NRx Pharmaceuticals, Inc. (NRXP) Q2 2026 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to the NRx Pharmaceuticals Second Quarter 2026 Results Conference Call. [Operator Instructions]. I would now like to turn the conference call over to Sebastian Gomez of astr partners. Please go ahead.

Thank you, operator, 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. 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 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 in the company's Form 10-Q, which may be accessed from the Investor page of the NRx Pharmaceuticals website. Joining me on today's call is Dr. Jonathan Javitt, our Founder, Chairman and CEO; and Michael Abrams, our Chief Financial Officer. Dr. Javitt will provide an overview of the company's progress during both the first half of the year and second quarter in particular, following which Michael Abrams will review our financial results. Following their prepared remarks, we will address investor questions. I will now turn the call over to Jonathan. Jonathan?

Thank you, Sebastian. Good morning, everyone. Thank you for joining us. The second quarter of 2026, was a major inflection point for our company across multiple key objectives as we advanced our mission to bring hope to valuable patients battling depression and suicidal ideation. We continue to drive forward toward those key objectives with quarterly results that include completing the first cycle of a review of our ANDA for preservative-free ketamine with only a single remaining major deficiency to resolve with FDA, advancing the path to approval for NRX-100, supported by White House and Congress guidance to the FDA for the use of real-world evidence to establish comparable or superior efficacy working in concert with the U.S. military as the prime contractor that's been identified for the SPARC-TMS trial. That's an FDA-approved Phase II/III trial of NRX-101 with robotic TMS that we expect will include 240 patients in our HOPE clinics and at Harvard/McLean together with another 160 patients at military treatment facilities all funded through the military. And we're still in the contracting process for that. Completing the acquisition of the general assets and the resulting partnership with NIH, to potentially develop the first disease-modifying drug to treat ALS and finally, continuing growth and development at the HOPE Therapeutics clinic footprint with expanded operations in Florida. Let me start with the ANDA for preservative-free ketamine. As we discussed on our August 10 conference call, the FDA identified no major deficiencies related to the drug or with manufacturer. A single major deficiency was identified, however, related to the Luer lock component of the vial, that's the little prongs on the tip of the vial that connects the vial to a syringe without having to use a needle. And FDA requested that the company provider manufactures attestation that the vials manufactured in the same manner as it is for 3 other currently approved drugs have shipped more than 12 million units a year. This attestation has been provided to the FDA and the company aims for 2026 approval. Accordingly, 5 million units of launch stock have been ordered from the manufacturer. Turning to NRX-100. We've continued to advance that new drug application to treat depression. During the second quarter, our presidential executive order was signed by President Trump and congressional budget language was added by the Agricultural Appropriations Committee of the U.S. Congress as the committee that funds the FDA. In both cases, guiding the FDA to use real-world evidence for approval of ketamine and other psychedelic products to treat depression. Evidence gathered from 65,000 Americans was presented at the American Society of Clinical Psychopharmacology meeting in Miami this year, demonstrating that intravenous ketamine, has greater or comparable efficacy to Intranasal S-ketamine with more rapid onset in treating depression. With alignments on the drug vial that's used both in this product and the ANDA product, the company is now poised to finalize its NDA, also aiming for 2027 approval. Turning to NRX-101, we're delighted to announce a positive and meaningful potential expansion of the market for this drug. As you know, we began working on this drug as an oral antidepressant for the treatment of bipolar depression. However, data began to emerge that the D-cycloserine component of our drug, not only had the potential to augment the effects of transcranial magnetic stimulation or TMS, perhaps doubling or tripling that effect in randomized prospective trials. More recently, research partners at Harvard/McLean have seen evidence that the lurasidone component of our drug is independently beneficial. The military has gotten involved in the implications of this research because military personnel were required to take chronic antidepressants are not deployable. That's also true of first responders. A firefighter who takes SSRIs is off the truck. A police officer who takes SSRIs is generally forced to surrender a badge and a gun. At the extreme end, a pilot on antidepressants is grounded for 5 years. Now, TMS plus NRX-101 potentially opens the door to a short-term effective treatment with long-lasting effects that can put a sailor back on a ship or a firefighter back on the truck. Now as you know, DARPA, the Defense Advanced Research Projects Agency as DoD's most advanced research organization rarely does medical research. They are the people who invented the Internet, invented military simulation who invented swarming drone technology and a host of our most critical forward-looking technology. In this case, however, managing depression of PTSD has become such a key issue for force readiness and the readiness of first responders, the health of veterans and the general population that DARPA did get involved. The SPARC-TMS trial that you can read about on clinicaltrials.gov is a continuation of Phase I and Phase II research that was funded by DARPA at Harvard/McLean that showed extremely promising results. So in a potentially federally funded expansion of our business plan for NRX-101, that is D-cycloserine and lurasidone, we were selected as a prime contractor by the Defense Advanced Research Projects Agency, and we're currently in that contract negotiation process to lead the SPARC-TMS trial led by Professor Josh Brown that will combine NRX-101 with robotic-driven TMS. Our partners include Harvard/McLean Hospital and multiple U.S. military treatment facilities, including the flagship Walter Reed National Military Medical Center. rTMS measures the efficacy of our neuroplastic drug in combination with robotic-assisted TMS. Successful clinical results could lead to widespread adoption of this drug with robotic TMS for treatment of depression in the military and first responder organizations and in the general population. With initially published results that have rivaled or exceeded the results achieved with psychedelic drugs, the idea of fixing your robotic arm to a transcranial magnetic stimulation coil and combining that with precise neuronavigation maybe surprising to many who assumed that all TMS is basically alike. Our belief, however, and it's a belief that supported by the published literature is that traditional TMS is 2 technician dependents and the failure of some clinics may have been tied to human technicians who aim the coil based on basic anatomic guidelines. The technology that will be tested in the SPARC trial locates the depression focus in the brain using functional magnetic resonance imaging and then treats that area with sub-millimeter precision. The NRX-101 component of the treatment creates a neuroplastic environment that, at least in small peer-reviewed studies, has doubled or tripled the effect of TMS. Until now, NRX-101 was positioned only for the treatment of suicidal bipolar depression, a separate inpatient market. This military partnered and FDA-approved Phase III trial, potentially expands the market for NRX-101 to all patients with treatment-resistant depression with an addressable market of more than 15 million Americans. You can see more about this on our website, nrxdefense.com. Our HOPE Therapeutics network has continued to expand, and we now have 5 clinical locations in Florida. With the likelihood of expanding more broadly as opportunities to fold in partner clinics that share our philosophy are identified. The SPARC-TMS trial and the technologies we're embracing in that process, provides HOPE Therapeutics a unique platform from which to take a stand on technology, clinical excellence and the highest standards of compassionate care. Our focus on neuronavigation, on robotic TMS and neuroplastic-assisted care is not today the mainstream focus for people who get TMS. However, we expect to show that it produces a superior result in a shorter time frame than traditional handheld TMS. Finally, GeNeuro, a word that's new to many of you, is the culmination of 3 years of work and the potential beginning of a breathtaking paradigm-changing but longer-term opportunity. The project began with the partnership we established and announced several years ago with the Fondation FondaMental in Paris chaired at the time by David de Rothschild and led by our colleague and Advisory Board member, Professor Marion Leboyer. And their work that demonstrated the role of human endogenous retroviral proteins, specifically HERV-W in causing psychosis in both schizophrenia and bipolar disorder. Now most of you have probably never heard of human endogenous retroviruses. When I got my molecular biology degree in 1978, they taught me that 8% of the human genome was junk DNA. Now we know that 8% of the human genome are old fossilized viruses that crept into humanity over the last 3 to 5 million years. And for the most part, they just sit dormant. But when they start expressing proteins, they're no longer capable of becoming competent viruses, but when they start expressing proteins, some of those proteins are exquisitely neurotoxic. You can read about the work, read about the patents that GeNeuro now owns on the geneuro.us website. Over time, as we learn more of the roles of these fossilized viruses that appear in the DNA of every human today, it made sense to acquire the entire portfolio of patents, cell lines and human stage drugs, an acquisition that was finalized in June by the Swiss courts. The GeNeuro now owns 2 clinical stage monoclonal antibody drugs, one to treat ALS, that's called GNK-301 and another temelimab so far has shown meaningful effects in multiple sclerosis and type 1 diabetes, and in Professor Leboyer's work, may well have an important role to play in the treatment of schizophrenia and other forms of psychosis. So it's been shown that perhaps as many as 50% of patients who come into French and German psychiatric hospitals with acute psychosis have the HERV-W envelope protein in the blood and in their CSF. And at least in animal models, it's been shown that the psychosis induced by HERV-W envelope protein actually reduces the psychogenic effect. Now the work that's been done was done by the Fondation FondaMental in Paris with French government funding, and GeNeuro aims to partner with them to launch a clinical trial of temelimab to treat schizophrenia. GNK-301 is a very different story, whereas HERV-W is associated with the diseases I just discussed, human endogenous retrovirus K has an envelope protein that's found in the vast majority of patients with ALS with the sporadic form of ALS, not the people with genetically induced ALS. And this drug, which is the antibody to that envelope protein was coinvented at the U.S. National Institute of Neurologic Diseases and Stroke, NINDS, of the National Institutes of Health by the Head of ALS, Avindra Nath, under Cooperative Research and Development Agreement, between GeNeuro and the NIH. So GeNeuro owns the patent for the treatment of HERV-K envelope protein, which may possibly turn out to be the first disease-modifying drug for ALS. And GeNeuro has already been selected in the first round of its congressionally-directed medical research program for drug development and biomarker funding. The first-in-human trial is targeted for July 2027. And should those initial clinical activities succeed, substantial funds have already been added to the 2027 defense appropriation to support ongoing activities. Again, you can read much more about the work on the GeNeuro website. So in summary, in our second quarter, we've advanced our core business towards commercial revenue. We've substantially strengthened our balance sheet. We brought committed institutional investors to our company. We've established a key partnership with the U.S. military that creates a far broader opportunity for NRX-101 than we previously imagined. And we've added a potentially transformative portfolio of drugs that have the potential to treat some of the worst diseases that affect humanity. With that, I'll turn it over to Mike to review our financial results. Mike?

