NRX Pharmaceuticals, Inc. (NRXP) Q2 2026 Earnings Call Transcript

Good afternoon, ladies and gentlemen, and welcome to the NRX Pharmaceuticals' second quarter 2026 results conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. To require any operator assistance, you may press star zero. I would now like to turn the conference call over to Sebastian Gomez of ASTAR 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 law. 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 Micro 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 Micro 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 FDA 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 EMS trial. That's an FDA-approved Phase 2-3 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 60 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 Gineuro assets and the resulting partnership with NIH to potentially develop the first disease-modifying drug to treat ALS. And finally, continuing growth and development of the Hope Therapeutics Clinic footprint with expanded operations in Florida. Let me start with the end of her preservative free ketamine. As we discussed on our August 10th conference call, the FDA identified no major deficiencies related to the drug or to its manufacture. A single major deficiency was identified, however, related to the lure 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 provide a manufacturer's attestation that the vial is manufactured in the same manner as it is for three other currently approved drugs that ship more than 12 minutes million units a year this attestation has been provided to the FDA and the company aims for 2026 approval accordingly five million units of launch stock have been ordered from the manufacturer turning to nrx 100 we've continued to advance that new drug application uh to treat depression during the second quarter a presidential executive order was signed by president trump and congressional budget language was added by the agricultural appropriations committee of the u.s congress that's 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 alignment 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 Hospital have seen evidence that the lorazodone component of our drug is independently beneficial. Now, the military has gotten involved in the implications of this research because military personnel who are 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 five years. Now, TMS plus NREX 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 a Now, as you know, DARPA, the Defense Advanced Research Projects Agency, as DOD's most advanced research organization, rarely does medical research. They're 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 and 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 decycloserine and lorazodone, we were selected as 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. FARC-TMS 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, in 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 affixing a robotic arm to a transcranial magnetic stimulation coil and combining that with precise neuronavigation may be surprising to many who assume that all TMS is basically alike. Our belief, however, and it's a belief that's supported by the published literature, is that traditional TMS is too technician-dependent, 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 SPARK 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 suddenly 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 five clinic 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 neuro-navigation, 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, genuro, a word that's new to many of you, is the culmination of three 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 Fundation Fundamentale of Paris, chaired at the time by David de Rothschild and led by our colleague and advisory board member, Professor Marion Le Boyer. 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 Genuro now owns on the Genuro.us website. Over time, as we learn more about 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. So Genuro now owns two clinical-stage monoclonal antibody drugs, one to treat ALS, that's called GnK301, and another to melumab, that so far has shown meaningful effects in multiple sclerosis and type 1 diabetes, and in Professor Laboyer'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 their 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 Foundation Fundamentale in Paris with French government funding, and Gennaro aims to partner with them to launch a clinical trial of Temelumab to treat schizophrenia. GnK301 is a very different story, whereas per 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 co-invented at the U.S. National Institute for Neurologic Diseases and Stroke and INDS of the National Institutes of Health by the head of ALS, Dr. Avendra Naf, under a cooperative research and development agreement between Genuro and the NIH. So, Genuro co-owns the patent for the treatment of HERF-K envelope protein, which may possibly turn out to be the first disease-modifying drug for ALS, and Genuro has already been selected in the first round of the 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 Genura website. So in summary, in our second quarter, we've advanced our core business toward commercial revenue. We've substantially strengthened our balance sheet. We've 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 six 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 fair value accounting measurements and other non-recurring charges related to the conversion and restructuring of previously issued convertible notes incurred during the six months ended June 30th of 2025. So, the six months ended June 30th, 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 administrative costs related to the anticipated near-term commercial launch of preservative-free ketamine, which is pending approval of the 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 31st, 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 attending and a 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.

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.

We will now begin the question and answer session. If you have a question, please press star 1 on your telephone keypad. Should you wish to withdraw your question, you may press star 2. Once again, that is star 1, should you wish to ask a question. Your first question is from Tom Schrader from VTIG. Your line is open.

Good afternoon. Thanks for taking the question. 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? Well, 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 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, you know, Ketafree targets the market, and we believe it's a $750 million current market of ketamine that's used in hospitals and clinics. Some is 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 those things that bears repeating. Keta-free, by law, has to have a comparable inert ingredient composition to the composition of the reference drug, which is Ketilar, a drug that was formulated back in the 1970s. That means that for reasons we don't understand, nobody seems to know, Ketilar was formulated as a hypotonic drug. The sodium chloride concentration is 6.4 milligrams per mil. Now, if we'd gone to the FDA and said, hey, would you please give us a letter telling us that NRX-101 and Ketterfree are, you know, two different drugs, they would have said, well, we don't write letters like that. So, instead, what we did is first we submitted the ANDA at an isotonic sodium chloride level at 7 milligrams per mil 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 resubmitted, we reformulated, resubmitted at 6.4 milligrams per mil of sodium chloride. and the ANDA was accepted for 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 the question?

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

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

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

Operator.

Thanks. Yes. Your next question is from Patrick Trichel from H.C. Wainwright. your line is out open.

Patrick, congratulations on being a new father.

I will relate to Patrick, this is Luis in for Patrick because he's on baby duty. Yes, thank you for taking our questions. I just have a couple of questions on the Spark TMS and then a follow-up. The trial positions NRX 101 in broader treatment-resistant 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, you know, indications and drug approvals. That's the role of the FDA.

From our perspective, you know, NDAs are 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 the kind of, you know, massive, non-dilutive 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. While it's not an orphan disease, There are, you know, 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 in 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.

Thank you. That makes sense. And on the GENERO program, 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 GENERO, or is it going to come from non-diluted sources? Thank you.

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, you know, 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, you know, recognize that in this case, we're partnered with the National Institutes of Health. This drug was co-invented with the head of ALS at the National Institutes of Health, and NIH owns the patent together with us, technically, and, you know, should the drug come to market, NIH gets a 3% royalty on anything that happens. but you know i don't think nih is in it for the money nih is in it for the you know 6 000 people every year who get als and who are mostly dead within three years that's why we're we're all in it uh so there's a tremendous amount of uh 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 Congress-directed medical research program. And sure enough, the two 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 30th. 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 because it took me years to understand it. The envelope protein, you know, 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, it was VEGF. In the case of ALS, it appears to be HERF-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, you know, in the world to take risks that, you know, 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 you're a combat vet, you're automatically admitted for ALS. that's how strong the association is so the the long answer but ultimately the short answer to your question uh is we expect to develop this with non-dilutive sources thank you that's helpful thank you and your next question is from ed ru from ascendian capital marilyn is that open yeah 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.

There are also, you know, 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 Spark TMS trial, the way we hope it's going to work has massive international implications. And the general assets began internationally. Some of the patent coverage was lost while the portfolio was sitting in a Swiss bankruptcy, see, but there's still coverage for most of the patents, and these patents are disclosed on the gineuro.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.

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 in Vienna right now with two members of our team. Tomorrow, the first manufacturer of G&K 301 is going to be initiated at a partner called Polymune 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.