectively grew by 10.5%. This is the direct result of more patients being treated and a more frequent dosing of patients across the U.S. and Europe. Our interest income was up by 26%. The direct result of a larger amount of funds held on term deposit together with higher interest rates being yielded through the last period. Expenses, as foreshadowed in August last year, after our full year results, there's been an increase in some expenditure areas linked directly to the expansion and reinvestment in our business. And those specifically are the personnel expenses, which are up by 34%, clinical and nonclinical expenses up 22% and our commercial distribution expenditure up 25%, which is a direct result of the larger sales figures. Total expenses were offset by reductions in the areas of materials and noncash expenditure such as share-based payments and depreciation. Our expenses show where we're focusing our efforts at CLINUVEL. We're expanding our team and getting operations in place to deliver vitiligo. We're anticipating expenses will continue to grow as we execute on our full vitiligo program, but we're cautious to maintain cost controls throughout that process. In 2021, some of you may recall that we released a 5-year $175 million expenses forecast. This was to take us through to the period of 30 June 2025. To date, at the end of December, we spent $146 million with a further $29 million to spend through to the end of June. We're confident we're on track to deliver this forecasted number. When we look at the combined revenue and expenses, they resulted in a 48% rise in the underlying earnings to the half year being our largest half year profit to date of $22 million. We continued to trend our profitability since our commercial operations commenced some years ago.

Right. So those scissors of revenue and expenses are all working in our favor. What have been some of the trends now turning to the balance sheet, Peter?

So Malcolm, our balance sheet continues to strengthen. We saw a 2% rise in total assets and almost an 8% rise in our cash reserves to $198 million. We saw a 7% rise in net assets and we continue for the 20th consecutive year to remain debt-free. We're really proud of building our cash reserves from our profits whilst delivering on our expenditure goals. Our reserves have enabled us to fund activities from profits rather than go via dilutionary methods such as capital raises or external debt funding, which is usually the case of a typical life sciences company. But that's just not us. That's not CLINUVEL. Our results alone tell you we're not a typical life sciences company. We do things a little different. Our diligent management of our expenditure, and because of this, we're able to invest in our clinical programs with a continuous year-on-year growth in profits. Ultimately, this is creating long-term sustainable value for our shareholders.

Good. Let's turn to some operational highlights and bring you in, Lachlan and give us your highlights for the operating or the reporting period just passed.

Well, Malcolm. Firstly, congratulations to Peter. Congratulations to the team. It's an excellent result today. I am mindful that this isn't an operations update, and we give a really good overview of the operations across the business for the period in the 4 day itself. But maybe there are 2 components that I highlight. The first is increase in revenues. I prefer not to use the term sales because we don't maintain a sales force really, we operate very differently in terms of our direct distribution model. This is not classical pharmaceuticals, but we found a model that really works. And it's a model that drives revenue through a network of prescribers that we've built over time. We've established mutual respect. We've established trust. What I would say is that engaging a physician, particularly one, who has a clinical academic interest in treating rare diseases, having that physician develop a new medical habit, introducing a standard of care and a new standard of care for their patients, that's a really long-term task. You need to be able to demonstrate that your drug is safe and effective. But you also need to demonstrate that the patients themselves are willing to receive treatment. They're willing to continue treatment. And also you have the processes in place to establish reimbursement is particularly important in the U.S. where prior authorization can be a real burden. And so you need to be able to support the physician, you need to be able to support their clinic. This isn't infrastructure that you build overnight. It's also infrastructure that isn't easily replicated. So there's clear momentum behind what we've been doing. That's reflected in the revenues. It's expanding. Is it expanding fast enough? Yes, but there's more to be expected from us. Now interestingly, from the clinical program, the dermatologists who are administering the drug in trials are seeing visible repigmentation. You're provoking a curiosity where we're now seeing those clinics who are involved in the clinical program also becoming involved in the commercial program. So really building the wider treatment network, specialty center network that we talked about. This is pretty common to CLINUVEL in terms of our history, where those clinics that were involved in evaluating the drug in clinical trials, have also become clinics that are administering the drugs to patients commercially. So I think we're going to expect more of that over the coming years. And certainly, that's going to have a flow on to revenues. On expenses, it's clear that we're expanding direct trial costs. I need to remind all on the line that we operate with an in-house team. And so the R&D expense line is not just -- sorry, the R&D expenses are not just across the clinical and nonclinical development line. But certainly, that is expanding over time. We also need to say where we're not the only company recruiting clinical trials in vitiligo. There's competition for these clinics, there's competitions for these patients, and you need to overcome that, it needs a different approach to classical pharma. And so we need to be smart in how we're deploying our resources. That's the challenge now for Dr. Rodenburger and her team. The good news is that there are efficiency gains now. We do expect those sites that are involved in 107 -- sorry, 105 will be involved in 107. And there are other things that we're learning as we go, so that we can incorporate that back into the program. But the message for me is you will see an increase in clinical and nonclinical development. You will see that line plateau, but you will also see some fluctuations as other projects like variegate porphyria, like ACTH manufacturing and commercialization as they advance to late stages.

