NRX Pharmaceuticals, Inc.

At this time, all participants are in listen-only mode. 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, Tom Johnson from Investor Relations. Sir, please go ahead.

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 law. 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 SEC. The forward-looking statements made during this call speak only as of 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 issued earlier today and in the company's Form 10-Q that we're filing today, which may be accessed from the investor's page of the NRX Pharmaceuticals website. Joining me on today's call from NRX Pharmaceuticals are Robert Bestoff, Interim Chief Executive Officer, and Ira Strasberg, Chief Financial Officer and Treasurer. Robert will provide a summary of the company's progress before turning it over to Ira for a review of the company's financial results. Following their prepared remarks, the management team will address investor questions. And now I'll turn the call over to Robert.

Thank you, Tom. Good morning, everyone, and thank you for joining us today. We appreciate your attendance and look forward to summarizing our progress on our strategic priorities that are guiding our work in 2022. So let's begin. On our previous year-end earnings call, we announced our new strategic focus for 2022 by concentrating on our two late-stage drug candidates. NRX-101 for the treatment of severe bipolar depression with acute and subacute suicidal ideation and behavior, for which we have reactivated clinical trial development as part of our psychiatry portfolio. SASAMI in its intravenous formulation for the treatment of critical COVID-19 and potentially other respiratory disease. We believe these two drug candidates have shown solid scientific evidence to potentially help patients in these areas of very high unmet need and can serve as platforms for numerous indications in other respiratory and psychiatric conditions. Congruent with our strategy to shift treatment paradigms, both drugs could fill significant therapeutic gaps. NREX-101 could become the first oral drug for bipolar depression in patients with acute and subacute suicidality. As you know, COVID and recent events have had a significant adverse impact on the mental health and well-being of our nation. We have all heard about the recent loss of lives due to suicide of well-known people and also of those only known to few. Though infections have decreased, COVID is still with us. In our opinion, it will remain a global health threat. Despite promising data from emerging oral medications for patients at earlier stages of the disease, for patients with critical COVID-19 who are on high nasal flow or on a respirator, there's still a large therapeutic gap. We're losing still nearly 300 patients daily to COVID. So let's talk about our psychiatry franchise and NRX 101. As we previously announced, we've reinitiated development of NRX-101 within our psychiatry franchise. NRX-101 is a patented oral medicine that could enable patients with bipolar depression and acute and subacute suicidality to be treated on an outpatient basis. Both components in NRX-101 are not scheduled substances and have not shown abuse potential, which could be a very important differentiator as NMDA antagonists such as ketamine and can be highly addictive. The treatment options for such patients are very limited, as antidepressants carry a warning about the potential for increased risk of suicidal thoughts and behaviors. Hence, patients with risk of suicide unfortunately have been excluded from the majority of clinical studies for depression. Last week, we announced that enrollment began in our Phase II trial for patients with bipolar depression with subacute suicidal ideation and behavior, or SSIB. In this study, patients are being treated only on an outpatient basis because this group does not require hospitalization. Additional sites are being activated for this 70-patient study, and we're targeting to get to data by the end of the year. It is important to note that every year we lose nearly 50,000 people in the U.S. to suicide. The 50,000 does not include lethal drug overdoses in this population, therefore likely understating the actual number. In the U.S., we estimate that about 150,000 to 180,000 individuals with bipolar depression, with acute suicidal ideation and behavior, or ASIB, are hospitalized. And about two to three times as many have bipolar depression and thoughts of suicide, but do not require hospitalization yet. Overall, this represents a very high unmet medical need. It is estimated that around 50% of individuals with bipolar disorder attempt suicide in their lifetime, and between 11 to 20% succumb to suicide. Given this very high unmet need, it is these individuals that we aim to help with NRX 101. Strategically, this positions NRX in a different segment than others working in the NMDA field. As others have focused on the traditional depression and treatment-resistant depression market, which is a much more crowded space. Recall that antidepressants, including those recently approved for bipolar depression, carry a warning for the increased risk of suicide. We believe NRX Pharmaceuticals can offer patients a highly differentiated treatment option. To the best of our knowledge, NRX 101 is the only oral drug in advanced clinical trials designed to address bipolar depression with suicidality. We were awarded breakthrough therapy designation by the FDA or NRX-101 for severe bipolar depression in patients with ASIB after initial stabilization with ketamine or other effective therapy. We plan to start a new NRX-100 and special protocol agreement or SPA study, NRX-101 for patients with ASIB in the second half of 2022. Recalled as part of our SPA, FDA provided guidance to us that the initial stabilization with ketamine should be done in a separate one to three day study. Those that stabilize can enroll in our NRX 101 versus lorazodone SPA study in which the primary endpoint is depression. This study will be conducted with commercial level material and if successful, could lead to a new drug application or NDA with the FDA for NRX 101. Of note, Restarting this study with commercial-level material will better position NREX Pharmaceuticals for potential NDA and commercial efforts. This psychiatry franchise is the starting foundation of our company, and with our knowledge, the potential for a highly differentiated product and broad patent estate, we're in a unique position to help patients in this area of high unmet need. We're also considering exploring other high