NRx Pharmaceuticals Q1 2025 Earnings Call Transcript

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May 15, 2025

There are 2 speakers on the call.

Operator

Good afternoon, ladies and gentlemen, and welcome to the NRx Pharmaceuticals First Quarter twenty twenty five 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 0 for the operator. This call is being recorded on Thursday, 05/15/2025.

Operator

I would now like to turn the conference over to Matthew Duffy, chief business officer. Please go ahead. Thank you, Andrew, and welcome, everyone. 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.

Operator

Federal Securities Laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or current 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 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 issued today and the company's Form 10 Q, which may be accessed from the Investors page of the NRx Pharmaceuticals website.

Operator

Joining me today on the call are Jonathan Javits, our Founder, Chairman and CEO and Michael Abrams, our Chief Financial Officer. Doctor. Javits will provide an overview of our company's progress as reported in today's Form 10 Q, following which Mike will review our company's financial results. Following their prepared remarks, we will address investor questions. I will now turn the call over to Jonathan.

Operator

Jonathan?

Speaker 1

Thank you, Matt. Good evening, everyone, and thank you for joining us. NRx has had an exceptional start to 2025 with important advances across each of our programs. Suicidality remains a national epidemic. Approximately thirteen thirty million Americans seriously consider suicide every year, and three point eight million of those make an active plan to do so according to the CDC.

Speaker 1

An American dies from suicide every eleven minutes, and worldwide, somebody dies from suicide every minute. These appalling statistics drive our mission. We've advanced our lead candidates, NRx 100 and NRx one zero one in the regulatory process with the US FDA. We've taken concrete steps toward establishing the Hope Therapeutics clinic network across The United States. We've also substantially reduced our core corporate expenses.

Speaker 1

We're ending our quarter with more cash on the balance sheet than in prior quarters. We have capital on the balance sheet for the end of the year and anticipate clinic revenue well before that. Clinic acquisition is being financed in a manner that does not require dilution of NRx stock. The founding of NRx is based on our mission to help patients and caregivers address our our country's national epidemic of suicidality, depression, PTSD, and related disorders. We introduced that with innovative medicines and now with Hope Therapeutics to offer direct patient care for these lethal conditions.

Speaker 1

Our mission has not changed. Importantly, we've accelerated our path to revenue with all three of our lead programs having potential to generate revenue in the foreseeable future. This extraordinary progress has been facilitated by the dedicated team at NRx and Hope as well as our committed investors. I'd like to take a moment to thank everyone for their tremendous efforts and support. Our timing is fortuitous as well.

Speaker 1

The US government and in particular, the new administration has increased focus on treatment of suicidal depression and PTSD with particular emphasis on our military and veteran communities. Two weeks ago in the televised White House cabinet meeting, the president asked via secretary of town what was being done to address suicide in veterans. The secretary's response included the need for psychedelic therapies. Ketamine, a drug we are developing, is one such therapy. The secretary of health and other members of the administration have specifically endorsed our class of medicine as well as clinical approaches that are central to our business.

Speaker 1

NRx has two separate operating groups, NRx Pharmaceutical, a traditional biotech drug development company with multibillion dollar opportunities and Hope Therapeutics, our patient care company, currently a wholly owned subsidiary that is expected to be revenue generating, profitable in the near term and ultimately spun out as its own company. With NRx, we've initiated filing of a new drug application or NDA for NRx100, our preservative free intravenous ketamine for the treatment of suicidal depression. There are no medicines approved to help people with this condition. We aim to change that this year. The application is supported by data from four well controlled clinical trials showing that the preferred dosing of ketamine has strong statistical efficacy compared to placebo to active competitors such as midazolam and to electro shock therapy.

