BRPAU Big Rock Partners Acquisition Corporation

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-K

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(Mark One)

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

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For the Fiscal Year Ended: December 31, 2021

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

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For the transition period from                to

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Commission File Number: 001-38302

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1201 Orange Street, Suite 600

Wilmington, DE 19801

(Address of principal executive offices) (Zip Code)

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(484) 254-6134

(Registrant’s telephone number, including area code)

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

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

Yes ☐  No ☒

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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 ☒

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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 ☐

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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 ☐

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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.

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. ☒

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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. ☐

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

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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 Select Market on June 30, 2021, was $187.3 million.

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As of March 24, 2022, the registrant had 66,641,314 shares of common stock outstanding.

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INDEX

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CAUTIONARY STATEMENT

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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, and projections of, as well as assumptions made by, and information 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 uncertainties include, 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 the global outbreak of the novel coronavirus disease (“COVID-19”); the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; 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, including patent litigation, and/or regulatory actions. Furthermore, there can be no guarantees with respect to pipeline products that the products will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties 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 and circumstances discussed herein might not occur in the way that the Company’s management expects, if at 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 forth above.

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Since becoming a public company in May of 2021 we have:

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NRx Products in Development

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NRX-101 is a patented, fixed dose combination of D-cycloserine and lurasidone that is the first investigational product supported by a portfolio of intellectual property exclusively licensed to us, related to combinations of NMDA and 5-HT_2A targeted medicines for CNS disease. NRX-101 has demonstrated a statistically-significant reduction in depression and suicidality in a randomized Phase II trial against an active comparator (lurasidone) and has been awarded FDA Breakthrough Therapy designation, a Special Protocol Agreement and a Biomarker Letter of Support.

We are re-initiating our psychiatry clinical work and expect to start a new study of NRX-101 for patients with bipolar depression and sub-acute suicidality (SSIB) during the first half of 2022. In the second half of 2022 we expect to start a new registrational study of NRX-101 for severe bipolar depression in patients with ASIB after initial stabilization with ketamine (NRX-100), using newly-manufactured commercial level material.

ZYESAMI®(aviptadil acetate), as a sterile liquid for intravenous administration, has demonstrated a statistically-significant reduction in mortality compared to placebo in patients with critical COVID-19 and respiratory failure when controlling for differences in baseline severity of disease. Without controlling for baseline severity, ZYESAMI demonstrates a numerical but not statistically-significant reduction in mortality. The U.S. National Institutes of Health (“NIH”) is currently conducting an additional Phase III study of ZYESAMI for intravenous administration.

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A separate Phase II exploratory study using inhaled ZYESAMI that was being conducted by I-SPY has been stopped as it was deemed futile after 52 patients. This futility is most likely driven by the challenges of delivering nebulized medication via mouthpiece to critically ill patients receiving high flow oxygen support (6 liters or more) because the turbulence generated by high flow oxygen prevents sufficient levels of the drug inhaled by mouth from reaching the lungs, although other factors may also play a role.

Given the recent geopolitical changes and our decision to focus on ZYESAMI and NRX-101 principally in the U.S., we have recently decided to discontinue the BriLife^TM vaccine project.

In 2022 we will be focused on some of the following priorities:

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History of our development of NRX-100/101 for suicidal depression and post-traumatic stress disorder

NRx was founded in 2015 by Drs. Jonathan Javitt and Daniel Javitt to develop drugs that aim to treat psychiatric disorders based on Daniel Javitt’s discovery of a synergistic effect when NMDA antagonists are combined with inhibitors of the brain’s 5-HT2A receptor (e.g., SSRI antidepressants and atypical antipsychotic drugs). This synergy has now been demonstrated in both laboratory rodent behavioral experiments and in multiple Phase II clinical trials and resulted in a Composition of Matter patent awarded in the U.S. and multiple foreign jurisdictions. Dr. Daniel Javitt observed that when patients with depression were treated with D-cycloserine (“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 blunt some of the antidepressant side effects (akathisia) common to all known serotonin-targeted anti-depressants.

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. We are 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 obsessive-compulsive disorder. 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 the 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-HT_2A drug and, in turn, the NMDA component can block the akathisia, a known side effect of 5-HT_2A-blocking drugs which is known to predispose to suicide. This dual-targeted approach is the basis of our worldwide patent portfolio, which currently encompasses 43 pending applications, and 47 granted patents in multiple jurisdictions covering both Compositions of Matter and Methods of Use (See “NRx Patent Portfolio”). The relevant patents and patent applications in this portfolio are either owned by NRx, exclusively licensed to NRx by Glytech, LLC (“Glytech”), a Delaware limited liability company solely owned by Dr. Daniel Javitt (the “Glytech License”), or licensed to NRx by Sarah Herzog Memorial Hospital Ezrat Nashim (“SHMH”), a non-profit organization organized under the laws of the State of Israel (the “SHMH License”).

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NRx owns a composition of matter patent that covers NRX-101 in the U.S. 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.

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 NRx 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 for NRX-101 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 NRx 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.

