Neuren Pharmaceuticals : Notice of special meeting of shareholders

Neuren Pharmaceuticals Limited ARBN 111 496 130

Suite 201, 697 Burke Road, Camberwell, VIC 3124, Australia

Notice is given that a special meeting of shareholders of Neuren Pharmaceuticals Limited (Company or Neuren) will be held at Chartered Accountants Australia and New Zealand, Level 18, Bourke Place, 600 Bourke Street, Melbourne, VIC 3000, on 29 August 2017 commencing at 10.00 am AEST. In accordance with the Constitution, the Board has fixed 9 August 2017 as the date of shareholder entitlement to receive this notice.

1. To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval be given to the Company to issue 9,677,419 shares to Essex Castle Limited at an issue price of

   $0.062 per share."

2. To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval be given to the Company to issue 1,290,323 shares to Karen Elizabeth Treagus ATF Treagus Family Trust at an issue price of $0.062 per share."

3. To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval be given to the Company to issue 1,290,323 shares to Larry Glass at an issue price of $0.062 per share."

4. To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That for the purposes of ASX Listing Rule 7.4 and for all other purposes, approval is given to the prior issue on 11 and 12 July 2017 of 11,935,485 shares at an issue price of

   $0.062 per share."

5. To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That for the purposes of ASX Listing Rule 7.4 and for all other purposes, approval is

given to the prior issue to Lanstead Capital L.P. on 18 July 2017 of 161,290,323 shares at an issue price of $0.062 per share and 8,064,516 shares as consideration for entering a Sharing Agreement."

Each Resolution is to be considered as an ordinary resolution and, to be passed, requires the approval of a majority of the valid votes cast on the resolution by the shareholders entitled to vote and voting on the resolution. The Company will disregard any votes cast in relation to each resolution by any person who either participated in the issue of securities, or is to receive securities, and by any associates of those persons. However, the Company will not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form.

Each Resolution is explained in the attached Explanatory Memorandum which forms part of this notice. By order of the Board

Jon Pilcher

CFO & Company Secretary Neuren Pharmaceuticals Limited 14 August 2017

1

The purpose of this Explanatory Memorandum, which forms part of the Notice of Special Meeting of Shareholders dated 14 August 2017, is to provide shareholders with an explanation of the Resolutions to be proposed and considered at the meeting on 29 August 2017 (Meeting) and to allow shareholders to determine how they wish to vote on these Resolutions.

In July 2017, Neuren completed a placement of new shares raising $11.5 million at 6.2 cents per share, including $10 million from UK fund Lanstead Capital and $1.5 million from Rettsyndrome.org and Neuren's directors and management. The placement provides funding to enable initiation of key activities on the critical path for commencing a Phase 3 trial in Rett syndrome.

Neuren has an End of Phase 2 Type B Meeting with the US Food and Drug Administration (FDA) Division of Neurology Products scheduled in October 2017 to discuss the remaining development for trofinetide to treat Rett syndrome, including the Phase 3 trial design.

In parallel with the FDA interactions, the funding enables Neuren to initiate the following key manufacturing and non-clinical activities that are required to be completed before a Phase 3 trial can commence:

• Conclude optimisation of the drug substance manufacturing process for commercial supply

• Conclude stability testing and analytical validation of the new to-be-marketed liquid drug formulation

• Conduct non-clinical toxicity study in a second species, which is required for a Phase 3 trial with longer dosing and subsequently to support a New Drug Application to the FDA

The purpose of resolutions 1, 2 and 3 is to obtain shareholder approval to issue 12,258,065 shares at 6.2 cents per share to three of Neuren's directors or their associates, as is required by ASX Listing Rule 10.11. The shares will be issued by 31 August 2017 and will rank equally with all other shares currently on issue. The funds of $760,000, which were received in July 2017, will be used as described in the Background section above.

Trevor Scott is a director of Essex Castle Limited and Richard Treagus is a beneficiary of Treagus Family Trust.

For each resolution, any votes cast by a person who is to receive shares in the proposed issue, or any associates of those persons, will be disregarded. However, a vote cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form will not be disregarded.

The Board recommends that each of Resolutions 1, 2 and 3 be passed.