Speaker 1

No other drug in history has demonstrated FDA approved application is further supported by stability data that now supports three years of labeled room temperature shelf stability, the maximum allowed by FDA. To protect n r x one hundred exclusivity, this month we filed a patent for our novel preservative free formulation of n r x one hundred with the US Patent and Trademark Office, potentially protecting our ketamine product into 2045 with a potential orange book listing. Crucially for Americans and the disproportionately impacted veteran and war fighter communities together with first responders and others who suffer from this condition, we have manufacturing capacity to supply more than 1,000,000 doses a month should we gain FDA approval. Because of our success in achieving long term stability for preservative free ketamine, we are also filing an abbreviated new drug application or ANDA for this product because of the administration's new focus on eliminating toxic substances such as preservatives and dyes from the food and drug supply.

Speaker 1

The benzathonium chloride family of preservatives currently used in all commercial forms of ketamine has been showing to be neurotoxic and also toxic to epithelial cells. Now that we've shown there's no need for that preservative in the setting of modern drug manufacturing, we have the potential to deliver a ketamine based product for all current use of ketamine, not just to treat psychiatric conditions. In parallel, we're preparing a new drug application requesting accelerated approval for NRx one zero one, our fixed dose oral combination of desicloserine and lirazodone for the treatment of suicidal depression in patients with suicidality or akathisia with the anticipation that we will initiate the filing in the current quarter. NRx one zero one is the only antidepressant ever shown to decrease akathisia compared to standard of care antidepressants. Akathisia is the side effect of all previously marketed antidepressants, most closely associated with suicidality.

Speaker 1

In our clinical trial, NRx101 was also associated with a more rapid resolution in suicidal ideation than the standard of care antidepressants. Last year, we organized Hope Therapeutics, a wholly owned subsidiary, in order to develop a national network of clinics to provide treatment directly to patients with suicidality, depression, PTSD, and other life threatening conditions. These clinics focus on deliberating delivering integrated neuroplastic therapies, all under one safe, reliable umbrella. Although people talk about psychedelic drugs, focusing on the hallucinations that may be a side effect of many drugs in the class, science continues to teach us that these drugs work by stimulating the brain to form new connections or synapses, a process known as neuroplasticity. New treatments such as transcranial magnetic stimulation or TMS and some forms of hyperbaric therapy also have neuroplastic effects.

Speaker 1

The treatment paradigm for these diseases is rapidly evolving, and we intend to be on the forefront of that paradigm. The totality of evidence as we see it suggests that no one treatment can depend dependently yield the long term remission from a disease that claims the lives of well over fifty thousand Americans each year. The clinical data along with practitioners experience suggest that most patients contacting interventional psychiatry clinics for care will require a combination of NMDA antagonist drugs plus additional neuroplastic therapies such as TMS and or digital therapeutics in order to achieve long term remission. These approaches are believed to work by raising a level of glutamate and other chemicals in the brain and causing the brain to form new healthy connections. As we become increasingly familiar with pioneers in the field, we routinely hear that as isolated therapies, a sixty percent or so remission from suicidal depression and PTSD can be seen.

Speaker 1

However, when therapies are integrated, some practitioners believe they are seeing sustained remission rates approaching ninety percent. The fact that successful clinics are able to provide patients with integrated care continue to grow as distinct from the pop up ketamine clinics like Come and Go tells us that patients and their families embrace this model. Hope has signed purchase agreements and a binding letter of intent to acquire three state of the art interventional psychiatry practices, Kadema Neuroscience Institute in La Jolla, California, Duromedical in Southwest Florida, and NeuroSpa TMS in the Tampa Bay area of Florida. The expansion pipeline includes a number of additional clinics in Florida, the Mid Atlantic and Midwest with whom we are in discussion or active negotiation. We continue to navigate the complexities of purchasing medical treatment facilities under state regulations as we move forward to closing and consummating these transactions.

Speaker 1

As reported earlier, Hope signed a term sheet with Universal Capital, a global investment firm, for $7,800,000 in debt facility to fund Hope's growth and acquisition strategy. This, in addition to the previously announced term sheet with a strategic investor, brings 10,300,000.0 in expected capital to Hope in the coming weeks, providing sufficient resources for clinic acquisition and growth in a manner that is anticipated to be non dilutive to shareholders of NRx stock. As you can see, we're making important progress building NRx into a company that will bring life saving treatment to patients and financial returns to our investors. Shareholders routinely ask us when and why we expect to become a revenue generating company. We believe that if we continue to execute according to plan, we'll be able to offer our proprietary ketamine drug NRx one hundred to the marketplace by early next year.