History of ZYESAMI Development

ZYESAMI® is named for Professor Sami Said, Distinguished Professor at the State University of New York at Stony Brook (“SUNY”), who discovered the endogenous neuropeptide Vasoactive Intestinal Peptide (“VIP”) in 1970 and published a large number of peer-reviewed studies on its effects. ZYESAMI is a patent-pending shelf-stable composition of matter formulation based upon VIP. VIP showed promise for treating Acute Respiratory Distress Syndrome (“ARDS”) associated with ARDS in 2005.

The term “VIP” should be interpreted as referring to the natural peptide produced in the human body, while the terms “aviptadil” and “ZYESAMI” refer to our drug substance (i.e., active pharmaceutical ingredient) and drug product, respectively. Aviptadil is the generic name for synthetically-manufactured VIP, as distinct from the natural peptide.

VIP became uniquely important in 2020 when it was demonstrated to have potential to treat respiratory failure in patients with COVID-19. While we are still learning about the adverse effects of COVID-19 on the body, the scientific rationale for use of aviptadil in this disease appears attractive. Its potential effectiveness in treating COVID-19 is based on the principle that the coronavirus specifically invades the Alveolar Type II (“ATII”) cell of the pulmonary (lung) epithelium, where it blocks surfactant production, replicates into millions of virus particles, unleashes inflammatory cytokines, causes cell death, and deprives the lung of surfactant, which is the fluid that lines the lung and allows oxygen to pass from the air to the blood. ZYESAMI was shown in preclinical laboratory experiments at the Oswaldo Cruz Institute (Rio de Janeiro, Brazil) to increase the production of surfactant, block replication of the SARS-CoV-2 coronavirus in human lung cells, block cytokine production, and block lung cell death (cytopathy). This attack on ATII cells is believed to be a common mechanism of ARDS in sepsis, influenza, and conditions other than COVID-19.

VIP is also shown to have important potential effects in the treatment of other non-infectious lung diseases including Chronic Obstructive Pulmonary Disease (“COPD”), Sarcoidosis, asthma/allergy, and Chronic Respiratory Inflammation Syndrome. We intend to research the use of VIP in these and other lung conditions in the future, as well as other non-lung disorders. VIP is also known to be active in the brain and we plan to understand its potential use in the treatment of Central Nervous System (“CNS”) diseases if an appropriate mechanism of CNS delivery can be developed.

Our involvement with aviptadil began on March 4, 2020 when Relief Therapeutics Holding AG (“Relief Therapeutics”) approached our then Chief Executive Officer, Jonathan Javitt, and asked him to develop an aviptadil formulation based on archival data, including an FDA Investigational New Drug Application (“IND”) (52,088).

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Accordingly, with the agreement of Relief Therapeutics, NRx filed IND 149,152 on March 24, 2020 and was issued a “Study May Proceed” letter by the FDA on March 28, 2020. NRx proceeded to work with a manufacturer of clinical supplies, engaged a clinical research organization, and enabled enrollment of the first patient at the end of May 2020. The companies agreed to an initial framework for cooperation under which Relief Therapeutics would fund all development costs related to aviptadil. For the next five months, Relief Therapeutics and NRx discussed how to share the obligations and economic benefits of developing aviptadil. See “Relief Relationship in the Development of ZYESAMI / Aviptadil” below.

Our first VIP-derived product ZYESAMI was awarded Fast Track designation by the FDA in June 2020 and was admitted to the Coronavirus Treatment Acceleration Program. We have completed a Phase IIb/III randomized controlled trial of ZYESAMI vs. placebo (NCT 04311697), conducted under FDA Fast Track designation. The Phase IIb/III trial enrolled 196 patients and the last patient completed 60 days of observation on February 22, 2021. Across all patients and sites, ZYESAMI did not meet the primary prespecified endpoint for “alive and free of respiratory failure” at day 60 (P=.085), but did meet this endpoint (P=.02) when adjusting for treatment site. Across all patients and sites, ZYESAMI demonstrated a statistically significant increase in odds of survival through day 60, whether or not the participant was fully recovered (P <.01). In a post-hoc subgroup analysis of patients already treated with remdesivir (70% of the randomized cohort), the primary endpoint was met (P=.03) with 3-fold increased odds compared to placebo at both 28 and 60 days and 4-fold increased odds of survival was seen (P=.006). This post-hoc analysis was done based on the FDA’s feedback in their denial to our Breakthrough Therapy designation request. On February 10, 2022 we resubmitted our Emergency Use Application request focused on this more narrow population.

The ratio of arterial blood oxygen concentration (PaO₂) to the concentration of oxygen delivered to the lung (FiO₂), known as the PF ratio is an important intermediate clinical endpoint that is associated with survival (see figure 1 below). Rapid (i.e. within 24 hours) improvement in the PF ratio has been seen in our Phase IIb/II trial, the Houston Methodist open label trial, and inpatients treated under the Right to Try program. Documentation of improvement on intermediate clinical endpoints may constitute a basis for applying for accelerated approval of a new medicine pending confirmatory studies that must be submitted as a post-approval commitment.

