What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-14 compared with 2023-05-15 · 93 added, 37 removed, 160 unchanged (45% of the section changed)

13 unchanged sentences

NRX-101 is being developed as a rapid-onset and sustained treatment for bipolar depression with ASIB and SSIB.

NRX-101 combines d-Cycloserine, a NMDA receptor modulator, and lurasidone, a 5-HT2a receptor antagonist.

NRX-101 combines d-Cycloserine, or DCS, a NMDA receptor modulator, and lurasidone, a 5-HT2a receptor antagonist.

NRX-101 has been awarded Fast Track designation, Breakthrough Therapy designation, a Biomarker Letter of Support, and a Special Protocol Agreement by the FDA.

23 unchanged sentences

We intend to use newly manufactured material that was manufactured using the expected commercial process.

On January 3, 2023, the Company announced that its first clinical trial sites had been contracted for this study, but patient recruiting has not begun.

● On February 14, 2023, the Company announced its receipt of the written minutes of a Type B meeting held with the FDA on January 11, 2023, to outline the clinical & preclinical requirements for registration of NRX-101.

1 unchanged sentence

This broader indication would enable the Company to potentially demonstrate the use of NRX-101 to maintain stabilization from suicidality in patients stabilized either with ketamine (NRX-100) or with other standard of care therapeutic approaches.

FDA encouraged the Company to request a Breakthrough Therapy Planning Meeting for NRX-101, which we intent to do in the next few months.

FDA encouraged the Company to request a Breakthrough Therapy Planning Meeting for NRX-101, which we intend to do in the next few months.

NRX-101 Indication – Bipolar Depression in Patients with Sub-acute Suicidal Ideation and Behavior (SSIB)

3 unchanged sentences

Consolidated NRX-101 Program in Suicidal Treatment-Resistant Bipolar Depression

Based on the comments and guidance from the FDA in its recent Type B meeting regarding the registrational Acute Suicidality trial and a potentially broader indication, as well as the guidance it received from the DSMB regarding the ongoing Phase IIb/3 clinical study of NRX-101 for the treatment of severe bipolar depression in patients with SSIB, the Company is evaluating changes to its registrational program for NRX-101 and will seek to consolidate patients originally expected to enroll in the ASIB study into the currently enrolling Phase IIb/3 trial.

● Based on the comments and guidance from the FDA in its Type B meeting regarding the registrational Acute Suicidality trial and a potentially broader indication, as well as guidance the Company received from the Data

Safety Monitoring Board (the “DSMB”) regarding the ongoing Phase IIb/3 clinical study of NRX-101 for the treatment of severe bipolar depression in patients with SSIB, the Company is evaluating changes to its registrational program for NRX-101 and will seek to consolidate patients originally expected to enroll in the ASIB study into the currently enrolling Phase IIb/3 trial.

This would potentially allow registration of NRX-101 for Suicidal Treatment-Resistant Bipolar Depression, regardless of the mechanism of stabilization.

1 unchanged sentence

patients within both groups are deemed to have treatment resistant bipolar depression with suicidality.

This broader indication may also offer significant advantages in commercialization, while negating the need for a separate NDA for ketamine in Suicidal stabilization.

This broader indication may also offer significant advantages in commercialization, while potentially negating the need for a separate NDA for ketamine in suicidal stabilization.

● The US population of patients with Suicidal Treatment Resistant Bipolar Depression is estimated to be between 700,000 and 1,000,000 people.

1 unchanged sentence

NRX-101 Indication – Post Traumatic Stress Disorder

● NRx plans to commence a Phase 2 clinical trial of NRX-101 in PTSD in the second half of 2023.

● Depression in PTSD may be driven by pathways that are similar to those that drive depression in other conditions (NMDA and 5-HT2A).

1 unchanged sentence

● In a preclinical PTSD study, D-cycloserine, a component of NRX-101, demonstrated the ability to extinguish recurring images of traumatic events, also known as fear memory, in a validated WKY model of PTSD.

Financial Results

Since inception, NRx Pharmaceuticals has incurred significant operating losses.

For the three months ended March 31, 2023 and 2022, NRx Pharmaceuticals’ net loss was $11.0 million and $13.4 million, respectively.

As of March 31, 2023, NRx Pharmaceuticals had an accumulated deficit of $234.0 million.

For the three months ended June 30, 2023 and 2022, NRx Pharmaceuticals’ net loss was $8.7 million and $7.0 million, respectively.

For the six months ended June 30, 2023 and 2022, NRx Pharmaceuticals’ net loss was $19.8 million and $20.4 million, respectively.

