NRx Pharmaceuticals - Earnings Call - Q2 2025

Executive Summary

• Q2 2025: net loss was $17.6M driven largely by ~$12M non‑cash fair value mark-to-market on previously issued convertibles/warrants; loss from operations improved to $3.7M vs $7.1M in Q2 2024; quarter-end cash was $2.9M.
• Regulatory momentum: FDA expanded Fast Track for NRX‑100 to all suicidal ideation in depression, CNPV application filed, ANDA for preservative‑free ketamine submitted, and a Citizen’s Petition filed to remove benzethonium chloride from ketamine products.
• Strategic execution: HOPE Therapeutics received AHCA clearance to close Dura Medical; initial acquisitions expected accretive in 2025; management targeting ~$100M forward pro‑forma clinic revenue by year‑end 2025.
• Capital: $6.5M registered direct (3.96M shares at $1.65) with one‑year lockup, no warrants/reset features; management guides runway into 2026 on current cash plus proceeds.
• Estimates context: EPS came in at -$0.98 vs S&P Global consensus -$0.26 (one estimate) — a significant miss; revenue consensus was $0.00 and the company did not report revenue for Q2 2025 [Values retrieved from S&P Global].

What Went Well and What Went Wrong

What Went Well

• Expanded Fast Track: “FDA…granted Fast Track designation to NRX‑100 for the treatment of suicidal ideation in patients with depression, including bipolar depression,” a ~10x addressable population expansion to ~13M Americans annually.
• Operating leverage: Loss from operations fell to $3.7M, a ~47% YoY improvement, reflecting disciplined G&A/R&D management; management reiterated focus on continuing cost controls.
• Financing quality: $6.5M equity raised with long‑term, strategic healthcare investors under a one‑year lockup, no warrants/resets/commissions; CFO indicates cash supports operations “well into 2026”.

What Went Wrong

• GAAP optics: Net loss increased to $17.6M from $7.9M YoY, driven by ~$12M non‑cash fair value adjustments tied to convertibles and warrants, masking underlying OpEx progress.
• No formal guidance: Management does not provide quantitative guidance, limiting visibility on near‑term burn and commercialization cadence despite proximity to potential approvals.
• Regulatory friction (minor): FDA’s initial ANDA feedback requested justification of one inert ingredient level and administrative fixes, adding incremental review steps (company does not expect undue delay).

Transcript

Speaker 3

Good morning, ladies and gentlemen. Welcome to NRx Pharmaceuticals Q2 2025 earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, August 20, 2025. I would now like to turn the conference over to Matthew Patrick Duffy, Chief Business Officer. Please go ahead, sir.

Speaker 0

Thank you, Ludi, 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 security 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 vary 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 Monday and in the company's Form 10-Q, which may be accessed from the investor page of the NRx Pharmaceuticals website. Joining me today on the call are Jonathan C.

Javitt, our Founder, Chairman, and CEO, and Michael S. Abrams, our Chief Financial Officer. Dr. Javitt will provide an overview of our company's progress as reported in Monday's 10-Q, following which Mike will review the company's financial results. Following their prepared remarks, we will address investor questions. I'll now turn over the call to Jonathan. Jonathan.

Speaker 2

Thank you, Matt. Good morning, everyone, and thank you for joining us. The past several months have been nothing short of exceptional for NRx Pharmaceuticals. We've made vital advances across each of our programs, with three drug approval applications in progress and our evolving network of interventional psychiatry clinics, Hope Therapeutics, taking place. At the same time, as we position for near-term revenue, we've reduced our quarterly operating loss by approximately 50% year over year, while filing more than 80,000 pages of regulatory data in the last quarter alone with a small team of dedicated scientists. As we announced on Monday, we've strengthened our balance sheet and added long-term healthcare specialist investors with extensive experience in biotechnology, as well as experience in managing multi-unit retail operations. Led by Mr.