Speaker 1

Ketamine, for example, is available today almost exclusively to those who can afford to pay out of pocket. It will remain so until FDA approval for ketamine to treat suicidal depression is attained. We've initiated filing our NDA for NRx100, the intravenous preservative free ketamine for treatment of suicidal depression. And as noted, the NDA is supported with powerful efficacy data from multiple well controlled trials, accelerated stability data sufficient to support a three year shelf life and an already filed manufacturing module. Once filed, we expect receiving a PDUFA date from the FDA for later this year.

Speaker 1

Long term ketamine safety is an issue that we believe will receive increased attention in the future as clinician prescribing and patient acceptance of ketamine becomes more widespread. There are data available not just from primate studies, but from human studies as well that show repeated ketamine doses on the order of sixty doses or more of the currently available commercial formulations of intravenous ketamine may be toxic to the brain. Repeated ketamine use is associated with damage to the urinary tract and bladder. The currently available ketamine preparation was designed in the nineteen seventies in a multiuse vial in order for the product to be used in anesthesia. This multidose vial was anticipated to be drawn for multiple doses in various patients necessitating the addition of a preservative.

Speaker 1

Back in the nineteen sixties, when this preparation was formulated, they used the potentially toxic preservative benzathlonium chloride. While there's no evidence that benzathlonium chloride is toxic at its current concentration, for the intended onetime use in anesthesia, its safety has never been shown or even proposed for repeated use. Indeed, the manufacturers of benzatholium chloride identify as caustic, toxic and capable of causing severe burns. This class of preservatives has already been removed from many eye drop formulations because of clear evidence of toxicity to the cornea and conjunctiva even at the currently allowed levels. Chronic use of ketamine is associated with development of ulcerative colitis, potentially a dangerous bladder condition.

Speaker 1

This condition may be caused by the excretion of the preservatives rather than by ketamine itself. We also note that we are not aware of any cases of interstitial societies reporting reported following the use of SPRAVATO, a nasal form of IV of esketamine that does not contain benzatholium chloride. Accordingly, we're filing a citizen's petition with the FDA to remove ketamine preparations with benzathonium chloride from the market, given that this substance is now shown to be unnecessary for stability and sterility of ketamine. The company also plans to file an abbreviated NDA or ANDA for preservative free ketamine so that this drug can be used as broadly as possible. Although we'll never lose sight of our core mission to treat lethal CNS diseases, including suicidal depression and PTSD, the market for NRx one hundred may be far larger than originally anticipated based on the current scenario.

Speaker 1

As I discussed previously, we have current manufacturing capacity to supply 1,000,000 vials of ketamine each month. We also have potential to scale up capacity if needed. As noted, we have taken steps to protect our preservative free formulation with the filing of a patent that has the potential to protect the product into 02/1945. The toxic preservative is not the only challenge associated currently available sixty year old ketamine formulation. As produced, ketamine hydrochloride has a pH of less than four.

Speaker 1

This isn't a problem for intravenous use where it's diluted, but precludes subcutaneous administration as dosing of any drug with this pH can cause pain and even cause skin ulcers. If you try to raise the pH of the current ketamine formulation, the ketamine precipitates out of solution rendering it unusable. Further administration challenges face those who try to give it by mouth. So aside from the obvious safety risks with unmonitored administration of the schedule of free drug, People have learned that the resulting blood levels from oral ketamine administration are highly inconsistent. Similar products have occurred with ketamine intranasal spread.

Speaker 1

While intravenous administration is completely reliable in achieving the blood levels, this requires field nurses and clinic facilities. With these challenges to administration, we hope to offer an attractive alternative subcutaneous ketamine delivered in the same way that insulin and neuro obesity drugs are given. However, this route of administration is only possible with the pH neutral form of ketamine. We've now developed that patentable version of pH neutral ketamine, one that remains stable at room temperature and is expected to begin human bioequivalence trials this year. As is well known, bioequivalence is far simpler and less expensive to prove than safety and efficacy.