As of June 30, 2023, NRx Pharmaceuticals had an accumulated deficit of $242.8 million.

Components of Results of Operations

6 unchanged sentences

General and administrative expenses consist primarily of salaries, stock-based compensation, consultant fees, and professional fees for legal and accounting services.

Results of operations for the three months ended March 31, 2023 and 2022

Results of operations for the three months ended June 30, 2023 and 2022

The following table sets forth NRx Pharmaceuticals’ selected statements of operations data for the following periods (in thousands):

Three Months Ended March 31,

Three months ended June 30,

Operating expenses:

1 unchanged sentence

General and administrative

Settlement expense

Total operating expenses

2 unchanged sentences

Interest income

Change in fair value of convertible note payable

Change in fair value of warrant liabilities

Change in fair value of Earnout Cash liability

Total other (income) expenses

Research and development expenses

For the three months ended June 30, 2023, NRx Pharmaceuticals recorded $3.9 million of research and development expenses compared to $3.0 million for the three months ended June 30, 2022.

The increase of $0.9 million is related primarily to an increase of $1.3 million in clinical trials and development expenses related to the NRX-101 program for Suicidal Treatment-Resistant Bipolar Depression and $0.1 million in shipping, freight, and delivery costs, partially offset by a decrease of $0.4 million related to fees paid to regulatory and process development consultants, and $0.1 million in stock-based compensation .

The research and development expenses for the three months ended June 30, 2023 and 2022, respectively, include $0.1 million and $0.2 million, respectively, of non-cash stock-based compensation.

General and administrative expenses

For the three months ended June 30, 2023, NRx Pharmaceuticals recorded $4.1 million of general and administrative expenses compared to $6.6 million for the six months ended June 30, 2022.

The decrease of $2.5 million is related primarily to a decrease of $1.0 million in insurance expenses, $0.7 million in consultant fees, $0.7 million in legal, professional and accounting fees, $0.3 million in stock-based compensation expense, partially offset by an increase in $0.2 million in employee expenses.

The general and administrative expenses for the three months ended June 30, 2023 and 2022, respectively, include $0.4 million and $0.8 million, respectively, of non-cash stock-based compensation.

Other (income) expenses

Interest income

For the three months ended June 30, 2023, NRx Pharmaceuticals recorded $0.1 million of interest income compared to less than $0.1 of interest income for the three months ended June 30, 2022.

The increase of $0.1 million is due to the Company’s money market account.

Change in fair value of convertible note payable

For the six months ended June 30, 2023, NRx Pharmaceuticals recorded a loss of $0.7 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option.

Change in fair value of warrant liabilities

For the three months ended June 30, 2023, NRx Pharmaceuticals recorded a loss of less than $0.1 million in fair value of warrant liabilities compared to a gain of $0.1 million for the three months ended June 30, 2022.

The decrease of $0.1 million related to the decrease in the fair value of certain Substitute Warrants and the Private Placement Warrants assumed pursuant to the Merger Agreement.

Change in fair value of earnout cash liability

For the three months ended June 30, 2023, NRx Pharmaceuticals recorded no change in fair value of the earnout cash liability compared to a gain of $2.5 million for the three months ended June 30, 2022.

The earnout cash milestones were not achieved by December 31, 2022 and therefore the earnout cash liability expired.

The gain for the three months ended June 30, 2022 related to the decrease in fair value of the earnout cash liability.

Results of operations for the six months ended June 30, 2023 and 2022

The following table sets forth NRx Pharmaceuticals’ selected statements of operations data for the following periods (in thousands):

Six Months Ended June 30,

Operating expenses:

Research and development

General and administrative

Settlement expense

Total operating expenses

Loss from operations

Other (income) expenses:

Interest income

Interest expense

5 unchanged sentences

Research and development expenses

For the three months ended March 31, 2023, NRx Pharmaceuticals recorded $3.7 million of research and development expenses compared to $5.5 million for the year ended March 31, 2022.

The decrease of $1.8 million is related primarily to a decrease of $1.8 million in clinical trials and development expenses related to ZYESAMI.

The $3.7 million and $5.5 million of research and development expenses for the three months ended March 31, 2023 and 2022, respectively, include $0.1 million and $0.2 million, respectively, of non-cash stock-based compensation.

For the six months ended June 30, 2023, NRx Pharmaceuticals recorded $7.5 million of research and development expenses compared to $8.4 million for the six months ended June 30, 2022.

