NRx Pharmaceuticals Q1 2023 Earnings Call Transcript

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May 16, 2023

There are 7 speakers on the call.

Operator

Good day, everyone, and welcome to the NRx Pharmaceuticals First Quarter 2023 Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask Please note this event is being recorded. I would now like to turn the conference over to Suzanne Meveri with Stern Investor Relations. Please go ahead.

Speaker 1

Thank you, Vaishnavi. 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.

Speaker 1

Additional information concerning factors that could cause actual results to differ 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 to forward looking statements. Information presented on this call is contained in the press release issued earlier today and in the company's Form 10 ks, which was refiled on May 1, which may be accessed from the Investors page of the NRx Pharmaceuticals Inc. Website. Joining me today From NRx Pharmaceuticals are Stephen Willard, Chief Executive Officer and Seth Van Voorhees, Chief Financial Officer and Treasurer.

Speaker 1

Stephen will provide a summary of the company's progress, Seth will review the company's financial results and then Steven will review upcoming milestones before making closing comments. Following their prepared remarks, Steven and Steph will be joined by Jonathan Javitt, the company's Chief Scientist and Matthew Duffy, the company's Chief Business Officer, to address investor questions. I will now turn the call over to Steven.

Speaker 2

Thank you, Suzanne. Good morning, everyone, and thank you for joining us to discuss our continued success As we advance our pipeline of innovative therapeutics for patients facing psychiatric disorders with great unmet need, including treatment resistant suicidal bipolar depression, post traumatic stress disorder and potentially chronic pain related to depression. Today, we will discuss Q1 2023 results and provide a business update. 2023 is off to a great start In recent months, we've made great strides in our clinical trials for our lead product candidate, NRX101, while continuing to execute on our corporate strategy. To summarize, we aligned with the FDA on the chemistry, manufacturing and controls of NRX101 as well as a path to commercial stage product and continue to align with the FDA on a potential path for approval of NRX101 in a Type B meeting.

Speaker 2

We announced The data identified no safety concerns and subsequent evaluation indicated that no safety or futility signals were reported in the first 50 patients treated and provided a positive recommendation to continue enrollment. And Based on FDA interactions and DSMB findings, we are consolidating our 2 clinical trials of NRX101 in suicidal bipolar depression into one study for patients with suicidal treatment resistant bipolar depression. I'll begin by reviewing recent Progress made for NRX101 in suicidal treatment resistant bipolar depression, PTSD and chronic pain. NRX101 is a fixed dose combination of decycloserine, an NMDA receptor modulator and lorazodone, a standard of care medicine for use in treatment resistant bipolar depression. There are approximately 7,000,000 people living with bipolar depression in the U.

Speaker 2

S. And the risk of suicide is very high with this population. Data indicates that 50% or more of these patients will attempt suicide in their lifetime. However, there are currently no approved medicines for people with suicidal bipolar depression. To our knowledge, NRx is the 1st company to attempt to bring a medicine to people whose only FDA approved treatment alternative is electroshock therapy.

Speaker 2

This is a potentially life saving event because antidepressants carry black box warning labels regarding the potential for increased risk of suicide Based on the NRx's differentiated therapeutic profile, we believe that we have the potential to address a significant unmet need for patients who are currently underserved by available treatment options. Turning to the science behind NRX101, NMDA antagonist drugs have been shown to reduce symptoms of depression and suicidal ideation, And neither Dcycloserine nor lorazodone have shown potential for abuse, which is an important consideration When treating psychiatric disorders with suicidal thoughts. At NRx, we discovered the unique synergy between NMDA and and 5 HT2A targeted drugs as well as the critical dosages at which dacycloserine may be effective in these conditions. These discoveries resulted in a portfolio of 90 patents around the world, 48 of which have now been issued, relating to the treatment of bipolar We initially introduced NRX101 as a drug that showed benefit in conjunction with ketamine in acute care patients, Proof of concept data from the Phase 2 STABL B clinical trial, which administered NRX101 following stabilization of hospitalized bipolar patients With acute suicidal ideation after treatment with Ketamine demonstrated a highly differentiated therapeutic profile in a patient population with no drug therapy options.