Brandon Mull and the B Group Capital, these investors have demonstrated their long-term commitment to our success by way of their one-year lockup agreement not to trade short or otherwise hypothecate our stock, while also foregoing warrants and other dilutive features that are so destructive to biotechnology stocks today. We at NRx Pharmaceuticals look forward to their ongoing partnership. As you can see from our balance sheet, we have substantially reduced the burden of convertible debt that was in place when I rejoined as CEO in order to create a more straightforward growth path for long-term appreciation-oriented investors. Let me start with a high-level overview for each program, starting with NRX-100. Our preservative-free intravenous ketamine is following two parallel approval processes. First, however, let me take a moment to explain how this came about.

As many of you know, my original medical discipline is ophthalmology, and for 10 years, I cared for patients with chronic glaucoma, first at Johns Hopkins and then at Georgetown University. Around 1995, one of my colleagues noticed that glaucoma patients were far more likely to suffer from dry eye and tear film deficiency than most other eye patients. The problem was tracked down to benzalkonium chloride, a preservative that was in most glaucoma medicines. The problem was compounded by the presence of benzalkonium chloride in the artificial tear drops that were used to try to help the dry eye that was caused by the glaucoma drops in the first place. Clear evidence emerged that benzalkonium chloride was toxic to the epithelial cells that cover the eye and to the nerves of the cornea. That's why so many eye drops have gone preservative-free over the years.

The first cousin to benzalkonium chloride, benzethonium chloride, or BZT, is found in ketamine. BZT is similarly toxic to epithelial surfaces. It was added to ketamine when the drug was first formulated 70 years ago so that the same vial of drug could be used for multiple doses of drug without contaminating the bottle. In today's hospital environment, multi-dose administration is increasingly infrequent. The BZT in ketamine may not pose much risk when ketamine is used once in the operating room for anesthesia. The problem is patients who get ketamine for depression often get repeated administrations. As we have shown the FDA in our citizen petition, and as you can see from the scientific paper identified in the Q and the earnings release, multiple doses of ketamine with BZT preservatives can approach toxic doses of BZT.

That's why we filed the citizen petition with FDA to have BZT removed from all forms of ketamine. Our basis for this petition is expert toxicology analysis documenting that BZT has never been shown to be safe, is not on a list of preservatives generally recognized as safe. That's called a GRAS list by the FDA. Indeed, FDA's concern about BZT is high to the point where FDA no longer allows its use in hand cleaners and topical antiseptics. Thus, we believe that BZT has no legitimate place in a parenteral drug that will be administered repeatedly. As I said, we're following two regulatory paths for ketamine. The first is a New Drug Application, or NDA, for NRX-100 in suicidal ideation for patients with depression, including bipolar depression. The second is an Abbreviated New Drug Application, or ANDA, to make preservative-free ketamine available for ketamine's existing indications.

Data are clear in our view that NRX-100 can offer effective and safe options for patients with suicidal depression, whose only current treatment alternative is ECT or electroconvulsive therapy. Our corporate presentations highlight randomized controlled trials demonstrating the priority of ketamine to placebo to active comparator, along with demonstration of equivalence to ECT overall in more than 1,000 patients. We'll be presenting real-world data for FDA's consideration on nearly 180,000 patients treated with both ketamine and Spravato. We aim to submit these data in support of an application for accelerated approval and have already filed the Module 3 manufacturing information and the draft proposed label. You can read about accelerated approval on the FDA website.

It represents an approval pathway for fast-tracking breakthrough drugs whereby intermediate clinical data are presented in support of an initial approval with a concomitant commitment by the sponsor to present dispositive clinical proof of efficacy within five years. Last week, FDA granted a major expansion of the fast-track designation originally granted to NRX-100 in 2017. Whereas the initial designation was related to bipolar depression, FDA has now broadened our fast-track designation to encompass all patients with suicidal ideation in depression, including bipolar depression. The CDC estimates that 13 million Americans consider suicide each year and that an American dies from suicide every 11 minutes. Hence, FDA's broadened fast-track designation offers NRx Pharmaceuticals a tenfold greater opportunity to make a real difference in one of the largest public health crises to face our nation.

