NRXP · Read the filing

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended: December 31, 2023

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38302

NRX PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

1201 Orange Street, Suite 600

Wilmington, DE19801

(Address of principal executive offices) (Zip Code)

(484) 254-6134

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $0.001 per share NRXP The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐No☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes☐No☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of common stock held by non-affiliates of the registrant based on the closing price of the registrant’s common stock as reported on the Nasdaq Global Market on June 30, 2023, was $29.7 million.

As of March 25, 2024, the registrant had 95,699,780 shares of common stock outstanding.

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INDEX

Page

Annual Report on Form 10-K

Part I.

Item 1. Business 4

Item 1A. Risk Factors 46

Item 1B. Unresolved Staff Comments 84

Item 1C. Cybersecurity 85

Item 2. Properties 85

Item 3. Legal Proceedings 86

Item 4. Mine Safety Disclosures 86

Part II

Item 6. [Reserved] 88

Item 7A. Quantitative and Qualitative Disclosure about Market Risk 102

Item 8. Financial Statements and Supplementary Data 102

Item 9A. Controls and Procedures 145

Item 9B. Other Information 146

Part III.

Item 10. Directors, Executive Officers, and Corporate Governance 147

Item 11. Executive Compensation 147

Item 14. Principal Accounting Fees and Services 147

Part IV.

Item 15. Exhibits and Financial Statement Schedules 148

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CAUTIONARY STATEMENT

This document and the information incorporated by reference herein include “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995, which may include, but are not limited to, statements regarding our financial outlook, product development, business prospects, and market and industry trends and conditions, as well as the Company’s strategies, plans, objectives, and goals. These forward-looking statements are based on current beliefs,expectations,estimates,forecasts,andprojectionsof,aswellasassumptionsmadeby,andinformation currently available to, the Company’s management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “would,” “seek,” “plan,” “intend,” “shall,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. These forward- looking statements are, by their nature, subject to significant risks and uncertainties, many of which involve factors or circumstances that are beyond the Company’s control. These risks and uncertaintiesinclude, but are not limited to, our relatively limited operating history; our ability to expand, retain and motivate our employees and manage our growth; risks associated with general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; technological advances, new products and patents attained by competitors;challenges inherent in new product development, including obtaining regulatory approval; the Company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; changes in laws, rules or regulations relating to any aspect of the Company’s business operations, or general economic, market and business conditions; financial instability of international economies and sovereign risk; dependence on the effectiveness of the Company’s patents and other protections for innovative products; and the exposure to litigation,includingpatentlitigation,and/orregulatoryactions.Furthermore,therecanbenoguaranteeswith respect to pipeline products that the products will receive the necessary regulatory approvals or that they willprovetobecommerciallysuccessful.Ifunderlyingassumptionsproveinaccurateorrisksoruncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. The Company assumes no obligation and does not intend to update or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. As a result of these and other risks, uncertainties and assumptions, forward-looking events andcircumstancesdiscussedhereinmightnotoccurinthewaythattheCompany’smanagementexpects,ifat all. Accordingly, you should not place reliance on any forward-looking statement, and all forward-looking statements are herein qualified by reference to the cautionary statements set forthabove.

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PART I

Unless the context requires otherwise, references in this annual report to “NRx,” “Company,” “we,” “us” and “our” and similar designations refer to NRx Pharmaceuticals, Inc. and its subsidiary.

Item 1. Business

Company Overview and History

NRx is a clinical-stage bio-pharmaceutical company which develops and will distribute, through its wholly-owned operating subsidiaries, NeuroRx, Inc., (“NeuroRx”) and HOPE Therapeutics, Inc. (“HOPE”), novel therapeutics for the treatment of central nervous system disorders including suicidal depression, chronic pain, and PTSD. NeuroRx is organized as a traditional Research and Development (“R&D”) company, whereas HOPE is organized as a Specialty Pharmaceutical (SpecPharma) company intended to distribute ketamine and other therapeutic options to clinics that serve patients with suicidal depression and PTSD.

The 2023 fiscal year was one of extraordinary growth and transition for NRx. During the year the Company restructured its management to overcome challenges in capital formation, clinical trial enrollment, and corporate growth, in a manner that resulted in demonstrable milestones for 2023 and a company that we believe to be poised for growth in 2024. Those milestones achieved in 2023 and through the date of this filing include:

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The Company has two lead compounds today, NRX-100, a proprietary presentation of ketamine and NRX-101, a patented fixed-dose combination of D-cycloserine and lurasidone. Both products have Fast Track designation from the U.S. Food and Drug Administration (“FDA”) for the treatment of suicidal bipolar depression. NRX-101 additionally has Breakthrough Therapy Designation and a Biomarker Letter of Support from the FDA for this purpose. To the Company’s knowledge, NRX-101 is the only oral antidepressant demonstrated to reduce suicidal ideation in a phase 2 trial.

For mechanistic reasons unrelated to its central nervous system N-methyl-D-aspartate (“CNS NMDA”) antagonist properties, NRX-101 interferes with cell wall formation in certain bacteria, rendering it a potent antibiotic and is demonstrated to kill certain treatment-resistant urinary tract bacteria. Accordingly, NRX-101 has been awarded Qualified Infectious Disease Product Designation and Fast Track Designation by the FDA to treat Complicated Urinary Tract Infection and Pyelonephritis. Our strategy is to apply innovative science to known molecules in the pursuit of therapies for high unmet needs, including lethal conditions (NeuroRx) and to distribute ketamine and ancillary therapies to qualified clinics and practitioners who treat patients with suicidal depression (HOPE). The Company has announced plans to spin off HOPE to a freestanding company, half of which will be owned by the Company and half by individual shareholders.

NeuroRx was founded in 2015 by Professors Jonathan Javitt, MD, MPH and Daniel Javitt, PhD, MD, as a privately-funded R&D company targeting psychiatry drug development and attracted sufficient capital to enter phase 2b/3 research in 2016. Over the subsequent three years it formulated and manufactured clinical supplies of NRX-101, initiated and completed the STABIL-B trial and established the first Special Protocol Agreement issued by the FDA Division of Psychiatry Products to conduct a confirmatory trial of NRX-101 following induction with NRX-100 in hospital Emergency Department patients with acutely suicidal bipolar depression. That trial was initiated in November 2019 and suspended in February 2020 because of the COVID pandemic lockdown. In March 2020 NeuroRx was asked to undertake clinical drug development of intravenous Aviptadil, a synthetic form of human Vasoactive Intestinal Peptide (VIP), by Relief Therapeutics, AG (Relief, Switzerland: RLF.SW).

In December 2020, NeuroRx was approached by Big Rock Partners Acquisition Corporation, a special purpose acquisition company (“BRPA”) (Nasdaq:BRPA) about a potential business combination. On May 24, 2021, BRPA consummated the Agreement and Plan of Merger (as amended, the “Merger Agreement”) with NeuroRx, and Big Rock Merger Corp., a Delaware corporation and wholly owned, direct subsidiary of BRPA (“Merger Sub”). Pursuant to the Merger Agreement, on May 24, 2021 (the “Closing Date”), which has been accounted for as a reverse recapitalization, Merger Sub was merged with and into NeuroRx, with NeuroRx surviving the merger (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). On the Closing Date, BRPA changed its name to NRX Pharmaceuticals, Inc. (“NRx Pharmaceuticals” or the “Company”). The Company’s ticker symbol was changed to “NRXP.”

The Company formulated Aviptadil (later named Zyesami®) for human administration and achieved FDA clearance to initiate the first human trial for treatment of COVID-19 Respiratory Failure in 10 weeks from project inception to first

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patient treated. A company-sponsored randomized, double-blind clinical trial of Aviptadil vs. placebo demonstrated a 50% reduction in mortality compared to placebo among patients on ventilators for COVID-19 together with dramatic reductions in inflammatory markers (cytokines) and improvement in chest x-ray findings. These results caused Zyesami to be selected from among 5,000 candidate drugs as the only investigational compound tested in the ACTIV-3 Critical Care arm of the NIH nationwide program to test novel drugs for COVID-19. The Company additionally formed a partnership with the Israel Institute for Biological Research (IIBR) to test a novel COVID vaccine (BriLife®), which NRx committed to test in clinical trials to be conducted in the Caucasus region. Unfortunately, IIBR did not succeed in manufacturing BriLife to the Good Manufacturing Practices (GMP) standards required by FDA, the European Medicines Authority (EMA) and other strict regulators, preventing the clinical initiation of the BriLife project.

The COVID lockdown ended in March 2022 and the Company’s Board unanimously voted to return NRx’s focus to CNS drug development and to recruit a new Chief Executive Officer with legal and business skills that would complement the scientific strength of the Company’s Founder, Chairman, and Chief Scientist. Subsequently, in June 2022, the NIH trial announced futility in its attempt to replicate the survival benefit reported for Aviptadil in patients on ventilators for COVID-19 and subsequently disclosed its failure to fully treat 30% of those randomized to Aviptadil. The trial could not be restarted because it was unrecruitable in the aftermath of the pandemic. In December 2022, the Company agreed to return all Aviptadil assets to Relief in exchange for a commitment by Relief to use commercially-reasonable efforts to develop Aviptadil and to pay NRx more than $30 million in royalties and milestones from its future success, if any.

In July 2022, the Company recruited Mr. Stephen Willard, JD, a Presidentially-commissioned member of the U.S. National Science Board as CEO and a member of the Company’s Board of Directors, with Dr. Javitt continuing in his leadership role Chief Scientist. In December 2023, the Company’s reorganized Board of Directors re-elected Dr. Javitt as its Chairman. At the same time, the Company announced its plan to form HOPE Therapeutics as a specialty pharmaceutical company to develop a clinical market for ketamine and other treatments for suicidal depression.

Recent Developments

February 2024 Offerings

On February 27, 2024, we entered into an underwriting agreement (the “Underwriting Agreement”) with EF Hutton LLC (the “Representative”), as the representative of the several underwriters named therein (the “Underwriters”), relating to an underwritten public offering (the “February 2024 Public Offering”) of 5,000,000 shares of the Common Stock. The public offering price for each share of Common Stock was $0.30, and the Underwriters purchased the shares of Common Stock pursuant to the Underwriting Agreement at a price for each share of Common Stock of $0.276. On February 28, 2024, the February 2024 Public Offering closed (the “Closing Date”). Aggregate gross proceeds from the February 2024 Public Offering were approximately $1.5 million, before deducting underwriting discounts and commissions and estimated expenses payable by the Company.

Pursuant to the Underwriting Agreement and the engagement letter, dated as of February 22, 2024, by and between the Company and the Representative, the Company agreed to issue to the Representative in connection with the February 2024 Public Offering, a warrant to purchase up to a number of shares of Common Stock representing 5.0% of the shares of Common Stock and any Option Shares (as defined below) sold, at an initial exercise price of $0.33 per share, subject to certain adjustments (the “Underwriter’s Warrant”). On February 28, 2024, the Company issued to the Representative the Underwriter’s Warrant to purchase up to 250,000 shares of Common Stock (the “Underwriter Warrant Shares”). The Underwriter’s Warrant is exercisable six months following the date of the Underwriting Agreement and terminates on the five-year anniversary of the date of the Underwriting Agreement.

Pursuant to the Underwriting Agreement, the Company also granted the Representative a 45-day option to purchase up to an additional 750,000 shares (the “Option Shares”) of the Common Stock on the same terms as the Shares sold in the Offering (the “Over-Allotment Option”). On March 5, 2024, the Underwriters exercised (“Overallotment Exercise”) the Over-Allotment Option to purchase an additional 750,000 shares of Common Stock. In connection with the Overallotment Exercise, we issued an additional Underwriter’s Warrant to purchase up to 37,500 shares of Common Stock. The Overallotment Exercise closed on March 6, 2024.

On February 29, 2024, we entered into a securities purchase agreement with an investor providing for the issuance and sale of 2,700,000 shares of Common Stock and warrants to purchase up to 2,700,000 shares of Common Stock (the

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“February Warrants”) at a price of $0.38 per share of Common Stock and accompanying warrant, which represents a 26.7% premium to the offering price in February 2024 Public Offering. The Common Stock and the February Warrants were offered pursuant to a private placement (the “February 2024 Private Placement”) under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The February Warrants will have an exercise price of $0.38 per share, are initially exercisable beginning six months following the date of issuance and will expire 5 years from the date of issuance. The aggregate net cash proceeds to the Company from the February 2024 Private Placement were approximately $1.0 million.

NRx Products in Development

NRX-101

NRX-101 is a combined NMDA/5-HT2A-targeted medicine designed to address both depression and suicidal ideation, consisting of a patented, oral, fixed dose combination of D-cycloserine (DCS) and lurasidone. Although DCS has been known for more than 70 years as an anti-infective, its propensity to cause psychedelic side-effects, together with challenges in maintaining drug stability, limited its use clinical use and by the year 2000, DCS was rarely used in the United States. The critical doses of DCS required to achieve a clinical effect in treatment of these conditions was not understood, prior to NRx’s recent patented discoveries.