Speaker 2

Based on this data, the FDA granted Breakthrough Therapy Designation and a Special Protocol Agreement or SPA for NRX101 in bipolar depression with acute suicidality. In January 2023, the company initiated a Phase 3 registrational clinical trial of NRX101 for the treatment of severe bipolar depression with acute suicidal ideation and behavior. Based on recent comments from the FDA at a Type B meeting of NRX101 for hospitalized patients with subacute suicidal ideation, a study initiated in 2022 for a much broader potential patient population. This decision was made in March of this year when we announced encouraging findings from our outpatient trial of NRX101 in this subacute population Our independent DSMB examined unblinded data from the first 50 patients and found no futility signal at this time in the trial. Similarly, no safety signals were identified in association with NRX101 and the DSMB recommended that enrollment in the trial continue as planned.

Speaker 2

According to the study's statistical analysis plan, the Failure to identify futility requires that an advantage, though not yet a statistically significant advantage, of the investigational drug relative to the comparator treatment must be observed by the DSMB. The newly converged and upgraded Phase IIbIII clinical trial includes patients with suicidal bipolar depression about suicidal bipolar patient populations, which represents a broader indication. We believe the results of this study could be used in a future registrational filing should the trial prove successful. In this trial, we have focused our outpatient clinical trial first on those of greatest unmet medical needs, specifically those patients who are under care of a physician for bipolar depression and who have ongoing depressive symptoms and active thoughts of self harm despite treatment of available medicines. The objective of this multicenter, randomized, double blind, controlled, potentially registrational study is to demonstrate NRx's ability significantly improved symptoms of depression and suicidality over 6 weeks when taken twice a day on a home use basis.

Speaker 2

The study has the potential to expand the use of our medicine to the nearly 1,000,000 people who currently suffer from severe depression and suicidal ideation despite expert medical care with currently available medicines. We anticipate that this is a market of approximately 2 point $2,000,000,000 a year. The company believes that the strategy to converge the ongoing clinical trials and broaden the indication could enable more patients with suicidal bipolar depression, the option of an outpatient therapy in the coming years. Data from the ongoing Phase 2bthree clinical trials are expected in the Q4 of 2023. This broader indication may also offer Importantly, in January 2023, we also reached alignment with the FDA on our proposed manufacturing plan based on a Type meeting to review our chemistry, manufacturing and controls.

Speaker 2

As a result, NRx is now positioned to conduct registrational trials of NRx101 and able to make NRX101 available through expanded access and right to try programs for patients who have exhausted approved treatment options. We are excited about this milestone, in particular, as we believe that adopting a commercial ready manufacturing process at this stage of our development can lead to a more seamless NDA submission, review and approval process under the potential breakthrough therapy designation without the need for bridging studies. During Q1 of 2023, the company refined its ability to validate the psychometric ratings that are used to assess the efficacy endpoints for the clinical trial. The company relies upon a team of veteran raters who both train independent site raters and monitor the technical quality of each rating. A standard was set of 90% or better concordance between the company's veteran rating team and site raters.

Speaker 2

This standard was met for all study participants whose ratings were obtained in their primary language And management believes that the standard can be maintained for the duration of the trial. In April 2023, the company contracted with 1 in Health to initiate a recruitment campaign that may cover up to 45 states in the U. S. To recruit sufficient participants for this enlarged trial. The company has similarly broadened its previously disclosed relationship with CYENS 37, a contract and to randomize them to be treated within the broad clinical trial.

Speaker 2

Linen Health has additionally engaged The mighty, a voice of the patient organization with national reach to publicize the clinical trial to the 800 plus 1,000 subscribers who have initiated indicated a focus on bipolar depression and suicidality. Additionally, last quarter, we Continued to work to advance our development plans for NRX101 in post traumatic stress disorder or PTSD, Another area of high unmet medical need, which is also associated with suicidality. Approximately 9,000,000 individuals Our country experienced PTSD and 1 third had severe PTSD with 10% experiencing civility. Between 1722 members of our armed forces of veterans are lost every day to suicide. Depression and PTSD may be driven by pathways that are similar to those that drive depression and other conditions.