Thank you, Jonathan. For the 6 months ended June 30, 2026, NRx reported a net loss of $18 million versus a net loss of $23.1 million during the comparable period in 2025. The change is primarily related to the impact of certain tariff value accounting measurements and other nonrecurring charges related to the conversion and restructuring of previously issued convertible notes incurred during the 6 months ended June 30, 2025. For the 6 months ended June 30, 2026, NRx reported a net operating loss of $11.3 million versus a net operating loss of $7.6 million for the comparable period in 2025. The change was primarily driven by an increase in research and development and selling and general and administrative costs related to the anticipated near-term commercial launch of preservative free-ketamine, which is pending approval of the pending approval of ANDA. As of June 30, 2026, the company had approximately $26.7 million in cash and cash equivalents versus $7.8 million as of December 31, 2025. This increase was primarily related to the company's completion of a public offering of common stock with gross proceeds of more than $22 million. Management believes current cash resources, the economic potential of pending ANDA launch anticipated growth in clinic revenue and opportunistic utilization of the company's active at-the-market offering facility will be sufficient to support operations for at least a year. With that, I turn the call back over to Jonathan. Jonathan?

Thank you, and thank all of you for giving us the resources to operate from a stable platform. As previously noted, the second quarter of 2026 was a major inflection point for NRx in our ongoing mission to bring hope to the most vulnerable patients battling depression and suicidal ideation with noted advancements across all of our major platforms. So our goal of bringing hope to life is closer than ever, and now we're ready to take questions.

[Operator Instructions]. Your first question is from Tom Shrader from BTIG.

You just had a nice call. So I really just have one sort of big picture call or question. How do you think about launching KETAFREE when you have the NDA ketamine coming on its tail. And I guess my view is that's a very different drug because of its likely potential for reimbursement. But it's really the same drug. So I appreciate it's early, but how should we think about that? Because it's -- I get it's a high-quality problem, but nonetheless, it's a complex one. So any thoughts you can share would be great.

Tom, it's a great question, and thank you for asking it. First of all, KETAFREE, targets the market, and we believe it's a $750 million current market of ketamine that's used in hospitals and clinics, some has certainly used to treat depression. But the vast majority of it is used as an anesthetic and used for pain control. And we've talked about this a little bit before, but it's one of the things that there is repeating. KETAFREE by law has to have a comparable inert ingredients composition, to composition of the reference drug, which is Ketalar, drug that was formulated back in the 1970s. That means that the -- for reasons we don't understand, nobody seems to know. Ketalar was formulated as a [ hypotonic ] drug. The sodium chloride concentration is 6.4 milligrams per mL. Now if we've gone to the FDA and said, hey, would you please give us a letter, telling us that NRX-101 and KETAFREE are 2 different drugs. They would have said, well, we don't write letters like that. So instead of what we did is, first, we submitted the ANDA at an isotonic sodium fluoride level at 7 milligrams per mill of salt. And FDA, of course, rejected it and said, you can't do that. You have to use the same salt concentration as the old reference listed drug. So we submitted, we reformulated, resubmitted at 6.4 milligrams per mL of sodium chloride and the ANDA was accepted for a review. So what's happened as a result of that is that the preservative-free ketamine, the ANDA product is under the law, a whole different drug than NRX-101. They will have different -- assuming they both get approved, they'll have different NDC numbers. They'll have different commercial pathways. And while the label for NRX-101 with its NDC number, hopefully will include the treatment of depression. The label for KETAFREE never will. So if one of those drugs is reimbursed by insurance for treating depression, it's not substitutable with the old generic product. Does that answer your question?

Got it. No, I admit you have talked about this a little bit before, but it wasn't worth repeating because of it's subtlety. The answer is you got another trick up your sleeves.

Well, hopefully, it's more than a trick. Hopefully, it's sort of solidly grounded in pharma.

No, no, I don't mean in a negative way. I just mean they are going to be different drugs, so you are covered. So that's very useful.

Your next question is from Patrick Trucchio from H.C. Wainwright.

Congratulations on being a new father.

I will relay to Patrick. This is Luis in for Patrick because he's on baby duty -- I just have a couple of questions on the SPARC-TMS and then a follow-up. The trial positions in NRX-101 in broader treatment-resistance depression rather than suicidal bipolar depression. So does DARPA support a separate indication file? And does it change the timing or priority for the NRX-101 NDA now that the module 3 has been submitted?

Well, I think Dark is interested in research that can empower the military. So I don't think they focus on indications and drug approvals. That's the role of the FDA. From our perspective, NDA's incredibly expensive to submit. The PDUFA fee alone is close to $5 million. So if this trial gets funded and as you can imagine, it's a kind of massive nondilutive funding that rarely happens. But you can read about the trial on clinicaltrials.gov. And if we're looking at a chance to go for this much broader opportunity in conjunction with the military, we'll probably take guidance from people like you, from our shareholders about whether to pursue both indications at once. My point of view is that if we have the resources, I think the bipolar depression indication is a very important one. Well, it's not an orphan disease. There are hundreds of thousands of people who have severe bipolar depression. It is a breakthrough therapy indication. FDA gave us a breakthrough therapy indication for NRX-101 and suicidal bipolar given that there is nothing else that's ever been shown to reduce suicidality or reduce akathisia while also reducing depression in those patients. So our objective is going to remain to be to pursue both. But assuming the SPARC-TMS trial kicks off the way we hope it will, and as I said, people are welcome to look on the NRx Defense website to look on clinicaltrials.gov, that's a massively transformative opportunity for NRX-101.

That makes sense. And on the GeNeuro program in GNK-301, you talked -- you gave some nice color on that. The first in-human ALS targeted for July '27. What will be NRx's role in that program to reach that IND? Is that going to commit funding towards the GeNeuro? Or is it going to come from nondilutive sources?

It's a great question, and thank you for asking it. The folks who invested in our last round, the investors we talk to every day, have really given us an opportunity to fund the commercial launch of the ketamine family of products. And we take that commitment incredibly seriously. That's our key objective with the funds that have been entrusted to us. ALS has a massive stream of available funding, and recognize that in this case, we're partnered with the National Institutes of Health. This drug was coinvented with the Head of ALS at the National Institutes of Health and NIH owns the patent together with us technically, and should the drug come to market, NIH gets a 3% royalty on anything that happens. But I don't think NIH isn't for the money, NIH is in it for the 6,000 people every year who get ALS and who are mostly dead within 3 years. That's why we're all in it. So there is a tremendous amount of federal commitment around ALS. Just a few days after we were awarded this portfolio. I applied for the first $3 million of funding from the Congressional-directed medical research program. And sure enough, the 2 applications we put in were selected in the first round, and we were invited to submit a best and final bid, which we'll do by September 30. A number of members of Congress have formed an ALS Caucus and an additional $80 million has been added to the 2027 Defense appropriation.to potentially fund a clinical trial of any drug that could be shown to be a disease-modifying drug for ALS. And as I said in brief and people are probably going to need to dig into it if they really want to understand it, but it took me years to understand it. The envelope protein, every virus is a little bit of DNA with an envelope of protein that keeps it from being immediately chewed up. The envelope protein for human endogenous retrovirus K causes ALS in laboratory animals and causes ALS in human cells. It's exquisitely neurotoxic. And you can block that neurotoxicity with a monoclonal antibody.against that endogenous -- against that envelope protein, in the same way, and once upon a time, I was involved in the first monoclonal antibody drugs that today treat macular degeneration. These are not drugs that cure a disease, but if you can identify a toxic protein in the case of macular degeneration, was VEGF, in the case of ALS, it appears to be HERV-K envelope protein, those monoclonal antibodies are like a sponge for spilled milk, they take and neutralize the toxic antigen. So if we're able to advance this, there's all the philanthropic money and government money in the world to take risk that Wall Street investors generally don't want to take, and we're talking to many of those funding sources. But one of them is the U.S. military because combat veterans are known to have twice the rate of ALS as people who haven't been in combat. In fact, generally, if you want care through a VA hospital, you have to prove that your disability is service connected. And the law says that if you go to a VA hospital and can show that your combat that you're automatically admitted for ALS. That's how strong the association is. So the long answer, but ultimately, the short answer to your question is we expect to develop this with nondilutive sources.

And your next question is from Ed Woo from Ascendiant Capital.

Yes. Congratulations on all the progress. I was wondering, is it too early to think about international opportunities for any of your initiatives either in Canada or in Europe?

Well, on the ketamine front, I think there are international opportunities. They are also international suppliers. On NRX-101, we have worldwide or mostly worldwide patent coverage. And there's clearly an opportunity there. The robotic TMS opportunity, if it works in the SPARC-TMS trial, the way we hope it's going to work, has massive international implications. And the GeNeuro assets began internationally. Some of the coverage was lost while the portfolio was sitting in a Swiss bankruptcy, but there's still coverage for most of the patents. And these patents are disclosed on the geneuro.us website, so people can look at them one by one. There's still extensive patent coverage worldwide. And if these drugs show promise, I think one would expect that they will become global drugs.

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

Thank you. There are no further questions at this time. I will now hand the call back over to Dr. Javitt for the closing remarks.

Well, thank you all for joining us. As you can tell, it's been an incredibly busy quarter. In fact, I'm Indiana right now with 2 members of our team. Tomorrow, the first manufacture of GNK-301 is going to be initiated at a partner called Polymun in Vienna, and we're going to be excited to see you a quarter from now and hopefully have a lot to tell you. So thank you all for coming.

Thank you, ladies and gentlemen. That concludes the conference call for today. Thank you all for joining. You may now disconnect your lines.