Q2 2021 NRX Pharmaceuticals Inc Earnings Call

Greetings and welcome to the Rx Pharma second quarter 2021 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded I would now like to turn the conference over to your host Eric Goldstein Managing director lifestyle advisors. Thank you you may begin.

Thank you operator before we proceed with the call we'd 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 securities and exchange submission. 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, we issue.

Q yesterday and in our Form 10-Q, which may be accessed from the investors page of the Rx website, joining me on today's call from an Rx or Jonathan Jamba.

Chairman and Chief Executive Officer, Randy Guggenheim or Chief Business Officer, and Robert Best Laws, Chief Commercial Officer, Jonathan will provide a summary of the company's progress during the quarter and recent weeks before turning it over to Randy for a review of the company's financial results. Following their prepared remarks imagine Jim will address investor questions I will.

Now I'll turn the call over to Jonathan.

Thank you Eric Good morning, everyone and thank you for joining us on the inaugural quarterly results call as we move the company forward rapidly on many fronts. We're also formalizing our investor outreach and we intend to host regular opportunities for interactive dialogue, we appraised.

State your attendance today, we look forward to answering your questions on this and future quarterly calls.

Yesterday, we issued a press release outlining the encouraging progress made during our last quarter and in recent weeks to advancing our pipeline in fairly late stage programs with significant potential and COVID-19 and other respiratory illnesses, a COVID-19 vaccine and a drug for suicide a bipolar depress.

<unk>.

I'll spend just a few brief moments summarize each of these programs and the developments that we've made over the quarter and in recent weeks I'll, then turn the call over to Randy for review of our second quarter results before we conclude the call I'll be answering the question. Some of you have submitted online as well as potentially questions from Ana.

Before diving into the specifics of each program. It makes sense to reflect for a moment on the change in our company from Q2 'twenty 'twenty. So the second quarter of 2021.

In 2020, we were clinical stage biotech company with a single asset in CNS the type curve over the subsequent 12 months, we brought a dormant drug.

Until from warehouse boxes.

Candidate for emergency use authorization COVID-19 that has now completed its first phase to be slashed preclinical crowd out last month, we were awarded worldwide rights to develop and market a second asset the pre life vaccine and a competitive bidding process organized by Israel.

<unk> and the Institute for biological research.

Along the way we've developed an executive team and board that has learned how to manage the rapid change that occurs in the midst of an unprecedented public health emergency.

So let's begin with an overview of our lead programs the salmon or visited all asked to take for the treatment of patients with acute respiratory failure and critical COVID-19, and potentially in other respiratory conditions.

That means our proprietary formulation of a book to Bill acetate, which in turn generic term for synthetic that means manufactured basal active intestinal peptide or VIP are Victor <unk>, the drug ingredient not a drug that is manufactured and sold by multiple suppliers around the world. So it's Sam.

Based on our manufacturing methods.

A proprietary products, we have signed a collaboration agreement with <unk> therapeutics under which will leap has rights to share in the profit of our drug based on its commitments to fund developments all of which is delineated in our securities filings.

VIP has unique mechanism protecting the drug from injury and that it binds specifically because they are the alert tight T cell that's part of the lining the air sacs of the law.

VIP has long been known to have potent anti inflammatory and anti cytokine activity in animal models of respiratory distress of acute lung injury and inflammation.

It stimulates these there'll be alert type T cells to make the surfactant that must coat the lining of the lungs. So that the lung can exchange oxygen with a blood loss of surfactant causes the alveoli or air sacs to collapse and causes respiratory failure, both of which are home.

Marks of critical COVID-19.

He has also been shown in preclinical models to prevent replication of the Corona virus within those type T cells.

So the eyepiece action in protecting the long aside from the direct anti viral action is not COVID-19 specific it was previously shown in phase one to have a striking effect on treating acute respiratory distress syndrome.

And has shown suggestions of efficacy in treating sarcoidosis and other chronic lung disease.

They have other uses as a treatment for various forms of lung injury.

Given the urgency and finding new therapeutic options for the treatment of severe COVID-19.

Rapidly moved to Sammy for a robust clinical development plan, consisting of one recently completed and three ongoing clinical trials.