The key discovery by Daniel Javitt that the psychedelic side-effects of DCS can be attenuated by the concomitant use of serotonin-targeted drugs creates a new life for this promising molecule, whose use was previously limited by hallucinogenic effects. The manufacture of DCS was similarly limited by propensity to form inactive dimers and trimers of the cycloserine ring and no modern manufacturing program was undertaken over the past 50 years. The Company has now modernized the required analytic methodology, achieved control over impurities as required for modern commercial drug manufacture, and solved the stability challenges in a manner that achieved five-year shelf stability in the Company’s phase 2 program and is on track to replicate that stability at commercial scale.

Currently, there are numerous atypical antipsychotic drugs targeting the 5-HT2A receptor approved for treatment of bipolar depression. However, all are known to increase a side effect known as akathisia, which is closely linked to suicidal ideation and behavior, and all carry a black box warning on the label regarding the potential for increased risk of suicide. In contrast, DCS has been demonstrated in at least two clinical trials (Nierenberg 20226, Chen 20197) to reduce suicidal ideation, a finding also demonstrated for ketamine (Abbar 20228, Grunebaum 20179). Because its effect is synergistic to the antidepressant effects of serotonin-targeted drugs and because of the specific effect on suicidal ideation, the NMDA receptor of the brain is increasingly viewed as a key target for treating depression and suicidality. To the Company’s knowledge, NRX-101 is the first investigational medicine to advance for severe bipolar depression in patients with Acute Suicidal Ideation and Behavior (“ASIB”).

A safe, oral medicine for suicidal depression represents a key unmet medical need because the only currently approved treatment for this condition today is electroconvulsive therapy (ECT). Although the effects of NMDA antagonist drugs were first reported by Javitt in 1989, the development of NMDA-targeted medicines has been hampered by the known propensity of direct-acting NMDA-targeted drugs to cause neurotoxicity, addiction, psychedelic effects, and blood pressure elevation. Javitt discovered and patented the finding that when serotonin-targeted drugs are added to NMDA-targeted drugs, the hallucinogenic side effects of NMDA-targeted drugs are blocked and, at the same time, the NMDA component blocks the akathisia that is a known side effect of serotonin-targeted drugs – a side effect associated with suicidal ideation and behavior.

D-cycloserine, the NMDA-targeting component of NRX-101, is a mixed NMDA agonist/antagonist that has been demonstrated in nonclinical studies to have no potential for neurotoxicity10 or addiction.2 Although it may have psychedelic effects when given as monotherapy, psychedelic effects of DCS have not been seen in four different studies where DCS was administered together with serotonin-targeted drugs. Javitt additionally discovered and patented the finding that DCS is a mixed NMDA agonist/antagonist and a critical dose of DCS must be administered (in the region of 400mg – 500mg per day) to exert its NMDA antagonist properties. This finding explains the failure of DCS to demonstrate clinical effects in a number of published trials at lower doses, where it acts as an agonist at the NMDA receptor.11

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Although development of NRX-101 began in 2015, when NeuroRx, Inc. was privately funded, the COVID pandemic interrupted clinical development in March 2020 because of study site closures. The Company was hampered in continuing to manufacture its investigational product in China because of global supply chain and other international challenges. Accordingly, when the Company raised funds in February 2022 to reinitiate the psychiatric drug development program, a strategic decision was made to transfer all manufacture to the United States and to upgrade the Chemical Manufacturing Controls (CMC) level of NRX-101 to a commercial standard prior to entering phase 3 trials.

Manufacturing is a key component of drug approvals and current estimates suggest that more phase 3 biotechnology products fail or experience delays over manufacturing issues than over safety and efficacy. Moreover, registrational studies require either that the trial be conducted with commercial grade investigational product or compel the sponsor to conduct subsequent bridging studies to prove biological equivalence to commercial grade product. In March 2022, the Company executed a tender process and selected Alcami, Inc. (“Alcami”) (Wilmington, NC) as its manufacturing partner. Technology transfer was accomplished within 3 months and a first phase 3/commercial-scale batch was completed by August 2022. In January 2023, the Company achieved alignment with the FDA on its proposed registration manufacturing and stability plan in a Type C meeting.

In February 2023, the Company aligned with FDA in a Type B meeting to outline the clinical & preclinical requirements for registration of NRX-101. Overall, the FDA suggested expanding the safety data base of NRX-101 to allow for chronic/intermittent use of NRX-101, as well as a broadening of the addressable population of the indication (under the SPA or otherwise) to patients with severe bipolar depression and recent acute suicidality regardless of how the initial stabilization was achieved. This broader indication would enable the Company to potentially demonstrate the use of NRX-101 to maintain stabilization from acute 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.

In late 2022 we confronted the challenges associated with recruiting suicidal patients in the traditional clinical trial site model. We learned that the “suicidality state” is sufficiently transient that simply having trial sites offer our therapy to existing databases of known patients with bipolar disorder was both insufficient to attract sufficient numbers of patients to a clinical trial and overly prone to attracting participants seeking secondary gain. We implemented an artificial intelligence (“AI”) based national recruitment strategy designed to identify and recruit participants who are sincerely looking for the potential benefit offered by NRX-101. We paired this with a distributed clinical trial model developed by Science37, Inc., where traveling nurses are able to visit prospective clinical trial participants who are then treated by their own physicians, rather than relying on our ability to identify participants who live within traveling distance of a “bricks and mortar” study site. Thus, in order to achieve clinical trial feasibility for an enormously complex and potentially lethal disease, in 2023 we invented and demonstrated a new model of clinical trial recruitment and implementation.

Psychiatry trials succeed or fail based on a high degree of confidence that psychometric ratings are implemented in a reliable manner that is consistent from one study site to the next. An entire industry has emerged of third party rating companies that seek to achieve this consistency on behalf of sponsors. Unfortunately, the lag time between site-rating and central rating is inconsistent with achieving real-time quality control. Accordingly we developed in internal capability to review a study site rating within 24 hours, using an in-house team of master raters. The industry standard has traditionally allowed a 10% difference between site raters and third party rating companies as the standard for “concordance” and has allowed a 90% concordance rate between study sites and central raters. We tightened that standard to allowing only 5% difference between site raters and central master raters and demonstrated that 94% concordance could be maintained, with the exception of one study site that was excluded from the study and replaced at the direction of our Independent Data Safety and Monitoring Committee early in the study (prior to any data unblinding) for failure to maintain rating quality.

We applied the above technologic infrastructure to our clinical trial of NRX-101 for the treatment of severe bipolar depression in patients with sub-acute suicidal ideation and behavior (“SSIB”), an indication we now call “Suicidal Treatment Resistant Bipolar Depression.” Between 700,000 and 1,000,000 Americans suffer from Suicidal Treatment Resistant Bipolar Depression and 25,000 – 50,000 kill themselves each year. In March 2023, the independent Data Safety Monitoring Board (reviewed the patients enrolled and determined no futility signal, which means that they observed a potential numerical advantage of NRX-101 over comparator.

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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 2b/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 2b/3 trial. This would potentially allow registration of NRX-101 for Suicidal Treatment-Resistant Bipolar Depression, regardless of the mechanism of stabilization. With the FDA’s guidance to enroll patients for the acute (SPA) study in the outpatient setting only after stabilization, the design of this trial has effectively converged with the currently enrolling Phase 2b/3 trial; 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. We expect top-line data from this consolidated trial in the second quarter of 2024.

Lastly, the Company will also continue exploring early signal-finding studies in PTSD and chronic pain.

NRX-100

NRX-100 is racemic ketamine that is FDA-approved as a generic anesthetic. NRX-100 has shown efficacy in some clinical studies of depression and suicidality.12 In the Company’s STABIL-B Study, NRX-100 was used for the initial stabilization of patients with bipolar depression who were also acutely suicidal, prior to receiving NRX-101 or lurasidone. The Company has opened an Investigational New Drug (IND) file with the FDA for the purpose of developing ketamine as a rapid induction agent in the treatment of Severe Bipolar Depression with Acute Suicidal Ideation and Behavior. The FDA awarded Fast Track Designation to this use.

Although the Company did not initially plan to develop ketamine as a monotherapy for rapid treatment of suicidal depression, the FDA guided NRx to do so in January 2023. Because of the urgent need, the company elected to license data from several well-controlled, publicly funded clinical trials that had not been submitted to the FDA and to prepare those data in the rigorous patient-level electronic form that is required for FDA review of clinical trial data. These trials demonstrate clear benefit of ketamine over both placebo and active comparator (midazolam), as well as non-inferiority of ketamine to the standard of care electroconvulsive therapy. The Company similarly entered into a manufacturing contract with Nephron Pharmaceuticals (West Columbia, SC) to create a proprietary formulation of ketamine for commercial sale. The company expects to file a New Drug Application for ketamine through its HOPE Therapeutics division in 1H 2024 and to achieve a 2024 FDA review date (“PDUFA” date) of this application.

Zyesami (Aviptadil)

Between March 2020 and mid-2022, the Company engaged in the development of Aviptadil acetate (ZYESAMI®) for the treatment of respiratory failure in COVID-19 under a collaboration agreement signed with Relief Therapeutics Holdings, AG. ZYESAMI initially showed promise when administered intravenously to patients with acute respiratory failure and demonstrated a statistically significant 2-fold decrease in mortality when administered in a randomized, prospective clinical trial. Significant improvement in survival was demonstrated in a well-controlled multicenter trial.13 This finding was deemed “hypothesis generating” by the US FDA because mortality was the declared secondary endpoint of the clinical trial and the primary endpoint, recovery from respiratory failure, was deemed to be near (P=0.08) but not sufficiently significant to warrant Emergency Use Authorization. The study further documented immediate improvement in levels of blood oxygen and decrease in inflammatory cytokines, evidence of biological activity.

A subsequent large multicenter conducted by the US National Institutes of Health was halted for futility in May 2020. The NIH published report revealed that approximately 1/3 of participants who were randomized to receive Aviptadil were not fully treated at the NIH study sites. Because the trial only considered an intent to treat analysis, this failure to treat a large number of participants may have contributed to the finding of futility. In 2022, we suspended our efforts to develop the pharmaceutical product, Aviptadil acetate for all indications as part of an agreement with Relief Therapeutics, the original developer of Aviptadil.

On December 20, 2022, the Company transferred to Relief all of the assets it used in its Aviptadil development program. Relief now has the exclusive right to control, and the obligation to use commercially reasonable efforts to develop

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and commercialize, an Aviptadil product. If successful, Relief is obligated to pay NeuroRx (i) milestone payments should Relief successfully obtain commercial approval of an Aviptadil product (whether for COVID-19 or any other indication) and (ii) royalties based on a percentage of future sales of an Aviptadil product (whether for COVID-19 or any other indication), up to a maximum of $30 million in the aggregate. In addition, Relief has agreed to use commercially reasonable efforts to continue the existing Right to Try Program for Aviptadil in the U.S. for at least two years.

Additional Potential Psychiatry Products

Our intellectual property estate enables us to pursue additional combinations of known molecules, including dextromethorphan, d-methadone, and other named NMDA antagonists. Most patients with depression have major depressive disorder (MDD). Additionally, PTSD is an area of high unmet need for which there are very few pharmacological treatment options. PTSD can also be associated with suicidality and depression, in particular severe PTSD. Whereas episodes of depression in bipolar disorder are episodic and tend to resolve in two to three months, depression is a chronic feature of MDD, and it can also be associated with PTSD. NRX-102, is a potential new product in which we expect to pair a fixed dose combination of DCS with Mirtazapine, a currently approved antidepressant. In the 2013 Phase 2 study, clinical data demonstrate the potential efficacy of DCS in combination with an SSRI antidepressant versus an SSRI antidepressant alone in treating patients with treatment resistant MDD. We expect to resume the exploratory preclinical development of NRX-102. Further, we have identified additional 5-HT2A antagonists that may be appropriately paired with DCS. We are also further guided by preclinical data disclosed in our patents and publications which demonstrates that DCS may inhibit the akathisia induced by SSRI antidepressants.

Existing clinical data have shown DCS to be a useful initial therapeutic agent with which to target the glycine site on the NMDA receptor. However, DCS has mixed agonist/antagonist effects and its antagonist properties are only manifest at high doses of DCS. We have identified other small molecule NMDA antagonists that are effective at lower doses and may be paired with 5-HT2A antagonists to yield a dual-targeted pro-drug. Accordingly, we plan to explore design initiatives to develop candidate prodrugs that will expand on the dual-targeted properties of NRX-101 and NRX-102.

NRX-201/202 will target bipolar depression and MDD/PTSD, respectively, and are anticipated to replace the DCS component of NRX-101/102 with a molecule that is more specifically targeted than DCS at the same glycine site target. Our patent portfolio includes issued and pending claims for many such dual-targeted combinations.