The decrease of $0.9 million is related primarily to a decrease of $0.6 million in clinical trials and development expenses related to ZYESAMI, $0.5 million related to fees paid to regulatory and process development consultants, $0.2 million in stock-based compensation, partially offset by an increase in $0.2 million in other regulatory and process development costs and $0.2 million in shipping, freight, and delivery costs.

The research and development

expenses for the six months ended June 30, 2023 and 2022, respectively, include $0.2 million and $0.4 million, respectively, of non-cash stock-based compensation.

General and administrative expenses

For the three months ended March 31, 2023, NRx Pharmaceuticals recorded $5.8 million of general and administrative expenses compared to $10.2 million for the three months ended March 31, 2022.

The decrease of $4.4 million was primarily, related to a decrease of $3.9 million in legal, professional and accounting fees, $0.6 million in insurance expenses, $0.5 million in stock-based compensation expense, partially offset by $0.3 million in employee expenses and $0.3 million in consultant fees.

The $5.8 million and $10.2 million of general and administrative expenses for the three months ended March 31, 2023 and 2022, respectively, include $0.6 million and $1.1 million, respectively, of non-cash stock-based compensation.

For the six months ended June 30, 2023, NRx Pharmaceuticals recorded $9.9 million of general and administrative expenses compared to $16.9 million for the six months ended June 30, 2022.

The decrease of $7.0 million is related primarily to a decrease of $4.6 million in legal, professional and accounting fees, $1.6 million in insurance expenses, $0.9 million in stock-based compensation expense, $0.4 million in consultant fees, partially offset by an increase in $0.5 million in employee expenses.

The general and administrative expenses for the six months ended June 30, 2023 and 2022, respectively, include $1.0 million and $1.9 million, respectively, of non-cash stock-based compensation.

Other (income) expenses

Interest income

For the three months ended March 31, 2023, NRx Pharmaceuticals recorded $0.2 million of interest income earned on the Company’s money market account.

For the six months ended June 30, 2023, NRx Pharmaceuticals recorded $0.3 million of interest income compared to less than $0.1 of interest income for the six months ended June 30, 2022.

The increase of $0.3 million is due to the Company’s money market account.

Change in fair value of convertible note payable

For the three months ended March 31, 2023, NRx Pharmaceuticals recorded $1.8 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option.

For the six months ended June 30, 2023, NRx Pharmaceuticals recorded a loss of $2.4 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option.

Change in fair value of warrant liabilities

For the three months ended March 31, 2023, NRx Pharmaceuticals recorded a gain of less than $0.1 million related to the change in fair value of the warrant liabilities compared to a gain of $0.2 million for the three months ended March 31, 2022.

For the six months ended June 30, 2023, NRx Pharmaceuticals recorded a gain of less than $0.1 million related to the change in fair value of the warrant liabilities compared to a gain of $0.3 million for the six months ended June 30, 2022.

The decrease of $0.3 million related to the decrease in the fair value of certain Substitute Warrants and the Placement Warrants assumed pursuant to the Merger Agreement.

Change in fair value of earnout cash liability

For the three months ended March 31, 2023, NRx Pharmaceuticals recorded no change in fair value of the Earnout Cash liability compared to a gain of $2.1 million for the three months ended March 31, 2022.

For the six months ended June 30, 2023, NRx Pharmaceuticals recorded no change in fair value of the earnout cash liability compared to a gain of $4.6 million for the six months ended June 30, 2022.

The earnout cash milestones were not achieved by December 31, 2022 and therefore the earnout cash liability expired.

The gain for the three months ended March 31, 2022 related to the decrease in fair value of the Earnout Cash liability.

The gain for the six months ended June 30, 2022 related to the decrease in fair value of the earnout cash liability.

Liquidity and Capital Resources

The Company has generated no revenues, has incurred operating losses since inception, and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable.

The Company has generated no revenues, has incurred operating losses since inception, expects to continue to incur significant operating losses for the foreseeable future and may never become profitable.

Until such time as the Company is able to establish a revenue stream from the sale of its therapeutic products, NRx Pharmaceuticals is dependent upon obtaining necessary equity and/or debt financing to continue operations.

NRx Pharmaceuticals cannot make any assurances that sales of NRX-101 will commence in the near term or that additional financings will be available to it and, if available, on acceptable terms or at all.

NRx Pharmaceuticals cannot make any assurances that sales of NRX-101 will commence in the near term or that additional financings will be available to it on acceptable terms or at all.

This could negatively impact NRx Pharmaceuticals' business and operations and could also lead to the reduction of NRx Pharmaceuticals' operations.