Speaker 2

However, NMDA antagonist as a class and dacycloserine in particular may have a more specific effect in treatment of PTSD. In a preclinical PTSD study, decycloserine demonstrated the ability to extinguish reoccurring images of traumatic events, also known as Pure Memory, and validated WKY model of PTSD. This model has been similarly used by others to document a PTSD specific effect of Ketamine. Repeated IV Ketamine has also been demonstrated to improve PTSD scores in a randomized controlled trial. Unlike Ketamine, however, NRX101 is not neurotoxic, is not addictive and has not caused psychedelic side effects in clinical trials.

Speaker 2

We anticipate that our investigational drug will show antidepressant effects in PTSD compared to placebo, and we hope that it will demonstrate specific effects on the fear memory components of PTSD and directly reduce symptoms of PTSD itself. Today, there is no approved medicine for these specific PTSD symptoms. We are on track to initiate a study of NRX101 for PTSD in 2023. We are incredibly excited about the potential life saving effect of NRX101 and in order to Support the continued clinical development of these programs, we announced the close of a $2,900,000 registered direct offering to support our pipeline efforts and more specifically, the initiation of an expanded access protocol and safety database for NRX-one hundred and one studying treatment resistant bipolar depression with risk of self harm. This database allows us to investigate the expanded indication put forward by the FDA psychiatric division and our Type B meeting for our registrational trial.

Speaker 2

And we look forward to providing you all with an update of our clinical activity in the months to come. The continued financial support from our existing shareholders based on our existing data and ongoing trials demonstrates their commitment to people living with serious CNS disorders and the potential of NRX-one hundred and one to become commercially successful. We have achieved a number of significant corporate milestones in recent months. In February, we received notice of the issuance of the U. S.

Speaker 2

Patent for NRX101, which covers the use of NRX101 to treat patients suffering from depression, including bipolar depression or major depression with or without suicidality. This pattern strengthens the company's intellectual property position until at least 2,033. We also strengthened our deep bench of healthcare executives and world class psychiatrists in recent months. We announced the appointment of Professor Andrew Nuremberg and Professor Marion Leboisier to our advisory board in March. Professor Nierenberg is a Chaired Professor of Psychiatry at Harvard Medical School and is the Director of the Daughton Family Center For Bipolar Research at Massachusetts General Hospital.

Speaker 2

He is one of the world's most published scientists in the area of psychiatric research, particularly as it relates to bipolar disease. We are honored to have him as principal investigator of our ongoing clinical trial in suicidal bipolar depression. Professor Leboisier is one of France's leading psychiatrists and extensively published researcher in the field of neuropsychiatry, particularly as it relates to bipolar disease and autism. In addition to her academic achievements, Professor Liboiej shares the Foundation Fundamental and has facilitated an important collaboration between NRx and French psychiatry researchers, Also, the company has continued to engage in a strategic conversation focused on funding the drug approval and commercialization of product. In parallel, the company has established an ongoing dialogue with Streeterville Capital LLC, the company's current debt lender, to address the company's current debt facility to best support the ongoing needs of the clinical trial.

Speaker 2

We are confident that we have achieved a strong foundation for NRx that enables us to efficiently advance our clinical trials and make a difference in the lives of patients with life threatening psychiatric disorders. I would like to express my gratitude to the patients, the NRx team, clinical trial investigators and shareholders for their continued support. With that, I'll turn it over to Seth for a brief overview of our financial results.

Speaker 3

Good morning, everyone. Thank you, Stephen. I will now review the highlights for our Q1 2023 financial results. For the 3 months ended March 31, 2023, NRx Pharmaceuticals recorded $3,700,000 of R and D expenses compared to $5,500,000 for the quarter ended March 31, 2022. The decrease of $1,800,000 is related primarily to a reduction in clinical trials and development expense related to our discontinued activities related to XYZAME.

Speaker 3

For the 3 months ended March 31, 2023, NRx Pharmaceuticals recorded $5,800,000 of G and A expenses compared to $10,200,000 for the 3 months ended March 31, 2022. The decrease of $4,400,000 was primarily related to a decrease in legal, professional and accounting fees. Our net loss for the quarter was $11,000,000 an improvement of $2,400,000 compared to the net loss of $13,400,000 for the comparable quarter in 2022. On the financial side, our cash resources were enhanced in March when we entered into a securities purchase agreement with accredited investors who had previously established positions in the company. This transaction involved the sale of approximately 3,900,000 shares of the company's common stock and a 5 a year warrant in a registered direct offering priced slightly above the market at $0.75 per unit for the securities.

Speaker 3

The investors agreed not to sell these shares of common stock or exercise the warrants for 6 months following the issuance date. The aggregate gross proceeds to the company for the offering was approximately $2,900,000 As of March 31, 2023, we had approximately $16,500,000 in cash. Assuming future debt payments can continue to be made in stock, the $16,500,000 of cash and cash equivalents at the end of the Q1 of 2023 is expected to fund the company's operations through the expected delivery of data in the Q4 of this year from our Phase 2bthree trial. Additionally, we are evaluating operation efficiencies associated with the completion of our manufacturing activities as well as considering capital raising activities to extend this runway. With that, I'll turn it back to Steve for closing remarks.

Speaker 3

Steve?

Speaker 2

Thanks, Seth. The past quarter has been incredibly productive and we look forward to advancing our NRX-one hundred and one program in suicidal bipolar depression, PTSD and chronic pain in the months to come. Based on the experience we have as a clinical trial company working in CNS, NRx is uniquely positioned for success and future growth. We plan to build on our momentum in the remainder of 2023 As we continue to execute on multiple regulatory and clinical catalysts, we believe that NRX101 is a potentially life saving medicine that could change the treatment paradigm for life threatening psychiatric conditions, which is the driving force behind our and to meeting the needs of underserved patients with serious CNS disorders. We look forward to updating you on the near term milestones, which are on track for the coming year, including the initiation of our study of NRX101 in PTSD, the advancement of NRX101 in chronic pain associated with depression, as well as future updates on for depression as well as data from our Phase IIbIII study in the Q4.

Speaker 2

With the shared commitment of our investors, our team and our researchers, We aim to bring hope to the millions of patients with suicidal bipolar depression and PTSD who have been systematically excluded from trials of previous antidepressants. Operator, we are ready to take questions from the call.

Operator

All right. Then we will begin the question and answer session. Our first question comes from Ed Woo with Ascendiant Capital. Please go ahead.

Speaker 4

Yes. Thank you for taking my question. My question is on PSSD additional indication. Do you Pete, starting filing the IND this quarter or the next quarter in order to start the trial by the Q4?

Speaker 5

Thank you, Ed. This is Jonathan Javed. Yes, we do anticipate filing that IND.

Speaker 4

Great. And then in terms of how large the possible trial can be, do you have any indications of How big it may be?

Speaker 5

Well, I think from a registration perspective, There were some precedents from the anti depressant recent approvals, But until there's a formal meeting with FDA, it's not possible to know exactly what the Sample size would be, but I think there's some good precedence in recent approvals of antidepressants.

Speaker 4

Great. And then my last question is in terms of what you guys have learned with your current study, do you think that it would be you'll be able to use any of that data in order to Facilitate the trial possibly being easier or you want me to go faster?

Speaker 5

Well, certainly, a trial for any indication adds to the safety database For all indications and clinical experience with the drug Yes, it's always helpful. But the endpoints in PTSD are a little different than the endpoints In depression, because in PTSD, you're primarily relying on the CAHPS V scale, looking at symptoms of flashbacks Some of that's been Demonstrated with Ketamine, which as you know is a very potent NMDA antagonist. So there's reason to be optimistic that a more controllable MDA antagonist might also relieve symptoms of PTSD.