COVID-19 is widely demonstrated to be associated with release of inflammatory cytokines, particularly interleukin 6 (IL-6) and this Cytokine Release Syndrome, colloquially known as “cytokine storm”, is predictive of mortality in numerous clinical studies. Across all patients and sites of care in our study, those treated with placebo showed a ten-fold increase in blood IL-6 levels within 7 days of treatment, while those treated with ZYESAMI showed a 2-fold increase (P<.02). Preventing this rise in IL-6 was statistically correlated with improved survival in ZYESAMI-treated patients (P<.0001) (see figure 2 below). In an open-label trial, ZYESAMI similarly demonstrated a substantial and statistically significant difference in cytokine levels between those treated with ZYESAMI and those who were treated with the best-available standard of care. This demonstrated effect on Cytokine IL-6 potentially constitutes a surrogate or biomarker endpoint as defined under the FDA’s accelerated approval pathway.

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In a published open label study as well as other data, we have seen rapid and dramatic improvement in some patients. Overall, when patients are treated earlier, there appears to be a better chance of recovery. In December 2021, a Texas regional hospital reported to us that 16 of 19 patients treated with ZYESAMI had survived through 28 days and 14 of those patients had been discharged to home or to rehabilitation facilities. These patients were treated within the Right to Try program, after exhausting all approved therapies. An example of rapid clearing of the x-ray signs of COVID-19 is shown below.

While findings such as this are highly encouraging and have been seen in multiple patients, drug approval can only be obtained through randomized prospective trials, such as the ones in which we are engaged. Treatment of patients with advanced stages of COVID-19 can be very challenging. Patients with Critical COVID-19 (who are in the ICU) can develop multiple complications, which ZYESAMI does not treat. Such complications can lead to high morbidity and mortality, e.g. renal failure and infections/sepsis, that is not addressed by investigational drugs such as ZYESAMI. Furthermore, published literature also indicates that percent occupancy of an ICU and other factors can influence overall outcomes and mortality of patients with COVID-19. Overall, clinical studies of COVID-19 in advanced stages of the disease are and will continue to be very challenging.

ZYESAMI has demonstrated promise in a randomized, double-blind multicenter trial, but has not yet met FDA’s standards for efficacy and safety. We applied for Emergency Use Authorization (“EUA”) with the FDA on May 31, 2021, based on a finding of near statistical significance at day 60 on the primary endpoint of recovery from respiratory failure and a statistically significant improvement in survival at day 60. In November 2021, the FDA notified us that it was unable to issue the EUA at that time due to insufficient data regarding the known and potential benefits of ZYESAMI and the known and potential risks of ZYESAMI in patients suffering from Critical COVID-19 with respiratory failure. In its letter, the FDA noted that so far, it has reviewed safety in only 131 randomized patients treated with ZYESAMI. The FDA similarly denied an application for Breakthrough Therapy designation, but indicated we could reapply if we were able to provide data on the performance of ZYESAMI compared to remdesivir, a COVID-19 treatment offered by Gilead Sciences. In response, the Company worked to coordinate a review by the FDA of approximately 750 patients treated with ZYESAMI in our clinical trials, our Expanded Access Programs, our Right to Try Program and the NIH ACTIV-3b trial. The Company narrowed its request for EUA to the treatment of patients with COVID-19 respiratory failure who are at risk of death despite treatment with remdesivir and other approved therapies, and submitted a new request for EUA and Breakthrough Therapy designation to the FDA. Although the COVID-19 environment continues to evolve rapidly, and the unmet need continues to be high, it is uncertain if the FDA will deem this post-hoc analysis of our prior data as sufficient basis for Emergency Use Authorization for this narrower patient population. As of the date of this filing, that request is still pending. See “Risk factors - Risks Related to Our Business and Industry - Our initial application to the FDA for Emergency Use Authorization was not successful.”

Based on the scientific foundation of the COVID-AIV trial, NRx was selected by the NIH for inclusion in the ACTIV-3b TESICO trial. This represents an important public sector investment in NRx. The ACTIV-3b TESICO trial is publicly-financed, but could provide NRx with Phase III data to submit in support of drug registration, should the trial demonstrate clinical success. The TESICO protocol includes geographic participation from Scandinavia, the EU, the UK, and Brazil. In September 2021 NRx passed a European Qualified Person (QP) audit at its manufacturing site (Alcami in North Carolina). As a result, NRx expects to be able to ship investigational drug to the EU, the UK, and Brazil in mid-2022. Given the opportunity afforded by the investment of the NIH and the inclusion in the ACTIV-3b TESICO trial, NRx has decided to principally focus its ongoing regulatory efforts for ZYESAMI in this direction.

According the NIH website, ZYESAMI is the sole investigational medicine still under consideration in ACTIV-3b and four reviews conducted by the NIH Data Safety Monitoring Board have identified no new safety concerns.

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ZYESAMI’s formulation and composition of matter is based on discoveries made by NRx and is not based on any prior U.S. or international patent. U.S. Patent 8178489B2 and its foreign counterparts cover only formulations of aviptadil that are formulated in a buffer. Laboratory evidence suggests that VIP (aviptadil) aggregates and may be inactivated by known buffers. We conducted research to determine the molecular sites at which aviptadil is degraded (causing its instability) and invented a stable composition of matter that allows for 150-180 day stability at refrigerated temperatures with expected multi-year stability while frozen. Those discoveries led to the filing of U.S. Provisional Patent Application No. 63/295,058 which was filed in the U.S. Patent and Trademark Office (“USPTO”) on December 30, 2021, and to the filing of Utility Patent Application No. 17/574,753 with the USPTO on January 13, 2022.