FDA, under its new leadership and the MAHA program, has dramatically focused on national public health crises by creating the Commissioner's National Priority Voucher program that affords substantially faster review times of one to two months versus the standard 10 to 12-month review, provides enhanced communication throughout the review process, and creates potential for accelerated approval of NRX-100. To receive a CNPV, a product must meet at least one of the following criteria: it must address a U.S. public health crisis, it must deliver more innovative cures for the American people, it must address a large unmet medical need, and this was noted in our fast-track designation that we do, in fact, address a large unmet medical need. It must onshore drug development and manufacturing to advance the health interests of Americans, strengthen the U.S. supply chain, or increase affordability. Our team believes that NRX-100 meets all of CNPV's criteria.

On the second approval path, we filed the ANDA in June of this year utilizing existing manufacturing data found in Module 3 of our suicidal depression NDA. We've since received comments from the FDA identifying only one scientific discrepancy, along with some easily remediated administrative deficiencies. Specifically, FDA asked us to justify the level of a single inert ingredient in the formulation. We're actively addressing this matter with the FDA and do not believe it will cause undue delay in the approval process. The existing market for ketamine has been projected at approximately $750 million a year, and we believe NRX-100, made in the U.S. and offered without any toxic preservatives, offers patients and clinicians a superior option. Approval of the citizen petition removing benzethonium chloride from the U.S. ketamine supply would give NRx Pharmaceuticals a substantial position in that existing $750 million generic ketamine market.

We'll continue to work diligently with the FDA to move our application as rapidly as possible and provide a safer version of this critical product to the American public. NRX-101, our oral product for the treatment of suicidal bipolar depression, recently achieved an important milestone that is the filing of the initial module known as Module 3, the Chemistry Manufacturing Control section, or CMC, with the U.S. FDA last week. This was filed under the previously granted breakthrough therapy designation awarded to NRX-101, and therefore, we anticipate rolling review of this application. We're working diligently to complete this filing and will request priority review, which, if granted, would confer a six-month review period.

There are more than 7 million patients suffering from bipolar depression in the U.S., and many of these are at risk of akathisia, a terrible side effect related to serotonin-active drugs that is closely related to suicide and can cause an irresistible need to move, inability to sit still, and all too often is associated with patients jumping off of roofs, jumping in front of trains, and otherwise harming themselves in horrible ways. These patients are at tremendous risk of self-harm, and there are no current treatment options available that have been shown to reduce akathisia, although newer generations of atypical antipsychotics have demonstrated less akathisia than their predecessors. NRX-101, in our estimate, offers the only current treatment option that both reduces depression, suicidality, and akathisia in this patient group and, as an oral treatment, should generate widespread accessibility and benefit in these patients.

We look forward to coming interactions with the FDA on this application. Hope Therapeutics continues to make great progress developing what we believe will be the nation's premier interventional psychiatry clinic network. We expect to finalize the purchase of our first clinics and continue to evaluate new opportunities in the field. We aimed to achieve this goal some months ago but needed to wait for state regulatory approval to acquire DuraMedical. That approval is now in hand, as we announced last week. With that milestone reached, we anticipate that you will shortly see closing of acquisition financing that is well along in the closing process. Our goal of delivering the most comprehensive, high-quality care possible in each of our clinics continues to drive us, and we look forward to continuing to update you on the progress of our network.

The clinics we have under contract currently will provide strong revenue and EBITDA for the growth of our entire network. We've identified additional milestones reached in our 10-Q filing, including the FDA's grant of a PDUFA fee waiver, saving the company $4.3 million in filing fees. Waivers are granted at the discretion of the FDA to small business entities and for drugs that are deemed necessary to the public health. With the key milestones reached in Q2 and with the addition of a committed investor group composed of experienced biotechnology investors, we now have the balance sheet capacity to continue our quest to bring hope to life well into the coming year. I will now turn it over to Mr. Michael S. Abrams, our CFO, to review our financial results from the second quarter of 2025. Mike?