On March 8, 2023, NRx Pharmaceuticals entered into a securities purchase agreement (the “Securities Purchase Agreement”) with accredited investors (the “Investors”), providing for the issuance and sale of 3,866,666 shares of the Company’s common stock (“Common Stock”) and warrants to purchase up to 3,866,666 shares of Common Stock (the “Investor Warrants”) in a registered direct offering priced at-the-market under Nasdaq rules for a purchase price of $0.75 per share (the “Offering”).

The Investors have agreed not to transfer the Common Stock for six months following the date hereof.

The Investor Warrants will have an exercise price of $0.75 per share, will be initially exercisable beginning six months following the date of issuance (the “Initial Exercise Date”) and will expire 5 years from the Initial Exercise Date.

The aggregate gross proceeds to the Company from the Offering are expected to be approximately $2.9 million.

On March 8, 2023, NRx Pharmaceuticals entered into a securities purchase agreement with certain accredited investors (the “March Investors”), providing for the issuance and sale of 3,866,666 shares of the Company’s common stock (“Common Stock”) and warrants to purchase up to 3,866,666 shares of Common Stock (the “March Investor Warrants”) in a registered direct offering priced at-the-market under Nasdaq rules for a purchase price of $0.75 per share (the “March

The March Investors have agreed not to transfer the Common Stock for six months following the date of issuance.

The March Investor Warrants have an exercise price of $0.75 per share, are initially exercisable beginning six months following the date of issuance (the “March Initial Exercise Date”) and will expire 5 years from the March Initial Exercise Date.

The aggregate gross proceeds to the Company from the March Offering were approximately $2.9 million.

The Company intends to use the net proceeds from such offering for working capital and general corporate purposes.

The closing of the sale of these securities occurred on March 9, 2023.

NRx Pharmaceuticals believes that it does not currently have sufficient funds and, if necessary, the ability to reduce expenditures, to support operations through at least the next twelve months from the date hereof.

On June 2, 2023, the Company entered into a License Agreement (the “License Agreement”) with Alvogen Pharma US, Inc., Alvogen, Inc.

and Lotus Pharmaceutical Co.

(collectively, “Alvogen”).

Under the License Agreement, NRx granted Alvogen an exclusive, worldwide, transferable and sublicensable license under certain intellectual property (including patents, know-how and trademarks) owned or controlled by NRx to develop (with certain limitations), manufacture, and commercialize NRX-101, for the treatment of bipolar depression with suicidality.

The term of the license is, on a country-by-country basis, 20 years from the first commercial sale of NRX-101 in such country, extendable by Alvogen for a two-year period upon its request made prior to the expiration of such 20-year period.

During the term of the License Agreement, the parties have agreed (on behalf of themselves and their affiliates) not to research, develop, seek or obtain any regulatory approval for the manufacturing, marketing, sale, or other commercialization of any product containing a fixed dose combination of D-cycloserine and lurasidone in the treatment of bipolar depression with suicidality, nor to authorize or assist (including by investing in or otherwise providing funding to) any third party to do so.

During the term of the License Agreement, NRx is permitted to develop additional products containing D-cycloserine in combination with one or more other active antidepressant or antipsychotic ingredients for use outside of the field of treatment of bipolar depression with suicidality, such as in post-traumatic stress disorder (PTSD) or chronic pain in depression, in which case, if NRx wishes to license rights to develop or commercialize such additional products or indications, Alvogen has a right of first negotiation to obtain such a license.

Under the terms of the License Agreement, we have the right to an aggregate of up to $330 million in cash milestone payments, including an initial $10 million First Milestone Payment, upon the achievement of certain milestones.

A second milestone payment of $5 million is due upon Alvogen’s receipt of a copy of the FDA’s notice of NDA Approval for Product with the label indication for the treatment of bipolar depression with sub-acute or acute suicidality.

Additional cash milestone payments will become payable to us upon the achievement of net sales targets measured over the trailing four quarters.

Alvogen has also agreed to pay the Company royalties based on the net sales of NRX-101.

On June 6, 2023, the Company entered into a securities purchase agreement with institutional investors (the “June Investors”), providing for the issuance and sale of 9,670,002 shares of the Company’s Common Stock and warrants to purchase up to 9,670,002 shares of Common Stock (the “June Investor Warrants”).

The Common Stock was issued in a registered direct offering for a purchase price of $0.65 per share (the “June Offering”) and the June Investor Warrants were offered pursuant to a private placement under Section 4(a)(2) of the Securities Act.

The June Investor Warrants have an exercise price of $0.6525 per share, are initially exercisable beginning six months following the date of issuance (the “June Initial Exercise Date”) and will expire five and one half years from the date of issuance.