In the event that no patent protection is granted covering the composition of ZYESAMI, if the drug is approved by the FDA, it is anticipated to receive at least five (5) years of data exclusivity from the FDA under what is commonly known as “paragraph 4” protections. Should no patents be granted by the end of this data exclusivity period, competitors may be able to file an ANDA to market generic versions of ZYESAMI.

Relief Therapeutics Relationship in the Development of ZYESAMI / Aviptadil

In September 2020, NRx and Relief Therapeutics entered into the Binding Collaboration Agreement (“Collaboration Agreement”) under which NRx and Relief Therapeutics agreed to collaborate as separate companies and to share profits from the “Product” defined in paragraph 25 of the Collaboration Agreement as any formulation of aviptadil for which Relief Therapeutics would pay the costs of research and development. Under the Collaboration Agreement, Relief Therapeutics was obligated to fund all development costs related to aviptadil for respiratory diseases in exchange for a predetermined division of profits and NRx had the right to continue its development program with other investor funds should Relief Therapeutics not provide such funding.

We reported to Relief Therapeutics in December 2020 that the formulation data provided by Relief Therapeutics could not be replicated and that a new formulation of composition and manufacturing method was required. Relief Therapeutics declined to fund the costs of developing a stable formulation of aviptadil, which NRx proceeded to do with funding from other investors under the tradename ZYESAMI.

On October 6, 2021, Relief Therapeutics filed a complaint in New York State Court (the “NYS Court”), claiming that NRx failed to honor its obligations under the Collaboration Agreement (the “Complaint”). The Complaint seeks several remedies, including damages for alleged breaches of the terms of the Collaboration Agreement. We believe that the claims are baseless and without merit. In addition to asking the NYS Court to enter summary judgment in favor of NRx with regard to Relief Therapeutics’ demand to receive profit without having funded the underlying product, NRx has filed a complaint seeking damages of at least $185 million.

The parties to the lawsuits agreed to engage in an effort to amicably resolve the litigation, held a mediation meeting on February 22, 2022, and plan to hold an additional mediation meeting in the coming months. If the mediation does not resolve the dispute, the Company intends to defend itself vigorously and to prosecute its claims against Relief Therapeutics. There can be no assurance, however, that we will be able to successfully resolve the dispute through mediation or that, in the event the dispute continues in litigation, we will be successful in our claims against Relief Therapeutics or our opposition to Relief Therapeutics’ claims. See “Risk Factors - Risks Related to our Business and Industry - The outcome of any current or future disputes, claims, arbitration and litigation, including our dispute with Relief Therapeutics could have a material adverse effect on our business, financial condition and results of operations.”

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Path to regulatory approval of ZYESAMI

Commencing March 24, 2020, NRx:

There are 3 recognized pathways by which NRx might gain marketing approval or authorization for ZYESAMI in the United States: Emergency Use Authorization, Accelerated Approval, and (traditional) New Drug Approval:

Pathway 1: Emergency Use Authorization.

In the setting of a public health emergency declared by the U.S. Secretary of Health and Human Services, the FDA is empowered to grant EUA to drugs and vaccines that may be beneficial in combating the emergency. Emergency Use Authorization may grant one year of limited marketing authorization to a medicine that “may be effective,” during which time the sponsor is expected to demonstrate traditional safety and efficacy in support of a New Drug Application. In September 2020, we opened a Pre-EUA file with the FDA and requested a narrow EUA only to treat patients who were already allowed under the Expanded Access Protocol granted by the FDA in July 2020 but whose hospitals could not implement the administrative requirements of the Expanded Access Program. The FDA notified us in December 2020 that EUA could only be granted upon submission of randomized, placebo-controlled data and stated that such data would be reviewed “promptly” upon submission. In a subsequent communication in January 2021, the FDA advised us that review of complete efficacy and safety data would be required for an EUA determination.

On May 31, 2021, we filed for EUA with the FDA for ZYESAMI, thereby delivering a regulatory file delineating safety and efficacy data of an investigational drug within approximately 3 months of last visit in a clinical trial. As noted elsewhere in this annual report, the initial request for EUA was denied and we have filed a new request for EUA in patients with COVID-19 respiratory failure who are at immediate risk of death despite treatment with remdesivir and other approved therapies. As of the date of this annual report, that request is still pending.

Pathway 2: Accelerated Approval.

Accelerated approval is a new regulatory pathway emphasized by Congress as part of the 21^st Century Cures Act that allows early approval of treatment or drugs that are used in the treatment of severe or life-threatening indications and fulfill and unmet medical need. In 2012, Congress passed the Food and Drug Administration Safety Innovations Act (“FDASIA”). Section 901 of FDASIA amends the Federal Food, Drug, and Cosmetic Act to allow the FDA to base accelerated approval for drugs for serious conditions that fill an unmet medical need on whether the drug has an effect on a surrogate or an intermediate clinical endpoint.

We plan to assess whether filing an application for accelerated approval this year might offer a quicker path to marketing authorization for ZYESAMI than the traditional New Drug Approval pathway. Additionally, we await findings

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from our radiographic substudy in order to learn whether the radiographic improvement may constitute an intermediate clinical endpoint.

Pathway 3: New Drug Approval:

The traditional pathway of New Drug Approval requires demonstration of safety and efficacy in adequately controlled studies. ACTIV-3b is designed as a Phase III trial. Therefore, we believe that should the ACTIV-3b trial demonstrate a statistically-significant benefit to patients who are treated with ZYESAMI compared to those treated with placebo, the results of this trial – together with our other trials described herein – may support a finding of efficacy in support of New Drug Approval. NIH has reported a likely readout of the ACTIV-3b trial in early 4Q 2022, notwithstanding Data Safety and Monitoring Board reviews, one of which is expected at the end of April 2022. Under rolling review, NRx has the ability to submit all completed sections of a New Drug Approval application for ZYESAMI for review prior to that readout in order to facilitate an earlier review of a ZYESAMI NDA should the ACTIV-3b trial demonstrate efficacy.

Non-U.S. initiatives:

In the second half of 2021, NRx was invited to meet with the Prime Minister and Minister of Health of the Nation of Georgia, to discuss clinical trial operations in Georgia, and to apply for emergency use authorization for intravenous ZYESAMI in Georgia. In late July 2021, NRx was notified that an authorization for emergency use of ZYESAMI was issued by Georgia’s Ministry of Health to the Georgian Respiratory Association. NRx arranged for one of its principal investigators from the U.S. to travel to Georgia to train physicians and medical personnel in the use of ZYESAMI. Shortly thereafter, Georgia entered a period of political instability. The Minister of Health resigned in December 2021. As previously disclosed, the Company’s Board has determined that it cannot confirm the current status or effectiveness of the authorization for emergency use of ZYESAMI in Georgia. In light of the uncertainty regarding the recent changes at the Ministry of Health in Georgia and the ongoing hostilities in Eastern Europe, the Company is not currently pursuing regulatory or commercial opportunities in Georgia (which neighbors Russia and Ukraine) or elsewhere in the Caucasus region or Europe. The Company believes its strategic priorities are principally based in the U.S.

Clinical Trials and Objectives

NRX-101 Phase IIb/III Clinical Trial

We initiated a clinical research program of NRX-101 during the second half of 2017 under an FDA IND application that was granted Fast Track designation by the FDA in August 2017 and was granted Breakthrough Therapy designation by the FDA in November 2018. In April 2018, the FDA granted a Special Protocol Agreement (SPA). We completed a Phase II clinical trial of NRX-101 in patients with Severe Bipolar Depression and Acute Suicidal Ideation and Behavior (ASIB) following initial stabilization with a single dose of ketamine (NRX-100) and saw a statistically significant reduction in depression (P=0.04) and suicidal ideation (P=0.02) compared to lurasidone alone over 42 days of treatment. If this statistically-significant advantage is replicated in the Phase III clinical trial, under the terms agreed to with the FDA in our Special Protocol Agreement, we aim to submit an NDA to the FDA for the regulatory approval and commercialization of NRX-101 in the U.S. in 2023 and will evaluate our ability to submit to regulatory agencies in other regions or countries.

We believe our products are urgently needed by patients because no current serotonin-targeted antidepressant (such as SSRI drugs) or atypical antipsychotic (e.g., the D2/5HT2A drugs) has been shown to decrease suicidal ideation in patients with bipolar depression or PTSD. Moreover, drugs in these classes bear an FDA-mandated warning regarding the potential increased risk of suicide in vulnerable patients, and to monitor all antidepressant-treated patients for the increased risk of suicide. Ketamine has been shown to decrease suicidal ideation because of its NMDA-blocking properties, but is known to be hallucinogenic, addictive, potentially neurotoxic, and not administrable by mouth. The only FDA-approved therapy for patients with suicidal bipolar depression remains electroconvulsive therapy (“ECT”), a treatment that is known to be effective, but to have a large number of serious side effects, and is very disruptive to the lives of these individuals.

Analysis of our first Phase II study, the STABIL-B trial, showed a statistically significant reduction in depression and suicidal ideation vs. the control group over 42 days. We commenced a pivotal Phase IIb/III clinical trial under an FDA Special Protocol Agreement of our lead product candidate, NRX-101, in 2019 and paused that study due to the pandemic.

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During this pause we advanced the commercial manufacture of NRX-101 and anticipate receiving commercially-manufactured supplies of investigational product in next few months. In the meantime, we are initiating a Phase II trial of NRX-101 in patients with bipolar depression with SSIB.

Note: the above numbers do not include patients treated under the Right to Try Program. As some studies are still blinded only an approximation of the number of patients treated with ZYESAMI is provided.

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ZYESAMI Phase IIb/III Clinical Trial for treatment of Respiratory Failure in Critical COVID-19 (COVID- AIV)

We completed a 196-person Phase IIb/III clinical trial of intravenous ZYESAMI for the treatment of respiratory failure in patients with critical COVID-19 (the “Intravenous Trial”). The U.S. Secretary of Health and Human Services has declared the COVID-19 pandemic to be a public health emergency under the terms of the Pandemic and All Hazards Preparedness Reauthorization Act of 2013. Accordingly, ZYESAMI could be authorized for use in the U.S. under the standard of safe and “may be effective,” rather than the more stringent standard of “proven to be safe and effective in adequately- controlled trials” required for traditional drug approval under section 505.b.1 of the Federal Food, Drug, and Cosmetic Act (“FFDCA”).

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Participants were enrolled between May and December 2020 at 10 U.S. hospitals and followed through day 60. Six of these were classified as tertiary care hospitals. The primary endpoint was pre-specified by the FDA as “alive and free of respiratory failure” at day 60. Secondary endpoints included survival and duration of hospital stay in patients who recover.

In the Intravenous Trial, across all patients and sites, ZYESAMI did not meet statistical significance for the primary endpoint of time to recovery from respiratory failure by day 60 (P=.085) but did meet the secondary endpoint of survival at day 60, demonstrating a 2-fold increased odds of survival compared to placebo (P=.03). When controlling for type of hospital (community hospitals vs. tertiary care centers,) ZYESAMI demonstrated higher odds of recovering from respiratory failure at days 28 (P = .014) and 60 (P = .013) and also demonstrated a statistically significant advantage in likelihood of surviving to day 60 (P = <.001). The study did not demonstrate a statistically-significant difference on the primary endpoint without statistical adjustment for these pre-specified covariates.

Additionally, when controlling for ventilation status and treatment site, a significant advantage favoring ZYESAMI was seen (P=.018), with the largest effect in the subgroup of patients (n=98) treated by High Flow Nasal Cannula (“HFNC”), compared to those treated with mechanical or non-invasive ventilation at tertiary care hospitals. In this group, ZYESAMI patients had a 71% chance of successful recovery by day 28 vs. 48% in the placebo group (P=.017) and a 75% rate of successful recovery by day 60 vs. 55% in the placebo group (P=.036). 84% of HFNC patients treated at tertiary medical centers with ZYESAMI survived to day 60 compared with 60% of placebo patients (P=.007). The finding that patients fared substantially better in tertiary care centers as compared to regional hospitals may be influenced by the intensity of the public health crisis at the regional hospitals that participated in the Intravenous Trial, such centers may have been more resource constrained or faced with high occupancy in their ICUs, including implementation of temporary ICU beds, and shortages of critical care staff. As mentioned before, high ICU occupancy can be associated with higher mortality.

In reviewing our request for Breakthrough Therapy designation (“BTD”) which was denied, the FDA pointed out that BTD can only be awarded for an unmet medical need and that remdesivir is currently labeled for use in patients with COVID-19 respiratory failure. With that insight, we asked Prof. David Schoenfeld, one of the world’s most widely published statisticians with unique expertise in life-threatening diseases of the lung, to conduct an independent analysis of recovery and survival from respiratory failure in patients treated with ZYESAMI after treatment with remdesivir compared to those treated with placebo after treatment with remdesivir. That analysis determined that across all patients and sites of care, treatment with ZYESAMI was associated with a statistically-significant 3-fold increased odds of meeting the primary endpoint (recovery from respiratory failure) and 4-fold increased odds of survival at day 60 (P=.006).

In addition to the primary and secondary endpoints that will be key for Emergency Use Authorization and subsequent drug approval, ZYESAMI met two important secondary endpoints that could be supportive of those approvals and that may qualify ZYESAMI for accelerated approval as anticipated by the 21st Century Cures Act: Blood oxygenation as measured by Respiratory Distress Ratio (RDR) and IL-6 cytokine reduction.

RDR is measured as the ratio of arterial oxygen partial pressure (PaO2) to fractional inspired oxygen partial pressure (FiO2). This ratio (PaO2/FiO2) is also known as the Horowitz index or PF ratio. As patients recover and leave the ICU, PF ratio can no longer be measured because arterial blood gas is no longer obtained. Over the first three days of therapy, however, PF ratio is obtained on the entire study cohort and provides an early indication of biologic response to aviptadil vs. placebo.

Mean RDR was comparable at baseline (aviptadil=112.1, placebo=105.2), with differentiating improvement noted at Day 2 pre-dose (aviptadil=124.6, placebo=107.8; two-sided t-test=0.12) and at Day 3 pre-dose (aviptadil=140.1, placebo=107.7; two-sided t=0.01). A sustained mean numeric advantage at Day 7 pre-dose was seen (aviptadil=139.2, placebo=116.2; two-sided p=0.11). For patients treated at baseline with HFNC, differentiating improvement was confirmed at Day 2 pre-dose (aviptadil=124.4, placebo=93.4; two-sided t=0.01), at Day 3 pre-dose (aviptadil=141.9, placebo=105.4; two-sided t=0.03), and at Day 7 (aviptadil=146.1, placebo=115.2; two-sided t=0.04).

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Mixed Model Repeated Measures (MMRM) regression was used to determine whether higher mean RDR was associated with a higher likelihood of achieving the primary endpoint at 60 days. The higher mean RDR seen in aviptadil- vs. placebo-treated participants was predictive of achieving the primary endpoint on MMRM (F 16.0; P<.001).

This biologic effect of aviptadil on RDR is consistent with the improvement in RDR associated with aviptadil reported in the single-center, open-label trial conducted at Houston Methodist Hospital (Figure 1).

Figure 1 Respiratory Distress Ratio in patients treated with aviptadil and placebo. Significant differences in improvement are noted at days 1, 2, 3, and 7 (t-test P<.05) and across the 7-day interval on MMRM (P<.02).

Figure 2 (above left): Percent change from pre-treatment (Day 0) baseline in IL-6. A significant difference is seen between day 3 and day 7 favoring aviptadil (P=.024) with independent significance on days 3 (P=.002) and 7 (p=.06).

Figure 3 (above right): Predicted probability of primary outcome vs. change in Log IL-6 level from baseline to day 7. Increase in IL6 at day 7 predicted >50% of the variance in treatment outcome (R2- .53). Treatment with aviptadil is less likely to be associated with a day 7 increase in IL-6 and is associated with higher probability of primary endpoint success.

Among the subgroup of subjects for whom biomarker data were collected, treatment arm (p=.034) and baseline ventilation status (p=.019) were significant independent predictors of day 60 primary endpoint success, independent of any interaction effects (Figure 2). Type of hospital was not significantly associated with this biological effect. A lower level of IL-6 on Day 7 strongly predicted achieving the primary endpoint and survival at Day 60 (p<.0001) and was collinear with treatment-type (p=.95). Baseline ventilation status (p=.07) demonstrated a trend level of significance as a covariate in this model.

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Prospective, administratively-controlled trial of ZYESAMI in highly comorbid patients with COVID-19 (High Comorbidity Open Label)

Youssef (2021) has reported on 21 consecutively admitted patients with Respiratory Failure in Critical COVID-19 and multiple co-morbidities, enrolled under Emergency Use INDs and an Expanded Access Protocol as detailed below. These patients were compared with 24 patients with comparable comorbidity from the same ICU, who were treated by the same clinical team during the same timeframe and who received maximal standard of care (“SOC”). All patients were treated with three successive 12-hour intravenous infusions of increasing doses of aviptadil (50/100/150 pmol/kg/hr). This initial 60 day-trial has now been updated to one year for the purpose of assessing survival. All enrolled patients were followed to one year and survival status was assessed either at a clinic visit or by telephone call initiated by the principal investigator.

Survival

By Kaplan-Meier lifetable analysis (Figure 4), aviptadil-treated patients were 3-fold more likely to survive over one year than were those treated with SOC (Hazard Ratio 0.26; 95% CL 0.12, 0.60). The difference is both dramatic and statistically significant (log rank test: P<.0001).

Figure 4: Survival in patients treated with aviptadil (n=21) vs SOC (n=24) from Time of ICU Admission (Hazard Ratio 0.26; 95% CL 0.12, 0.60)

Time to Recovery

Time to recovery from respiratory failure was similarly analyzed by life table analysis (Figure 5 Youssef et. al. 2021). Respiratory failure was defined by the FDA resource-based criterion (FDA 2021) of requirement for mechanical ventilation, noninvasive ventilation, or high flow nasal oxygen at 20L or greater. A similar 5.5-fold increase in the likelihood of recovery from respiratory failure from the time of ICU admission was seen (55% vs 10%; P=.002) at 60 days. The hazard ratio is 0.115 (95% CL: 0.0254, 0.5219).

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Figure 5: Time to recovery from Respiratory Failure. (Hazard Ratio 0.115 (95% CL: 0.0254, 0.5219)

Improvement on Respiratory Distress Ratio (PAO2:FiO2)

As was also demonstrated in the Phase IIb/III trial, Aviptadil-treated patients demonstrated a significant, nearly 3-fold improvement in oxygenation as measured by the Respiratory Distress Ratio (RDR), also known as the Pa02:FiO2 ratio. Control SOC patients demonstrated no significant mean improvement (164 (SD 134) vs. 3 (SD 86): P<.001) (Figure 6). 15 of 21 aviptadil-treated patients demonstrated a 100- point or greater improvement in RDR, compared to 4 of 30 controls (P<0.001). No aviptadil-treated patient demonstrated significant worsening in blood oxygenation, whereas 5 control patients demonstrated a decrement of 100 points or greater (P<.05). The improvement in patients on ECMO was similar to that seen in patients treated with conventional mechanical ventilation. Available data from blood gases showed clear increases in the PaO2:FiO2 ratio after the second dose (median increase = 92.5, IQR = 74) and at 24 hours after the third dose (median increase over baseline = 84.5, IQR = 110). A statistically significant difference in mean improvement is seen in aviptadil-treated patients vs. controls (164 vs. 3: P<.001).

Subsequent follow-up reveals that 7 additional aviptadil-treated patients returned either to home or long- term acute care for a total of 17 (81%), and 1 additional patient has died. In contrast, 2 additional control patients have died, and the remaining 2 were continuing on mechanical ventilation at 60 days. Thus, from a post-hoc perspective, aviptadil-treated patients with Critical COVID-19 were eight times more likely to return to home or long-term care than were patients given SOC.

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Figure 6: Respiratory Distress Ratio (PaO₂:FiO₂) in aviptadil-treated vs. control patients demonstrating statistically significant improvement in RDR among aviptadil-treated patients at 48-96 hours (P<.001).

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Changes on Radiographic Appearance

Radiographic evidence (Figure 7) on a subgroup of patients from our first clinical study is currently undergoing formal evaluation by a panel of blinded experts. Full or partial resolution of the “ground glass” parenchymal changes associated with COVID-19 pneumonitis occurred in 17 of 21 aviptadil-treated patients.