unmet need indications such as PTSD with suicidality. Our intellectual property estate offers a range of options to combine other molecules and NMBA receptor antagonists, including with D-cycloserine, which is a component in NREX-101. So turning now to SESAMI, which is our proprietary formulation of Aviptadil for the treatment of patients with acute respiratory failure and critical COVID-19 and potentially other respiratory diseases. FASAMI is currently being studied in intravenous form in a second phase 3 study of patients with critical COVID-19 who are experiencing respiratory failure. This is the active 3B study, which is sponsored and managed by the U.S. National Institute of Health, or NIH. FASAMI was selected amongst a large number of other agents based on the promising science and data from our own studies. In our view, active 3B is a vital study for our country in the fight against critical COVID-19. Following a decline of cases, signals are that cases are once again on the rise with the Omicron BA.2 subvariant. According to a May 22 update from the CDC COVID data tracker, we're still losing nearly 300 people in the U.S. daily to COVID-19, and has lost nearly 1 million people total to this virus. According to a Washington Post article this month, White House officials expect a spike in cases in the fall. Clinical experts signal that the BA.2 subvariant of Omicron is highly transmissible. Therefore, we will believe that there will be continuing demand for improved therapeutics to treat the advanced stages of COVID-19, especially critical COVID-19. Last month, we announced the filing of a new breakthrough therapy designation, or BTD, request with the FDA. This submission includes data from a post-hoc analysis of patients who were also treated with remdesivir and whose respiratory failure due to critical COVID-19 continued to progress. You may recall that our original BTD request was submitted in September of last year, which the FDA did not grant. In its response, the FDA requested new clinical evidence comparing the safety and efficacy of sasami relative to other existing therapies for critical COVID-19, such as remdesivir. Based on the FDA's input, we performed a post hoc analysis of our completed phase 2b3 study focused on the approximately 70% of patients that continued to progress to COVID-19 respiratory failure that also received treatment with remdesivir. This analysis showed that for these patients who were already treated with remdesivir and continued to deteriorate, K-SAMI showed a highly significant four-fold increase in survival odds compared to placebo at 60 days. Safety data is, of course, crucial and has been an area of focus of the FDA. This new filing included a recently completed cumulative safety analysis of approximately 750 patients across all programs treated with intravenous SESAMI for critical COVID-19. Our cumulative safety analysis identified no new or adverse drug reactions and an overall safety profile of IV SESAMI for critical COVID-19 that we believe is congruent with its use in the ICU and critical care setting. In February, we submitted a new emergency use authorization request also focused on this narrower patient population. We continue to make progress on the manufacturing of sesame, recently reaching up to eight months of stability in the refrigerated form, and in the frozen form, it may be stable for years. This is important, as we do not know what the future of COVID-19 may herald. The limitations of currently available therapies for COVID-19 were highlighted by the results of the Solidarity Trial, study recently published in The Lancet, in particular for those in the more advanced stage of critical COVID-19. Also, the promising data for oral compounds has emerged for the treatment of patients with earlier forms of COVID-19, including moderate and severe. Such agents do not work in all patients and may not be suitable for patients that are on respirators with critical COVID-19. In spite of the advent of Paxlovil, We are still losing nearly 300 people to COVID daily. Our view is that COVID-19 is likely to become endemic and that it will add 200,000 to 300,000 COVID ARDA cases per year. During the first quarter, it was announced that the NIH ACTIV-3V trial has been cleared to complete full enrollment. This trial is certainly a key study for CZME in our view also for our nation's fight against COVID-19. It is scheduled to enroll 640 patients and enrollment has reached almost 75%. Seysami is the only new investigational treatment drug in this study focused on patients for whom there are few alternative therapies, especially once patients are in respiratory failure due to COVID-19. Recall that patients in this study are tracked for 90 days. The next DSMB meeting is scheduled for May 25th of this year. instead of an originally planned meeting in April. The NIH active 3B trial leadership indicated that this new timing would allow the vast majority of patients enrolled to date to have reached the end of the observation period for the endpoint at 90 days. We expect data from this trial by the end of the year, notwithstanding periodic DSMB reviews. We continue to believe that SESAMI could be a valuable therapeutic for those with COVID-19 respiratory failure who have exhausted all other available therapies, especially when they reach the critical COVID-19 stage. To summarize, we see the following potential paths for SESAMI in 2022. Number one, our ongoing EUA application for SESAMI with our narrow patient population scope. And number two, the filing of a traditional new drug application or NDA with the FDA for SESAME should the NIH active 3B study data support this. With data expected later this year, under fast track, we're allowed to initiate submissions of parts of our NDA, which could accelerate the process if the NIH study is successful. We also will explore submission of SESAME under the accelerated approval pathway early in the second half of the year. The FDA instituted the accelerated approval program to allow for earlier approval of drugs that treat serious conditions and fill an unmet medical need based on a surrogate endpoint. As previously disclosed, CSAMI showed a series of positive biomarker data, such as IL-6, that correlated with positive outcomes. As mentioned in prior communications, we have partnerships with Cardinal Health, with Third Party Logistics, and Distribution Services, and with Acuvia, for commercial and medical pharmacovigilance support upon potential EUA or NDA approval. With that, I will turn it over to Ira for a brief overview of our financial results.