Good insights there, Lachlan. And shareholders ask me in the vein of all the operations of the business, what catalysts we can expect over the course of '25, would you like to address that?

Sure. So there's a list that's been published. There it is. Look, I'll spare reading it. What needs to be stated is that the drug development is risky. This isn't a sprint, but it's a marathon with milestones. I think what many are keen to understand is, will those milestones catalyze the share price? Now as a management team, you have no control over this. But as a company, we've set a very clear plan to build intrinsic value over the long term, and that's the intention. If I give this in concrete terms, the Board first took the view that it was worthwhile focusing development on EPP. That's been successful. It hasn't been replicated. And so next is vitiligo, a visible disorder where the result of treatment is clear. It works or it doesn't work, it repigments or a doesn't repigment. So for a drug that is the only product which has been shown to activate the pigmentary process, this is a natural home for afamelanotide. Question then is, if this is the natural home is our commercial model, what we've established in EPP viable in vitiligo as well. I think there's a few criteria that one can consider here. Do you have the medical community support? I think that's building, but it takes time. Is there regulatory and payer support? Certainly. And certainly, more so now than when we first considered the program, there's a recognized need to treat vitiligo from regulators from payers. But also there's a comfort that we've developed over time amongst those groups with the use of a systemic melanocortin. And lastly and importantly, is there patient support? We think so. We believe so the feedback that we have is positive, but patients will generally trust their physician. So what is clear here is that if a physician sees a drug working in a clinical trial, if they see that product helping their patients, then they are most likely to become a future prescriber. Our task is thus to put vitiligo the forefront and engage with those communities. And that's really what we reflect in the catalysts, but also the other activities that are taking place in and around the business at the moment. And I started out talking about risks, and this whole program is not without risks. You're competing with immunosuppressants, there are other things we can talk about. But the visible effect of the drug is clear, and certainly, we see that it works. Perhaps the other comment that I have is on the EPP program, where we've met resistance in the past. This is a company that knows resistance that understands how to overcome resistance. And there has been an ongoing dialogue with the regulators in order to allow afamelanotide to be approved for adolescent patients. The paradox here is that you already have some prescribers who are facilitating treatment access, but even more so that the regulatory agencies, those same agencies that you're engaged in dialogue have allowed a clinical trial in CUV105, a protocol that enables administration of the drug to patients from the ages of 12 and up. So -- there's -- I think the agencies need time to get used to the idea of safety and adolescents, but we have more than 20 adolescent EPP patients who have now been treated and we're working behind the scenes to get an approval here. The same is true of the European variation to harmonize the label, to recommend -- to remove the recommended maximum dose. And so these things are moving. What I would say is that we have strong data that support the adolescent label change, that support the harmonization of label. So I'm optimistic that logic will prevail here.

Thanks, Lachlan. And I can say, too, that these results we've achieved our positive outlook, the resilience we have displayed in our persistence, this permeates our CLINUVEL personnel, and they have the equanimity to rise to the challenges ahead, and I hope all participants to the webinar and those that view it later, feel that. It's a highly motivated company.

We can now turn to some questions that have come in from shareholders and analysts, but I'll start first with a question for you, Peter, on the financials. And it's really one as to how you characterize our revenue growth. And what can we expect in future periods?

Of course. Thanks, Malcolm. Our revenues from SCENESSE sales still continue to briskly grow with yet another double-digit growth of revenue. There's diligence of our team working with the stakeholders that support those revenues, and that's whether it be patients, whether it be doctors, whether it be the hospitals and the clinic administrators or the reimbursing insurers. We don't provide any forward guidance on revenue. But I believe there are several factors underpinning this ongoing growth situation. That is an increased number of patients, a high retention of patients, treatment of adolescents, a higher dose frequency in Europe and adding new jurisdictions to our pipeline such as Canada and Latin America, to the point where in North America now, we have 93 sites across North America, and we're still on track for the 120 sites that we envisage will achieve by the end of this year.

