Good afternoon and welcome to the NRx Pharmaceuticals Full Year 2022 Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Suzanne Messere, Stern Investor Relations. Please go ahead.

Thank you, Danielle. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under US 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 SEC. The forward-looking statements made during this call speak only as 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 earlier today and in the company's Form 10-K planned to be filed tomorrow, which may be accessed from the Investor Relations sections of the NRx Pharmaceuticals' website. Joining me on today's call from NRx Pharmaceuticals are Stephen Willard, Chief Executive Officer and Seth Van Voorhees, Chief Financial Officer and Treasurer. Stephen will provide a summary of the company's progress; Seth will review the company's financial results, and then Stephen will review upcoming milestones before making closing comments. Following their prepared remarks, Stephen and Seth will be joined by Jonathan Javitt, the company's Chief Scientist and Matthew Duffy, the company's Chief Business Officer to address your questions. I will now turn the call over to Stephen.

Thank you, Suzanne. Good afternoon everyone and thank you for joining us. We scheduled this conference call to coincide with World Bipolar Day. As you know, bipolar depression is a lethal condition that affects 2% of Americans, nearly 7 million people and a similar percentage of the world's population. With the commitment of our investors, our team, and our researchers, we aim to literally bring hope to the millions of patients with suicidal bipolar depression and PTSD who have been systematically excluded from the trials of previous antidepressants. Today, we will discuss full year 2022 results and provide a business update. As you can see from our filing, 2022 was a pivotal year for NRx. When we filed our 2021 earnings, the COVID pandemic was just winding down and we announced our intention to redirect our energy to NRx's core business, the development of life saving drugs for lethal central nervous system conditions with an initial focus on suicidal bipolar depression. As we promised investors a year ago, we have now completed manufacture of NRX-101 and aligned with the FDA on a path to commercial stage product. We've reinstituted our clinical trials for NRX-101 for patients with suicidal treatment resistant bipolar depression, we've continued to align with FDA on a path to approve NRX-101, and this week we announced encouraging findings from the first evaluation of unblinded data by our independent data, safety, and monitoring board. As you know from the online publications we have posted, this DSMB initiative is being led by highly experienced executive team together with leading psychiatrists from around the world. Today, we are delighted to announce the appointment two world-class psychiatrists to our Advisory Board, Professor Andrew Nierenberg, a Chair Professor of Psychiatry at Harvard Medical School is the Director of the Dauten Family Center…

Thank you, Stephen and good afternoon everyone. I will now review the highlights of our fiscal year 2022 financial results and our expectations for 2023. For the year ended December 31st, 2022, NRx Pharmaceuticals recorded $17.0 million in R&D expenses compared to $20.3 million for the year earlier. The decrease of $3.2 million is related primarily to the decrease of $2.5 million in clinical trial and development expenses related to our discontinued XIAFAMI [ph] clinical work. For the year ended December 31st 2022, we also recorded $27.4 million of general and administrative expenses compared to $74.9 million for the year earlier. The decrease of $47.6 million was primarily related to a decrease of $53.3 million in consulting fees, of which $41 million was related to the fair value of common stock issued. For the 12-month period ended December 31st, 2022, our resulting net loss was $39.8 million, which is $53.3 million improved compared to the net loss of $93.1 million for the 12 months ended the prior year. In fiscal year 2023, we expect our annual R&D expenses to decrease further from both fiscal year 2021 and 2022 levels as we focus solely on the development of NRX-101. Furthermore, we expect our annual G&A cost will decrease in 2023 due to a number of factors, including reduced legal costs related to the relief therapeutic -- therapeutical settlement, which has the potential for a significant royalty payments to us in the future; lower insurance costs, especially related to D&O coverage; and as well as other cost initiatives that we have undertaken. Now, I'd like to comment on our cash resources. At year end, we had $20.1 million in cash. Our cash resources were enhanced several weeks ago when we entered into a Securities Purchase Agreement with accredited investors who had previously…

Thank you, Seth. Over the past year, we have built strong momentum as we advance our NRX-101 program in two indications, while also positioning NRx for future growth with the potential for both the broader bipolar depression population as well as additional indications. Building on that momentum, 2023 promises to be an even more productive year as we continue to execute on multiple regulatory and clinical catalysts. We believe that NRX-101 is a potentially life-saving medicine that could change the treatment paradigm for individuals with bipolar depression who are experiencing suicidality, which is the driving force behind our mission of meeting the needs of underserved patients with serious CNS disorders. We look forward to updating you on our near-term milestones, which are on track for the coming year. Assuming that efficacy endpoints and safety are met in our Phase 3 trial, we plan to initiate the rolling submission of a new drug application by the end of this year with potential for drug approval by the end of 2024. Operator, Danielle, we are ready to take questions from the audience.