Background of the Portfolio

Our portfolio is based upon fundamental scientific discoveries of Daniel Javitt, MD, PhD, a Professor of Psychiatry at Columbia University and co-founder of NRx. In 1987, Daniel Javitt discovered the role of blocking the brain’s NMDA receptor (a molecule on the surface of brain cells) in producing psychosis. The discovery was made in the context of attempting to determine the molecular mechanism by which phencyclidine (angel dust: a once popular drug of abuse frequently added to cannabis) caused acute psychosis in a high proportion of users. Daniel Javitt discovered that phencyclidine exerted its psychotogenic action by blocking the NMDA receptor and devoted the balance of his subsequent career to studying the brain chemistry of schizophrenia, depression, and related disorders. Daniel Javitt is one of the most widely published scientists in molecular psychiatry.

About 10 years after the original discovery, it was learned that NMDA inhibition is the mechanism by which ketamine, dextromethorphan, and other NMDA antagonists exert their antidepressant effects. Javitt subsequently made the seminal observation that when an NMDA antagonist, specifically D-cycloserine (“DCS”), is combined with a traditional (serotonin-targeted) antidepressant or antipsychotic, the two drugs have a synergistic effect wherein antidepressant activity is enhanced, and side effects are decreased. The mechanism of this synergy has been demonstrated in multiple non-clinical models. The discovery has led to a broad patent portfolio now owned by us and to the development of NRX-101, the first investigational drug specifically targeting bipolar depression with suicidality.

NRx was founded in 2015 by Drs. Jonathan Javitt and Daniel Javitt to develop drugs that aim to treat psychiatric disorders based on the initial discovery of the phencyclidine binding site on the NMDA receptor and the role of NMDA antagonists in schizophrenia and experimental psychosis. Javitt subsequently discovered a synergistic effect when NMDA antagonists are combined with inhibitors of the brain’s 5-HT2A receptor (e.g., SSRI antidepressants and atypical

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antipsychotic drugs). This synergy has now been demonstrated in both laboratory rodent behavioral experiments and in multiple Phase 2 clinical trials and resulted in a Composition of Matter patent awarded in the U.S. and multiple foreign jurisdictions. Javitt subsequently observed that when patients with depression were treated with DCS, an NMDA antagonist, in combination with antidepressants, they manifested increased antidepressant effect, but did not exhibit the hallucinations and other NMDA effects previously reported with DCS. He further observed that DCS appeared to reduce some of the antidepressant side effects (akathisia) common to all known serotonin-targeted antidepressants.

Figure 1 Synergistic composition of matter in which drugs that inhibit the NMDA receptor block the akathisia caused by serotonin-targeted drugs and serotonin-targeted drugs, in turn, block the psychedelic effects of NMDA inhibitors. Basis for US Patent 10583138. Source: NeuroRx, Inc.

These patented discoveries support NRX-101, the first investigational oral antidepressant to be granted Fast Track designation, Breakthrough Therapy designation and a Special Protocol Agreement by the FDA for severe bipolar depression in patients with ASIB. NRx is engaged in the research, development and future commercialization of this and other products for the treatment of patients suffering from suicidal ideation in the setting of bipolar depression and major depressive disorder (“MDD”) as well as PTSD and potentially chronic pain. Drugs that inhibit the brain’s NMDA receptor without ketamine’s limitations, have generated substantial interest, and have been explored for the treatment of the above conditions since the finding that ketamine has potent effects in reducing depression and suicidal ideation. It is our view that NRX-101 and our intellectual property to combine different molecules may yield a competitive advantage to use NMDA-inhibiting drugs for this purpose, as other compounds may be limited by adverse elements such as neurotoxicity (with prolonged use), hallucinations, potential habituation (i.e., addictive properties), blood pressure elevations, and/or lack of oral bioavailability.

This synergy is a key discovery underlying the patent portfolio described below. The scientific findings showed that some of the side effects of an NMDA drug can be blocked by the 5-HT2A drug and, in turn, the NMDA component can block akathisia, a known side effect of 5-HT2A-blocking drugs which is known to predispose to suicide. This dual-targeted approach is a primary basis of our worldwide patent portfolio, which currently encompasses 38 pending applications, and 48 granted patents in multiple jurisdictions covering compositions of matter and methods of use (See “NRx Patent Portfolio”). The relevant patents and patent applications in this portfolio are either owned by NeuroRx, exclusively licensed to NeuroRx by Glytech, LLC (“Glytech”), a Delaware limited liability company solely owned by Dr. Daniel Javitt (the “Glytech License”), or exclusively licensed to NeuroRx by Sarah Herzog Memorial Hospital Ezrat Nashim (“SHMH”), a non-profit organization organized under the laws of the State of Israel (the “SHMH License”).

NeuroRx owns a U.S. composition of matter patent that covers NRX-101. Patents under the Glytech License, which cover compositions of matter (including NRX-101 and pipeline therapeutic candidates) and methods of use (including methods of using NRX-101 in the treatment of bipolar depression with suicidal ideation and in treating PTSD), have been granted in the U.S., Europe (including validation by 18 members of the European Patent Convention), Japan, Australia and China.

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Additional patent applications under the Glytech License cover compositions of matter and methods of use of pipeline therapeutic candidates other than NRX-101 together with methods of use of NRX-101 in treating additional CNS disorders. These patents are pending in various locations including the U.S., Canada, Israel, Europe, Japan, Australia and China. Assuming all maintenance fees are timely paid in each jurisdiction and that the patents are not held invalid or unenforceable by a court or patent office, the patents licensed to NeuroRx by Glytech will expire in each jurisdiction in which they have been granted in 2033 (for the base NRX-101 patents) and 2038 (for the PTSD treatment patents). See “Summary of NRx Material In-licensing Obligations — NRX-100/101 — Glytech Development and License Agreement” for more information. We intend to seek patent extensions as allowed by law.

Patents under the SHMH License, which cover methods of use of DCS, alone or in combination with an antidepressant agent or an antipsychotic agent (including but not limited to lurasidone) in the treatment of depression, have been granted in the U.S. and Europe with additional patent applications covering similar subject matter pending in these countries and in Israel and Canada. Assuming all maintenance fees are timely paid in each jurisdiction and that the patents are not held invalid or unenforceable by a court or patent office, the patents licensed to NeuroRx by SHMH will expire in each jurisdiction in which they have been granted in 2032. See “Summary of NRx Material In-licensing Obligations — NRX-100/101 — Sarah Herzog Memorial Hospital License Agreement” for more information.

NRX-101 for the Treatment of Acute Suicidal Ideation and Behavior (ASIB)

Background on the Indication

Bipolar disorder, formerly known as manic depressive disorder, is a well-established psychiatric diagnosis. According to the NIH, an estimated 2.8% of the US adult population had bipolar disorder in the past 12 months, and the lifetime prevalence is 4.4% of adults in the U.S. The risk of ASIB is uniquely high in patients during bipolar depressive episodes, compared to those with MDD, thought disorders, and personality disorders. Lifetime suicide behavior occurs in 25% to 56% of people with bipolar depression. It is possible that a significant portion of the approximately 48,000 deaths in 2021 from suicide in the U.S. were associated with bipolar depression. Substance abuse is high in this population and death due to drug overdoses are generally not counted as suicides. Furthermore, according to the CDC, the COVID-19 pandemic increased many of the risk factors for suicide. Patients with bipolar depression are 20-30 times more likely to attempt suicide than the general population. Some epidemiological study data suggests that over the course of 5 years, approximately 1 in 5 patients suffering from bipolar depression may attempt suicide or have serious thoughts about attempting suicide. The overall rate of death by suicide among bipolar patients is approximately 10 to 30-fold greater than that of the general population. Those who have attempted suicide are at significantly higher risk to experience another suicide attempt or die by suicide. Thus, ASIB in bipolar depression has uniquely lethal clinical characteristics.

Current Treatment Options for ASIB in Bipolar Depression

Despite its lethal characteristics, there are no approved pharmacologic treatments for patients with ASIB in bipolar depression. As a result, electroconvulsive therapy (ECT, colloquially known as “shock therapy” or “electroshock therapy”), often combined with inpatient psychiatric care, remains the only FDA-approved treatment for patients with ASIB in bipolar depression, despite ECT’s well-documented side effects that include memory loss and confusion, along with its high cost. In recent years, several combined D2/5-HT2a antagonists have been shown to have efficacy in treating bipolar depression (olanzapine/ fluoxetine combination, quetiapine, lurasidone, cariprazine, lumateperone) with treatment guidelines endorsing common use as first-line standard-of-care treatment in acute bipolar depression. While these medications are effective at reducing overall symptoms of depression, they do not specifically reduce suicidal ideation, and may potentially increase the risk of suicide. In the two bipolar depression registration studies of lurasidone14,15, individuals with active suicidal ideation were specifically excluded because of concerns regarding the possibility of exacerbating suicidality. Similarly, acutely suicidal patients are routinely excluded from clinical trials of other experimental anti-depressive agents. Thus, ASIB in bipolar depression represents a major unmet medical need that must frequently be treated with voluntary or involuntary hospitalization under highly supervised conditions and in some cases the use of ECT.

Whereas all approved drugs for depression act primarily through monoaminergic mechanisms, the serendipitous discovery that ketamine can have a rapid and profound effect on depression and suicidality led to the realization that the glutamate system and the N-methyl-D-aspartate receptor (“NMDAR”) may also play an important role in depression and

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suicidality. In our Phase 2b/study, acutely suicidal and depressed bipolar patients received a single low, i.e., subanesthetic dose of IV ketamine to determine clinical response.6 Patients who responded with an acute improvement of suicidality and depressive symptoms to ketamine (NRX-100 received NRX-101 orally twice daily for up to six weeks).

Rationale for NRX-101 in ASIB

NRX-101 is a fixed-dose combination oral capsule composed of DCS and lurasidone used to reduce acute suicidality symptoms in patients with bipolar depression.

DCS is a broad-spectrum antibiotic approved for the treatment of tuberculosis (Seromycin, or Cycloserine). DCS has been used in millions of patients and has a well-known safety profile. Its antidepressant effects were first noted as a serendipitous observation in individuals with co-morbid tuberculosis and depression receiving high-dose DCS treatment for anti-tuberculosis therapy and subsequently confirmed in a prospective investigation. However, these were not pursued further at the time because of the liability of DCS to induce significant psychotomimetic side effects when given at high dose.

Preclinical Observations

The interaction of DCS with the NMDA receptor was first demonstrated in 1989, leading to some interest in NMDAR blockers as potential antidepressant treatments. For example, both DCS and the related compound ACPC were shown to be active in mice, using the forced swim test for depression. Cross-species translation of DCS effects is based upon plasma level, such that NMDAR antagonist effects are observed consistently at plasma levels >25 μg/ml (~250 μM). This plasma level is achieved in rodents with doses >30 mg/kg and in humans with doses >10 mg/kg. Evidence for functional target engagement at these doses comes from 1) rodent behavioral studies, 2) clinical studies of DCS in schizophrenia, and 3) clinical studies of DCS in depression.

Effects of DCS on NMDAR activation were first evaluated in 1990 by Hood et al., 1989 who noted inhibition of NMDAR activation by DCS at doses similar to our proposed active dose. These effects were subsequently confirmed by Watson et al., 1990, and the issue of high-dose antagonist effects of DCS were extensively discussed by Lanthorn et al., 1994.

The majority of rodent behavioral studies conducted with DCS used doses of DCS of 30 mg/kg produced significant dose-dependent anxiolytic effects in the fear-potentiated startle assay that were similar to those produced by the known NMDAR glycine-site antagonist 7-chlorokynurenate. The authors state as follows: “...the results of the present study show that D-cycloserine exhibits anxiolytic activity at higher doses, an effect consistent with antagonist activity,” and also argue for potential effectiveness of DCS in treatment of anxiety- and fear-related disorders including generalized anxiety disorder or PTSD.

Early Clinical Results

High-dose (>500 mg) DCS was subsequently shown to reduce persistent depressive symptoms in patients with MDD who were depressed despite treatment with approved antidepressant agents. A slow DCS titration was used, with 250 mg/dX3 days, followed by 500 mg/d for 18 days (i.e., until end of week 3); followed by 750 mg/day for 1 week (i.e., until end of week 4), followed by 1000 mg/day (i.e., until end of study). In the study (Figure 2), significant beneficial effects were observed in 13 subjects vs. placebo control with SSRI-nonresponsive depressive symptoms. The improvements were manifest within two weeks and persisted throughout the six-week treatment period. These data suggest a >0.9 effect size. Statistical separation between groups was observed by end of week 4, i.e., within 1 week of initiation of a dose >500 mg/day. An unexpected finding of the study was that psychotomimetic effects of combined DCS and antidepressants were minimal, suggesting unexpected synergy between the two components of the treatment.

