NRx Pharmaceuticals Q4 2024 Earnings Report

NRx Pharmaceuticals EPS Results

• Actual EPS: -$0.30
• Consensus EPS: -$0.20
• Beat/Miss: Missed by -$0.10
• One Year Ago EPS: N/A

NRx Pharmaceuticals Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

NRx Pharmaceuticals Announcement Details

• Quarter: Q4 2024
• Date: 3/14/2025
• Time: After Market Closes
• Conference Call Date: Monday, March 17, 2025
• Conference Call Time: 8:30AM ET

NRx Pharmaceuticals (NASDAQ:NRXP) is a clinical-stage specialty biopharmaceutical company focused on the development and repurposing of small-molecule therapeutics for central nervous system and rare disease indications. The company’s research strategy centers on advancing compounds with established safety profiles into new neurological and inflammatory conditions, leveraging translational science and biomarker-driven trial design to accelerate clinical development. NRx’s pipeline includes Ifenprodil, an NMDA receptor antagonist in investigation for acute respiratory distress syndrome and inflammatory muscle disorders, as well as investigational formulations targeting depressive and cognitive disorders.

Since securing global rights to its lead assets, NRx has initiated multiple proof-of-concept studies in the United States and Europe, collaborating with academic institutions and clinical research organizations to evaluate safety and efficacy across a range of indications. The company’s development programs are designed to address high-unmet-need patient populations, applying precision-medicine principles to optimize dosing regimens and patient selection. By building on decades of prior clinical experience with these molecules, NRx aims to reduce development timelines and costs relative to novel drug discovery.

Headquartered in New York, NRx Pharmaceuticals operates a lean corporate structure, with R&D activities supported by a network of external partners and contract research organizations. The company is led by a management team with deep expertise in pharmaceutical development, regulatory affairs and commercial strategy, drawing on experience at major biotech and global healthcare companies. Through strategic collaborations and disciplined capital allocation, NRx seeks to advance its product candidates efficiently toward regulatory milestones and, ultimately, market approval.

NRx Pharmaceuticals Q4 2024 Earnings Call Transcript

Key Takeaways

• The company plans to file NDA applications for NRX100 (preservative-free IV ketamine) and NRX101 (oral combination for suicidal bipolar depression) in Q2 2025 under accelerated approval, aiming for FDA PDUFA actions and potential revenue by year-end 2025.
• Through its Hope Therapeutics subsidiary, NRx is acquiring profitable interventional psychiatry clinics (three LOIs signed and nine more in progress), targeting a network of 15–20 facilities by end-2025 to generate recurring revenue and EBITDA-positive contributions.
• In 2024, NRx cut its operating loss by 33.5% to $18.5 million, reduced R&D expense by 53.6%, raised $8.5 million in January 2025 financings, and holds cash runway through at least end-2025.
• NRx has received non-binding commercial term sheets valuing NRX100 licensing at over $300 million in milestones plus a tiered double-digit royalty, supporting validation and scale of its ketamine development program.
• The company filed a citizen petition to remove preservative-containing ketamine from the market and plans an ANDA/abbreviated NDA for preservative-free ketamine across all current IV indications, potentially expanding the market beyond psychiatric use.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the NRx Pharmaceuticals' fourth quarter and full year 2024 earnings call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Monday, March 17, 2025. I would now like to turn the conference over to Matthew Duffy, Chief Business Officer. Please go ahead.

[Matthew Duffy, Chief Business Officer at NRx Pharmaceuticals]

Thank you, Joelle, and good morning, everyone. Welcome to our call. 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 day 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 this morning and the company's Form 10-K, which was filed on Friday.