Data from our phase two b slash three randomized controlled trial.

Studying intravenous side, Sammy and patients with critical COVID-19 has shown a statistically significant difference in the primary endpoint of patients being alive and free of respiratory failure at day 60. These are patients who started out in the ICU.

When controlling for baseline severity and also controlling for whether they were treated in a tertiary versus a regional hospital.

Without controlling for that site of care for the type of hospital, we were able to demonstrate a two fold increase the odds of survival across all patients and all hospitals in the study.

Typically significant level. Moreover, the patients who received placebo demonstrated a tenfold increase in the level of IL six cytokine Betsy inflammatory cytokine that we discussed earlier by day seven compared to only a two fold increase in IL six Senate.

Time, among those who are treated with sun irrespective of the site of care for the patients baseline severity.

Those who suffered this cytokine storm and it's commonly known we're more likely to die from Covid in the ICU and those who did not suffer the cytokine storm.

Thus they eat away submission that's pending before the FDA suggests that a significant biological effect was seen across all patients.

A significant effect on survival was seen across all patients without regard to the site of care and the endpoints of whether patients have both survived and recovered by day 60 requires controlling for whether patients were hospitalized in tertiary care or community hospitals. The data have been submitted.

A peer reviewed publication.

And finding some tertiary care hospitals would say Sami mirrored a sixfold difference in mortality and recovery that was.

Served in a 45 patients administratively controlled open label study.

Houston Methodist Hospital, one of the nation's top 10 tertiary care hospitals.

Based on these encouraging trials the national Institutes of health selected sites family and its active freebie critical care clinical trial.

<unk> also called test itself and Rx has been named an industry partner by the National Institute of allergy and infectious diseases NIH funding the cost of the clinical trial with an Rx providing the investigational drug.

While randomly assigned patients with respiratory failure and critical COVID-19.

Tammy to.

Two vessels memory or Ram deaths of Europe from Gilead.

Tuesday centimeters plus dex, Laurie or to placebo F.

FDA has designated this is a phase III trial, which if successful may be used in support of new drug approval for as I said.

While we hope that emergency use authorization might be obtained with a single clinical trial typically a new drug approval will require more than one adequately controlled trial in.

Enrollment began in April and as of today, we're advised by NIH that 140 patients have been enrolled in the test co trial. So far the trials data safety monitoring Board has reported no unexpected safety issues.

Second U S government supported trial Wednesday, Sami is being conducted by the quantum leap healthcare collaborative this trial called I spy is supported by the Biomedical advanced research and development authority of the U S Department of health and human services.

Ongoing studies include a phase two b slash three randomized controlled trial of inhaled <unk> salmon and non ICU patients.

The data readout from these trials are expected in early 2022, and we're hoping to have a readout from the inhaled trial by the end of 2021.

In Iraq is sponsoring a trial of inhaled <unk> for patients with severe but not critical COVID-19, not only in the U S. But with study sites soon to open in the nation of Georgia.

We originally hope to complete enrollment by this quarter, but we were delayed as the pandemic slowed enrollment for several months enrolled.

Enrollment has now accelerated with the resurgence of the pandemic.

We've applied for emergency use authorization for <unk> in the United States and we hope for an FDA decision in current within the coming weeks.

We've signed the logistics partnership with Cardinal Health in order to that site Sunny if it is approved for emergency use Cambridge any patients in the U S within 24 hours.

Our interpretation of our clinical trial results.

Is that time is of the essence when treating COVID-19.

Outside of the U S. We were recently granted emergency use authorization and the nation of Georgia with additional expansion possible throughout the call cast this region.

As the spikes in case, there's some market has shown COVID-19 is likely to remain an endemic problem globally with a persistent threat of regional outbreaks.

Development of new therapeutic options is an urgent priority as Dr. Anthony balance sheet stated during congressional testimony last April we.

We believe the taxonomy with its unique target and protecting the 80 to sell the alveolar type T cell of the lung and its effect on preventing cytokine brides and clinical trials.

Occupies a unique niche in the therapeutic spectrum and may ultimately be paired with other drugs that target other mechanisms.