Lurasidone is an atypical antipsychotic with approval for the treatment of depressive episodes associated with bipolar I depression in adults and pediatric patients (10-17 years old) as a monotherapy and as an adjunctive therapy with lithium or valproate in adults. It is also approved for the treatment of schizophrenia in adults and patients 13-17 years of age.

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DCS, when combined with Selective Serotonin Reuptake Inhibitor (“SSRI”) antidepressants in patients with treatment resistant depression, and when combined with atypical antipsychotics, in particular lurasidone, has shown separation from control and ability to maintain remission from suicidality and depression over 6 weeks with oral use (Figure 2).

Figure 2 Proportion of responders (≥50% improvement on 21-item Hamilton Depression Scale (HAMD) during 6 week adjuvant treatment with D-Cycloserine (N=13) and placebo (N=13) p=0.04. Source: Heresco-Levy et. al., 201316

Preclinical Safety

A major concern with use of agents that block the channel site of the NMDAR is their propensity to induce neurotoxicity within frontal brain regions (“Olney lesions”) with extended or higher levels of exposure. This propensity for neurotoxicity has been observed with direct channel-blocking NMDAR agents, but has not been observed with any glycine-site modulator, such as NRX-101. The concern regarding neurotoxicity has caused the FDA to issue new guidance for the development of NMDAR-targeted antidepressants, requiring neurotoxicity studies, according to FDA-agreed protocols. This element of NMDAR-targeted antidepressant use may become increasingly relevant in coming years, because drugs containing ketamine and dextromethorphan, two molecules with known neurotoxic potential in humans have been proposed for repeated administration in the treatment of depression.

We took advice from the FDA in 2016 and conducted a rodent neurotoxicity study according to a protocol agreed in advance between the FDA and NRx Pharmaceuticals. The combination of the drugs for the NRx Pharmaceuticals Sequential Therapy (DCS, lurasidone, and ketamine) were tested according to this protocol and found to have no evidence of neurotoxicity (Figure 3) demonstrating safety factors of 4-fold, 16-fold and 7.4-fold for ketamine, DCS, and lurasidone, respectively. Each of the proposed drugs has a long history of safe use in humans, and their adverse event profiles are well characterized.

Figure 3 Rodent neurotoxicity study showing “Olney lesions” induced by the NMDAR channel blocker MK-801 (left). No significant neurotoxicity was observed for maximum nonlethal dose of 2000 mg/kg of NRX-101 (center) or for ketamine at 12.5 mg/kg followed by NRX-101 (right). Source: Figures 2,3,4 of Jordan et al., 20221

Direct channel-blocking NMDAR-targeted antidepressants have shown substantial propensity for addiction and abuse liability, a propensity that has not been seen with glycine site modulators. This propensity may be related to theories that

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have been advanced indicating that such agents also bind opiate receptors. DCS has also been investigated in a drug-abuse liability assay using intravenous self-administration. Both ketamine and S-ketamine are known to have significant abuse liability and support self-administration in rodents. Substantial abuse liability is also known in association with dextromethorphan. We conducted a rodent abuse liability study in which the relative abilities of ketamine, S-ketamine and DCS to support self-administration were investigated in animals trained to self-administer ketamine (Figure 4). As expected, both ketamine (gray bar) and S-ketamine (yellow bar) significantly replaced ketamine, consistent with high clinical abuse potential. DCS did not significantly replace ketamine in this assay, consistent with lack of reported clinical abuse despite >50 years of clinical use.

Figure 4 Number of self-administered infusions in different treatments groups. S-ketamine largely substituted for ketamine, meanwhile DCS did not show any sign of substitution for ketamine at any dose. (N = 12 per group; mean ± SEM; ns: not significant and ****: P < 0.0001 compared to ketamine treatment). Source: Sapko et al., 20232

Licensure of a US Patent to Support Use of NRX-101

The Company has entered into a License Agreement with Apkarian Technologies to in-license US Patent 8,653,120 that claims the use of D-cycloserine for the treatment of chronic pain in exchange for a commitment to pay milestones and royalties as development milestones are reached in the field of chronic pain. The patent is supported by extensive nonclinical data and early clinical data that suggest the potential for NMDA antagonist drugs, such as NRX-101 to decrease both chronic pain and neuropathic pain while potentially decreasing craving for opioids.

The Company has signed an agreement with Dr. Vania Apkarian, Professor of Physiology, Anesthesia, Surgery, and Neuroscience Institute, Northwestern University Feinberg School of Medicine to join the NRx Pharmaceuticals Scientific Advisory Board (SAB).

As of December 31, 2023, the Company has recorded $0.2 million worth of expenses relating to the licensure of the patent recorded in research and development expense on the Consolidated Statements of Operations and Comprehensive Loss.

Should the Company succeed in serving 10% of the cUTI market, the Company believes that the potential royalty stream from NRX-101 has potential to exceed $1 billion annually.

Phase 2 Clinical Trial - Sequential Therapy (NRX-100 Followed by NRX-101) for the Treatment of Acute Suicidal Ideation and Behavior in Bipolar Depression: the STABIL-B Study

An initial study was conducted to confirm the selected dosing levels for DCS and lurasidone and evaluate the NRx Pharmaceuticals Sequential Therapy approach. The study enrolled patients with severe bipolar depression and acute suicidal ideation and behavior. Severe depressive symptoms are defined as a score of 30 or higher on the Bipolar Inventory of Symptoms Scale (“BISS”) derived MADRS score (“BDM”). Active suicidal intent with or without plan, but requiring hospitalization, was defined as a score of 4 or 5 using the Columbia Suicide Severity Rating Scale (“C-SSRS”). In Stage 1, all subjects received treatment with a blinded infusion of ketamine (0.5 mg/kg) or saline. Response to Stage 1 was defined as 25% improvement in BDM, and C-SSRS 3 or less. Responders to Stage 1 were entered into a 6-week double-blind

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comparison study of NRX-101 vs. lurasidone alone. The objective of the study was to demonstrate significant superiority of NRX-101 vs. lurasidone alone for maintenance of improvement and prevention of relapse following initial successful IV ketamine treatment.

Target doses were 950 mg for DCS and 66 mg for lurasidone. Both compounds were titrated upwards over the initial 5-days of treatment. Flexible dosing was permitted to allow dose reduction for side effects, or dose increases for agitation. The primary endpoint consisted of relative change in BDM score between NRX-101 and lurasidone. Secondary endpoints included suicidality, as reflect in both C-SSRS score and clinician-rated global suicidality impression score (“CGI-SS”) and relapse.

Stage 1: 22 subjects entered Stage 1. 17 were assigned to IV ketamine (NRX-100) and 5 to saline. All subjects showed significant response to treatment and entered into Stage 2. Stage 2 data were analyzed for the 17 subjects who responded to IV ketamine in Stage 1. These subjects were randomized to either NRX-101 (n=12) or lurasidone alone (n=5). Sequential treatment with ketamine/NRX-101 significantly reduced depression symptoms compared to sequential treatment with ketamine/lurasidone alone (P=0.032) in a last-observation carried forward (“LOCF”) analysis.6 In a parallel MMRM analysis, a statistical difference of P=0.09 was observed between groups. In addition, there were no relapses during NRX-101 treatment (0/12, 0%) vs. 2 relapses in the lurasidone alone group (2/5, 40%). The between-group significance level of P=0.0735 was not significant but showed feasibility of detecting a difference with larger samples given a similar response pattern.

In LOCF analyses of secondary endpoints, a significant between-group difference was also observed both for C-SSRS (P=0.02) and for CGI-SS (P=0.019). These findings suggest clinically noticeable between-group differences in liability for return of suicidality following initial ketamine treatment. Both effects were non-significant (P=0.11; P=0.15) on MMRM analysis.

Figure 5:(Graph) Primary Endpoint for those infused with ketamine vs. placebo in phase I (n=22) and those who responded to ketamine in phase I and were randomized in Phase 2 to receive either NRX-101 or lurasidone (n=17). Table depicts primary and secondary endpoints for those randomized in Phase 2 (n=17).; *, P<0.05. Source: Nierenberg et al., 20236

No significant treatment-related safety issues were observed in either group, and no deaths were reported in the study. Plasma DCS levels achieved during the study were within the range expected based on prior human PK studies.

This was the first clinical trial (to the Company’s knowledge) to demonstrate a decrease in both depression and suicidality with an antidepressant regimen. Upon presentation of the results was granted Breakthrough Therapy designation by the FDA in November 2018. In April 2018, the FDA granted a Special Protocol Agreement (SPA). Based on these results, the Company commenced a pivotal Phase 2b/3 clinical trial under an FDA Special Protocol Agreement of our lead product candidate, NRX-101 in 2019 but suspended that trial in February 2020 because of the lockdown of study sites caused by the COVID pandemic. The encouraging results of the trial suggested a possible use of NRX-101 without prior administration of ketamine in patients with subacute suicidality being treated in the outpatient setting.

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Phase 2b/3 Clinical Trial - A Randomized, Double-Blind Controlled Comparison of NRX-101 to Lurasidone for Adults with Bipolar Depression and Subacute Suicidal Ideation or Behavior

During the COVID pause we advanced the commercial manufacture of NRX-101, transferring the manufacture from China to the USA. The Company completed this transition in 2022 and generated clinical supplies of NRX-101 in 2023 using the expected commercial manufacturing process. In 2022 we initiated a Phase 2 trial of NRX-101 in patients with bipolar depression with SSIB. However, recruitment using traditional study site-based recruitment methods was inadequate to enroll study participants and in early 2023 the Company charged Zachary Javitt with designing and implementing an internet/AI-based national recruitment strategy.

In February 2023, we received feedback received from the FDA in a Type B meeting held on January 11, 2023. FDA guided the Company to broaden the overall clinical program of NRX-101 to include safety data that would enable the chronic/intermittent use of NRX-101, in accordance with the ICH requirements. ICH requirements should be 1500 patients in the short term, 300-600 patients for 6 months and at least 100 patients for 12 months. This could enable a pathway for the use of NRX-101 by a broader segment of the approximately 7 million individuals in the U.S. with Bipolar Disorder on a long-term basis.

Based on this feedback, the Company partnered with Alvogen and Lotus to plan a far larger phase 3 initiative than originally contemplated for a significantly larger patient market. The phase 2b/3 trial already in progress was reconfigured to an effect-size targeted trial. This study uses a more rapid titration schedule for DCS than was used in STABIL-B, which permits proposed therapeutic dosing levels to be obtained more rapidly. Otherwise, the study methodology remains similar. The objective of the study is to replicate findings from both the Kantrowitz et al., 201517 study (NMDA Antagonists in Bipolar Depression; NCT01833897) and the STABIL-B trial6 showing rapid remission of symptoms with a 6-week oral course of NRX-101 without prior use of ketamine. The primary hypotheses are that NRX-101 will be superior to lurasidone alone in establishing and maintaining remission from depression and suicidality, as reflected both in a significant between-group separation on depression and suicidality scores as rated by the MADRS and C-SSRS scales, and in prevention of clinician-rated relapse. In Q1 2024, the study met its target enrollment of 74 adult subjects randomized 1:1 to NRX-101 vs. lurasidone. The clinical protocol and statistical analysis plan for this trial are available on clinicaltrials.gov NCT NCT03396068 (https://storage.googleapis.com/ctgov2-large-docs/92/NCT03395392/Prot_SAP_000.pdf).

Type C Meeting Guidance Received on January 10, 2023 from the FDA on the Chemistry, Manufacturing and Controls (CMC) Aspects of the NRX-101 Program

In response to a request for Type C guidance on the chemistry, manufacturing and controls (CMC) aspects of the NRX-101 program, FDA provided Written Responses on January 10, 2023. As previously announced in October 2022, an updated NRX-101 module 3 was submitted to add the intended commercial manufacturer to the IND. With FDA’s written response, it appears that NRx Pharmaceuticals has reached alignment with the FDA regarding its proposed registration manufacturing and stability monitoring plan. Accordingly, all clinical trials and expanded access programs being conducted with NRX-101 are now being conducted with investigational product manufactured to commercial standards.

Data Safety Monitoring Board (DSMB) Review of Phase 2b/3 Clinical Trial NRX-101 for the Treatment of Severe Bipolar Depression and Subacute Suicidal Ideation or Behavior

In February 2023, the Company reported the recommendations of an independent Data Safety Monitoring Board (DSMB) which reviewed the safety findings of the first fifty enrolled participants in the Company’s Phase 2 clinical trial of NRX-101 for the treatment of severe bipolar depression and subacute suicidal ideation or behavior (www.clinicaltrials.gov NCT NCT03395392). Based on a safety analysis of the first 50 enrolled patients, the DSMB recommended that enrollment in the trial continue as planned and identified no drug-related Serious Adverse Events or other safety issues of concern.