Speaker 4

Thank you, Jonathan. For the three months ended June 30, 2025, the company reported a net loss of $17.5 million versus a net loss of $7.9 million for the comparable quarter in 2024. The increase in the net loss was driven by an approximately $12 million charge in fair value accounting measurements related to previously issued convertible notes and warrants recorded in other expense, all of which is non-cash. For the three months ended June 30, 2025, the company reported a loss from operations, which excludes the non-cash impact of fair value accounting measurements, of $3.7 million versus a loss from operations of $7.1 million for the comparable quarter in 2024. This marks an improvement of more than $3.3 million, or 47% compared to the prior comparable quarter. As of June 30, 2025, NRx Pharmaceuticals had approximately $2.9 million in cash and cash equivalents.

On August 18, 2025, the company closed a registered direct offering with a select group of experienced long-term healthcare and biotechnology investors led by B Group Capital. In connection with that offering, the company issued approximately 3.9 million shares of common stock and received net proceeds of approximately $6.5 million. The shares issued in the offering are subject to a one-year lockup, and the terms of the offering did not include warrants, pricing resets, or any other structured elements. The company did not use a broker or investment bank in connection with the offering. The company believes that its current cash position will support operations well into 2026 and provide sufficient capital to reach critical and anticipated regulatory inflection points and milestones. Our singular focus remains advancing our primary drug development initiatives and planned clinic acquisitions to build long-term value for our shareholders.

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

Speaker 2

Thank you, Mike. As you can see, the company has made significant progress and stands at the precipice of enormous inflection points for patients and investors. Our goal of bringing hope to life is closer than ever. Our progress towards three potential drug approvals in the near term 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 U.S. I would like to thank the NRx Pharmaceuticals team, our longtime and new investors, and most importantly, the patients who participated in our clinical trials for their steadfast support of our pursuit of this vision. Operator, we're ready to take questions from the audience.

Speaker 3

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. To ask a question, you may press star followed by the number one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, you can press star two. Our first question comes from the line of Thomas Eugene Shrader with BTIG. Please go ahead.

Speaker 1

Good morning. It really has been a lot of progress this quarter. I have a couple of quick ones. For NRX-101, why is the pathway accelerated approval? Seems like you have very conventional clinical endpoints that you can argue you've hit. I think of accelerated approval for more biomarker-type trials. A quick one on the new voucher. It looks like it's even more valuable than the older pediatric voucher. Is it clear it can be sold the way the other vouchers were? Has that been defined yet?

Speaker 2

Thank you. Let me start with the second question first. I think the agency has been clear that the CNPVs are not to be sold. Certainly, we would have no interest in selling a Commissioner's National Priority Voucher were we to be awarded one. Our sole objective is to get this drug to patients as a lifesaving drug for a critical unmet medical need as quickly as humanly possible. That's the objective of the Commissioner's program, and that's the objective of NRx Pharmaceuticals. As far as accelerated approval for NRX-101, as you recall, the primary endpoint of the clinical trial that we conducted was reduction in depression compared to lurasidone alone. The secondary endpoint was reduction in suicidality and akathisia as your separate named endpoints.

The clinical trial did not demonstrate that NRX-101 is a superior antidepressant to a very well-established antidepressant, namely lurasidone, but did demonstrate reductions in akathisia and suicidality. We believe that those are intermediate endpoints and that they haven't necessarily been demonstrated to be associated with long-term health benefits. For that reason, we think the appropriate thing to do is ask for accelerated approval only for use in those patients who have demonstrated akathisia and suicidality despite best available medicine. In other words, for patients where there's truly an unmet medical need and an immediate risk of harm to the patient in the absence of treatment for those conditions, and to ask FDA to give us five years in which to demonstrate that NRX-101 has a conventional long-term benefit compared to placebo.

Speaker 1

To follow up, what would the second trial or the follow-up trial, confirmatory trial, look like? Do you have any sense?

Speaker 2

Yeah. The confirmatory trial, if you look at the approval path of Auvelity, for instance, the confirmatory trial would be a very conventional randomized control trial of NRX-101 versus placebo with depression on the MADRS as primary endpoint because that's the endpoint that FDA has really set as the bar for all antidepressant drugs.