Thank you, Robert, and good morning, everyone. I would like to start by providing an overview of our financial results for the first quarter of 2022. When comparing to the first quarter of 2021, please note that the company was privately held during the first quarter of 2021. Research and development expenses for the three months ended March 31st, 2022 totaled $5.5 million, compared to $2.9 million for the quarter ended March 31st, 2021. The increase was primarily driven by an increase in clinical trials and development expenses related to SISAMI. General and administrative expenses for the three months ended March 31, 2022 totaled $10.2 million, compared to $2.1 million for the three months ended March 31, 2021. The increase of $8.1 million was primarily related to an increase of $4.4 million in legal, professional, and accounting fees, an increase of $2.2 million in insurance expense, an increase of $0.8 million in stock-based compensation expense, and an increase of $0.7 million in other general administrative expenses. The $10.2 million and $2.1 million of general and administrative expenses for the three months ended March 31st, 2022 and 2021 included $1.1 million and $0.3 million, respectively, of non-cash stock-based compensation. For the three months ended March 31st, 2022, NRX Pharmaceuticals recorded gains of $2.1 million and $0.2 million for the change in fair value of earn-out cash liability and warrant liability, respectively. NRX Pharmaceuticals recorded no such gains in the first quarter of 2021. For the three months ended March 31, 2021, NRX Pharmaceuticals recorded reimbursement expenses from Relief Therapeutics of $0.8 million and a $0.1 million gain on extinguishment of debt, and a non-cash settlement expense of $21.4 million related to the GEM warrant. NRX Pharmaceuticals recorded no such items in the first quarter of 2022. Net loss for the three months ended March 31, 2022, was $13.4 million, or 21 cents per share, compared with a net loss of $25.5 million, or or 71 cents per share for the three months ended March 31st, 2021. For the three months ended March 31st, 2022, NRX Pharmaceuticals used $10.4 million of cash in operating activities compared to $3.0 million during the three months ended March 31st, 2021. As of March 31st, 2022, NRX Pharmaceuticals held cash of $40.2 million compared to $27.6 million as of December 31st, 2021. We believe we have sufficient cash to support operations for at least the next 12 months. With that, I'll turn it back to Robert for closing remarks.