[Matthew Duffy, Chief Business Officer at NRx Pharmaceuticals]

It may be accessed from the investor page of the NRx Pharmaceuticals website. Joining me today on the call are Jonathan Javitt, our founder, chairman, and CEO, and Michael Abrams, our Chief Financial Officer. Dr. Javitt will provide an overview of our company's progress as reported in the 10-K and in the press release, following which Michael will review the company's financial results. Following our prepared remarks, we will address investor questions. I will now turn the call over to Jonathan. Jonathan.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Thank you, Matt. Good morning, everyone. Thank you for joining us. As you know, the board asked me to assume leadership of NRx five months ago and to chart a path forward in the context of a capital market environment that's been less than supportive of pre-revenue biotechnology companies. Over the past five months, we've raised new capital, retired toxic debt, and begun executing on a path that leads our enterprise from a purely research and development-focused company to a healthcare company that has potential to generate revenue and look forward to profit by the end of 2025. We believe that's rare among small-cap biotech companies. At NRx, we continue to be driven by our mission to treat and prevent suicidality, depression, PTSD, and related disorders. While our mission has not changed, our path to revenue has advanced. Moreover, the U.S.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Government, and particularly the new administration, has expressed increased commitment to the treatment of these lethal conditions with the class of medicines and clinical approaches that are central to our business. NRx Pharmaceuticals now owns two operating entities: the original NeuroRx business and the newly created Hope Therapeutics. All drugs under development are owned by NRx, while Hope is focused on delivering clinical care. Under the original NeuroRx business, we've initiated filing of a New Drug Application, or NDA, for NRX-100, our preservative-free intravenous ketamine, based on stability data that support more than two years of room temperature shelf stability. We have proven manufacturing capacity to supply more than one million doses per month should we gain FDA approval.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

We believe the strategic term sheet we have received to acquire this product for more than $300 million in total milestones and a double-digit royalty provides further validation of our drug development approach. NeuroRx is further preparing an accelerated NDA filing for NRX-101, a fixed-dose combination of D-cycloserine and lurasidone, with the anticipation that we will initiate an NDA filing in the coming quarter under accelerated approval. Last year, we incorporated Hope Therapeutics as a wholly-owned subsidiary and began refining its mission. Simply put, NeuroRx will continue developing lifesaving drugs, while Hope will own clinics to treat patients with depression, PTSD, and other life-threatening brain diseases with a combination of drugs, medical devices, digital therapeutics, and integrated psychiatric care. Those wishing to understand the mission of Hope may gain insight from our presentation at the Sachs Biotechnology Innovation Forum cited in our annual report.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

In the past 10 years, treatment of these diseases has transformed from a hopeless world in which psychiatric hospitalization, electroshock therapy, and frequently ineffective drugs were the only alternatives for patients contemplating suicide to a world in which clinical success is being reported routinely in the public arena and being demonstrated in a number of well-controlled clinical trials published in first-tier journals. However, the totality of evidence, as we see it, suggests that no single treatment will yield the long-term remission from the disease that Winston Churchill called his black dog, a disease that claims the life of well more than 500,000 Americans each year. The totality of evidence suggests that many patients require a combination of NMDA antagonist drugs or perhaps newer psychedelic therapies when they're approved, plus neuromodulatory therapies such as transcranial magnetic stimulation to achieve long-term remission.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

All of these approaches are believed to work by a common pathway, namely raising the level of glutamate and other beneficial chemicals in the brain and causing the brain to form new healthy connections, otherwise known as synapses. Hope has signed non-binding letters of intent to acquire three already profitable interventional psychiatry clinics. Our pipeline includes a number of additional clinics in Florida with whom we're in negotiation, as well as additional clinic groups in other geographies. We're in the process of drafting definitive acquisition documents and navigating the complexities of purchasing medical treatment facilities under state regulations. We're dedicated to building a company that will bring lifesaving treatments to patients and financial returns to our investors. Let's look at these programs in more detail. Suicidality is a national epidemic. Approximately 3.8 million Americans make an active plan to commit suicide each year, according to the CDC.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