The purpose of resolutions 4 and 5 is to obtain shareholder ratification of the prior issues of shares to Lanstead Capital, Rettsyndrome.org and management. ASX Listing Rule 7.1 provides that a company must not, subject to the specified exceptions under Listing Rule 7.2, issue or agree to issue securities during any 12 month period in excess of 15% of the number of ordinary shares on issue at the commencement of that 12 month period, without shareholder approval. Listing Rule 7.4 sets out an exception to Listing Rule 7.1, by permitting the ratification of a previous issue of securities which was not made under a prescribed exception under ASX Listing Rule 7.2 or with prior shareholder approval, provided that the issue did not breach the 15% threshold set out by Listing Rule 7.1. If shareholders of a company approve the ratification of a previous issue of securities, those securities will be deemed to have been issued with shareholder approval for the purposes of Listing Rule 7.1. The effect of ratification in accordance with Listing Rule 7.4 is the reinstatement of the maximum capacity to issue further securities up to 15% of the shares, if required, in the next 12 months without requiring shareholder approval.

The shares to be ratified rank equally with all other shares currently on issue.

In respect of Resolution 4, the 11,935,485 shares to be ratified were issued at 6.2 cents per share on 11 July 2017 and 12 July 2017 to International Rett Syndrome Foundation, GW Investment Holdings LLC and Jennifer Pilcher. The funds of $740,000, which were received in July 2017, will be used as described in the Background section above.

In respect of Resolution 5, the following shares to be ratified were issued on 18 July 2017 to Lanstead Capital L.P.:

• 161,290,323 shares at 6.2 cents per share ($10 million)

• 8,064,516 shares as consideration for the Sharing Agreement (5% of 161,290,323 shares)

The funds received will be used as described in the Background section above. Neuren received $1.5 million from Lanstead in July 2017. The remaining $8.5 million is invested in a Sharing Agreement with Lanstead, which enables Neuren to secure much of the potential upside from anticipated near term news flow. The Sharing Agreement provides that Neuren's economic interest will be determined and payable in 18 monthly settlements commencing in September 2017, as measured against a benchmark price of 8.86 cents per share (Benchmark Price).

If the measured share price exceeds the Benchmark Price, for that month, Neuren will receive more than 100 per cent of the monthly settlement due on a pro rata basis. Importantly, there is no upper limit on the additional funds receivable by Neuren as part of the monthly settlements. Should the measured share price be below the Benchmark Price, Neuren will receive less than 100 per cent of the monthly settlement on a pro rata basis. In no event would a decline in the share price result in any increase in the number of shares received by Lanstead or any other benefit accruing to Lanstead. The amount of each settlement is dependent on the volume weighted average price at which Neuren's shares are traded in the 20 days preceding the settlement (VWAP).

If the VWAP over the 18 month period is equal to the Benchmark Price, Neuren will receive $8.5 million in total. If the VWAP is higher than the Benchmark Price, Neuren will receive proportionately more than $8.5 million, with no upper limit. If the VWAP is lower than the Benchmark Price, Neuren will receive proportionately less than $8.5 million.

For each of resolutions 4 and 5, any votes cast by any person who participated in the issue of shares and by any associates of those persons will be disregarded. However, a vote cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form will not be disregarded.

The directors believe that it is in Neuren's best interests to maintain its ability to issue up to 15% of the issued capital of the Company. The Board therefore recommends that each of Resolutions 4 and 5 be passed.

The persons who will be entitled to attend and vote at the Meeting are those persons (or their proxies or representatives) registered as holding Ordinary Shares on Neuren's share register at 7.00 pm (AEST) on 25 August 2017.

To vote on the Resolutions to be put to the Meeting follow these steps:

1. Attend the Meeting. Please bring the enclosed Proxy Form with you to assist registration at the Meeting.

   OR

2. Complete the enclosed Proxy Form and return it to Neuren's share registry, Link Market Services Limited, by facsimile or mail as directed on the Proxy Form, or lodge it on-line at the registry's website (www.linkmarketservices.com.au) in accordance with the instructions given there (you will be taken to have signed your Proxy Form if you lodge it in accordance with the instructions given on the website).

Shareholders entitled to attend and vote at the Meeting may appoint a proxy or representative (in the case of a corporate shareholder) to attend the meeting and vote on their behalf by completing the enclosed Proxy Form. A proxy or representative need not be a shareholder of Neuren. Proxy Forms must be received by Neuren's share registry, Link Market Services Limited, at the address on the enclosed Proxy Form, or be lodged on-line at the registry's website, by 10.00 am (AEST) on 27 August 2017. A representative should bring to the Meeting evidence of his or her appointment by the shareholder.