Speaker 1

All right, Jonathan. Thanks for all the detail.

Speaker 3

All right. Thank you. Your next question comes from the line of Jason Howard Kolbert with D. Boral Capital LLC. Please go ahead.

Speaker 5

Good morning again. Congratulations on all the progress. Can we talk a little bit about some expense guidance? I'm not really talking about third quarter or fourth quarter, but just from a big-picture point of view, R&D, you know, is that likely to ramp up in the future? Should we see it at about the same level? G&A, as you become a commercial entity, how do you envision G&A expanding? I also have some questions about the acquisition pipeline associated with the clinics. Thanks.

Speaker 1

One of my guess is clinics. John, you want to answer the clinics first?

Speaker 2

Please go ahead.

Speaker 1

Okay. Sorry. I'll answer from a financial perspective, Jason, thank you for your question. Obviously, as you know, we don't give guidance. I think the best proxy for our financial statements and our trends and the expectations is what's reported in the 10-Q. This is where it's very notable. We talked about we had an approximately 50% reduction, 47%, almost 50% reduction in our loss from operations. As a pre-revenue company, that is entirely made up of G&A expense and R&D expense. The decline from $7 million to $3 million or change is as a direct result of internal budgeting and cost-saving measures that we continue to execute on.

Not to get clouded with the net loss that was reported because that involves fair value accounting, which some people call derivative liability accounting, which can be quite counterintuitive in its impact on the income statement and the balance sheet, whereby an increase in our stock price makes it look like an increased liability, increased expense, but those are all non-cash. Really, looking at loss from operations, I think, is the cleaner view into our financial picture. The trends of reducing our overall operating costs comprised of G&A and R&D are evident and we believe to be continued. Not prepared to give guidance on where that may go in the future, but we announced it and discussed it because we think it's a worthy note of our financial statements that investors should take note of. With that, I'll turn it back over to Jonathan.

Speaker 2

I can appreciate your comments. The expectation is that we would see G&A ramping up as you become a commercial entity. I think what you're saying is temper expense ramp up with the strength of the balance sheet so that it kind of comes together in sync. That's how I interpret what you're saying.

Speaker 1

Yes, just to follow up on that, any increase in G&A that is sometimes seen in these situations as commercialization comes also comes in line with revenue. We have been managing the business for what it is now. As Jonathan C. Javitt mentioned in his comments during the call, we believe we're at, you know, relatively near-term commercialization and in advance, you know, all of our drug programs as well as have opportunities with Hope Therapeutics. As revenue comes on, management will continue to assess those and make decisions. The timing in which I'm not going to want to provide forward-looking statements on or provide projections on what that revenue flow will look like. Any increase in expense related to commercialization will be taken part and parcel simultaneous with, you know, the revenue itself. Your point is noted.

Speaker 2

Yeah, fair enough. Thank you.

Speaker 5

Typically, Jason, a question like that is going to get plugged into a model that ultimately projects a price per share for a company such as ours. You're asking in a very legitimate way, do we think our G&A may increase as we get forward to actually, as we get closer to selling a drug? Although that answer might well be yes, by the time we do that, our probability of success in any such model will have substantially increased. The projected increased costs of G&A will be closely tied to an increased probability of corporate success.

Speaker 2

Of course, very reasonable. Jonathan, how about the acquisition pipeline in terms of clinics? Can you give any kind of idea of what you might look like? From a big-picture point of view, five years from now, what do you think your footprint looks like?

Speaker 5

Five years from now, if we're successful in what we aim to do with Hope Therapeutics, first of all, it will almost certainly be an independent company from NRx Pharmaceuticals. The companies that we would hope people would look at are companies like DaVita and Fresenius that transformed the dialysis industry from disparate clinics where it was almost impossible for a consumer to know what kind of quality to expect to coherent networks of care delivery organizations where consumers had a reasonable expectation of consistent quality, consistent outcomes across the network. Investors enjoyed extraordinary financial success in the process. Our challenge is finding best-of-breed clinics that have really integrated the use of neuroplastic drugs. This is a word you'll hear us using more and more. People talk about psychedelic therapy as if the hallucinations that are induced have something to do with the medical benefit, and they may.