An American dies from suicide every 11 minutes, and worldwide, somebody dies from suicide every minute. Today, we are faced with a system where all patients who need lifesaving, precision psychiatry care with ketamine and other therapies are not routinely able to get it. Ketamine, for example, is available today almost exclusively to those who can afford to pay out of pocket and will remain so until FDA approval of ketamine for treating suicidal depression is obtained. We've initiated filing of our NDA for NRX-100, our intravenous preservative-free ketamine, and the treatment of suicidal depression, an indication with no approved pharmacotherapies. This NDA is supported with efficacy data from multiple well-controlled trials. As identified in our 10-K, we've accepted non-binding potential terms from a commercial pharmaceutical company to license and distribute NRX-100, valued at potentially more than $300 million in milestones, plus a tiered double-digit royalty.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

The issue of ketamine safety is one that will garner increased attention as the repeated use of ketamine becomes more widespread. Data from both primate and human studies show that repeated ketamine doses, on the order of 60 doses or more, of a currently available commercial intravenous ketamine may be toxic to the brain. The currently available ketamine preparation was designed for single use of the product in anesthesia. Ketamine is currently sold in a multi-dose vial, where it was anticipated that doctors would draw from the same vial for multiple doses. Back in the 1960s, when this preparation was formulated, it was manufactured with a potentially toxic preservative, benzethonium chloride. While there's no evidence that benzethonium chloride is toxic at its current concentration for the intended use in anesthesia, its safety has never been shown or even proposed for repeated use.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

The manufacturers of benzethonium chloride identify it as caustic, toxic, and capable of causing severe burns. This class of preservatives has increasingly been removed from eye drops because of clear evidence of toxicity to the cornea and conjunctiva, even at the currently allowed levels. Chronic use of ketamine is associated in the literature with ulcerative cystitis, a dangerous bladder condition. This condition may be caused by the excretion of the preservative rather than by ketamine itself. Notably, there are no cases reported of interstitial cystitis following the use of Spravato, a nasal form of S-ketamine that does not contain benzethonium chloride. Accordingly, we are filing a citizens' petition with the FDA to remove ketamine preparations with benzethonium chloride from the market until it can be shown safe for repeated use.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

In light of our success in achieving long-term stability with preservative-free ketamine, the company is also filing an abbreviated NDA, or ANDA, for preservative-free ketamine for all currently approved human and veterinary uses of intravenous ketamine. Hence, although we will never lose sight of our core mission to treat lethal CNS diseases, including suicidal depression and PTSD, the market for NRX-100 may be far larger than originally anticipated. We have current manufacturing capability to supply one million vials of ketamine per month, with the potential to scale up if needed. The toxic preservative is not the only challenge with the old Vietnam era ketamine formulation. It's supplied at a pH of less than 4, which can be administered intravenously but cannot be injected subcutaneously because it causes pain and may cause skin ulcers. If you raise the pH, ketamine precipitates out of solution.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Those who have tried to give ketamine by mouth have learned that the resulting blood levels can be highly inconsistent. Similar problems have occurred with ketamine nose spray. While intravenous administration is completely reliable in achieving intended blood levels, this mode of administration requires skilled nurses in clinic facilities. An attractive alternative is to give ketamine subcutaneously in the same way that insulin and newer obesity drugs are given. That route of administration is only enabled by a pH-neutral form of ketamine. We've now developed a patentable version of pH-neutral ketamine that remains stable at room temperature and our HTX-100, and we expect to begin human bioequivalent studies this year. As is well known, bioequivalence is far simpler and less expensive to prove than safety and efficacy.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