Good. I think there's plenty of sources of growth of incremental revenues here. Just on expenses, I think you did go through expenses pretty well, but some have said that the 2% that we contained the growth to was a bit less than they would expect of an expanding business. So can you reiterate some of those trends and what we can expect in the second half of the year and beyond?

Look, as I touched on earlier, we had flagged in August late last year after the end of our full year results that we would have a change in the nature of our expenditures, and this is what we've seen. There's increases in the key areas of personnel, clinical and nonclinical expenditure and the distribution costs, which are the direct result of the increase in revenues, and all these things support the business' expansion. The counter to this, I guess, is also that there's been a contraction in other areas of the expenditure. But overall, we expect our expenses in the future to rise as we invest in the growth initiatives, particularly our significant late-stage vitiligo program.

Sorry, Peter, I cut you off there. But I just wanted to add, you mentioned earlier the expenditure projection from '21 to '25, in terms of where we are at the moment, the intention is to provide an update on the expense plan for the next 12 months. I think it's really not appropriate that we go further than that, even though we do internally. Just because we haven't yet started the 107 trial and there's obviously various ongoing engagements with regulatory authorities. The other comment on that is, of course, you will have a new CEO starting. She or he will have a new vision for the business. And then I think it's appropriate that they share their longer-term view with the markets in '25, '26.

Thanks, Lachlan. That answers the question. Now as you mentioned, Lachlan, it's not an operational update. It's not even a strategic update, but we have some time for some general questions, and I'm going to start with you, Lachlan, on a strategic question and bring you back to November of last year when we refocused the company's strategy. There's some questions that I think would be benefited by you explaining why we did that refocus.

Yes. Well, my first comment is to take a look at that November announcement, but the intent of the company was really to focus our resources on those programs, which were the most immediate, the most probable and likely to come to market and most sizable opportunities certainly with vitiligo. So the intention is to focus on what builds incremental value. As a result of that, the medium to long-term programs, DNA repair, stroke and Parkinson's disease have been suspended. But I think it's fair to say that we've received broad support for this approach in so much as we can move our programs, those priorities forward faster.

Indeed. Support across the board, whether investors be retail or institutional. Further question, Lachlan, is your assessment of the potential of competition in the treatment of EPP?

Yes. Thanks, Malcolm. I've seen this question comes through the chat as well from Australia. We seem to only get this question in Australia. We don't get it abroad. But perhaps there's an expectation elsewhere in the world that the competition really is just part of pharma. There are 2 active companies that have EPP programs. There are other research groups in early stage. But both of the 2 active companies are yet to complete clinical studies and generate data that would satisfy a regulatory agency. We know that because they haven't submitted. It is still questionable whether either company will have the experimental products that they're working with proven safe and effective, whether there is a positive benefit risk profile and ultimately whether they're going to come to market. I do know that one of those companies and what we're learning externally is that what it is to reposition a essentially acting drug that was originally developed for schizophrenia that might impair simple cognitive function like driving. I don't know how innovative this is, but we watch on from -- with interest. We've always said we aren't complacent, but we need to be realists. We need to focus on what's actual. You see from today's revenue results, you see from my comments earlier, the teams are continuing to meet the needs of patients. Some of them have been on treatment for a decade or perhaps even more in terms of some of the European programs. And then ultimately, we're focused on expanding the use of SCENESSE.

Yes. Thanks, Lachlan. So we've received a lot of questions on the vitiligo program. So let's try and encapsulate them into 3 components. First, what can you advise on the recruitment of CUV105? Do we plan to issue more case reports on the compelling visual reports that we put out in January? And thirdly, when would some preliminary results of the study, CUV105 be announced?

Well, first things first, recruitment of 105 is on track, on track to complete by 30th of June 2025. On the case reports, the 4 that we facilitated a release in January are compelling. We, as a company, only see them shortly before they're released to market. For those who haven't seen them, certainly, I would encourage you to go and have a look. One of the more interesting observations and the excitement feedback that we get from the physicians running the study is -- and this is new, is that patients are continuing to see repigmentation after the completion of therapy. So they complete that 20-week window, and then you still see repigmentation. So it suggests there's an ongoing benefit for patients. It's something that we are going to monitor more closely. And I think that is a key learning for us thus far. We know that there are presentations planned at upcoming conferences, including the AAD that starts next week. It really is at the discretion of the presenting physicians, whether they choose to share new case reports, whether the patients consent to the sharing of those reports. But if they do, then certainly, we're going to disclose them. Your third question was preliminary results. It's a 20-week study. There's a follow-up at week 44. The primary endpoint is evaluated at 20 weeks. So if I take the completion of recruitment 20 weeks, time needed for data management analysis, that gives you a good indication of when you're going to see those first readouts.