We will now begin the question-and-answer session. [Operator Instructions] The first question comes --

Hello?

The first question comes from Jason Kolbert of Dawson James. Please go ahead.

Hi, guys. Thanks.

Hey Jason.

I appreciate -- hi, how are you? Thank you for the very comprehensive update. I mean, that is really, really good, very detailed. That's what we need. Just want to understand a couple of comments you made. The DSMB lack of utility, which implies that the active drug is showing efficacy, equivalent or even better than competitor, although not yet statistically significant. Can you just talk a little bit about that statement and kind of the math behind it, that would be helpful?

Sure, Jonathan.

Sure. Jason, as you know, it's critical that we keep the blinding for the trial in place the protocol for the trial and statistical analysis plan are up on clinicaltrials.gov. And all we've been authorized to say by the DSMB is that no futility signal was identified. And their leading methodologist Dr. Levine said that we could offer the additional comment that in this trial, the way this is set up, for that conclusion to be reached a numerical superiority, though not a statistically significant superiority would have to be identified. There are some trial designs where as long as you're not worse than the placebo, you're still not futile, we put in place a stricter futility rule than that. But that's really all we're at liberty to say.

Right. But actually that's very critical, that last sentence when you talked about -- because that's what I was familiar with. But in most clinical trial are designed that if you're equivalent to the comparator or non-inferior to the comparator, that's how they're mostly designed. And what I didn't understand until this moment was that if your trial design is a little bit different, and in fact, you're not futile because of the powering -- and I'm assuming because of the powering differences and the assumptions around the effect between active and comparator that in fact, if no futility is shown, it suggests that there is a superiority because otherwise -- because the numbers are stacked against you because of the tough trial design. Is that kind of Layman's interpretation about right?

Well, I don't think I want to wax overly optimistic. I think we're delighted that we didn't hit a futility signal given that we had a fairly strict rule in place. I don't think it would be necessarily care for us to talk about most trial designs, but we did get permission from our methodologies.

Let me ask the second half of the -- sure. I understand. So, I don't want to beat up this point because you're limited by what you can say. But I was also very interested from a clinical perspective when you talked about potential modifications of the Phase 3 trial and the combination of the two trials together. Can you talk a little bit about what that might mean? And particularly I was -- yes, particularly the timeline--

Let's talk about how we got to where we are.

Thank you.

When this began, it began because people were using ketamine to treat acutely depressed patients. And everybody saw that ketamine wears off after a couple days to a week. And a lot of people thought that repeat use of ketamine wasn't a great idea. So, people suggested perhaps we develop NRX-101 as a maintenance therapy to prolong the effect of ketamine. And that's what we did in the STABIL-B study. We got results that was quite encouraging. As you know, lurasidone was originally approved on a 3.9 point difference between lurasidone and placebo and yet we beat lurasidone, a known good drug by 7.7 points. Pretty impressive effect. Remember, Avelity [ph] just got approved on a four point difference between Avelity and placebo and we didn't go against placebo because it wouldn't be appropriate to do that in suicidal patients. We went against the best available standard-of-care drug. So, that's how we got into this and that's why we got the Breakthrough Therapy Designation. Along the way, we said, well, what if NRX-101 is actually good enough to be a benefit to patients without prior use of ketamine. And we asked that question just as we were getting back into psychiatry a year ago, where we had just enough of our old Phase 2 material to do a smallish study like this. We said let's test NRX-101 against lurasidone without prior ketamine and see if there's a signal, see if it's not futile. And that's where we are at this point. And based on having reached that point and based on having now the availability of newly manufactured Phase 3 and potentially commercial scale drugs, we're enlarging this to a registration study because we now believe that there is a real potential for this home-use oral pill -- actually capsule to be effective in its own right, not just as a drug to take after ketamine. So, that's how we got to where we are.