In our view, what's really going on is that this class of drugs causes the brain cells to form new connections to other brain cells. That's a process called neuroplasticity. If you want to make a computer chip, you take a piece of silicon, you etch it with a laser. You may use programming to turn circuits on and off, but the circuits on the chip will be there for the end of time. The brain works completely differently. Brain cells are constantly branching, making new connections to other brain cells, pruning those connections. The evidence is that when that process of neuroplasticity stops, that's when you have severe depression, you have suicidality. All of these drugs that are showing benefit are doing so in our view and in the evolving view of many of the scientists we talk to because they're causing neuroplasticity. How do you do that?

You can do it with ketamine and related drugs. There's evidence you can do it with the psilocybin class of drugs, what people call the psychedelics. There are drugs over the horizon that achieve neuroplasticity without the hallucinations. You can achieve it with a treatment called transcranial magnetic stimulation, which is FDA approved. You put powerful electromagnets outside the head and achieve profound changes on depression, on suicidality. There's emerging evidence that it may work for autism, for PTSD. People are seeing benefits with hyperbaric oxygen therapy. I'm sure there will be other neuroplastic therapies coming down the pike. Our objective with Hope Therapeutics is to identify best-in-class clinics that are already combining those treatments. The notion of a ketamine clinic where you can get IV ketamine on Mondays and peptides on Tuesdays and vitamins on Wednesdays, that's the opposite of what we think patients need.

We may be able to identify $100 million of acquisition of that kind of best-in-breed clinic. Very quickly, you'll see Hope shifting to a model of building clinics from the ground up to extend those flagship clinics that we acquire on day one because we don't think we can grow beyond $100 million or so just by acquiring clinics that already exist. It's hard enough to talk about what we'll do next year versus five years from now. I think five years from now, you're going to see a national network in place such that patients and families who are suffering from these conditions know to pick up the phone, call Hope Therapeutics, and expect to have a life-changing opportunity to get better.

Speaker 2

That's amazing. Thank you. I share your vision.

Speaker 3

All right. Thank you. Your next question comes from the line of Patrick Ralph Trucchio with H.C. Wainwright & Co. Please go ahead.

Speaker 4

Thanks. Good morning and congrats on all the progress advancing NRX-100, NRX-101, and the Hope Therapeutics platform. It's clear the team's made meaningful strides on both clinical and regulatory fronts. We have a few follow-up questions. The first is just on the citizen petition impact. You've explained a scientific basis for the citizen petition on benzethonium chloride. I'm wondering if you can give us a sense of when you may expect an FDA response. From a commercial perspective, if the FDA were to mandate preservative-free formulation across ketamine, how meaningful could that revenue uplift be for NRX-100? How challenging might it be for existing suppliers to adjust?

Speaker 2

The FDA's requirement is to respond to a citizen petition within six months of filing. We hope that FDA will beat that requirement. Certainly, we have a Secretary of Health and Human Services, Mr. Kennedy, who has demonstrated a profound dislike for both artificial colors and preservatives in foods and drugs, who clearly recognizes that many of the things we've assumed to be safe, unless proven safe, may not be safe. In this particular case, we're talking about a preservative that's toxic to the point where FDA won't even allow you to put it into a hand cleaner or topical antiseptic. They know a lot about benzethonium chloride, maybe even more than we do. In terms of impact, right now, the generic ketamine market is $750 million a year. It's mostly foreign-sourced goods.

From what we've seen, and we haven't gotten other people's products into the laboratory and measured ourselves, that level of BZT may not be entirely consistent from product to product. If you read the toxicology paper that we posted last week for the public to read, as you have repeated doses of ketamine, you start to get a cumulative impact of this what's called a quaternary amine preservative. In fact, one thing you'll see if you poke around is that there's a known incidence of ulcerative cystitis. That is an inflammatory and serious condition of the lining of the urinary bladder associated with repeated use of ketamine that's never been seen with repeated use of the J&J Spravato product, which is a nasal form of S-ketamine. If you ask what's different between the two products, certainly intravenous ketamine is racemic, whereas the J&J product is the S enantiomer.