Investors have asked US why event to build it's not previously developed as the drug given the encouraging results in by discover professors Sammy say ease in the early two thousands.

While we were not involved at the time a.

A likely answer is that VIP like many peptide such as insulin and human growth hormone is unstable at room temperature and its destroyed by many common pharmaceutical manufacturing and packaging processes professors phase of original work was conducted with <unk>.

All amounts of custom synthesize drug that was formulated and sterilized on the day of use in a hospital pharmacy that was possible under the pharmacy laws of those years, but it is not possible today.

Although the public has focused extensively on our clinical trials program much of our work has been focused on creating a long term stable form of Avista deal and we believe that along the way we've developed valuable knowhow.

Some of which can become protected bull intellectual property.

Last month, we announced that the government of Israel signed a memorandum of understanding awarding us worldwide exclusive rights to develop and market innovative still experimental COVID-19 vaccine called free life.

For those of you who don't speak Hebrew the gray stands for.

Hebrew word for health.

The emergence of the Covid Delta variants and the rapidity with which this and other variants have eroded the immunity generated by first generation vaccines highlights the ongoing need for continued vaccination innovation research and development in addition to therapeutics.

The brutalized vaccine is developed by Israel Institute for Biological Research, that's an institution, whose roots go back to the early collaboration with Dr. Jonas Salk, who develop the polio vaccine.

Relies vaccine is based on a non pathogenic ultra virus that was previously used to develop a successful FDA approved vaccine against Ebola.

This platform was further optimized by the IPR and targeted towards COVID-19.

Realized vaccine differs from other COVID-19 vaccines and that it presents the entire spike protein of the Covid virus to the body's immune system rather than merely a small segment of that spike protein.

We believe this may be the reason really shows encouraging protection against Delta and other variants in preclinical studies.

Additionally, as new variants are discovered the spike protein complex that those new variants, making rapidly added to the <unk> seed, thereby expanding the spectrum of coverage and its adaptability to future variants.

Because realize it's a self propagating live virus vaccine, we anticipate rapid and affordable manufacturing scale up.

<unk> ability to deliver to a large population across the world showed the vaccine be successful.

Recently, we announced the initiation of a phase <unk> trial of the <unk> vaccine to be conducted in the nation of Georgia.

Focus of this study was to confirm the dose level.

And the Vaccine's ability to generate an immune response against the COVID-19 Delta variants prior to initiating a phase III trial in multiple nations.

Originally we plan to proceed with the placebo controlled design that is in the final stages of enrollment in Israel. However, just this week we received indication.

That the Georgia Ministry of Health would prefer we'll go straight to a non inferiority design.

An active comparator design against an already approved vaccine.

And we're in the process of revising our clinical protocol accordingly.

Hours that Sami program has taught us a great deal about the interaction between the Covid virus and the eighth two receptors in the lung and elsewhere.

Those are the angiotensin converting enzyme receptors.

It enables the COVID-19 virus to attack and kill human beings, even though it does it can be.

It doesn't kill other mammals.

Because of the spike protein on the surface of realize it binds to H T cells in the skin or H two.

Receptor containing cells in the skin and then those and then alone.

There are some early indications that it may.

May be even more effective when delivered by intradermal or intranasal vaccination.

Traditional intramuscular injection.

We would expect to test these hypotheses in the coming year. We will also be observing the effect of realized and protecting against the delta variant and even newer variance that have proven so challenging for first generation vaccines.

Georgia is particularly promising location for clinical development because of the Richard Lugar Center for public Health research named for the late Senator from Indiana and built by the U S governments in collaboration with leading scientists in Georgia.

We aim to enroll sufficient patients to prove efficacy realized against the original COVID-19 virus and against its newer variance.

By early 2022.

Where we had an Rx are honored to have been selected for this project and grateful for the trust placed in us by the government of Israel, but people of Georgia and its neighboring countries as the Delta and subsequent variance continued to threaten the immunity generated by first generation vaccines.

We hope that this new vector based approach.

Offer enhanced immunity.

Let's turn for a moment to the ongoing development of our drug and Rx one on one for the treatment of suicidal bipolar depression, a condition that accounts for a large part of the approximately 50000 deaths attributed to suicide annually in the United States alone. According to.

