NRX Pharmaceuticals, Inc.

Greetings and welcome to the NRX Pharma second quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Eric Goldstein, Managing Director of LifeSci Advisors. Thank you. You may begin.

Thank you, operator. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the Securities and Exchange Commission. The forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements. Information presented on this call is contained in the press release we issued yesterday and in our Form 10-Q, which may be accessed from the Investors page of the NRX website. Joining me on today's call from NRX are Jonathan Jammett, Chairman and Chief Executive Officer, Randy Guggenheimer, Chief Business Officer, and Robert Bestoff, Chief Commercial Officer. Jonathan will provide a summary of the company's progress during the quarter and recent weeks before turning it over to Randy for review of the company's financial results. Following their prepared remarks, the management team will address investor questions. I will now turn the call over to Jonathan.

Thank you, Eric. Good morning, everyone, and thank you for joining us on the inaugural NRX quarterly results call. As we move the company forward rapidly on many fronts. We're also formalizing our investor outreach, and we intend to host regular opportunities for interactive dialogue. We appreciate your attendance today. We look forward to answering your questions on this and future quarterly calls. Yesterday, we issued a press release outlining the encouraging progress made during our last quarter, and in recent weeks, advancing our pipeline of three late-stage programs with significant potential in COVID and other respiratory illnesses, a COVID vaccine, and a drug for suicidal bipolar depression. I'll spend just a few brief moments summarizing each of these programs and the developments that we've made over the quarter and in recent weeks. I'll then turn the call over to Randy for a review of our second quarter results. Before we conclude the call, I'll be answering the questions some of you have submitted online. as well as potentially questions from analysts. Before diving into the specifics of each program, it makes sense to reflect for a moment on the change in our company from Q2 2020 to the second quarter of 2021. In 2020, we were a clinical stage biotech company with a single asset in CNS psychiatry. Over the subsequent 12 months, we brought a dormant drug, of this bill from warehouse boxes to a candidate for emergency use authorization, COVID-19, that has now completed its first phase 2B slash 3 clinical trial. Last month, we were awarded worldwide rights to develop and market a second asset, the pre-life vaccine, in a competitive bidding process organized by Israel government and their Institute for Biological Research. Along the way, we've developed an executive team and board that has learned how to manage the rapid change that occurs in the midst of an unprecedented public health emergency. So, let's begin with an overview of our lead program, Zysamin, or vitil acetate, for the treatment of patients with acute respiratory failure in critical COVID-19 and potentially in other respiratory conditions. Zysami is our proprietary formulation of Aviptadil acetate, which in turn is the generic term for synthetic, that means manufactured, basal active intestinal peptide, or VIP. Aviptadil is a drug ingredient, not a drug, that is manufactured and sold by multiple suppliers around the world. Zysami, based on its manufacturing methods, is a proprietary product. We have signed a collaboration agreement with Relief Therapeutics under which Relief has rights to share in the profits of our drug based on its commitments to fund development of our drug, all of which is delineated in our security filings. VIP has a unique mechanism of protecting the drug from injury, and that it binds specifically to the alveolar type 2 cell that's part of the lining of the air sacs of the lung. VIP has long been known to have potent anti-inflammatory and anti-cytokine activity in animal models of respiratory distress, of acute lung injury, and of inflammation. It stimulates these alveolar type 2 cells to make the surfactant that must coat the lining of the lungs so that the lungs can exchange oxygen with the blood. Loss of surfactant causes the alveoli or air sacs to collapse and causes respiratory failure, both of which are hallmarks of critical COVID-19. VIP has also been shown in preclinical models to prevent replication of the coronavirus within those type two cells. So VIP's action in protecting the lung aside from the direct antiviral action is not COVID specific. It was previously shown in phase one to have a striking effect on treating acute respiratory distress syndrome and has shown suggestions of efficacy in treating sarcoidosis and other chronic lung disease. It may have other uses as a treatment for various forms of lung injury. Given the urgency in finding new therapeutic options for the treatment of severe COVID-19, we have rapidly moved to ISAMI for a robust clinical development plan consisting of one recently completed and three ongoing clinical trials. Data from a phase 2B slash 3 randomized controlled trial studying intravenous ISAMI in patients with critical COVID-19 has shown a statistically significant difference in the primary endpoint of patients being alive and free of respiratory failure at day 60. These are patients who started out in the ICU. when controlling for baseline severity and also controlling for whether they were treated in a tertiary versus a regional hospital. Without controlling for the site of care for the type of hospital, we were able to demonstrate a two-fold increased odds of survival across all patients and all hospitals in the study at a statistically significant level. Moreover, the patients who received placebo demonstrated a tenfold increase in the level of IL-6 cytokines. That's the inflammatory cytokine that we discussed earlier by day seven, compared to only a twofold increase in IL-6 cytokines among those who were treated with Zysamin, irrespective of the site of care or the patient's baseline severity. Those who suffered this