In one case, it's given by nasal administration versus IV administration. Either way, once it's in the bloodstream, the residual product winds up being metabolized by the liver, excreted in the bladder. The main difference, or a main difference, is that there's no benzethonium chloride in the J&J product. It may be that we're already seeing an impact of repeated use of a BZT-containing ketamine in real life without having to look too hard for other examples. Now, in terms of what would be the impact of removing this toxic preservative from generic ketamine, it would, first of all, we think, benefit patients substantially because the only reason it's in the bottle is so that a doctor can stick a needle into the same bottle more than once and administer drugs from that bottle either to the same patients or to multiple patients.

There's no real benefit to the patient associated with injecting benzethonium chloride into the patient. What would be the impact? The impact could well be that rather than a normal share of the generic market that we would associate with an Abbreviated New Drug Application for a U.S.-manufactured, safe, and reliable form of ketamine, we might have a substantially larger share of that generic market while other suppliers readjust their formulations to take the toxic preservative out of those formulations. Since some of those current generic suppliers have pretty much left this product on the shelf, it's not even clear how many of them would readjust their formulations and re-enter the marketplace versus simply go on to other things. Granted, the citizen petition could really help us exceed people's financial expectations for us.

Speaker 4

Right. That's really helpful. Just another follow-up on NRX-100. I think you mentioned plans to submit real-world data from nearly 180,000 patients treated with ketamine and Spravato. I'm wondering how you expect the FDA to weigh this data set alongside the randomized control trials, and do you believe it could further strengthen the case for an accelerated approval?

Speaker 2

We think real-world data in that quantity of patients certainly should motivate the FDA to see the cases as substantially strengthened. The FDA guidance is that the agency really needs to pay attention to real-world data. Commissioner McCarry has said very clearly that he wants to move the agency solidly into the 21st century in terms of using real-world data. We hope this will be one of the first examples where real-world data supports an approval. It's very rare to have a drug approval coming down the pike where more than 200,000 people have already gotten the drug for this purpose. It just doesn't happen to be approved for this purpose yet. That's a unique circumstance.

Speaker 4

Yes, that's interesting. Just on NRX-101, it's an interesting highlight of the potential synergy between NRX-101 and TMS. I'm wondering if this combination could accelerate adoption either within the Hope Therapeutics clinics or across interventional psychiatry more broadly. Is this something that you may seek a label expansion to more formally capture this potential?

Speaker 2

Thank you. You're asking a fascinating question. We've identified a very provocative, in a good way, provocative scientific study that was performed out of Canada, where investigators showed that NRX-101, well, they specifically showed that d-cycloserine, the main active ingredient in NRX-101, compared to placebo, enhanced the effect of transcranial magnetic stimulation, or TMS, in treating depression. They didn't really give an antidepressant dose of d-cycloserine. They gave about 100 milligrams per patient per day, which was a lower dose than would be needed to block the NMDA receptor. As you recall, my brother Dan Javitt has done most of the work, as supported by patents all over the world, in demonstrating that you have to get to about 400 to 500 milligrams a day of d-cycloserine before the drug becomes a potent NMDA antagonist. They used a much lower dose of d-cycloserine.

They used 100 milligrams a day, which is believed to be neuroplastic, even if it's not a potent NMDA antagonist at those doses. Lo and behold, they showed a very potent improvement in the results achieved with transcranial magnetic stimulation. We're in active discussion with U.S. academic medical centers about mounting a confirmatory clinical trial in that area. It would be a very interesting label expansion for NRX-101. More importantly, if that drug is able to potentiate the effect of TMS, it will bring TMS, in our estimate, much more into the mainstream as maybe even a first-line treatment for depression rather than starting out with these old generic serotonin drugs that may or may not work depending on who you read.