In March 2023, the Company reported the recommendations of the DSMB which reviewed the initial efficacy findings for the enrolled participants in the Company’s Phase 2 clinical trial of NRX-101 for the treatment of severe bipolar depression and subacute suicidal ideation or behavior. The DSMB found no futility signal at this stage of the trial and the DSMB recommended that enrollment in the trial continue as planned. According to the study's statistical analysis plan, the

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failure to identify futility requires that a numerical advantage of the investigational drug relative to the comparator treatment must be observed by the DSMB. The DSMB will continue to monitor safety and efficacy in the trial.

Data Integrity Monitoring in Psychiatric Clinical Trials

Psychiatric clinical trials commonly include psychometric instruments as endpoints. Interrater reliability (IRR), which is the concordance between two or more raters on the same instrument in the same patient, must be satisfactorily high or signal detection and statistical power will be diminished, potentially leading to failed trials.18 Poor IRR in clinician-administered rating scales has many sources including a lack of adherence to structured and semi-structured interviews, rater scoring differences, inconsistent interview duration, poor interview quality, and rater bias.19,20 NRx pursued a unique approach to ensure IRR. Our novel patient rating system is an a priori-defined, protocol-specific, data-driven method to optimize psychometric training, data validity and reliability across each site rating. In this system, the Sponsor employs expert raters with extensive experience in training, conducting, and analyzing the clinician-rated scale of interest. In this patient rating system, these Rater Program Managers (RPMs) work closely with the clinical operations team to select suitable clinical trial sites, document site rater qualifications and training, and confirm that all data management conforms to the Study Protocol and GDP & GCP guidelines. Most importantly, RPMs review the site raters’ psychometric assessments within 24 to 48 hours to identify discordance and provide corrective feedback according to defined adjudication processes, as needed.

This unique approach was highly successful in the Phase 2b/3 clinical trial “NRX101 for Suicidal Treatment Resistant Bipolar Depression” (ClinicalTrials.gov Identifier: NCT03395392). While it has been proposed that a spread of one standard deviation (6 points) on the Montgomery-Åsberg Depression Rating Scale (MADRS) is acceptable, we chose a more stringent 3-point concordance. In a sample of 236 ratings (58 patients), IRR between site ratings and blinded independent RPM ratings was 94.49% (223/236) using this 3-point cutoff. The absolute mean difference in MADRS rating pairs was 1.77 points (95% CI: 1.58-1.95). The intraclass correlation was 0.984 and an eta2 = 0.992 (F = 124.35, p < 0.0001). This exceptionally high concordance rate demonstrates the feasibility and value of in-house expert rater monitoring of site rater assessments.

NRX-101 for the Treatment of Depression and Other Symptoms of Post-Traumatic Stress Disorder

Post-traumatic stress disorder (PTSD) affects 13 million Americans and 5 of every 100 adults in the US has PTSD in any given year.21 PTSD is frequently accompanied by Depression. However, the hallmark of PTSD is recurrent memories of the traumatic event, often called “flashbacks,” that may lead to avoidance behavior, negative thoughts, hyperarousal, and suicidal ideation. Although there are several serotonin-targeted medicines that are indicated for use in PTSD, no serotonin-targeted antidepressant has demonstrated an effect in extinction of fear memory in patients. Recently, Sala and coworkers demonstrated the extinction of fear memory in a rodent model of PTSD.22 The same rodent model was implemented by NRx to study the effects of NRX-101 on fear memory extinction.

Figure 6: Effect of DCS (dark blue) and NRX-101 (light blue) in extinction of Fear Memory in the WKY rodent model.

Data on File, NRx Pharmaceuticals, Inc.

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A small clinical trial was conducted by de Kleine and coworkers in which a low dose of DCS (50 mg/day) demonstrated an augmentation of response to psychotherapy for PTSD (Figure 7).23 In a related editorial, Krystal suggested, “some provocative findings suggest that when fear extinction takes place during D-cycloserine administration, usual forms of neuroplasticity are enhanced and additional forms of neuroplasticity are recruited that may enhance extinction and protect against reinstatement.24 Authors of a 2017 meta-analysis of 7 clinical trials of DCS for PTSD, 2 trials comparing DCS with placebo as add-on treatment to ongoing stable pharmacotherapy and 5 trials that compared DCS with placebo given prior to exposure therapy, stated that “D-cycloserine might have a role in augmentation of exposure therapy.”25

Figure 7 Estimated model means for self-reported posttraumatic stress disorder symptom scores (Posttraumatic Stress Symptom Scale—Self Report; PSS-SR) per completed session for the completer subgroups, with errors bars indicating standard errors. DCS, D-cycloserine. Source: de Kleine, et. al. 201223

Javitt demonstrated in animal models that for DCS to maximize its effect on fear memory, plasma dosages in excess of 25μg/mL, must be achieved, which represents an oral dose in excess of 500mg/day. As noted in US patent 10881665B2, low dose DCS did not demonstrate a beneficial effect on fear memory (freezing behavior), while a dose of DCS sufficient to reach this plasma threshold did produce a significant reduction in freezing behavior.

The Company’s 2022 completion of phase 3/commercial-scale NRX-101 manufacturing enables clinical trials of NRX-101 for the treatment of PTSD under FDA Good Clinical Practices.

NRX-101 for the Treatment of Chronic Pain

Chronic pain is commonly defined as pain that lasts beyond 3 months and extends past normal tissue healing time. Between 18% and 34% of Americans are believed to suffer from chronic pain.26 The use of opiates to treat chronic pain has led to a national crisis resulting in widespread addiction and death. Few alternatives to opiates have emerged that both treat chronic pain and potentially decrease craving for opiates among chronic pain sufferers. Recent epidemiologic studies indicate that Chronic Back Pain is the leading cause of disability in the US and the seventh leading cause worldwide.27

Various non-clinical studies have suggested that NMDA antagonist drugs may be useful in treating animal pain models. Intravenous ketamine has been widely used off-label to treat chronic pain at doses similar to those used in depression studies. A meta-analysis of 7 studies representing 94 participants demonstrated a consistent improvement in pain score but a consistent finding of nausea and psychomimetic effects associated with ketamine administration.28

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A pilot study of D-cycloserine in the treatment of chronic pain was undertaken by Schnitzer and coworkers in patients with chronic low back pain.29 The study randomized 41 participants to a placebo-controlled dose-escalation study of 100mg, 200mg, and 400mg (each dose for two weeks) vs. placebo. The primary outcome measure was back pain intensity on a 1-10 numeric rating scale. The study was deemed not to have met its primary endpoint to detect a difference between DCS and placebo over 6 weeks. However, post-hoc analysis demonstrates a significant difference between baseline and six weeks (P<0.01), which is the point in time that the 400mg DCS dose was reached. (see figure 8)

Figure 8: Back pain intensity ratings over a six- week, dose escalating, placebo or DCS treatment in CBP. (a) Across subject average back pain, assessed on the primary outcome measure of 0–10 numeric rating scale. (b) Within subject change in pain, relative to baseline, using the 0–10 numeric rating scale. Error bars are SEMs. Source Schnitzer 2016.29

Although the authors expressed the post-hoc clinical effect in terms of time from baseline, the observation that DCS did not demonstrate an NMDA-antagonist effect until the critical threshold documented in the NRx patent portfolio was reached is consistent with our understanding of the DCS mechanism of action. In 2024 the Company may initiate a pilot study in the treatment of chronic pain using NRX-101 at daily dosages that exceed 500mg/day of DCS. The Company’s 2022 completion of phase 3/commercial-scale NRX-101 manufacturing enables clinical trials of NRX-101 for the treatment of chronic pain under FDA Good Clinical Practices.

NRX-101 for the Treatment of Complicated Urinary Tract Infection and Acute Pyelonephritis

D-Cycloserine (DCS) is a broad-spectrum antibiotic that is currently FDA-approved to treat pulmonary or extrapulmonary tuberculosis disease and urinary tract infection (UTI).30 The drug inhibits two sequential enzymes in the bacterial cell wall peptidoglycan biosynthetic pathway, alanine racemase and D-Ala-D-Ala ligase.31 DCS also antagonizes a third bacterial enzyme, D-amino acid dehydrogenase.32 DCS is bactericidal or bacteriostatic depending on the concentration or microorganism of interest. Since DCS is mostly excreted unchanged by the kidney, the drug reaches substantial levels in the urine. Indeed, DCS was used to treat various types of infections in the 1950s and 60s, including UTI, with numerous reports showing its clinical efficacy.33-36 The use of DCS as an antibiotic for the treatment of UTI fell out of favor in the 1970s, however, due to its potential to cause CNS side effects.

The incidence of multi-drug-resistant urinary tract pathogens is outpacing the development of new antimicrobial agents. Only 17 new systemic antibiotics and 1 related biologic have been approved by the FDA between 2010 and 2022, and very few antibiotics are in clinical development.37 This has forced a renewed interest in older antimicrobial drugs. The addition of lurasidone should permit DCS to be administered at dosages that would permit bactericidal action in the urinary tract with dose-limiting side-effects.

NRx tested DCS and NRX-101 (DCS + lurasidone) against various urinary tract pathogens including several multidrug resistant strains. DCS showed activity against all bacterial isolates tested (Table 1) with minimal inhibitory concentrations (MICs) below levels that can be achieved in the urine. As expected, lurasidone alone had no antibacterial activity, nor did it interfere with the antibacterial activity of DCS. Based on these results, the US Food and Drug Administration has awarded Qualified Infectious Disease Product and Fast Track Designation to NRX-101 for the treatment of complicated UTI including acute pyelonephritis.

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Table 1. Minimum Inhibitory Concentrations of DCS and Lurasidone in Cation-Adjusted Mueller Hinton Broth

a, Gentamicin; b, Colistin; c, Tobramycin; d, Ciprofloxacin

NRX-100 (ketamine) – Development under HOPE Therapeutics

Ketamine HCl is a dissociative, rapid-acting general anesthetic for intravenous or intramuscular injection, approved for surgical anesthesia. Ketamine has shown in multiple randomized clinical trials the potential to rapidly reduce depressive symptoms and suicidal ideation. However, the clinical effect has been demonstrated to diminish three to seven days post-dose when used intravenously and two days post-dose when the S-enantiomer is delivered intranasally. Ketamine is classified as a schedule III substance under the Controlled Substances Act, due to its potential for addiction.

Whereas ketamine is a direct NMDA channel blocker, which binds to the phencyclidine binding site, DCS in high doses has an NMDA-antagonist effect mediated through interaction with the glycine binding site. This effect is apparently unrelated to its properties as an anti-infective. By combining the potential of DCS to extend the anti-depressant effects of ketamine with the antipsychotic properties of lurasidone, the NRx Pharmaceuticals Sequential Therapy has the potential to stabilize individuals with bipolar depression during acute crisis and address a serious medical need.

Ketamine HCl, infused at 0.5 mg/kg IV over 40 minutes has been shown to induce acute reductions in suicidality and depression in patients with bipolar depression, relative to control. Numerous reports have documented approximately a 50% reduction in the MADRS and up to a 75% reduction in suicidality following a single infusion of ketamine in patients with suicidal ideation and depression.

The Company has undertaken to assemble a New Drug Application for use of Ketamine in suicidal depression, based on existing clinical trials conducted under government auspices that the Company and its regulatory counsel believe constitute evidence of safety and efficacy in “adequately-controlled studies” required for drug approval. The Company has executed licenses to use the underlying data from those trials with Columbia University and with a consortium of 8 French Government-owned psychiatric hospitals.

A randomized controlled trial of ketamine in the treatment of suicidal ideation among patients with bipolar depression was conducted at Columbia University under NIH funding. A statistically significant and clinically meaningful improvement in suicidal ideation was seen on the Beck’s Scale for Suicidal Ideation within 24 hours of infusion with ketamine, compared to midazolam an active comparator.

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Figure 9: Suicidal ideation severity during a randomized trial of sub-anesthetic intravenous ketamine or midazolam control infusion in bipolar depressed participants with clinically significant suicidal thoughts. The figure depicts change in severity measured using the Beck Scale for Suicidal Ideation (SSI) from baseline to 24 hours after infusion. Error bars represent ± one standard error of the mean (SEM). Source Grunebaum 20179

A randomized, controlled multicenter trial was conducted at 8 French hospitals by Abbar and coworkers.8 Participants with acute suicidal ideation associated with bipolar depression, major depressive disorder, and other disorders were randomized to receive either ketamine or placebo infusion. Overall, the study demonstrated that 63% of ketamine-infused participants vs. 31% of placebo-infused participants achieved remission from suicidal ideation at day 3 (P<.01). However, the finding was most pronounced for the subset of participants with bipolar depression (85% vs. 28%; P<.001) with an Odds Ratio of 14 for ketamine vs. placebo.

Summary of results from multicenter trial of ketamine vs. placebo in hospitalized patients with suicidal depression. The overall odds ratio of 3.7 (P<0.001) was largely driven by the 14 fold increased odds of remission from suicidal ideation seen among the subgroup with bipolar depression (P<.001). Source: Abbar 2022.8

A randomized prospective open-label trial was conducted to determine the efficacy of ketamine versus that of electroconvulsive (electroshock) therapy for suicidal ideation in bipolar depression. In addition to providing a basis for developing ketamine as an induction drug for treatment of suicidal ideation in bipolar depression, the above clinical findings provide important clinical support for the use of NMDA-antagonist drugs in the treatment of this condition.

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References

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Summary of NRx Material In-licensing Obligations

NRX-100/101

Development and License Agreement (“Glytech DLA”)

The Company was founded based upon a development agreement with Glytech, a Company founded by Daniel Javitt. The initial Glytech development agreement was signed on August 6, 2015, and subsequently amended on May 2, 2016,

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October 19, 2016, June 13, 2018, April 16, 2019, December 31, 2020, August 6, 2022, November 6, 2022 and January 31, 2023.

The License

Pursuant to the Glytech DLA, Glytech granted to NeuroRx an irrevocable, perpetual, exclusive (even as to Glytech) royalty-free license, with the right to sublicense, to use the Licensed Technology (as defined below) to develop, manufacture and offer for sale drug products for the treatment of depression and suicide associated with bipolar disorder in humans, including all products containing (a) DCS (including metabolites and structural variants thereof) combined with an antidepressant agent or an antipsychotic agent (including but not limited to lurasidone), or (b) DCS (including metabolites and structural variants thereof) for treatment of all types of bipolar, depressive and/or anxiety disorders and/or symptoms thereof. The key composition of matter patent (U.S. Patent No. 10,583,138) that supports NRx was assigned to us by Glytech in January 2021 and is no longer the subject of a license grant under the Glytech DLA; and (2) Glytech agreed to transfer and assign the remainder of the Licensed Technology and the Excluded Technology (as defined below) which are not essential for the manufacture or sale of NRX-101 to NRx for no additional consideration at any time upon receipt of written notice from us if, on or prior to March 31, 2024, (i) the value of the Glytech equity holdings in NRx (the “Glytech Equity”) has an aggregate value of at least $50 million for twenty (20) consecutive trading days immediately preceding any given date and (ii) there are no legal or contractual restrictions on selling all of the securities represented by the Glytech Equity then applicable to Glytech (or reasonably foreseeable to be applicable to Glytech within the following twenty trading days). The Company is working with Glytech to extend this option.

Glytech also agreed to transfer and assign the Licensed Technology and the Excluded Technology to us for no additional consideration simultaneously with the closing of a merger, acquisition or other transaction involving NRx, where, as a result of such transaction, Glytech receives at the closing thereof, by virtue of its status as a stockholder of NRx, at least $50 million in cash proceeds.

As used in this section of the Glytech DLA, the term “Aggregate Liquidity Value” for any given date means the sum of each trading day’s Daily Liquidity Value during the Eligible Measurement Period applicable for such date, and “Daily Liquidity Value” for any particular trading date means the aggregate proceeds Glytech would receive if it sold that number of shares of Glytech Equity on such trading date equal to 5% of the total number of shares of Common Stock or successor stock sold on such trading date. “Licensed Technology” means the patent rights and know how that disclose, describe or claim subject matter relating to use of DCS in combination with one or more antidepressants or one or more atypical antipsychotics (e.g., lurasidone) that are controlled by Glytech or its affiliates. “Excluded Technology” means any other patent right and knowhow owned by Glytech that does not relate specifically to compositions containing either DCS or lurasidone. Regardless of the option, NRx has the intellectual property necessary to perform it’s business as currently anticipated.

NRx Obligations

The Glytech DLA imposes certain obligations on NRx in connection with maintaining the Glytech License, which include:

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Glytech Termination Rights

The term of the Glytech DLA continues for an indefinite period unless terminated by one or both parties in accordance with its terms. Glytech has an independent right to terminate the Glytech DLA in the event that (a) NRx is in material breach of the Glytech DLA, including material breaches of the obligations set forth above, and does not rectify such breach within thirty (30) days of notification (unless such breach is not capable of rectification within such thirty (30) day period and NRx acts diligently in a commercially reasonable manner to correct such breach) or (b) if NRx becomes insolvent or has proceedings in voluntary or involuntary bankruptcy instituted against it.

If Glytech terminates the Glytech DLA, then the Glytech License is withdrawn and NRx is required to transfer and assign all of its assets to Glytech, including without limitation any inventions, patent rights and knowhow developed by NRx from the Licensed Technology and all data and research, in whatever format, relating to the Licensed Technologies and the products.

NRx is currently in compliance with its obligations under the Glytech DLA.

Sarah Herzog Memorial Hospital License Agreement

The initial clinical trial of D-cycloserine was conducted by Drs. Uri Hersco-Levy and Daniel Javitt at the Sarah Herzog Memorial Hospital (SHMH) in Jerusalem and resulted in a patent owned by SHMH in which Heresco-Levy and Javitt share inventorship. NeuroRx entered into an Exclusive License Agreement with SHMH, dated April 16, 2019 (the “SHMH License Agreement”).

The License

The SHMH License Agreement grants NeuroRx an exclusive, worldwide, royalty bearing license to U.S. Patent No. 9,789,093, certain patent applications pending at that time as well as subsequently filed patent applications in the same priority families, and patents issuing therefrom, including corresponding foreign patents and patent applications (together, the “Licensed Patents”), to develop, manufacture, offer for sale and otherwise commercialize drug products for the treatment of depression and suicide associated with bipolar disorder in humans, including certain products containing (a) DCS (including metabolites and structural variants thereof) combined with an antidepressant agent or an antipsychotic agent (including but not limited to lurasidone), or (b) DCS (including metabolites and structural variants thereof) ((a) and (b) collectively the “Licensed Products”) for treatment of all types of bipolar, depressive and/or anxiety disorders and/or symptoms thereof. We have the right to grant sub-licenses, subject to the agreed sub-licensing procedure, but are liable to SHMH for any breaches of a sub-license by a sub-licensee.

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NRx Obligations

We are required to make certain payments in order to maintain the license, including:

Milestone Payments

End of Phase I Clinical Trials of Licensed Product $ 100,000

End of Phase II Clinical Trials of Licensed Product $ 250,000

End of Phase III Clinical Trials of Licensed Product $ 250,000

First Commercial Sale of Licensed Product in U.S. $ 500,000

First Commercial Sale of Licensed Product in Europe $ 500,000

The milestone payments due above may be reduced by 25% in certain circumstances, and by the application of certain sub-license fees.

Royalties

A royalty in an amount equal to: (a) 1% of revenues from the sale of any product incorporating a Licensed Product when at least one Licensed Patent remains in force, if such product is not covered by a Valid Claim (as defined below) in the country or region in which the sale occurs, or (b) 2.5% of revenues from the sale of any Licensed Product that is covered by at least one Valid Claim in the country or region in which such product is manufactured or sold. A “Valid Claim” means any issued claim in the Licensed Patents that remains in force and that has not been finally invalidated or held to be unenforceable. The royalty rates above may be doubled if we commence a legal challenge to the validity, enforceability or scope of any of the Licensed Patents during the term of the SHMH License Agreement and do not prevail in such proceeding.

Royalties shall also apply to any revenues generated by sub-licensees from sale of Licensed Products subject to a cap of 8.5% of the payments received by us from sub-licensees in connection with such sales.

Annual Maintenance Fee

A fixed amount of $100,000 was paid on April 16, 2021 and, thereafter, a fixed amount of $150,000 is due on the anniversary of such date during the term of the SHMH License Agreement.

Costs of Licensed Patents

We are required to reimburse SHMH for any costs incurred in filing and prosecuting the Licensed Patents during the term of the SHMH Agreement. We are also responsible for paying directly any ongoing costs associated with the maintenance of the Licensed Patents.

Other Obligations

The SHMH License Agreement imposes certain other obligations on us, including:

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● Record keeping and reporting requirements.

Our exclusive rights under the Licensed Patents are at risk if we fail to fulfill our payment and other obligations under the SHMH License Agreement, including the obligations described above. We are currently in compliance with our obligations under the SHMH License Agreement.

SHMH Termination Rights

The term of the SHMH License Agreement continues until the expiration of the last-to-expire Licensed Patent or a final judgment of invalidity or unenforceability of the last Licensed Patent.

SHMH has the independent right to terminate the SHMH License Agreement in the event that NRx (a) is in material breach and does not rectify such breach within sixty (60) days of written notification of such breach or (b) becomes insolvent, or has proceedings in voluntary or involuntary bankruptcy instituted against and such proceeding is not set aside within sixty (60) days. If we make an application or claim that challenges the validity, enforceability or scope of any of the Licensed Patents, SHMH also has the right to terminate the SHMH License Agreement in respect of the Licensed Patents that are included in such proceeding.

Upon termination of the SHMH License Agreement, the license to use the Licensed Patents will terminate, and all rights included therein shall revert to SHMH.

As of the date hereof, we have not received any notice from SHMH alleging any material breach of the SHMH License Agreement by NRx.

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NRx Patent Portfolio

I. Glytech-licensed Patents/Patent Applications

Jurisdiction Patent/Appl. No. Status/Notes

European Patent Convention EP 18731195.6 Pending

New Zealand NZ 760542 Pending

New Zealand NZ 799961 Pending

New Zealand NZ 760544 Pending

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II. SHMH-licensed Patents and Patent Applications

Jurisdiction Patent/Appl. No. Status/Notes

III. NeuroRx-owned Patents and Patent Applications

Jurisdiction Patent/Appl. No. Status/Notes

Manufacturing Agreements

In 2022, the Company has entered into a manufacturing agreement with Alcami for the manufacturing of NRX-101. This enabled the technology transfer of manufacturing processes previously done in China to the U.S. In October of 2022 the Company submitted a Module 3 IND amendment to the FDA, allowing it to manufacture clinical supplies in the U.S.

In December 2022, as part of our agreement with Relief Therapeutics we transferred all manufacturing rights and know-how that we acquired for ZYESAMI (aviptadil) to Relief, including our collaborations with Nephron Pharmaceuticals and Alcami as contract manufacturers, and with the Polypeptide Group as a supplier of active pharmaceutical ingredient (“API”). This technology transfer does not affect our ability to contract with Alcami and Nephron for other purposes.

In 2023, the Company entered into a development and manufacturing agreement with Nephron Pharmaceuticals, Inc. for the manufacture of ketamine HCl (NRX-100, HTX-100) that the Company intends to distribute via its HOPE Therapeutics franchise. Manufacture will initially consist of the generic formulation of ketamine in a novel diversion-resistant presentation. Under the development portion of the agreement the Company intends to develop a pH-balanced new formulation of ketamine that will be suitable for subcutaneous use and that may be suitable for oral administration with predictable systemic absorption.

Government Regulation and Product Approval

Government authorities in the U.S. and in other countries, at the Federal, state and local level, extensively regulate, among other things, the research, development, testing, manufacture, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, import and export, pricing, and government contracting related to pharmaceutical products such as those we are developing. The processes for obtaining marketing approvals in the U.S. and in foreign countries, along with subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time and financial resources.

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U.S. Government Regulation

In the U.S., the FDA regulates drugs under the FFDCA and its implementing regulations. The process of obtaining marketing approvals and the subsequent compliance with appropriate Federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions or other actions, such as the FDA’s delay in review of or refusal to approve a pending NDA, withdrawal of an approval, imposition of a clinical hold or study termination, issuance of Warning Letters or Untitled Letters, mandated modifications to promotional materials or issuance of corrective information, requests for product recalls, consent decrees, corporate integrity agreements, deferred prosecution agreements, product seizures or detentions, refusal to allow product import or export, total or partial suspension of or restriction of or imposition of other requirements relating to production or distribution, injunctions, fines, debarment from government contracts and refusal of future orders under existing contracts, exclusion from participation in federal and state healthcare programs, FDA debarment, restitution, disgorgement or civil or criminal penalties, including fines and imprisonment.

The process required by the FDA before a new drug may be marketed in the U.S. generally involves the following:

● submission to the FDA of an NDA;

● satisfactory completion of an FDA advisory committee review, if applicable;

● FDA review and approval of the NDA.

Additionally, if a drug is considered a controlled substance, prior to the commencement of marketing, the DEA must also determine the controlled substance schedule, taking into account the recommendation of the FDA.

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Preclinical Studies and IND Submission

Preclinical studies include laboratory evaluation of product chemistry, pharmacology, toxicity and formulation, as well as animal studies to assess potential safety and efficacy. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND. Some preclinical testing may continue even after the IND is submitted. Once the IND is submitted, the sponsor must wait 30 calendar days before initiating any clinical trials. During this time, among other things, the FDA has an opportunity to review the IND for safety to assure that research subjects will not be subjected to unreasonable risk. The FDA may raise concerns or questions related to one or more proposed clinical trials and place the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

Implications for NRX-100/101

We have filed INDs and the FDA has accepted INDs 134025 and 129194 for NRX-100 and NRX-101 respectively. The FDA has advised us that no further preclinical studies are needed for submission of an NDA for NRX-100. The FDA has advised us and we have agreed that a genotoxicity study and a non-clinical maternal/fetal study for potential fetal effects are required prior to filing of an NDA for NRX-101. Furthermore, drugs that are potentially used chronic or chronic/intermittently do need to show preclinical carcinogenicity studies. Based on our latest FDA interactions we may be required to do so, even if our initial target indication is for 6 weeks. However, FDA indicated that they would review our request for an exemption, which we intend to submit.

Clinical Trials

Clinical trials involve the administration of the IND to human subjects under the supervision of qualified investigators in accordance with cGCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial, and review and approval by an Institutional Review Board (IRB). Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the trial procedures, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated, and a statistical analysis plan. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, a central or local IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must continue to oversee the clinical trial, including any changes, while it is being conducted. Information about certain clinical trials, including a description of the study and study results, must be submitted within specific timeframes to the NIH for public dissemination on their clinicaltrials.gov website.

Human clinical trials are typically conducted in three sequential Phases, which may overlap or be combined. In Phase 1, the drug is initially introduced into healthy human subjects or subjects with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. In Phase 2, the drug typically is administered through well-controlled studies to a limited subject population with the target disease or condition to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. In Phase 3, the drug is administered to an expanded subject population, generally at geographically dispersed clinical trial sites, in two adequate and well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product and to provide adequate information for the labeling of the product. Furthermore, depending on the expected use of a drug (e.g., acute, intermittent, chronic), regulatory requirements may include a safety database that goes beyond the number of subjects in the efficacy studies.

The manufacture of investigational drugs for the conduct of human clinical trials is subject to cGMP requirements. Investigational drugs and active pharmaceutical ingredients imported into the U.S. are also subject to regulation by the FDA relating to their labeling and distribution. Further, the export of investigational drug products outside of the U.S. is subject to regulatory requirements of the receiving country as well as U.S. export requirements under the FFDCA.

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Progress reports and other summary information detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if certain unexpected Serious Adverse Events occur or other significant safety information is found. Phase I, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk or the trial is not being conducted in accordance with the applicable regulatory requirements or the protocol. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to subjects. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board (DSMB) or data monitoring committee (DMC). This group regularly reviews accumulated data and advises the study sponsor regarding the continuing safety of trial subjects, potential trial subjects, and the continuing validity and scientific merit of the clinical trial. We may also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.

Implications for NRX-100/101

In the case of NRX-100/101, the FDA has agreed with us in writing that the investigational product meets the standards for a 505.b.2 (commonly called drug-repurposing) pathway, whereby the extensive safety literature regarding the individual components of NRX-101 may be cited in lieu of repeating various preclinical and Phase I clinical studies.

Because of examples in recent years where sponsors have received Complete Response Letters based on lack of agreement with the FDA regarding the research path required for NDA submission, we worked collaboratively with the FDA for one year in order to negotiate a Special Protocol Agreement (“SPA”) that would govern the development of NRX-101 and would define the Phase 2I trial required for the target indication., should the clinical trial be successful. This SPA was issued to us in April 2018 and defines the single clinical trial required for submission of NRX-101 for treatment of bipolar depression with acute suicidal ideation or behavior. In addition to the defined requirements in the SPA, FDA may require additional clinical safety data, especially if the use of the drug could be intermittent or chronic/intermittent as deemed by the FDA. As mentioned before, we recently received written guidance from the FDA that the Company is evaluating.

Marketing Approval

Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. In most cases, the submission of an NDA is subject to a substantial application user fee. These user fees must be filed at the time of the first submission of the application, even if the application is being submitted on a rolling basis. A waiver from the application user fee may be sought by an applicant. One basis for a waiver of the application user fee is if the applicant employs fewer than 500 employees, including employees of affiliates, the applicant does not have a drug product that has been approved under a human drug application and introduced or delivered for introduction into interstate commerce, and the applicant, including its affiliates, is submitting its first human drug application. Under the Prescription Drug User Fee Act (“PDUFA”) guidelines that are currently in effect, the FDA has agreed to certain performance goals regarding the timing of its review of an application. The FDA aims to review 90% of all standard review applications within ten months of acceptance for filing and six months of acceptance for filing for priority review applications.

In addition, under the Pediatric Research Equity Act an NDA or supplement to an NDA for a new active ingredient, indication, dosage form, dosage regimen or route of administration must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

The FDA may also require submission of a Risk Evaluation and Mitigation Strategies (“REMS”) program either during the application process or after the approval of the drug to ensure the benefits of the drug outweigh the risks. The REMS plan could include medication guides, physician communication plans, assessment plans, and elements to assure safe use, such as restricted distribution methods, patient registries or other risk tracking and minimization tools.

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The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

Under the FFDCA, before approving a drug for which no active ingredient (including any ester or salt of active ingredients) has previously been approved by the FDA, the FDA must either refer that drug to an external advisory committee or provide in an action letter, a summary of the reasons why the FDA did not refer the drug to an advisory committee. The external advisory committee review may also be required for other drugs because of certain other issues, including clinical trial design, safety and effectiveness, and public health questions. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA, the FDA will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications by the manufacturer and all of its subcontractors and contract manufacturers. Additionally, before approving an NDA, the FDA will inspect one or more clinical trial sites to assure compliance with GCP regulations.

The testing and approval process for an NDA requires substantial time, effort and financial resources, and each may take several years to complete. Data obtained from preclinical and clinical testing are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent marketing approval. The FDA may not grant approval of an NDA on a timely basis, or at all.

After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing, or other information, in order for FDA to reconsider the application. The FDA has a review goal of completing its review of 90% of resubmissions within two or six months after receipt, depending on the type of information included. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA may issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, including a black boxed warning, require that post-approval studies, including Phase IV clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms under a REMS which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post- marketing studies or surveillance programs. After approval, certain circumstances may require FDA notification, review, or approval, as well as further testing. These may include some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, or new safety information.

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Special FDA Expedited Review and Approval Programs

The FDA has various programs, including Fast Track designation, accelerated approval, priority review and Breakthrough Therapy (as defined below) designation, that are intended to expedite or simplify the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions, and demonstrate the potential to address unmet medical needs or present a significant improvement over existing therapy. The purpose of these programs is to provide important new drugs to patients earlier than under standard FDA review procedures.

To be eligible for a Fast Track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need. The FDA will determine that a product will fill an unmet medical need if the product will provide a therapy where none exists or provide a therapy that may be potentially superior to existing therapy based on efficacy, safety, or public health factors. If Fast Track designation is obtained, drug sponsors may be eligible for more frequent development meetings and correspondence with the FDA. In addition, the FDA may initiate review of sections of an NDA before the application is complete. This “rolling review” is available if the applicant provides and the FDA approves a schedule for the remaining information.

In some cases, a Fast Track product may be eligible for accelerated approval or priority review.

The FDA may give a priority review designation to drugs that are intended to treat serious conditions and provide significant improvements in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions. A priority review means that the goal for the FDA is to review an application in six months, rather than the standard review of ten months under current PDUFA guidelines. These six- and ten-month review periods are measured from the “filing” date rather than the receipt date for NDAs, which typically adds approximately two months to the timeline for review and decision from the date of submission. Products that are eligible for Fast Track designation may also be considered appropriate to receive a priority review.

In addition, products studied for their safety and effectiveness in treating serious or life-threatening illnesses or conditions and that fill an unmet medical need may be eligible for accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA may require a sponsor of a drug receiving accelerated approval to perform post-marketing studies to verify and describe the predicted effect on irreversible morbidity or mortality or other clinical endpoints, and the drug may be subject to accelerated withdrawal procedures.

Moreover, under the provisions of the new Food and Drug Administration Safety and Innovation Act enacted in 2012, a sponsor can request designation of a product candidate as a “Breakthrough Therapy.” A Breakthrough Therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Drugs designated as Breakthrough Therapies are eligible for the Fast Track designation features as described above, intensive guidance on an efficient drug development program beginning as early as Phase I trials, and a commitment from the FDA to involve senior managers and experienced review staff in a proactive collaborative, cross-disciplinary review.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

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Implications for NRX-101

Subsequent to the issuance of the SPA, in November 2018, the FDA also issued a Breakthrough Therapy designation to NRX-101. Breakthrough Therapy designation is awarded to drugs that have demonstrated preliminary evidence of efficacy for the treatment of a serious medical condition for which there is an unmet medical need.

Post-Approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, manufacturing, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences with the product and drug shortages. After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

The FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-marketing testing, including Phase IV clinical trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies and list drugs manufactured at their facilities with the FDA. These facilities are further subject to periodic announced and unannounced inspections by the FDA and these state agencies for compliance with cGMP and other regulatory requirements. Changes to the manufacturing process are strictly regulated and may require prior approval by the FDA or notification to the FDA before or after being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product becomes available in the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

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The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Although physicians in the practice of medicine may prescribe approved drugs for unapproved indications, pharmaceutical companies are prohibited from marketing or promoting their drug products for uses outside of the approved indications in the approved prescribing information. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly marketed or promoted off-label uses may be subject to significant liability, including criminal and civil penalties under the FFDCA and False Claims Act, exclusion from participation in federal healthcare programs, debarment from government contracts and refusal of future orders under existing contracts, and mandatory compliance programs under corporate integrity agreements or deferred prosecution agreements.

In addition, the distribution of prescription pharmaceutical products, including samples, is subject to the Prescription Drug Marketing Act (“PDMA”), which, among other things, regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

Moreover, the recently enacted Drug Quality and Security Act, imposes new obligations on manufacturers of pharmaceutical products related to product tracking and tracing. Among the requirements of this new legislation, manufacturers will be required to provide certain information regarding drug products to individuals and entities to which product ownership is transferred, label drug products with a product identifier, and keep certain records regarding drug products. The transfer of information to subsequent product owners by manufacturers will eventually be required to be done electronically. Manufacturers will also be required to verify that purchasers of the manufacturers’ products are appropriately licensed. Further, under this new legislation, manufactures will have drug product investigation, quarantine, disposition, and FDA and trading partner notification responsibilities related to counterfeit, diverted, stolen, and intentionally adulterated products such that they would result in serious adverse health consequences or death, as well as products that are the subject of fraudulent transactions or which are otherwise unfit for distribution such that they would be reasonably likely to result in serious health consequences or death.

Regulation under the Drug Enforcement Administration

We are required to evaluate the abuse potential of our product candidates. If any of our product candidates are considered controlled substances, we will need to comply with additional regulatory requirements. NRX-100 (ketamine) is a controlled substance with high abuse potential. Both components of NRX-101 are approved drugs (DCS and lurasidone) and neither is a controlled substance. We have completed abuse liability studies for DCS and identified no abuse potential.

Certain drug products may be regulated as “controlled substances” as defined in the Controlled Substances Act of 1970 and the DEA’s implementing regulations. The DEA regulates controlled substances as Schedule I, II, III, IV or V substances. Schedule I substances by definition have no established medicinal use, and may not be marketed or sold in the U.S. A pharmaceutical product may be listed as Schedule II, III, IV or V, with Schedule II substances considered to present the highest risk of abuse and Schedule V substances the lowest relative risk of abuse among such substances. The FDA provides a recommendation to the DEA as to whether a drug should be classified as a controlled substance and the appropriate level of control. If DEA scheduling is required, a drug product may not be marketed until the scheduling process is completed, which could delay the launch of the product.

Depending on the Schedule, drug products may be subject to registration, security, recordkeeping, reporting, storage, distribution, importation, exportation, inventory, quota and other requirements administered by the DEA, which are directly applicable to product applicants, contract manufacturers and to distributors, prescribers and dispensers of controlled substances. The DEA regulates the handling of controlled substances through a closed chain of distribution. This control

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extends to the equipment and raw materials used in their manufacture and packaging in order to prevent loss and diversion into illicit channels of commerce.

Annual registration is required for any facility that manufactures, distributes, dispenses, imports or exports any controlled substance. The registration is specific to the particular location, activity and controlled substance schedule. For example, separate registrations are needed for import and manufacturing, and each registration will specify which schedules of controlled substances are authorized. Similarly, separate registrations are also required for separate facilities.

The DEA typically inspects a facility to review its security measures prior to issuing a registration and on a periodic basis. Security requirements vary by controlled substance schedule, with the most stringent requirements applying to Schedule I and Schedule II substances. Records must be maintained for the handling of all controlled substances, and periodic reports may be required to made to the DEA for the distribution of certain controlled substances. Reports must also be made for thefts or significant losses of any controlled substance. To enforce these requirements, the DEA conducts periodic inspections of registered establishments that handle controlled substances. Failure to maintain compliance with applicable requirements, particularly as manifested in loss or diversion, can result in administrative, civil or criminal enforcement. The DEA may seek civil penalties, refuse to renew necessary registrations, or initiate administrative proceedings to revoke those registrations. In some circumstances, violations could result in criminal proceedings or consent decrees. Individual states also independently regulate controlled substances.

Federal and State Healthcare related, Fraud and Abuse and Data Privacy and Security Laws and Regulations

In addition to FDA restrictions on marketing of pharmaceutical products, federal and state fraud and abuse, and other laws regulations, and requirements restrict business practices in the biopharmaceutical industry. These laws include anti-kickback and false claims laws and regulations, state and federal transparency laws regarding payments or other items of value provided to health care professionals, as well as data privacy and security laws and regulations and other requirements applicable to the healthcare industry, including pharmaceutical manufacturers. There are also laws, regulations, and requirements applicable to the award and performance of federal contracts and grants.

The Federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value. The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, formulary managers, and beneficiaries on the other. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are narrowly drawn. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases, or recommendations may be subject to scrutiny if they do not meet the requirements of a statutory or regulatory exception or safe harbor. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated.

The reach of the Anti-Kickback Statute was also broadened by the Affordable Care Act, which, among other things, amended the intent requirement of the Federal Anti-Kickback Statute and certain provisions of the criminal health care fraud statute (discussed below) such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the Affordable Care Act provides that the government may assert that a claim for payment for items or services resulting from a violation of the Federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act. Penalties for violation of the Anti-Kickback Statute include criminal fines, imprisonment, civil penalties and damages, exclusion from participation in Federal healthcare programs and corporate integrity agreements or deferred prosecution agreements. Conviction or civil judgments are also grounds for debarment from government contracts.

The Federal civil False Claims Act prohibits any person from knowingly presenting, or causing to be presented, a false claim for payment to the U.S. Government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government, including payments under a federal grant. A

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claim includes “any request or demand” for money or property presented to the U.S. Government. The False Claims Act also applies to false submissions that cause the government to be paid less than the amount to which it is entitled, such as a rebate. Intent to deceive is not required to establish liability under the civil False Claims Act. Several pharmaceutical and other healthcare companies have been sued under these laws for allegedly providing free product to customers with the expectation that the customers would bill Federal programs for the product. Companies have also been sued for causing false claims to be submitted because of the companies’ marketing of products for unapproved, or off-label, uses. In addition, Federal health care programs require drug manufacturers to report drug pricing information, which is used to quantify discounts and establish reimbursement rates. Several pharmaceutical and other healthcare companies have been sued for reporting allegedly false pricing information, which caused the manufacturer to understate rebates owed or, when used to determine reimbursement rates, caused overpayment to providers. Violations of the civil False Claims Act may result in civil penalties and damages as well as exclusion from Federal healthcare programs and corporate integrity agreements or deferred prosecution agreements. The U.S. Government may further prosecute conduct constituting a false claim under the criminal False Claims Act. The criminal False Claims Act prohibits the making or presenting of a claim to the U.S. Government knowing such claim to be false, fictitious, or fraudulent and, unlike the civil False Claims Act, requires proof of intent to submit a false claim. Violations of the criminal False Claims Act can result in criminal fines and/or imprisonment, as well as exclusion from participation in Federal healthcare programs. Conviction or civil judgments and other conduct are also grounds for debarment from U.S. Government contracts and grants.

HIPAA also created Federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payers, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. As discussed above, the Affordable Care Act amended the intent standard for certain of HIPAA’s healthcare fraud provisions such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Violations of HIPAA’s fraud and abuse provisions may result in fines or imprisonment, as well as exclusion from participation in Federal healthcare programs, depending on the conduct in question. Also, many states have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

The civil monetary penalties statute imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a Federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.

The Veterans Health Care Act requires manufacturers of covered drugs to offer them for sale on the Federal Supply Schedule, which requires compliance with applicable Federal procurement laws and regulations and subjects us to contractual remedies as well as administrative, civil and criminal sanctions.

In addition, there has been a recent trend of increased Federal and state regulation of payments made to physicians and other health care providers. The Affordable Care Act created new Federal requirements for reporting, by applicable manufacturers of covered drugs, payments and other transfers of value to physicians and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members. Certain states also require implementation of commercial compliance programs and compliance with the pharmaceutical industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the U.S. Government, or otherwise restrict payments or the provision of other items of value that may be made to healthcare providers and other potential referral sources; impose restrictions on marketing practices; and/or require drug manufacturers to track and report information related to payments, gifts and other items of value to physicians and other healthcare providers.

We may also be subject to data privacy and security regulation by both the U.S. Government and the states in which we conduct our business. HIPAA, as amended by HITECH and its implementing regulations, imposes specified requirements relating to the privacy, security and transmission of individually identifiable health information. Penalties for violating HIPAA include civil penalties, criminal penalties and imprisonment. Among other things, HITECH, through its implementing regulations, makes HIPAA’s privacy and security standards directly applicable to “business associates,” defined as a person or organization, other than a member of a covered entity’s workforce, that creates, receives, maintains

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or transmits protected health information on behalf of a covered entity for a function or activity regulated by HIPAA. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in Federal courts to enforce the Federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing Federal civil actions.

In addition, other Federal and state laws govern the privacy and security of health and other information in certain circumstances, many of which differ from each other in significant ways and may not have the same requirements, thus complicating compliance efforts.

To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws, and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.

Coverage and Reimbursement

The commercial success of our product candidates and our ability to commercialize any approved product candidates successfully will depend in part on the extent to which governmental authorities, private health insurers and other third-party payers provide coverage for and establish adequate reimbursement levels for our therapeutic product candidates. In the U.S., the European Union and other potentially significant markets for our product candidates, government authorities and third-party payers are increasingly imposing additional requirements and restrictions on coverage, attempting to limit reimbursement levels or regulate the price of drugs and other medical products and services, particularly for new and innovative products and therapies, which often has resulted in average selling prices lower than they would otherwise be. For example, in the U.S., Federal and state governments reimburse covered prescription drugs at varying rates generally below average wholesale price. Federal programs also impose price controls through mandatory ceiling prices on purchases by federal agencies and federally funded hospitals and clinics and mandatory rebates on retail pharmacy prescriptions paid by Medicaid and Tricare. These restrictions and limitations influence the purchase of healthcare services and products. Legislative proposals to reform healthcare or reduce costs under government programs may result in lower reimbursement for our product candidates or exclusion of our product candidates from coverage. Moreover, the Medicare and Medicaid programs increasingly are used as models for how private payers and other governmental payers develop their coverage and reimbursement policies.

In addition, the increased emphasis on managed healthcare in the U.S. and on country and regional pricing and reimbursement controls in the European Union will put additional pressure on product pricing, reimbursement and utilization, which may adversely affect our future product sales and results of operations. These pressures can arise from rules and practices of managed care groups, competition within therapeutic classes, availability of generic equivalents, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, coverage and reimbursement policies and pricing in general. The cost containment measures that healthcare payers and providers are instituting and any healthcare reform implemented in the future could significantly reduce our revenues from the sale of any approved product candidates. We cannot provide any assurances that we will be able to obtain and maintain third-party coverage or adequate reimbursement for our product candidates in whole or in part.

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Impact of Healthcare Reform on Coverage, Reimbursement, and Pricing

The Medicare Modernization Act imposed new requirements for the distribution and pricing of prescription drugs for Medicare beneficiaries. Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities that provide coverage of outpatient prescription, pharmacy drugs pursuant to federal regulations. Part D plans include both standalone prescription drug benefit plans and prescription drug coverage as a supplement to Medicare Advantage plans. Unlike Medicare Part A and B, Part D coverage is not standardized. In general, Part D prescription drug plan sponsors have flexibility regarding coverage of Part D drugs, and each drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tier or level. However, Part D prescription drug formularies must include drugs within each therapeutic category and class of covered Part D drugs, though not necessarily all the drugs in each category or class, with certain exceptions. Any formulary used by a Part D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic committee. Government payment for some of the costs of prescription drugs may increase demand for any products for which we receive marketing approval. However, any negotiated prices for our future products covered by a Part D prescription drug plan will likely be discounted, thereby lowering the net price realized on our sales to pharmacies. Moreover, while the Medicare Modernization Act applies only to drug benefits for Medicare beneficiaries, private payers often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction in payment that results from Medicare Part D may result in a similar reduction in payments from non-governmental payers.

The American Recovery and Reinvestment Act of 2009 provides funding for the U.S. Government to compare the effectiveness of different treatments for the same illness. A plan for the research will be developed by the Department of Health and Human Services, the Agency for Healthcare Research and Quality and the NIH, and periodic reports on the status of the research and related expenditures will be made to Congress. Although the results of the comparative effectiveness studies are not intended to mandate coverage policies for public or private payers, it is not clear what effect, if any, the research will have on the sales of any product, if any such product or the condition that it is intended to treat is the subject of a study. It is also possible that comparative effectiveness research demonstrating benefits in a competitor’s product could adversely affect the sales of our product candidates. If third-party payers do not consider our product candidates to be cost-effective compared to other available therapies, they may not cover our product candidates, once approved, as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable basis.

The U.S. and some foreign jurisdictions are considering enacting or have enacted a number of additional legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably. Among policy makers and payers in the U.S. and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and expanding access. In the U.S., the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives, including, most recently, the Affordable Care Act, which became law in March 2010 and substantially changes the way healthcare is financed by both governmental and private insurers. Among other cost containment measures, the Affordable Care Act establishes an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; a new Medicare Part D coverage gap discount program; expansion of Medicaid benefits and a new formula that increases the rebates a manufacturer must pay under the Medicaid Drug Rebate Program; and expansion of the 340B drug discount program that mandates discounts to certain hospitals, community centers and other qualifying providers. In the future, there may continue to be additional proposals relating to the reform of the U.S. healthcare system, some of which could further limit the prices we are able to charge or the amounts of reimbursement available for our product candidates once they are approved.

The Foreign Corrupt Practices Act

The FCPA prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the U.S. to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.

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Activities that violate the FCPA, even if they occur wholly outside the U.S., can result in criminal and civil fines, imprisonment, disgorgement, oversight, and debarment from government contracts.

Exclusivity and Approval of Competing Products

Hatch-Waxman Patent Exclusivity

In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims that cover the applicant’s product or a method of using the product. Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential competitors in support of approval of an abbreviated new drug application (“ANDA”) or 505(b)(2) NDA. Generally, an ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths, dosage form and route of administration as the listed drug and has been shown to be bioequivalent through in vitro or in vivo testing or otherwise to the listed drug. ANDA applicants are not required to conduct or submit results of preclinical or clinical tests to prove the safety or effectiveness of their drug product, other than the requirement for bioequivalence testing. Drugs approved in this way are commonly referred to as “generic equivalents” to the listed drug, and can often be substituted by pharmacists under prescriptions written for the reference listed drug. 505(b)(2) NDAs generally are submitted for changes to a previously approved drug product, such as a new dosage form or indication.

The ANDA or 505(b)(2) NDA applicant is required to provide a certification to the FDA in the product application concerning any patents listed for the approved product in the FDA’s Orange Book, except for patents covering methods of use for which the applicant is not seeking approval. Specifically, the applicant must certify with respect to each patent that:

● the required patent information has not been filed;

● the listed patent has expired;

Generally, the ANDA or 505(b)(2) NDA cannot be approved until all listed patents have expired, except when the ANDA or 505(b)(2) NDA applicant challenges a listed patent or if the listed patent is a patented method of use for which approval is not being sought. A certification that the proposed product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification. We may seek Paragraph IV Certification for our product candidates. If the applicant does not challenge the listed patents or does not indicate that it is not seeking approval of a patented method of use, the ANDA or 505(b)(2) NDA application will not be approved until all the listed patents claiming the referenced product have expired.

If the ANDA or 505(b)(2) NDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the application has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days after the receipt of notice of the Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, a decision in the infringement case that is favorable to the ANDA applicant or other period determined by a court.

Hatch-Waxman Non-Patent Exclusivity

Market and data exclusivity provisions under the FFDCA also can delay the submission or the approval of certain applications for competing products. The FFDCA provides a five-year period of non- patent data exclusivity within the U.S. to the first applicant to gain approval of an NDA for a new chemical entity.

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A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the therapeutic activity of the drug substance. During the exclusivity period, the FDA may not accept for review an ANDA or a 505(b)(2) NDA submitted by another company that contains the previously approved active moiety. However, an ANDA or 505(b)(2) NDA may be submitted after four years if it contains a certification of patent invalidity or non- infringement.

NRX Pharmaceuticals, Inc. NRXP US Equity

NRXP · 10-K · period ended 2023-12-31

Item 1. Business

NRX Pharmaceuticals, Inc. NRXP US Equity☆

NRXP · 10-K · period ended 2023-12-31

Item 1. Business

NRX Pharmaceuticals, Inc. NRXP US Equity