cytokine storm, as it's commonly known, were more likely to die from COVID in the ICU than those who did not suffer the cytokine storm. Thus, the EOA submission that's pending before the FDA suggests that a significant biological effect was seen across all patients, a significant effect on survival was seen across all patients without regard to site of care, and the endpoint of whether patients have both survived and recovered by day 60 requires controlling for whether patients were hospitalized in tertiary care or community hospitals. The data has been submitted for peer-reviewed publication. The findings in tertiary care hospitals with Dysamy mirror the six-fold difference in mortality and recovery that was observed in a 45-patient administratively controlled open-label study at the Houston Methodist Hospital. one of the nation's top 10 tertiary care hospitals. Based on these encouraging trials, the National Institutes of Health selected Zysamin in its active freebie critical care clinical trial, also called TESACO. NRX has been named an industry partner by the National Institute of Allergy and Infectious Diseases. NIH is funding the costs of the clinical trial with NRX providing the investigational drug. The trial randomly assigned patients with respiratory failure and critical COVID-19 to Zysami, to Vekluri or Remdesivir from Gilead, to Zysami plus Vekluri, or to placebo. FDA has designated this as a phase three trial which, if successful, may be used in support of new drug approval for Zysamin. While we hope that emergency use authorization might be obtained with a single clinical trial, typically, a new drug approval will require more than one adequately controlled trial. Enrollment began in April, and as of today, we're advised by NIH that 140 patients have been enrolled in the test co-trials. So far, the Trial Data Safety Monitoring Board has reported no unexpected safety issues. A second U.S. government-supported trial with ISAMI is being conducted by the QuantumLeap Healthcare Collaborative. This trial, called I-SPI, is supported by the Biomedical Advanced Research Development Authority of the U.S. Department of Health and Human Services. Ongoing studies include a Phase 2b-3 randomized controlled trial of inhaled Zysamin in non-ICU patients. The data readouts from these trials are expected in early 2022, and we're hoping to have a readout from the INHALE trial by the end of 2021. NRX is sponsoring a trial of inhaled Zysami for patients with severe but not critical COVID-19, not only in the U.S., but with study sites soon to open in the nation of Georgia. We originally hoped to complete enrollment by this quarter, but we were delayed as the pandemic slowed enrollment for several months. Enrollment has now accelerated with the resurgence of the pandemic. We've applied for emergency use authorization for Zysami in the United States. and we hope for an FDA decision in current, within coming weeks. We've signed a logistics partnership with Cardinal Health in order that Zysami, if it is approved for emergency use, can reach any patients in the U.S. within 24 hours. Our interpretation of our clinical trial results is that time is of the essence when treating COVID. Outside of the U.S., we were recently granted emergency use authorization in the nation of Georgia with additional expansion possible throughout the Caucasus region. As the spike in cases this summer has shown, COVID-19 is likely to remain an endemic problem globally with a persistent threat of regional outbreaks. Development of new therapeutic options is an urgent priority as Dr. Anthony Fauci stated during congressional testimony last April. We believe that Zysamine, with its unique target in protecting the AT2 cell, the alveolar type 2 cell of the lung, and its effect on preventing cytokine rise in clinical trials, occupies a unique niche in the therapeutic spectrum and may ultimately be paired with other drugs that target other mechanisms. Investors have asked us why Aviptadil was not previously developed as a drug, given the encouraging results seen by its discoverer, Professor Sami Saeed, in the early 2000s. While we were not involved at the time, a likely answer is that VIP, like many peptides such as insulin and human growth hormone, is unstable at room temperature and is destroyed by many common pharmaceutical manufacturing methods and packaging processes. Professor Said's original work was conducted with small amounts of custom synthesized drugs that was formulated and sterilized on the day of use in a hospital pharmacy. That was possible under the pharmacy laws of those years, but is not possible today. Although the public has focused extensively on our clinical trials program, Much of our work has been focused on creating a long-term, stable form of Aviptadil, and we believe that along the way, we've developed valuable know-how, some of which can become protectable intellectual property. Last month, we announced that the government of Israel signed a memorandum of understanding awarding us worldwide exclusive rights to develop and market its innovative, though still experimental, COVID-19 vaccine, called Brie Life. For those of you who don't speak Hebrew, the Brie stands for Brie, the Hebrew word for health. The emergence of the COVID Delta variant and the rapidity with which this and other variants have eroded the immunity generated by first-generation vaccines highlights the ongoing need for continued vaccination innovation, research, and development in addition to therapeutics. The Brie Life vaccine is is developed by Israel's Institute for Biological Research. That's an institution whose roots go back to the early collaboration with Dr. Jonas Salk, who developed the polio vaccine. The Bre-Life vaccine is based on a non-pathogenic altered virus that was previously used to develop a successful FDA-approved vaccine against Ebola. This platform was further optimized by the IIBR and targeted towards COVID-19. Freelife vaccine differs from other COVID vaccines in that it presents the entire spike protein of the COVID virus to the body's immune system, rather than merely a small segment of that spike protein. We believe this may be the