Speaker 1

Our goal in gaining FDA approval for NRx100 is to significantly expand the number of patients who have access to the benefit from this important treatment. The current off label use of ketamine and CNS disorders is generally only available to patients who can pay out of pocket because insurance companies do not pay for unlabeled treatments. We expect NRx 100, once approved, to be widely reimbursed, thus providing access to the vast majority of people in need, not just those within means to spend thousands of dollars in cash for treatment. NRS 100 represents a major opportunity for our company. The current market for intranasal ketamine is significant.

Speaker 1

J and J recently released fourth quarter twenty twenty five sales data on SPRAVATO and is on track to generate $1,300,000,000 in sales this year, all while the label states that SPRAVATO has not demonstrated antisuicidal properties. Thus, NRx100 represents a multibillion dollar opportunity for NRx, and we are getting closer and closer to providing this life saving opportunity to patients. Let's now discuss our treatment for bipolar depression in patients with suicidality or akathisia, NRx one zero one. While bipolar depression affects approximately seven million people in The US, people with bipolar depression, akathisia, or suicidality are at imminent risk of self harm. There are no medications approved to treat these patients in The US.

Speaker 1

Current treatment options all carry the risk of suicide and akathisia, which are known side effects of serotonin active antidepressants. These patients need better treatment options urgently. Today, the only approved FDA treatment or the only FDA approved treatment is electro shock therapy. NRx one zero one is our oral combination of deep type of serine and NMDA receptor blocker and lirazidone, the standard of care in bipolar depression. NRx one zero one has the opportunity to offer a breakthrough in the care of patients with bipolar depression.

Speaker 1

In clinical trials, we've demonstrated comparable or greater antidepressant effect compared to the standard of care with a statistically significant improvement in the safety of NRx one zero one due to a reduction in suicidality and akathisia. In our clinical trials, NRx-one hundred one demonstrated strong antidepressant efficacy comparable to the standard of care with a more favorable safety profile. Our recently completed Phase 2bthree clinical trial of NRx-one hundred one presented last May at the American Society of Clinical Psychopharmacology demonstrated both a reduction in depression scores as well as symptoms suicidality and is now the first oral antidepressant to reduce symptoms of akathisia compared to standard of care of potentially lethal side effects of nearly all antidepressants. This would represent a new paradigm for the treatment of bipolar depression if approved. ACFE is not commonly discussed as a side effect of serotonin active medication.

Speaker 1

However, key opinion leaders and patients who suffered from akathisia regarded as the worst side effect of these antidepressants. Patients frequently describe it as a feeling of jumping out of their skin. Patients with akathisia are known to jump off of roofs and in front of oncoming trains. In fact, in 2024, a patient petitioned the British Columbia Supreme Court for the right to enter life rather than continue to suffer from akathisia. Currently, patients have no option other than simply enduring the side effect in order to achieve the critical antidepressant effects that are needed to control bipolar depression or choose to have electric shock therapy.

Speaker 1

The data we presented at ASCP confirmed data from our earlier STABLE B trial demonstrating that NRx-one hundred one is the first oral antidepressant that has effective antidepressant properties while simultaneously decreasing akathisia and suicidality. We believe this product profile could lead to NRx-one hundred one becoming the drug of choice in bipolar depression. We plan to initiate filing of our NDA for accelerated approval of NRx-one hundred one for suicidal bipolar depression in patients at risk of akathisia or suicidality this quarter. With the lack of treatment options for this segment of people with bipolar depression and our strong data, we and our regulatory council believe this to be a vital unmet medical need and appropriate for consideration of accelerated approval. We anticipate a 2025 PDUFA date.