Makes perfect sense. And last question and you just kind of touched on it also was Breakthrough Designation. Is that something that you feel you've been encouraged to go after?

Well, we've been awarded Breakthrough Therapy Designation for the original indication of NRX-101 to use after ketamine. And that gives us the ability -- the important part of Breakthrough Therapy Designation is it gives you a dedicated resource at FDA, a Program Manager who is committed, if at all possible, to helping the drug get through the approval process. So, we have that in place now. And the other key benefit of Breakthrough Therapy Designation is it gives you the right to submit your new drug approval application on a rolling basis. So, we've said by the end of the year, we're going to start submitting. We're going to submit the manufacturing data, the preclinical data so that the whole file is reviewed by the time we finally have the efficacy data to submit. So, those benefits of Breakthrough Therapy Designation are already in place.

Got you.

And I mentioned that--

Well, and I understand--

We may have a conversation with FDA when more data are available about specifically extending the Breakthrough Designation to this use of NRX-101, but I'm not sure that that would really change our path to approval in any meaningful way.

Perfect. Thank you. And that answer actually answers some of my timeline questions. So, really the only -- the critical hurdle for you is going to be, if I'm right, is just patient enrollment and then data analysis once you completed treating the last patient, right?

Patient enrollment, data analysis, and we announced after the Type B meeting with FDA that they want to see a safety database of 1,500 patients. Now, if you look at recent approvals, approvals actually happened at a smaller safety database than that, but 1,500 is the E1 Treaty target in the United States and other countries all sort of agreed on the safety database size for drugs to treat non-lethal conditions. This, of course, is a lethal condition. And you've seen us talk about how we're going to start building that safety database not only through our clinical trials, which take a while to enroll and are expensive to enroll, but also through an expanded access program that would allow doctors who have patients with bipolar depression and have exhausted approved medications for the treatment of bipolar depression to gain access to NRX-101. And there's a fair amount of precedent for the use of such expanded access programs in this way. So, to the extent that people imagine the safety database will be horribly, horribly expensive recognize that when we did expanded access in COVID, it was on the order of $3,000, $4,000 a patient as opposed to the kind of costs one would associate with a formal randomized controlled trial. Now, we don't know what standard access is going to cost us in NRX-101 yet. We don't know whether we're going to be able to gain reimbursement for expanded access, which if you look in the FDA guidance, can be applied for, but we do see it as an efficient way to get to the NDA, while at the same time, continuing our clinical trials for safety and efficacy full speed ahead.

Thank you, Jason.

Understood. Thank you.

The next question comes from Vernon Bernadino from H.C. Wainwright. Please go ahead.

Hi, everyone.

Hey Vernon.

Congratulations on the progress and thanks for taking my question. Hey, Jonathan, Steve, and Seth. What is important for me to perhaps ask about is with the current trial being upgraded to a Phase 2b/3 study, that may be used for registrational filing. With the nuances of this patient population and how they're treated, are there any specific changes that are going to occur or need to occur that it has been upgraded to a registrational study or is it just nearly an upgrade because that's something that you've asked for and you've already fulfilled the requirements?

Well, one of the things we did is posted the protocol on clinicaltrials.gov and that's an important thing to do because when -- and we certainly hope the trial will show efficacy. The reviewers for the scientific journals want to see that we were transparent upfront about what are our endpoints, how are we measuring them. So, that to the extent that there are changes along the way, those are known in a transparent manner. The main difference for us between simply Phase 2 and Phase 2b/3 is as I said to Jason, when we started this, all we had in our warehouse was Phase 2 investigational medicine that was made five years ago in China during our partnership with Wuxi Apptec and that's not investigational product that can be used for registrational purposes. Registration study means that you're doing your clinical trial with medicine that is essentially identical to the medicine that you intend to put on the shelf of the pharmacy. So, we're now at that point where we did the hard work to do the tech transfer, to bring the analytic methods over from China to North Carolina, and validate those methods. We've upgraded our control of impurities from a Phase 2 level to a Phase 3 level. So, now that we actually have medicine that we believe is substantially identical to the medicine that we would hope to put on a pharmacy shelf in a couple of years, we're able to make this a Phase 2b/3 registrational trial. So, that's not really a protocol change per se. And I think often investors don't realize how these days in biotech, failures in manufacturing and CMC are possibly more likely to bring down a promising drug than failures in an efficacy trial. And that's why we're so fortunate to have Dr. Panicucci, who is one of the world's more experienced drug manufacturing experts as our Chief Technology Officer.