reason Freelife shows encouraging protection against Delta and other variants in preclinical studies. Additionally, as new variants are discovered, the spike protein complex of those new variants may be rapidly added to the Brie Life vaccine, thereby expanding the spectrum of coverage and its adaptability to future variants. Because Brie Life is a self-propagating live virus vaccine, we anticipate rapid and affordable manufacturing scale-up and the ability to deliver to a large population across the world should the vaccine be successful. Recently, we announced the initiation of a phase 2B trial of the Greelife vaccine to be conducted in the nation of Georgia. The purpose of this study was to confirm the dose level and the vaccine's ability to generate an immune response against the COVID-19 Delta variant prior to initiating a phase 3 trial in multiple nations. Originally, we planned to proceed with the placebo control design that is in the final stages of enrollment in Israel. However, just this week, we received indication that the Georgia Ministry of Health would prefer we go straight to a non-inferiority design, an active comparator design against an already approved vaccine. And we're in the process of revising our clinical protocol accordingly. Our Zysami program has taught us a great deal about the interaction between the COVID virus and the H2 receptors in the lung and elsewhere. Those are the angiotensin-converting enzyme receptors that enable the COVID virus to attack and kill human beings, even though it can infect, but it doesn't kill other mammals. Because of the spike protein on the surface of relife, It binds to ACE2 cells in the skin or ACE2 receptor-containing cells in the skin, in the nose, and in the lung. There are some early indications that it may be even more effective when delivered by intradermal or intranasal vaccination than by traditional intramuscular injection. We expect to test these hypotheses in the coming year. We will also be observing the effects of relife in protecting against the Delta variant and even newer variants that have proven so challenging for first-generation vaccines. Georgia is a particularly promising location for clinical development because of the Richard Lugar Center for Public Health Research, named for the late Senator from Indiana and built by the U.S. government in collaboration with leading scientists in Georgia. We aim to enroll sufficient patients to prove efficacy of free life against the original COVID virus and against its newer variants by early 2022. We at NRX are honored to have been selected for this project and grateful for the trust placed in us by the government of Israel, the people of Georgia, and its neighboring countries. As the Delta and subsequent variants continue to threaten the immunity generated by first-generation vaccines, we hope that this new vector-based approach may offer enhanced immunity. Let's turn for a moment to the ongoing development of our drug NRX101 for the treatment of suicidal bipolar depression, a condition that accounts for a large part of the approximately 50,000 deaths attributed to suicide annually in the United States alone. according to the CDC. In awarding us breakthrough therapy designation, FDA agreed with us that suicidal bipolar depression constitutes a significant unmet medical need. The only currently approved treatment for this condition is electroshock therapy, or ECT. Sadly, if you know two people with bipolar depression, chances are one will attempt suicide at some point in his or her life. If you know people with bipolar depression, unfortunately one is likely to succeed. There is a compelling unmet medical need for an orally available drug that treats the NMDA receptor in order to treat depression, but does not cause hallucinations, is not neurotoxic, and especially is not addictive. The development of Benarex 101 is based on Dan Javits' early discovery of the role of the brain's NMDA receptor in psychiatric disease and his lifetime of research in neurochemistry that led to the award of a composition of matter patent that covers NRX 101 in 2020. So NRX 101 is a patented, dual-targeted mechanism of action. That means it binds to both NMDA, and 5-HT2A receptors in the brain designed to achieve a high level of NMDA blockade without significant NMDA side effects typically associated with the NMDA mechanism, such as the hallucinations that are frequently seen with ketamine. Five human studies have shown a positive effect on depression and or suicidal ideations. We have a special protocol agreement in place with the FDA for NRX 101 pivotal trial. And NRX 101 has been granted breakthrough therapy designation, fast track designation, and has received a biomarker letter of support. We believe that if our phase three pivotal trial results replicate those observed in our phase two study, we'll meet FDA criteria for approval. and have a path for NDA submission, new drug application submission, to the FDA in 2022. This drug potentially represents an important breakthrough for patients who have few therapeutic options, and we believe presents a significant commercial opportunity as well in both suicidal depression and post-traumatic stress disorder, which is also associated with suicidality. The composition of matter patents awarded for the dual target mechanism of NRX 101 is extensible to other dual targeted drugs for major depression and other conditions. We hope to announce a companion drug development program to treat major depression in the near future. With that, I'll turn it over to Randy for a brief overview of our financial results. Before doing so, however, I'd encourage you to notice that the uptake in quarterly loss between 2020 and second quarter 2021 has a substantial non-cash component associated with restructuring our employee stock option plan to meet the legal requirements of the merger with BRPA that we conducted in May. There were also substantial one-time costs associated with effecting the merger. Thus, although we anticipate raising additional investment capital going forward, we've consistently maintained ourselves as a going concern, according to U.S. accounting books. Randy?