Speaker 1

Based on prevalence data, prescribing frequency of serotonin active medications in bipolar depression and the risk of akathisia, the company anticipates that the market for the initial indication is over $2,000,000,000 while the broad bipolar market could markedly exceed $5,000,000,000 Since the beginning of the year, we've accelerated progress towards establishing the Hope Therapeutics Interventional Psychiatry Clinic network. We've outlined our plan to establish and grow the Hope network as a national and ultimately international network of interventional psychiatry centers. These centers would be designed to combine the latest neuroplastic treatments and protocols in an integrated and reproducible manner across the whole platform. The business model for Hope Therapeutics is somewhat similar to that of DaVita, a company that was instrumental in making kidney dialysis reliable and reproducible in a manner that has transformed the industry and continued to reward its investors. So far in 2025, we've signed definitive purchase agreements to acquire Kadema Neuroscience Institute, a pioneering interventional psychiatry clinic in La Jolla, California and Durham Medical, an extraordinary clinic group in Southwest Florida.

Speaker 1

Further, we've executed a binding letter of intent with NeuroSpa TMS Holdings, a pioneer in TMS offerings to acquire their clinic group in the Tampa Bay area on the West Coast Of Florida. Our objective for the year is to create a ring of Hope Therapeutics clinics that starts in Naples on the Southwest Coast, runs through Tampa and Orlando back down to Miami. But these three clinics collectively on a forward looking revenue are anticipated to represent $15 or more in annual revenue just on their own. Aedema's founder, doctor David Feifold, has agreed to serve as Hope's Chief Medical Innovation Officer post acquisition. He's one of the first academic psychiatrist to move ketamine and TMS therapy to the community care model, and it's frequently featured in the national media, such as in Rolling Stone, on Peacock, as one of their most knowledgeable experts on the safe and appropriate use of ketamine and other advanced therapies in mental health treatment.

Speaker 1

Some of you may have seen his recent interview with doctor Sanjay Gupta. Over the remaining months of 2025, we expect to announce the inclusion of additional EBITDA positive centers in the Hope Network. Looking at the market, we anticipate that the acquisition of 20 clinics, each with current revenue of approximately $5,000,000, will enable us to meet our forward looking revenue targets. Looking ahead, this best these best in class clinics can generate operating margins of 30% or higher with significant opportunities for future growth. On the financing front, Hope has announced signing term sheets for more than $10,000,000 in acquisition capital in the form of both debt and equity to fuel our initial acquisitions with strong interest expressed by investors in continuing to support our roll up strategy.

Speaker 1

As we've always said and as these term sheets illustrate, we continue to expect funding for Hope to be independent of NRx stock and thus non dilutive to NRx shareholders. Additionally, we expect that a portion of the earnings generated through HOPE may support NRx's path to profitability and our plan spin out of HOPE and subsequent listing on a national stock exchange will provide balance sheet value both to NRx and to its shareholders. As you can see in our 10 Q, we have substantially reduced operating expenses and are forecasting profitability on a going forward run rate basis by the end of twenty twenty five with revenue and EBITDA from Hope Therapeutics along with potential sales of our medications. I'll now ask mister Michael Abrams, our CFO, to review our financial results from the first quarter of twenty twenty five. Mike?

Speaker 1

Thank you, Jonathan.

Operator

For the three months ended 03/31/2025, the company reported a net loss of $5,500,000 versus a net loss of $6,500,000 for the comparable quarter in 2024 and a loss from operations of $3,800,000 versus a loss from operations of $6,000,000 for the comparable quarter in 2024. Research and development and general administrative expenses were $800,000 and 2,900,000.0 as compared to 1,700,000.0 and 4,300,000.0 for the comparable quarter ended 03/31/2024, respectively. As of 03/31/2025, NRx Pharmaceuticals had approximately 5,500,000.0 in cash and cash equivalents. The company believes that its current capital position combined with ongoing financing discussions and partnerships will support operations through at least the end of twenty twenty five. NRx continues to implement operational efficiency to extend cash runway and maintain focus on our path to generating revenue and value for our shareholders.

Operator

With that, I turn it back to John. John?

Speaker 1

Thank you, Mike. So we founded NRx with the goal of preventing and treating suicidality in patients with depression and PTSD. This is close to my heart and to the hearts of everybody who works with us. Our planned 2025 PDUFA date for two NDAs in the space 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.

Speaker 1

We're ready to take questions from the audience.