If we are successful in gaining FDA approval for NRx-100, we have the potential to expand the number of patients who currently benefit from this form of care manyfold. The current off-label use of ketamine in brain disorders is generally only available to patients who can pay out of pocket. We expect NRx-100, once approved, to be widely reimbursed, thus providing access to the vast majority of people in need, not just those with the means to spend thousands of dollars in cash for treatment. NRx-100 represents a major opportunity for our company given the current market for intranasal S-ketamine, J&J's Spravato, which is already approximately $1 billion, and the label states that it has not demonstrated anti-suicidal properties. Now let's discuss NRx-101, our oral combination of D-cycloserine and NMDA receptor blocker and lurasidone, the standard of care in bipolar depression.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Bipolar depression affects approximately 7 million people in the US. Current treatment options all carry the risk of suicide and akathisia, a side effect of serotonin-active antidepressants, which is closely related to suicide. People with bipolar depression and akathisia or suicidality are at imminent risk of self-harm. These patients need better treatment options urgently. NRx-101 could represent a paradigm-changing breakthrough in the care of bipolar depression. In clinical trials, we've demonstrated comparable antidepressant effect to the leading antidepressant in this space, with a statistically significant improvement in the safety of NRx-101 when compared to the standard of care, that is, lorazepam. In our recently completed clinical trial presented at the American Society of Clinical Psychopharmacology, NRx-101 demonstrated comparable ability to reduce symptoms of depression when compared to lorazepam.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Critically, NRX-101 demonstrated a reduction in symptoms of suicidality, and it's the first oral antidepressant to reduce symptoms of akathisia, a potentially lethal side effect of nearly all antidepressants. This could represent a new paradigm for treatment of bipolar depression. You may not have encountered the word akathisia before. However, key opinion leaders and patients who have suffered from akathisia regard it as the worst side effect of antidepressants. Patients frequently describe it as a feeling of jumping out of their skin. Patients with akathisia are known to jump off roofs and in front of oncoming trains. Recently, a patient petitioned the British Columbia Supreme Court for the right to end her life rather than continue to suffer from akathisia. Patients have simply had to endure this side effect in order to achieve the critical antidepressant effects that are needed to control bipolar depression.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

The data we presented at ASCP confirms data from our earlier STABLE-B trial demonstrating that NRX-101 is the first oral antidepressant to have effective antidepressant properties while simultaneously decreasing akathisia and suicidality. We believe this product profile could lead to NRX-101 becoming the drug of choice in bipolar depression. We're initiating the filing of an NDA for accelerated approval of NRX-101 for suicidal bipolar depression in patients at risk of akathisia. Given our strong data and the lack of treatment options for this group of people with bipolar depression, we and our regulatory counsel believe this to be a vital unmet need and appropriate for consideration of accelerated approval. We plan to initiate filing in the early second quarter and anticipate a 2025 PDUFA date.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

The company estimates that the market for the initial indication is over $2 billion, while the broad bipolar market could exceed $5 billion. We've made substantial progress with Hope Therapeutics in recent months. During the second half of 2024, we began outlining the plan for Hope Therapeutics as a national and ultimately international network of interventional psychiatry centers that would combine neuroplastic treatments in an integrated and reproducible manner. The business model for Hope Therapeutics is analogous to that of companies who've been instrumental in making kidney dialysis reliable and reproducible in a manner that transformed the industry. We've learned that ketamine alone is not sufficient to maintain remission from suicidality in many patients with depression and PTSD. In clinical settings, ketamine has rapidly achieved a 50% reduction in suicidal ideation in numerous trials and real-world settings.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

This magnitude and rapidity of effect is a dramatic improvement from the prior 50 years of experience with SSRI and other serotonin-targeted antidepressants. The critical element is maintaining and enhancing the ketamine effect. This will, in our view, require a full range of additional therapies. In the fourth quarter, we announced our first major move to implement the Hope Business Plan when we announced signing of a non-binding letter of intent to acquire Kadima, LLC, a pioneering interventional psychiatry clinic in La Jolla, California. Kadima's founder, Dr. David Feifel, agreed to serve as Hope's Chief Medical Innovation Officer post-acquisition, and you heard his presentation with me at the SACS Forum.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