The CDC.

And awarding us breakthrough therapy designation FDA agreed with us that suicidal bipolar depression constitutes a significant unmet medical needs. The only currently approved treatment for this condition is electroshock therapy or ETT.

Sadly if you know two people with bipolar depression chances are one will attempt suicide at some points in his or her life.

If you know people with bipolar depression. Unfortunately, one is likely to succeed.

There was a compelling unmet medical needs.

For an orally available drug that treats the NMDA receptor in order to treat depression, but does not cause hallucinations is not neurotoxic and especially is not addicted.

The development of done Rx 101 is based on dance yet early discovery of the role of the brains NMDA receptor and psychotic psychiatric disease and his lifetime of research and neurochemistry.

The award of the composition of matter patents that cover sent Rx 101 in 2020.

So an Rx 101 is a patented dual targeted mechanism of action that means it binds to both NMDA and five Ht receptors in the brain designed to achieve a high level of NMDA blockade.

Without significant NMDA side effects typically associated with the NMDA mechanism such as the hallucinations that are frequently seen with ketamine.

Five human studies have shown a positive effect on depression and or suicidal ideation.

We have a special protocol agreement in place with the FDA for an Rx 101 pivotal trial and Rx 101 has been granted breakthrough therapy designation fast track designation and has received a biomarker letter of support.

We believe that if our phase III pivotal trial results replicate those observed in our phase II study.

Meet FDA criteria for approval.

Paths for NDA submission, new drug application submission to the SPM in 2022.

This drove potentially represents an important breakthrough for patients who have few therapeutic options.

And we believe presents a significant commercial opportunity as well and both suicidal depression and post traumatic stress disorder, which is also associated with suicide dalen.

The composition of matter patents awarded for the dual targeted mechanism of Rx 101.

Extensible to other dual targeted drugs for major depression, and other conditions, we hope to announce a companion drug development program to treat major depression in the near future.

With that I'll turn it over to Randy for a brief overview of our financial results before doing. So however, I would encourage you to notice that the uptick in quarterly loss between 2020 and second quarter 2021 has the substantial noncash components associated with it.

Restructuring our employee stock option plan to meet the legal requirements of the merger with the Europe that we conducted met there were also substantial onetime costs associated with assessing the merger thus, although we anticipate raising additional investment capital going forward.

We've consistently maintained ourselves as the going concern according to U S accounting books Randy.

Thank you Jonathan.

For our second quarter, we reported a net loss of $16 million compared to a net loss of $100000 for the three months ended June 30th 2020, while this may sound like a large number for a small company two thirds of the G&A expenses were non cash adjustments to earnings associated.

With Reconfiguring, our employee option program to meet the legal requirements of the merger and with warrants held by the merger partner. The remaining G&A expenses were largely attributable to one time expenses associated with the merger.

Research and development expenses were $4.7 million during the second quarter compared to $1.4 million for the prior year period. This was primarily due to an increase in clinical trials and development expenses Paradise Tammy <unk>.

General and administrative expenses were $12.5 million for the second quarter compared to half a million dollars during the prior year period.

This was driven primarily by $5.5 million of consulting fees of which $4.9 million relates to noncash consulting fees and $4 million in stock compensation expense of which $3.3 million relates to modification of stock options and warrants due to the merger with <unk>.

The RFP.

As of June 32021, cash and cash equivalents were $13.4 million compared to $1.9 million as of December 31, 2020. In addition, we received $9.2 million in cash investments subsequent to June 32021 from the exercise of.

Warrants.

As stated in our 10-Q, our core expenses are funded through the next 12 months are two major clinical trials.

Merrily funded by the U S government and we anticipate that the vaccine program will be co funded by one or more commercial partners.

With that I will turn it back to Jonathan for closing remarks.

Thank you Randy before taking questions I, just want to emphasize our continued commitment to rapid efficient drug development.

Made tremendous progress in our three lead programs in an incredibly short amount of time and have focused our resources and energies in areas of critical unmet medical need where we can have the most impact we're confident that we can realize the opportunities before us and look forward to updating you on.