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Followed by the number one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two.

Operator

If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question is from Tom Schrader from BTIG. Please go ahead. Good afternoon.

Operator

Congratulations on the whirlwind of progress. I I had a kind of a remedial question on the recent IP. What does that buy you if in fact you get approved? And as far as I understand it, the the IP you really care about is the pH neutral version. So just your thoughts on, one, how strong the patent application is to leave the preservative out?

Operator

And two, how important is it for you to get that if you get approval? Thanks.

Speaker 1

Well, I I would never make predictions about how strong any individual patent is. I know that the patent counsel filing the patent is highly experienced and strongly believed in the claims that we're filing with the USPTO. Why does it matter? It matters because in our view, drugs and plastic preservatives are gonna be withdrawn from the market. And if we're coming to market with an orange book patented form of ketamine, we potentially have market exclusivity for an extended period of time.

Speaker 1

We always said that ketamine was a generic drug and by adding a new use, the maximum we were gonna get was three years of data exclusivity under paragraph four from the FDA. And then we we kind of surprised ourselves. And it turns out that we may have much longer exclusivity on receiving ketamine and a preservative free preparation than we originally anticipated. So if that happens, that's certainly good for our shareholders. The pH neutral form of ketamine is is certainly proprietary, certainly patentable, and it's expected to have long term protection.

Speaker 1

But it turns out we may have longer term protection than we ever predicted from a better version of old fashioned racemic ketamine given the focus of the current Secretary of Health and Human Services on getting toxic preservatives out of food and drug supply.

Operator

Good. Thank you. That's a that's a useful answer. Thank you. Your next question is from Ed Woo, who is a private investor.

Operator

Please go ahead. Yes. I'm actually with Ascendiant Capital. Congratulations on all the progress, and, obviously, it's gonna be a very exciting year for you guys. Have you just given any consideration for NRx 100 and also, you know, hope that they're either be able to go international beyond the The US?

Speaker 1

Certainly, we intend to to make NRx 100 available more broadly. And, you know, European countries are actually more sensitive to toxic substances and foods and drugs than The United States historically has been. So if we're if we're able to make this case in The US, we would anticipate that there is significant international potential for NRx 100. And in fact, we've been approached by a number of international entities for that specific purpose.

Operator

Great. That sounds good. Thanks for answering my questions, and I wish you guys good luck. Thank you. There are no further questions at this time.

Operator

Please proceed. That's all the time we have for questions. Well, thank you very much for joining us this evening. We're extremely excited about the year ahead with two potential drug approvals and subsidiaries targeting multiple large profitable mental health clinics moving ahead. This concludes the NRx Pharmaceuticals first quarter twenty twenty five results conference call.

Operator

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

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Key Takeaways

  • NRx 100: NDA filed for preservative-free IV ketamine to treat suicidal depression, supported by four controlled trials and three-year room-temperature stability, with patent protection through 2045 and manufacturing capacity exceeding one million doses per month ahead of a PDUFA date later this year.
  • NRx 101: Preparing an accelerated NDA for an oral combination of d-cycloserine and lurasidone targeting suicidal bipolar depression and akathisia, the first antidepressant shown to reduce akathisia, with an anticipated 2025 PDUFA date.
  • Hope Therapeutics clinic network: Secured binding agreements to acquire three interventional psychiatry practices (La Jolla, Southwest Florida, Tampa Bay) and plans to expand to 20 centers, backed by over $10 million in non-dilutive debt and equity to drive clinic revenue and profitability before year-end.
  • Financial progress: Q1 net loss fell to $5.5 million from $6.5 million a year ago, operating expenses were cut nearly in half, cash stands at $5.5 million with runway through 2025, and the company forecasts profitability on a run-rate basis by year-end.
  • Integrated treatment model: Emphasizes a comprehensive neuroplasticity approach—combining NMDA antagonists, TMS, hyperbaric and digital therapies—in response to the national suicide epidemic and rising regulatory focus on psychedelic-based mental health treatments.
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Earnings Conference Call
NRx Pharmaceuticals Q1 2025
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