Okay. I can hear our analysts writing their notes on the time line there. Thanks, Lachlan. So 1 shareholder has commented that we haven't seen the manufacturing update on ACTH. So when will this be provided? And what can you say now is the current status?

Operationally heavy today, Mal, maybe as a courtesy to a CFO delivering stellar results. I'll keep it brief. We have been working on product manufacturing with ACTH and NEURACTHEL, it takes time. We hope to provide an update on the entire NEURACTHEL program in the second half of calendar '25.

Okay. That's succinct. Thank you. Peter, we're back to you and a favorite subject of ours at Board level as well, and that's capital management. For the edification of participants, can you please reiterate our approach to capital management?

Of course. So our approach to capital management has been outlined previously by the Managing Director and the Chairman of the company. But currently, we're in a development cycle. So what we're doing at the moment is positioning the company well to ensure we can fund these ongoing developments as we build the platform to the revenues of tomorrow. We're the envy of most other life science company, we delivered year-on-year profits. We've amassed significant cash reserves, which enable us to self-finance our expansion activities without needing to call on dilutive capital raisings or external debt sources, which is common in the industry. But overall, those -- that capital also protects us and drive shareholder value. The cash reserves of $198 million not only fund the operation and its expansion plans through product and clinical development for new indications but it also adds to items such as dividends, share buybacks, potential acquisitions and provides a buffer to manage any adverse events that may come across us.

Right, right. And I think we feel that the buffer needs to be substantial given the macro and geopolitical environment. But you mentioned share buybacks, and so I'm going to ask a question on that. Some have expressed some disappointment that they don't see us to be very active on the program. Can you reiterate our approach to that and what can be expected for the remaining time of the program?

Of course, Malcolm. So our Board as well has made this quite clear in their position on the share buyback as well as its approach to capital management as part of that. It's prudent that we reserve our right to deploy our cash reserves as and when they're needed and where they're needed. And we look to deploy them in a way that adds the most value to the organization. Specifically, we're focused on our R&D programs and acquisition opportunities currently. The share buyback program does remain active. But there are times where we need to hold off on purchasing because we either possess market-sensitive information or there's information that we're aware of about for sellers or there's rumors and misinformation swelling in the market around the company.

Okay. Got you. And a multitude of questions on the share price, we will appreciate the attention on the share price. There was a good solid increase in the last few days, something today to do with our results, no doubt. So rather than look back at the share price and where it's been, let's take a forward-looking view, Peter, and get your insights, your take on how those catalysts that have been mentioned by Lachlan, can help the recovery of the share price over the course of 2025?

Certainly. Well, I mean, the combination of positive results in regulatory submissions, the development of new products and achievement of our clinical programs and advancement of those and the ongoing growth in the SCENESSE distribution, all of these should look to assist the market in reassessing how it values CLINUVEL. However, I can't speculate on how the market's going to react in relation to those positive achievements. But if I look at CLINUVEL's history, I guess the company has quite -- twice had a valuation over $2 billion on much weaker financial results and positions, yet even now reaching a position of our strongest balance sheet we've ever had. We experienced a low share price or valuation of the company. There's clearly a disconnect between the company's performance and the perceived market value of the organization and the market is just not efficient at this end of the spectrum. And as the market seeks to determine CLINUVEL's true value in the future, we'll continue to build our reserves to finance our expansion initiatives while managing any adverse events that may come along. But I guess when you also consider the ASX biotech sector as a whole over the past year or so, there's been a low appetite to fund biotechs, there's been a low IPO market for new initiatives and ideas and there's been a limited opportunity for funding for advanced companies. And I guess for these reasons, I believe CLINUVEL has historically taken the right strategy to seek to self-fund itself through its own profits. Aside from what I've just mentioned, and you touched on it before, just a moment ago, Malcolm, there are also macroeconomic and geopolitical forces at play here, which add to the disconnect between company performance versus market value for the company. But all in all, I'm optimistic that in light of another period of outstanding results that a more positive market sentiment will emerge for CLINUVEL and how people view it.

Thanks, Peter. I think that's a good note to conclude the webinar on the company's stellar results for the half year just past the 31st of December 2024. And I thank you, Peter and Lachlan, for your comments and insights and being open and transparent on some of the aspects of our business, so participants can learn from what we're doing. I also thank the participants on the line. You've all dialed in at different times in your day, and we do appreciate your attendance, particularly those who asked questions. And finally, this webinar will be available to view through a link that we will post to the ASX tomorrow, and it will be on our website for you to access and all those who weren't able to attend can also get this update. So thank you, everyone.