Okay. Got it. And that's certainly important because conceivably, if it's a study that are very successful, you could also, and I say, conceivably use the Phase 3 material for commercial supply. I guess what I was specifically getting at is, is there going to be any change to pass the screening of patients such that it fine-tune those that would enter a Phase 3 level type of study that is registrational?

Well, one of the things that we're intensely focused on is ensuring that the psychometric ratings achieved in this study are as accurate as possible. There's been a lot of talk in this psychiatry space about study sites that yield surprising results and getting on top of study sites. And one of the things we've done that we think is a little different from what some have done is we've built a team of expert psychometric raters within the company who are evaluating in real-time the ratings that are being achieved at the study site. So, they get an audio recording of each rating session as it happens and we're constantly looking at in accordance between people who are being raided by the site raters on the [Indiscernible] score on the CTI suicidality scale and those same sessions being evaluated by our in-house master-raters and we've set up an adjudication system so that appears more than three points of this agreement, that rating session immediately goes out to an independent adjudicator. And if you look on clinicaltrials.gov, we published some of our information about how we do that. And I think in the coming months, we're going to hope to get a scientific publication out that will give the investment community get some sense of how we approach this this whole process of trying to keep a clinical trial under control where you don't win or lose based on a blood test or examining a piece of tissue, you win or lose based on what's inherently a subjective process where an expert psychologist is asking structured questions and assigning a score. And keeping the drift between study sites down as low as possible is the difference between having a very high standard deviation and a great deal of difficulty improving statistical significance versus having a tighter standard deviation and an easier ability to prove statistical significance. So, that's where we're focusing every day as we try to do our job to bring this medicine to market.

Sure. That's helpful information. And because of the placebo effect, as you know, and the problems with that in these kind of studies, that's why I asked the question because unfortunately sometimes it's impossible to know if somebody's suicidal unless they actually attempt suicide. But in the screening process, you can fine-tune the, like I said, the [Indiscernible] as well as possible and increase the chances for success. I appreciate you providing that additional information and wish you the best of luck for the study. Thanks for taking my questions.

You just said something very important and it's one of the early things that FDA guided us on when we first met with them. It's pretty well known that suicidality comes and goes and it may not be something that patients talk about as readily as symptoms of depression. So, the guidance we got from FDA early on because our original thought was that our primary indication we be the suicidality score. The guidance we got from FDA was to make the primary endpoint for our studies that measures depression scale. And the exact words, if you're able to prove that you improve depression in this population of patients who have suicidality, who have been excluded from previous trials, where there is no antidepressant that's indicated for use, no oral antidepressant because there's been some encouraging data with Johnson & Johnson does ketamine product, but there's no oral antidepressant that’s indicated for use in these patients with suicidality, that's great. That's enough to win. And if at the same time, were able to show that the secondary endpoint of improvement on the CGI suicidality scale is also significantly better than the comparator drug. Well, that's even better. But that's why our primary endpoint is the measures depression scale.

Thank you. I appreciate that. And I am very hopeful for you and the patients out there. Thanks again for taking my question.

Thank you, Vernon.

[Operator Instructions] The next question comes from Ed Woo of Ascendiant Capital. Please go ahead.

Yes, congratulations on the progress and also on the DSMB readout. Do we anticipate any more readouts or any interim data for either one of your studies this year?

We do expect that the DSMB is going to look at the data again at some point I would guess before the end of Q3, but they haven't told us exactly when that readout is going to be, but they're going to be monitoring the study in an ongoing way to the extent that there are safety signals emerge, they might look sooner. But they're working with us very closely because this is a population of patients who are actively at risk of self-harm, which is why they've been excluded from trials of ordinary antidepressants.

Great. Well, thanks for answering my questions and I wish you guys good luck. Thank you.

Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Suzanne Messere for closing remarks.

Thank you, Danielle, and thank you everyone for participating. That is all the time we have for questions. Thank you again. This concludes the NRx Pharmaceuticals' full year 2022 results conference call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.