Our continued progress.

Right.

John we're.

We're ready to take questions.

Well, we have a question from Kevin <unk> at Oppenheimer.

What is the target population of XI Sammy for EUA. The phase <unk> three suggest patients on high flow nasal cannula better primary outcome, how does that impact on the patient enrollment criteria subgroup analysis of the ongoing active study.

Thank you Kevin it's a great question.

The phase <unk> trial that we conducted enrolled patients who had critical COVID-19 and respiratory failure.

That includes patients who are in the ICU or the step down unit.

Some of whom were still able to be maintained on high flow nasal oxygen and some of whom have progressed to the point, where they needed either mechanical ventilation that is a tube down your throat or noninvasive ventilation. So the latter patients we're obviously far more.

Ill then the former patients.

This is something we recognized was going to happen when we develop the protocol would be SBA. So we said from the outset that we would stratified patients by their baseline severity of illness and actually we said we use the <unk> score and subsequently we discovered.

That simply using the baseline level of ventilation was a better way.

Controlling for baseline severity.

Now the data are a little complicated and our best read rather than recited but.

Across the board patient some high flow nasal cannula really no matter, what kind of possible. They were in good better onsite Sammy than on placebo and we showed substantial differences both in survival and recovery from respiratory failure.

Now it shouldn't be a surprise to anybody that the people who are less acutely ill going into the study the people on high flow nasal cannula.

It did better than the people who were more acutely ill, who had already progressed to being on ventilation.

In the tertiary care hospitals the people on ventilation also did better.

On Zeiss Sami than on placebo, but once once we got to the community hospitals.

Who were in the midst of that horrible surge between December and January there was very little survival of patients either on drug or placebo once they had progressed to intubation.

So I think we can say from the clinical trial results alone.

That.

All the patients in the tertiary care hospitals, which is about three quarters of the sample did substantially better.

On drugs for <unk>.

Bo.

And everybody on high flow nasal cannula, if you catch those patients early if you can catch patients before they get to needing.

Needing intubation.

We're going to do better on drug than placebo in this trial now if you look at the cytokine data.

Everybody on drug.

Or I should say the mean value of cytokine level on drug was substantially lower five fold lower.

Then.

Then on placebo you saw that.

10 fold increase in cytokine across the placebo group versus a two fold increase.

The.

Drug treated group and that was regardless of site of care or baseline severity.

So I think it's fair to say that we saw the biological effect.

Pretty much across all patients, but how patients ultimately did in terms of survival and recovery was affected by whether they were in a leading tertiary care hospital.

Versus community hospitals that may have been less well equipped to deal with it's absolutely lethal disease.

Does that get at your question.

Yes. Thank you. So another follow up question from Kevin <unk> of Oppenheimer, What does the development plan of the tails I Sami should we expect that to replace the IV formulation or will the two formulations target different patient populations.

Well initially the tube.

The two formulations, we will target different populations.

The the inhaled formulation is targeted for patients who can't hold nebulizer and actively inhaled drug.

And we expect that the drug will be affected there because it's shown promise and other respiratory conditions.

Treating the lung directly through an inhaled form of the drug is likely to actually be.

More direct form of treatment than giving the drug intravenously.

Now some of the hospitals, we talk to want to give the inhaled form of the drug through event Blake.

That's not something.

Nebulizer is those are FDA approved devices, we know that they create the proper dispersion of aerosolized drug in lung.

Putting our cooking a nebulizer two event or later.

Is a little bit of homemade medicine.

And we don't know whether inhaled drug will ever be a good approach for somebody who's already intubated. If it turns out to be a good approach for somebody who's already intimated that would be a major breakthrough.

Okay.

Okay, great. Thank you.

Now some questions from investors.

When will you get.

<unk>.

Well, yes, it's biotech investors know.

The approval conversation with the FDA, it's a dynamic scientific interaction and we're far from the only company in this EUA dialogue with FDA, but we're encouraged that FDA asked the first question to bus within a few weeks of our EUA submission, we continue to engage with FDA.

Providing additional statistical analyses in order to support their review.