Speaker 4

Great. Well, thanks for giving me the answer and I wish you guys good luck. Thank you. Thank you, Ed.

Operator

The next question comes from Jason Kolbert with Dawson James. Please go ahead.

Speaker 6

Hi, guys. Congratulations on all the progress. Good morning.

Speaker 1

Can you talk

Speaker 6

a little bit about The dynamics of actually enrolling these bipolar depressed patients with suicide ideology, How do they come to you? How do they end up being referred into the trial? What's the entry criteria on these patients? And then I want to talk a little bit about what are the endpoints of the trial?

Speaker 5

Thank you, Jason. As you know, we put the protocol for the trial onto www.clinicaltrials.gov so people are free to read it. And the trial enrolls patients who have Severe depression as measured by a score of 30 or higher on the MADRS scale And also have suicidal ideation to the extent that they have a Score of 3 or higher on the Columbia suicide severity rating scale. So historically, we've relied on Traditional study sites to recruit these patients either from the patients that they already know in their clinical treatment programs or patients that they're able to reach out to in the community. As Steve Discussed earlier in the call, we've decided to go broader than that, and we've engaged 1 in Health Really to stand up a recruitment effort that's licensed in 45 State so far in conjunction with the decentralized clinical trials organization called CYENS 37, Such that we're able to recruit patients in most of the country And we're in the process of reaching out to a very large pool of people who have identified themselves As having bipolar depression, and rather than demand that those patients come to A study site that could be some distance away from them.

Speaker 5

We have teams To participants including their home, to draw blood as needed by the protocol again at their location. And then we have psychometric graders who are able to do the assessments associated with the primary and secondary endpoints for the study on a remote basis. And we anticipate that by opening up our recruitment in that manner, We can much more efficiently recruit patients into the study, make it easier for them To stay in the study and at the same time be able to control the quality of the data Through a very small pool of very highly experienced raters.

Speaker 6

Yes. I mean, I can appreciate the infrastructure required to accomplish all of that. And given where you are, How confident are you in the velocity of enrollment that supports that statement that you're funded through kind of the data read at the end of the year?

Speaker 5

Well, Prediction is challenging, especially as Yogi Berra once said, when you're talking about the future. What we can tell you is that in the 1st week of the One in Health initiative, There were 150 inbound inquiries of which 75 were patients who were And to potentially meet the study criteria. So the interest in this study is very palpable. And by the time we speak again, I think we'll have a very good handle on The velocity with which enrollment can be achieved.

Speaker 6

Okay. Thank you. And can you break down for me, just review with The primary endpoint and what exactly the components of it are that are measured?

Speaker 5

So the primary endpoint It is very clear cut. It's the same primary endpoint that was used to approve lorazodone. It's the same primary endpoint that was used to approve Avelity, which is change in the Madras 10 depression score, the Montgomery Asper Depression Rating Scale, over 42 days Using what's called a mixed model, repeated measures regression, all of that's described in detail In our protocol, which people are free to read, and the secondary endpoint, the key secondaries are Measurement, well, time to treatment failure, in other words, how long is it between the time you start the study And the time that the treating physicians determine that the medicine you were randomized to isn't working, That's one secondary endpoint. And the other secondary endpoint is change on the clinical global impression suicide Severity scale, which is a scale that we saw significant change on And the STABLE B study and the Phase 2 study that are in this breakthrough therapy designation. So The endpoints are quite transparent in that regard.

Speaker 6

Really appreciate the update. Thank you. We'll be watching the progress.

Speaker 2

Thank you.

Operator

As we have no further questions, this concludes our question and answer session. I would like to turn the conference back over to Suzanne for any closing remarks.

Speaker 1

Thank you, everyone. That is all the time we have for questions. Thank you for joining us this morning. This concludes the NRx Pharmaceuticals Q1 2023 financial results call. Have a great day.

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