He is one of the first academic psychiatrists to move ketamine and TMS therapy to the community care model and is frequently featured in the national media such as Rolling Stone and on Peacock as one of the most knowledgeable experts in the safe and appropriate use of ketamine and other advanced therapies in mental health treatment. Subsequent to the Kadima commitment, the company was poised to contract to acquire and partner with nine facilities in Florida, aiming for 15-20 facilities in Florida by year-end 2025. The clinical centers that are being incorporated in this acquisition program are revenue-generating and EBITDA-positive centers that the company believes can experience substantial revenue growth through the addition of a broader array of comprehensive services.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Looking at the market, we estimate that the acquisition of 20 clinic networks, each with current revenue of approximately $5 million, will be required to meet the 2025 growth target. On the financial front, the best-in-class clinics currently generate operating margins of around 30%, with significant opportunities for further growth. We expect funding for Hope to be independent of, and thus non-dilutive to, NRx shareholders. However, we expect that a portion of the earnings generated through Hope will support NRx's path to profitability and support our planned path to a spin-out of the company and subsequent listing on a national stock exchange. Further, we recently announced the closing of our third tranche of funding from Anson Funds, an institutional investor, bringing the total amount of financing to nearly $20 million. We anticipate that Hope Clinics will be financed by traditional bank loans, supplemented by private equity and strategic lenders.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

We recently received a term sheet from a manufacturer of TMS technology to supplement funding from banks and similar financial institutions. As you've seen in our 10-K, we've substantially reduced operating expenses and are forecasting profitability on a going-forward run-rate basis by the end of 2025 with revenue and EBITDA from Hope Therapeutics, along with projected sales of our medications. My first action when the board asked me to assume the leadership of NRx was to invite Mr. Michael Abrams to become our first full-time CFO. Mike has decades of experience as an investment banker, biotechnology executive, and Chief Financial Officer. He stepped into NRx just two months before the end of the fiscal year and achieved his first audit on time and with no material concerns raised by the auditors. Now I'd like Mike to review our financial results from 2024. Michael?

[Michael Abrams, CFO at Arch Therapeutics]

Thank you, Jonathan.

[Michael Abrams, CFO at Arch Therapeutics]

For the year ended December 31, 2024, NRx Pharmaceuticals reduced its loss from operations by approximately $9.3 million, or 33.5%, to $18.5 million, and $27.8 million for the year ended December 31, 2023. This change was primarily driven by a decrease in research and development expense. For the year ended December 31, 2024, research and development expense decreased by approximately $7.2 million, or 53.6%, to $6.2 million, as compared to $13.4 million for the year ended December 31, 2023. This change is primarily driven by a decrease in clinical trial and development expense due to the conclusion of the phase 2B3 study for NRX-101. Finally, general administrative expense for the year ended December 31, 2024, decreased by approximately $7.7 million to $13.5 million, as compared to $14.2 million for the year ended December 31, 2023.

[Michael Abrams, CFO at Arch Therapeutics]

This change was primarily driven by a reduction in insurance and employee costs and partially offset by an increase in consulting fees related to the potential acquisition of several psychiatric clinics in support of the growth model for Hope Therapeutics. As of December 31, 2024, we had approximately $1.4 million in cash and cash equivalents. As noted above, in January 2025, the company completed two financings with aggregate gross proceeds of approximately $8.5 million. Management believes the current available cash resources will be sufficient to support ongoing operations through at least the end of 2025. NRx continues to implement operational efficiencies to extend cash runway and maintain focus on our path of generating revenue and value for our shareholders. Please see detailed financials on our Form 10-K filed with the Securities and Exchange Commission, which will also be available on our website.

[Michael Abrams, CFO at Arch Therapeutics]

With that, I turn the call back to Jonathan. Jonathan?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Thank you, Michael. The mission of NRx to prevent and treat suicidality in patients with depression and PTSD has continued to move forward. Over the last year, we've streamlined operations, we've retired toxic debt, we've capitalized the company to move forward. Planned 2025 PDUFA dates for our two NDAs and continuing the development of Hope Therapeutics' national network for care delivery are transformative steps for the company and for the treatment of mental health in the United States. I'd like to thank the NRx team, our investors, and most importantly, the patients who participated in our clinical trials for their steadfast support of our pursuit of this vision. Operator, we're ready to take questions from the audience.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session.

[Operator]

Should you have a question, please press Star, followed by the one on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press Star, followed by the 2. If you are using a speakerphone, please lift the hands up before pressing any keys. One moment, please, for your first question. Your first question comes from Jason with D. Boral Capital. Your line is now open.

[Operator]

Good morning, guys. Congratulations on all the progress. A couple of questions. Jonathan, you made a good argument for removing the preservative from ketamine. If you remove the preservative for ketamine, how does that change the formulation? For example, what do you do in its place? When you say, "What do you do in its place?" why do you need to do anything in its place?

[Operator]

Why is it there in the first place? Does ketamine degrade?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

That's a great question. The preservative was stuck in ketamine way back when because an anesthesiologist would put it on a cart in a hospital and would draw out of the vial multiple times. Anytime you stick more than one needle into a sterile vial, it's considered to be contaminated and to require a germicidal preservative in the bottle. Gotcha. That's a great question. As long as you have a single-use vial, by law, you don't need a preservative. Now, when we started this, people said, "Oh, yeah, but that preservative is critical to the stability and sterility of ketamine." It turns out not to be true. That turns out to be a novel and surprising finding.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

That is why we have pointed out that we have now got the ability to file for two-year shelf stability at room temperature for preservative-free ketamine. You have seen this happen in the ophthalmology industry, where it was assumed that glaucoma eye drops and other eye drops that people use on a long-term basis would always be in a big bottle with a preservative in it. The same was true for artificial tears that people were used to buying in the drugstore. Fifteen or more years ago, I was involved in research that showed that those preservatives are actually quite toxic to the cornea and the conjunctiva. That is why more often than not, people are buying artificial tears in single-dose preservative-free vials. More and more of the prescription eye drops have been moved to single-dose preservative-free vials.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

If you read the material data sheet on benzethonium chloride, it's pretty frightening. The material data sheet says this product is caustic, it's toxic, it may cause severe burns. Clinical evidence is that it's anything but safe.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Perfect.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Thank you. I just didn't make the connection during the call, but I got it now, and it makes perfect sense. Can you talk a little bit about the acquisition strategy to add more clinics this year? Without giving guidance, just give us some kind of rough idea on how that acquisition is going, what's the interest level, how many clinics out there? Are there particular geographies that you'd like to focus on? Talk with us a little bit about what we should expect a year from now.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Florida has become a geography of focus for us, partly because we've identified a group of clinics that, in our view, are already doing it right. Not to paint with too broad a brush, but you can find a ketamine clinic on every other street corner in the United States today. Many of them are clinics that do ketamine on Mondays and vitamin drips on Tuesdays and God knows what on Wednesday. Organizations that know how to combine ketamine and, in the future, other psychedelic drugs with neuromodulatory technology like TMS are few and far between. These are tough patients to treat on a comprehensive basis. Anybody who says, "Come on in for your ketamine shot and go elsewhere for the rest of your care," is not doing any patient any favors.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

That is why we retained BTIG and have partnered with BTIG to cast a broad net for clinics that we believe are doing it right and to use that platform of acquired clinics as a basis for building out a nationwide network. When we talk about the kinds of financing that is available, you are talking about a tiered risk financing. Our conversation so far suggests that commercial banks are prepared to finance up to 50% loan-to-value on fairly attractive commercial terms. Our conversation so far suggests that clinic owners are willing to take some piece of the acquisition in the form of Hope Therapeutics shares. That leaves financing in the middle, perhaps 20-30% of each acquisition, that will come from investors who expect a higher rate of return, but a rate of return that Hope can certainly afford to pay.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

The capital stack, from our perspective, is not a major impediment to getting our initial acquisitions done. The hard work is the pile of legal documents that are required to acquire any healthcare facility in the United States, especially in states that have corporate practice of medicine laws, and the due diligence that we have to do both on the financial front and on the regulatory front on each acquisition to make sure that these are acquisitions we can put on the balance sheet and offer to our shareholders.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Perfect. I completely understand. Thank you. One last question. In the press release, you talk a little bit about the potential for a ketamine deal, $300 million in milestones and tiered royalties, and the fact that you've received interest, non-binding term sheets. Can you expand a little bit about that?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Because that certainly changes the company's future and creates kind of a very significant inflection point for investors.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Yeah. A deal's never done till it's done. As we've moved closer to having a marketable drug, there's a real desire out there on the part of already commercial organizations to be able to offer such a drug to patients. I don't think anybody questions the size of the available market. Having a partner that already has a sales force in the field could be more attractive than raising the money to launch the drug ourselves. We're gratified that commercial partners have started showing up. We've told our investors what we can say today about what that might look like.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Thanks, Jonathan. Very exciting times.