Given the limited therapeutic options that are available to patients with critical COVID-19, we remain firm in our belief that the results of our phase <unk> study demonstrated clear and significant statistically significant improvements in patient survival and war.

The grant of emergency use.

Okay. Thank you next question why is the FDA, taking so long.

Well as we said we're in a continual dynamic dialog with FDA and we've been responsive to their requests for additional analyses and data.

There is no statutory timeline for emergency use reviews on the other hand, I think we see that FDA is processing visa merchants, who use reviews actually far more quickly than it processes traditional drug approval reviews, the country urgently need new treatments for.

COVID-19, as evidenced by the many calls we get from physicians and patients.

And we think FDA recognizes that we know FDA recognizes that.

And is moving.

Uncharacteristically quickly towards approving new treatments.

Next question what was the process for granted EUA in the caucuses region.

So.

In the nation of Georgia, the process was a little different from the FDA process and that the National physician Society reviewed our clinical trials data.

And made a formal recommendation to Georgia as Prime Minister and Minister of health in favor of emergency use authorization.

And that was the basis of the granted EUA other medical societies and other countries have approached us and are in the process of conducting their own independent reviews.

Okay.

Another question here, who owns the patent to Avista deal and why won't you faced generic competition.

Investors frequently ask us whether our drug goes generic.

When that we had no patent protection.

Well just like there is no patent on insulin or other national peptides that are highly successful drugs today, such as human growth hormone.

It's our current patent on specific formulations of it bill using certain buffers at specific facility ranges. However.

However, one of the inventors on that patent advised us that use of buffers with a book to bill can inactivate the peptide and must be avoided.

We've discussed that in our securities filings.

Most of this advice, we formulated ice damming without using any buffers.

<unk> never been approved as a drug in the United States or in most other major markets. Therefore should our drug since ceding gaining approval, we expect that it will be afforded whats called data exclusivity for some period of time by FDA and other regulators during this period.

A time the clinical data that we generate and supportive approval can be used by others to file a generic drug application. We also hope that the formulation work we've done to create size family, which is our proprietary stable form of it still will yield patents that provide additional protection.

Lastly, we've announced partnerships with two companies PFS of nine times, who have extensive experience in turning peptide such as ours into dry powder room temperature stable products that have long term patent protection.

What is happening in Europe partnership with relief Therapeutics.

Well, we've signed a collaboration agreement with relief Therapeutics under which release had the right to fund cost of development formulation and clinical trials in return for a predetermined share profits. All of this is detailed in our public filings.

Including our 10-Q filed yesterday.

As we've disclosed released chose not to fund significant portions of the development program or to fund the inhaled use trial. Therefore, an rx funded those activities with other sources of capital we remain committed to arriving at a mutually agreeable business relationship with <unk> going forward.

Yes.

No you have a question on the vaccine why get involved in a new vaccine is it the world already vaccinated.

Yeah.

Unfortunately, only a portion of the world was vaccinated.

And we're seeing even in vaccinated patients contract get hospitalized and die from new variants of Covid.

Like the Delta area.

We believe that <unk> has potential to demonstrate more robust immunity against new variance of the disease and we expect that that data in support of this view will be released to the public in the near future.

Moreover, the realize that <unk> is unique and that it binds to ace two receptor.

And those and then the loan.

Okay.

And that that enables it to be delivered by nasal or inhaled dosing.

And it may create what it's called mucosal immunity.

Most vaccines work by creating circulating antibodies and immune cells against the virus.

Coastal immunity means that the cells lining the lung and respiratory tract become immune to the virus as well. We're concerned that this virus will continue to mutate and create variant that bypass any vaccine.

Just like influenza, we expect that people will need to be re vaccinated on an ongoing basis and more convenient routes of administration will be important for patients. We look forward to organizing our science day for analysts and interested investors in the near future to share the basis of our enthusiasm for this clinical development program and we think the.

<unk> for selecting us as its partner.

Thank you Ryan and thanks, Thanks, Thanks for picking that up no.

Problem.

I'm showing no further questions in the queue. At this time. This concludes the Rx second quarter results conference call. Thank you all for participating.

Thank you.

Okay.

Yeah.

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