Thank you, Ira. In conclusion, We're executing on our development plans for our two late-stage potentially life-saving drugs, NRS-101 for bipolar depression in patients with acute and subacute suicidal ideation and behavior, and SESAMI delivered intravenously for critical COVID-19 patients. Both drugs, if successful, could significantly change patient care in their respective areas as they have properties that could make them highly differentiated products. Data is expected for both within the next nine to 18 months. We also see opportunities to leverage both compounds in other populations in disease areas with high unmet needs, which we are also exploring. PTSD with suicidality is an area of high unmet need. Recall that face AMI has applicability for ARDS that is not related to COVID. A phase one study in sepsis ARDS was actually the basis for us starting our COVID-19 program And there are other indications as well. We're excited about restarting development work in our psychiatry franchise as the COVID pandemic unfortunately also created a mental health strain on our nation. NREX Pharmaceuticals was founded on a commitment to the application of innovative science to known molecules to address very high unmet medical needs. This continues to be our focus and we remain confident in the opportunities before us. Tom? We're ready to take some questions.

Thank you, Robert.

Our first investor question is, what is your view regarding the impact of potential approval of Veru's drug and also Paxlovid being used?

Okay. Both medicines are oral medicines targeted at earlier COVID-19 populations. Paxlovid has been on the market now for a few months, and unfortunately, it does not work for all, and it is an oral medicine that needs to be taken quite soon after disease onset. Zabizabulin, I hope I'm pronouncing that correct, is an oral medication that was tested in moderate and severe COVID-19 patients. CSAMI is targeted at the critical COVID-19 patient segment. In essence, those who are in the ICU on high nasal flow are intubated. Recall that Paxlovid was tested in the ACTIV-3B study as well, and it was discontinued due to futility and critical COVID-19. Seysami is now the only medicine, to our knowledge, still being tested in the NIH ACTIV-3B protocol for critical COVID-19. Also note that the White House recently forecast a new wave of COVID for the fall and winter. Based on that, what we know today, we do see continued high unmet need for patients with critical COVID-19.

Okay.

Our next question, Robert, how do you see NRX-101 in comparison to Exome's and Romelda's compounds, which are in late Phase III?

That's a quite interesting question. Well, first, their programs validate the mechanistic approach of combining an NMDA antagonist with a 5-phase T2 compound. As I mentioned in my remarks before, we have positioned NRX 101 in the bipolar depression with suicidality space for which FDA awarded us breakthrough therapy designation. Their programs are focused on MDD, treatment of resistant depression, adjunctive treatment, etc., We know that up to 50% of individuals in bipolar disorder attempt suicide or experience serious thoughts of suicide over their lifetime, and between 11% and 20% unfortunately succumb to suicide. We also think that it's advantageous that both NREX 101 components are not scheduled, as abuse potential is of high concern. We also think that studying patients with depression and suicidality is of great importance in the bipolar space, given that current drugs carry warnings about the increased risk of suicide. And also, we have built a solid intellectual property position for NX-101, including a composition of matter patents.

Okay, that's all the questions we have. Thank you, everyone.

This is all the time we have for questions. Thank you, everyone, for joining us this morning. This concludes the NREX Pharmaceuticals First Quarter 2020 Results Conference Call. Thank you all for participating. Thank you.

Thank you very much. Ladies and gentlemen, this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.