[Operator]

Your next question comes from Tom Shrader with BTIG. Your line is now open. Good morning. Thanks for taking the question.

[Thomas Shrader, Analyst at BTIG]

Good luck on the busy year. A follow-up on the last line of questionings. The ketamine clinic landscape in Florida, is it chunky? When you say you have nine facilities, is that one deal, or is that nine independent negotiations? Should we look for this target to happen in big chunks? Maybe if you could give us a little bit of color on having an ANDA and an NDA in front of the FDA at the same time. How unusual is that? Is it the same people that deal with it? Is your manufacturing packet enough for both? It's unusual to me, and I thought you could talk a little bit about what it would look like at the FDA. Thank you.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

On the ketamine front, I think you should expect acquisitions to be chunky, your word, to represent more than, in general, more than one clinic at a time. In the case of Kadeema, which is a one-site facility, we started there because we've been unable to identify another clinic that's doing so many things right all at the same time. In general, the clinics that are doing it well are doing it at multiple locations, and we would expect that to be part of our acquisition path. With regard to an ANDA and an NDA, the NDA is specifically to ask the Division of Psychiatry Products to add the depression and suicidality indications to the ketamine label.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Quite frankly, somebody probably could have come along and said, "Let's do that with the original formulation that has the preservative in it." It is really a scientific exercise in attempting to prove safety and efficacy to the satisfaction of the review division while also satisfying the manufacturing side of FDA. That same manufacturing package, that same Module 3 that we have already submitted, while it is necessary to the new drug approval application, while it is necessary to the psychiatry indications, it is both necessary and largely sufficient for an ANDA because under the ANDA, we are not seeking to change the label of ketamine. We are seeking to offer a preservative-free version of a drug that is already generic.

[Thomas Shrader, Analyst at BTIG]

The ANDA would be for analgesia?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

The ANDA would have the same indications as the currently marketed forms of ketamine, but it would not have the toxic preservative in it.

[Thomas Shrader, Analyst at BTIG]

Got it.

[Thomas Shrader, Analyst at BTIG]

Okay. Thanks for the comment.

[Operator]

Your next question comes from Vernon Bernardino with H.C. Wainwright. Your line is now open.

[Vernon Bernardino, Analyst at H.C. Wainwright]

Hi. Good morning, everyone. Thanks for taking my question and congrats on the progress. Looks like it'll be a busy second quarter. Regarding the terms with the commercial pharmaceutical company for NRX-100, do you anticipate that'll be a second quarter announcement as far as the finalization of the deal?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

We hope it may be. A deal's never done till it's done. On the other hand, we see the expression of interest as one that may even become broader. We have the resources to continue to move these applications forward. We don't need a commercial deal right now, but we would certainly welcome the right partner.

[Vernon Bernardino, Analyst at H.C. Wainwright]

Great.

[Vernon Bernardino, Analyst at H.C. Wainwright]

In terms of the ketamine intended for intravenous use and removing benzethonium chloride, the idea there is single use. How easy would it be for a competitor to make their own single-use presentations of ketamine for intravenous use?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

There are a couple of challenges that anybody who wants to enter the market will have today. Certainly, the sponsor of ketamine who owns the label could certainly do it if they wanted to. If they do not already have a preservative-free formulation up for stability, they have a couple of years of work before they can enter the market and file that ANDA. Do we expect that we will long-term have the ketamine market to ourselves? I think that is too much for anybody to expect for a market that is quite that large. For a period of time, we may well.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

If some of the advice we've received that the preservative-free formulation we've engineered is surprising and ultimately stands up to patent review, we could have that market to ourselves for longer than anticipated.