The aggregate net proceeds to the Company from the June Offering were approximately $6.28 million.

The Company intends to use the net proceeds from the June offering for working capital and general corporate purposes.

NRx Pharmaceuticals is dependent upon obtaining necessary equity and/or debt financing to continue operating.

NRx Pharmaceuticals cannot make any assurances that additional financing will be available to it and, if available, on acceptable terms or at all.

NRx Pharmaceuticals cannot make any assurances that additional financing will be available to it on acceptable terms or at all.

This could negatively affect the Company’s business and operations and could also lead to the reduction of the Company's operations.

The following table presents selected financial information and statistics for each of the periods shown below:

March 31, 2023

June 30, 2023

December 31, 2022

9 unchanged sentences

Operating activities

During the three months ended March 31, 2023, operating activities used $6.1 million of cash, primarily resulting from a net loss of $11.0 million, reduced by (a) net non-cash losses of $2.5 million, including $1.8 million in change in fair value of convertible promissory note and $0.7 million of stock-based compensation, and (b) changes in operating assets and liabilities of $2.5 million.

During the three months ended March 31, 2022, operating activities used $10.4 million of cash, primarily resulting from a net loss of $13.4 million, increased by net non-cash gains of $1.0 million, including $2.1 million of gain from the change in fair value of earn out liability and $0.2 million of gain from the changes in fair value of warrant liability, partially offset by $1.3 million of stock-based compensation expense, and an increase in net operating assets of $4.0 million.

During the six months ended June 30, 2023, operating activities used $13.9 million of cash, primarily resulting from a net loss of $19.8 million, reduced by (a) net non-cash losses of $3.9 million, including $2.4 million in change in fair value of convertible promissory note and $1.2 million of stock-based compensation, and (b) changes in operating assets and liabilities of $1.9 million.

During the six months ended June 30, 2022, operating activities used $25.2 million of cash, primarily resulting from a net loss of $20.4 million, increased by net non-cash gains of $2.5 million, including $4.6 million of gain from the change in fair value of earn out liability and $0.3 million of gain from the change in fair value of warrant liabilities, partially offset by $2.3 million of stock-based compensation expense, and an increase in net operating assets of $2.2 million.

Financing activities

During the three months ended March 31, 2023, financing activities provided $2.5 million of cash resulting from $2.5 million in proceeds from issuance of common stock and warrants issued in a private placement, net of issuance costs.

During the three months ended March 31, 2022, financing activities provided $23.0 million of cash resulting from the net proceeds received by the Company from the issuance of common stock and preferred investment options in a private placement.

During the six months ended June 30, 2023, financing activities provided $8.8 million of cash resulting from $8.1 million in proceeds from issuance of common stock and warrants issued in a private placement, net of issuance costs.

During the six months ended June 30, 2022, financing activities provided $22.1 million of cash resulting from $22.6 million in net proceeds received by the Company from the issuance of common stock and preferred investment options in a private placement partially offset by $0.5 million of repayment of the loan between the Company and Relief Therapeutics Holding S.A.

Contractual Obligations and Commitments

See Note 6, Debt, and Note 7, Commitments and Contingencies, of the notes to the Company’s unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2023 included elsewhere in this report for further discussion of the Company’s commitments and contingencies.

See Note 7, Debt, and Note 8, Commitments and Contingencies, of the notes to the Company’s unaudited condensed consolidated financial statements as of and for the three months ended June 30 , 2023 included elsewhere in this report for further discussion of the Company’s commitments and contingencies.

Milestone Payments

6 unchanged sentences

Critical Accounting Policies and Significant Judgments and Estimates

The Company's management’s discussion and analysis of its financial condition and results of operations is based on its financial statements, which have been prepared in accordance with GAAP.

The Company's management’s discussion and analysis of its financial condition and results of operations is based on its financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

The preparation of these financial statements requires NRx Pharmaceuticals to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of expenses during the reporting period.

27 unchanged sentences

Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

The fair value of the Placement Warrants was estimated using a Black Scholes valuation approach and the fair value of the Substitute Warrants was estimated using a modified Black Scholes valuation approach which applies a probability factor based on the Earnout Cash Milestone and Earnout Shares Milestone probabilities of achievement at each reporting period.

The fair value of the Private Placement Warrants was estimated using a Black Scholes valuation approach and the fair value of the Substitute Warrants was estimated using a modified Black Scholes valuation approach which applies a probability factor based on the earnout cash milestone and earnout shares milestone probabilities of achievement at each reporting period.

Convertible note payable

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis