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Management Answers to Shareholder Questions

Shareholder Update
February 12, 2024

NRx today announced the advance of the first $5 million milestone payment based on the Company’s partnership agreement with Alvogen, Inc. and Lotus Pharmaceutical Co. Ltd.

Under the terms of the updated agreement, the Company will immediately receive $5 million of the first milestone, which NRx will use to fund development of NRX-101 through the phase 2 meeting with FDA. As compensation for advancing the milestone, Alvogen and Lotus will receive 4.1 million warrants to purchase the Company’s common stock, at a strike price of $0.40 with a three (3) year term.  The second portion of the milestone will be $4 million and, as before, be triggered by a positive response to the Company’s planned end of phase 2 meeting with FDA.

The information below is intended to provide our shareholders with further insight into this development and its potential effects on our business.

What does the advance of the Alvogen milestone funding mean for NRx?
Under the terms of the Alvogen/NRx licensing agreement, should the clinical data for NRX-101 for treatment of suicidal bipolar depression continue to look promising, Alvogen is charged with further development of NRX-101 and its ultimate commercialization by Alvogen and its Asia-Pacific partner Lotus Pharmaceuticals. Accelerating the milestone payment funds the clinical development team to keep study sites in place and to start expanding the framework of study sites to accommodate a larger registrational trial for NRX-101.

Does this mean that the current clinical trial has demonstrated efficacy?
No, it does not. As we reported,[1] enrollment in the trial is complete and we have continued to see a high level of data quality in terms of the rate of concordance between primary endpoint as measured at study sites and the same endpoint as ascertained by our central raters.[2] We have additionally reduced key barriers to trial enrollment. No unexpected serious adverse events have been observed in the clinical trial, even though this is the first outpatient trial in suicidal bipolar depression. Thus, while we wait to see whether there is an efficacy signal in the trial, the experience so far provides confidence that a larger trial can efficiently be enrolled and that patients can be managed safely.


If Alvogen is going to manage development of NRX-101 for bipolar depression from this point forward, what will be the future focus of NRx?
Naturally, we will be supporting Alvogen’s development program and members of our clinical team will be active in the future NRX-101 development. More importantly, this development frees up NRx leadership resources to focus on development of NRX-101 for treatment of chronic pain and PTSD.

Will Alvogen and Lotus be involved in those future indications for NRX-101?
The signed partnership agreement gives our partners the first right to negotiate for the license rights to NRX-101 in chronic pain, PTSD, and other indications. However, there is no commitment at this time for Alvogen and Lotus to develop those indications.

With NRX-101 partnered in suicidal bipolar depression, what programs will NRx pursue next?
NRx has more than 90 patents and patent applications worldwide that focus on the synergy between NMDA and 5-HT2A antagonists in the treatment of Bipolar Depression, Major Depressive Disorder, PTSD, Obsessive Compulsive Disorder, and Chronic Pain. While D-cycloserine and lurasidone represent a promising drug combination for bipolar depression, there may be more suitable combinations to advance to the clinic for treatment of those other disorders. NRx is also exploring alterations to the D-cycloserine molecule that may extend its half-life, with the aim of creating a once-a-day oral medicine. Handing off responsibility for the registrational trial of NRX-101 to Alvogen frees up resources and provides the opportunity for NRx to focus on developing those potential areas and bringing important medicines to patients who suffer from those debilitating conditions.

Now that NRx has additional resources, why does it make sense to spin out HOPE Therapeutics?
The key reasons for the HOPE spinout are 1) the fundamental difference in HOPE’s business and revenue focus relative to NRx’s focus on phase 2 and phase 3 drug development, and 2) a desire to unlock shareholder value that is not currently recognized within NRx.

On the business focus front, HOPE does not anticipate conducting additional clinical research to file the HTX-100 (IV ketamine) NDA and aspires to focus on commercialization in partnership with existing and future ketamine clinics. That will require a sales, medical liaison, and reimbursement infrastructure, a digital platform that supports doctors and patients, and close work with manufacturing and nationwide distribution partners.

In terms of shareholder value, despite analyst enthusiasm for the development of NRX-100 (ketamine) by NRx, no analyst so far has ascribed additional future value to NRx shares based on the progress made in the development of HOPE Therapeutics. We believe that value can best be unlocked if HOPE is viewed as a standalone company. By receiving shares of HOPE Therapeutics as a dividend, our shareholders will receive value for the work we have accomplished so far without losing value in their current NRx investment.

Can you illustrate what this might mean for NRx shareholders in financial terms?
Investors have frequently focused on the risk of multifold dilution in small biotech companies between their phase 2 and commercial stages. Currently, there are approximately 100 million outstanding shares and warrants in NRx. With Alvogen and Lotus taking on NRX-101 development expenses for NRX-101, assuming the data in bipolar depression continue to appear promising,

Based on the current Cap Table, the commercialization milestones associated with the current development agreement (if they are earned based on success of NRX-101) are worth in the neighborhood of $3.30 per share, not including royalties NRx will receive on net sales from Alvogen.

If NRX-101 is approved as the first antidepressant for suicidal bipolar depression in a market where all other antidepressants have a suicide warning on the label, it is not unreasonable to anticipate sales in excess of $1 billion per year. The royalty stream from that sales achievement would likely fall between $1.00 and $1.50 per share per year, depending on how many shares are outstanding at the time. Of course, there is no way to be certain that NRX-101 will ultimately succeed or to be certain of how much future dilution NRx will incur.


What financial expectations should NRx investors have from HOPE Therapeutics?
In the coming days, NRx will begin to provide its shareholders with a more formal structure for the HOPE Therapeutics spinout. In very rough terms, however, NRx believes that HOPE Therapeutics has the potential to offer NRx shareholders a return from the planned share dividend that is similar in magnitude to the financial potential of a commercial success with NRX-101. HOPE will be more focused on providing royalty revenue to its investors than on traditional equity capital appreciation, because of the fundamental difference in HOPE’s projected business model.

[2] Korczykowski, M, et. al., Real Time Quality Assurance of Depression Ratings in Psychiatric Clinical Trials Available at SSRN: or


Cautionary Note Regarding Forward-Looking Statements
This announcement of NRx Pharmaceuticals, Inc. includes “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, and projections of, as well as assumptions made by, and information currently available to, the Company’s management.

The Company assumes no obligation to revise any forward-looking statement, whether as a result of new information, future events or otherwise. 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 forth above.

Jeremy Feffer
LifeSci Advisors, Inc.

Matthew Duffy
Chief Business Officer