Certainly, every one of them has a label that says, "Gosh, and this drug may be associated with increased levels of suicidal ideation." Anything that leads to better outcomes from TMS, anything that makes that treatment more accessible and more potent for patients has the potential to really shift the whole paradigm of how we treat suicidal depression, even ordinary depression, and PTSD.

Speaker 4

Right. That's really helpful. Thank you so much.

Speaker 3

All right. Thank you. Your next question comes from the line of Ed Wu with Ascendiant Capital Markets LLC. Please go ahead.

Speaker 1

Yeah. Congratulations on all the progress. What is your commercial strategy with NRX-100 and NRX-101? Are you going to wait until closer to approval to actually expand and potentially get a sales force?

Speaker 2

Yeah, it's a wonderful question. You know, Matthew Patrick Duffy is on the phone with us. A lot of people know Matt in his role within our company as our Chief Business Officer. People have known Matt in his role on Wall Street as a highly respected research analyst. What fewer people know is that Matt got out of college, joined Pfizer, succeeded in a commercial role to the point where he actually wound up as the product manager for Viagra and went on to launch highly successful biologics at other companies. Matt, why don't you walk Ed through what you'd be likely to do if we dropped a drug approval in your lap?

Speaker 1

Sure. Thanks for the question, Ed. Good to hear from you. We've done launches like this. I've done a few of them. The Metamine is probably the most notable, but also at Lev Pharma, where it's a pretty focused launch for both of these drugs. It'd be different with different targets. If you think of NRX-100, you think of the clinics like we have with Hope Therapeutics and other mental health facilities. There's probably 600 to 1,000 that are really solid places that they'll administer these medications at this point. That'll grow once you have a reimbursed product. When you start looking at those numbers and thinking about what a rep or an MSL or a business person and an administrative person might be able to do, you probably can get away and really be successful with a small commercial force.

I think at Metamine, our initial group of reps and MSLs was about 20 people. That was a very focused group of folks in about 500 hospitals. At Lev, it was a similar situation with individual rheumatologists that we were targeting. For NRX-100, you probably launch with around 20 people, and you can do the math on what MSLs and reps cost these days and really do a good job really covering the key players in the market and really getting good coverage over a huge proportion of what we really think is the opportunity in the mental health side for ketamine and NRX-100. It's going to be kind of similar with NRX-101, but look different. There is a very focused number of perhaps, I think the number is about 1,500 or 1,600 maximum psychiatrists who treat bipolar patients.

Those numbers are a little dated from market research we did a few years ago. If you do the math backwards in terms of rep coverage and MSL coverage for that, it's a similar number of patients. I'm sorry, field personnel. Those folks may be a little bit more expensive because you may have a little bigger tilt towards MSLs. You can cover 1,500 high-prescribing bipolar psychiatrists with not that many reps. Those are pretty focused efforts. The marketing behind it, therefore, is more focused as well. I think these are two really focused launches. They can be synergistic because of the knowledge base of bipolar depression and major depression and suicidality for both will have a lot of overlap. As you look at those, the company will obviously get smarter and smarter on the commercial side as we're getting closer and as we're launching the products.

You're probably talking about, you know, two 20, 25-person commercial organizations with the supporting infrastructure. It's really focused. We did it with not a lot of money at MedImmune. They did it with not a lot of money at Lev, and when BioPharma bought us shortly thereafter, it can be really focused. It can be a very efficient launch. The nice thing about that is you hit profitability much, much, much more quickly than if you have a 500-person primary care salesforce like we would launch with at Pfizer.

Speaker 4

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

Speaker 1

Thanks, Ed.

Speaker 3

We have no further questions over the phone line. I would like to turn it back to Matthew Patrick Duffy for closing remarks.

Speaker 1

Thank you, everyone, for joining us this morning. We're extremely excited about the path ahead with three potential approvals and our Hope Therapeutics subsidiary targeting multiple profitable mental health clinics and interventional psychiatry centers. This concludes the NRx Pharmaceuticals second quarter 2025 results conference call. Thank you all for participating. You may disconnect.