[Vernon Bernardino, Analyst at H.C. Wainwright]

Great. Thanks for that additional information. Regarding the persistent psychiatry centers you intend to acquire, those are still projected to be ones you think will have run rates of about $5 million a year in revenue?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Or larger.

[Vernon Bernardino, Analyst at H.C. Wainwright]

Okay. One of those you intend to acquire, you say three position. One of those includes Kadeema, or these are in addition to Kadeema?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

That includes Kadeema.

[Vernon Bernardino, Analyst at H.C. Wainwright]

Okay. Lastly, for me, the term sheet with the publicly traded strategic investor that manufactures TMS devices, they manufacture their own or several devices, or?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

That probably would not be appropriate to say anything more at this time.

[Vernon Bernardino, Analyst at H.C. Wainwright]

Okay. Great.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Thanks for taking the information about the company.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Thank you. Yeah. And congrats on the progress.

[Operator]

Your next question comes from Ed Wu with Ascendiant Capital Markets. Your line is now open.

[Edward Woo, Analyst at Ascendiant Capital Market]

Yeah. Congratulations on the progress. As you may potentially have NRX-100 and NRX-101 approval this year at the FDA, have you thought about what you might do internationally with both of them?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

We've talked in previous calls and previous filings about relationships that we've developed in France, a European country that is highly focused on this disease. The French estimate that somebody commits suicide in France every 45 seconds. As you know, one of the clinical trials that we're citing to FDA is a French government-funded study conducted at seven French hospitals. It could be the largest study ever attempted in patients with suicidal depression.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Were that to continue to evolve and our relationship with Fondation FondaMental result in a European filing, that would certainly have resonance throughout Europe. We have not considered going beyond the US and Europe by ourselves. As you know, we have had relationships with Asia-Pacific entities. As we gain momentum, we expect that interest to increase at the same time.

[Edward Woo, Analyst at Ascendiant Capital Market]

Great. Thanks for answering my questions. I wish you guys good luck. Thank you.

[Operator]

Ladies and gentlemen, I will now turn the call over to Matt for other questions.

[Matthew Duffy, Chief Business Officer at NRx Pharmaceuticals]

Thank you, Joel. Jonathan, we had one other question electronically that came in, and that is regarding Hope. The question is that Hope sounds very interesting, but how does it directly benefit NRx shareholders that NRx owns the equity in Hope at this point?

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Right now, Hope is an asset on the NRx balance sheet.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

To the extent that NRx continues to own shares of Hope Therapeutics, if Hope becomes profitable, those profits will roll up to the benefit of NRx. As other investors come into Hope, those profits will devolve to the benefit of all investors in Hope. A prominent investor is likely to remain NRx. We've talked about our desire to spin out Hope shares to those who own NRx stock at the time of the spin-out. As was disclosed last year, that was slowed down by a toxic lender who ultimately was guided by the court that they could not block the Hope spin-out. We continue to be in a position to move forward towards spinning out some of those shares. Need to make sure that we do it in a tax-free manner to NRx shareholders.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Meanwhile, as long as NRx is on the, as long as Hope is on the NRx balance sheet, anything that Hope does devolves to the benefit of NRx shareholders.

[Jonathan Javitt, CEO at NRx Pharmaceuticals]

Okay. Thank you very much. Everyone, that's all the time we have for questions today. Thank you, everyone, for joining us this morning. We're extremely excited about the year ahead and with our two potential drug approvals and a subsidiary targeting multiple profitable mental health clinics. This concludes the NRx Pharmaceuticals Fourth Quarter 2024 Results Conference Call. Thank you all for participating and have a great day.

[Operator]

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.

Participants

Executives

• Matthew Duffy, Chief Business Officer
• Jonathan Javitt, CEO

Analysts

• Thomas Shrader, Analyst at BTIG
• Vernon Bernardino, Analyst at H.C. Wainwright
• Michael Abrams, CFO at Arch Therapeutics
• Analyst at D. Boral Capital
• Edward Woo, Analyst at Ascendiant Capital Market