Figure 7: Chest x-ray and CT imaging of a patient initially treated while on mechanical ventilation and extracorporeal membrane oxygenation for Critical COVID-19 with respiratory failure, data from a prospective, administratively controlled trial of aviptadil in highly comorbid patients with COVID-19 (High Comorbidity Open Label, Youssef et. al.)

Changes in inflammatory markers

A laboratory panel of inflammatory markers, including LDH, troponin, C-reactive protein, ferritin, D-Dimer, and IL-6 was obtained prior to and post treatment with aviptadil (Figure 8). In all patients, improvement can be seen on each of the inflammatory markers. The largest average percent decrease was seen in C-reactive protein (76% ±3%) and IL-6 (75% ±3%). No patient demonstrated an increase in any of the inflammatory markers. Because of the high mortality rate in the control group, an accurate comparison in cytokine reduction between aviptadil-treated and standard-of-care patients is not feasible.

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Decrease in Inflammatory Markers

Figure 8: Decrease in inflammatory markers as a percent change from pretreatment value. The decrease is both clinically and statistically significant (P<.001)

ZYESAMI inclusion in NIH ACTIV3b/TESICO Clinical Trial for Critical COVID-19 and Respiratory Failure (ACTIV3b / TESICO)

Based on the above research, the NIH selected ZYESAMI for further study. Dr. Francis Collins, then Director of the NIH gave a public presentation on September 21, 2021 in which he identified ZYESAMI as having been selected from among 600 candidate compounds and identified it as one of a handful of compounds still under study for critically-ill patients.

ZYESAMI was selected by the steering committee of the Therapeutics for Severely Ill Inpatients with COVID-19 (“TESICO”) protocol funded by Operation Warp Speed through the National Heart, Lung, and Blood Institute and the National Institute for Allergy and Infectious Disease of the NIH. The protocol is part of the NIH Accelerating COVID-19 Therapeutic Interventions and Vaccines (“ACTIV”) public private consortium. This clinical trial anticipates enrolling 640 patients in study sites located in the U.S., the EU, the UK, and Brazil in a factorial design that will compare ZYESAMI to placebo and to Veklury (Remdesivir) both alone and in combination with ZYESAMI for the treatment of critical COVID-19 with respiratory failure. The TESICO trial recruited its first patient in April 2021.

As of March 15, 2022, approximately 465 participants have been randomized in the TESICO trial.

ZYESAMI inclusion in I-SPY Clinical Trial for severe and critical COVID-19 with early or impending respiratory failure (I-SPY)

We signed a contract with Quantum Leap Healthcare Collaborative for the inclusion of ZYESAMI in the I-SPY clinical trial platform, whereby inhaled ZYESAMI was included as part of a panel of four drugs being tested as part of the I-SPY COVID-19 Trial, an adaptive platform trial for critically ill patients. After enrolling and dosing approximately 52 patients with inhaled ZYESAMI in the clinical trial, I-SPY determined that continued administration of ZYESAMI as a nebulized agent for this patient population who are receiving high flow nasal oxygen (6 liters or more) would be futile and has discontinued the study. Patients enrolled in this study were mostly Severe or Critical, and rapidly progressing. This program was targeted at exploring another route of administration for this mostly advanced patient population that could potentially expand the use of ZYESAMI beyond our intravenous route of administration. This futility is most likely driven by the challenges of delivering nebulized medication via mouthpiece to critically ill patients receiving high flow oxygen support (6 liters or more) because the turbulence generated by high-flow oxygen prevents sufficient levels of the drug inhaled by mouth from reaching the lungs, although other factors may also play a role. Administration of inhaled ZYESAMI in populations not on high flow nasal oxygen support (not critical or severe) hence continues to be an area of interest for us. Accordingly, NRx plans to focus on intravenous ZYESAMI in future trials of patients who are rapidly progressing and/or requiring higher levels of oxygen that cannot be reduced, e.g., Critical COVID-19.

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Phase IIb/III Clinical Trial for Inhaled ZYESAMI in Early COVID-19 (AVICOVID-2)

Although our initial focus has been on the use of ZYESAMI in patients with critical COVID-19 and respiratory failure (i.e., patients who require ventilation, extracorporeal oxygenation, or high flow nasal oxygen to survive), we received permission from the FDA to test inhaled ZYESAMI in patients with earlier disease. We believe that inhaled drug could reach the ATII cells in the lung better than the intravenous drug, provided patients are still able to inhale normally and do not have inflammatory debris clogging the alveoli. Enrollment for this study of patients with Severe COVID-19 commenced in January 2021. Enrollment in this trial has been paused to review safety and feasibility of this trial in the Severely ill inpatient population. The trial was originally sized and study power calculated based on the assumption that a high proportion of Severely ill patients with COVID-19 would progress to Critical COVID-19 and/or require ICU admission. With advances in the treatment of COVID-19 and a potentially milder strain becoming the dominant strain of COVID-19, it appears that now fewer patients admitted to the hospital with Severe COVID-19 progress to Critical COVID-19 and/or require ICU admission. After having enrolled approximately 40% of the initially targeted number of patients, we are now evaluating the best path forward for this study. Continuing this trial as configured would now likely require a sample size in excess of 600 patients to determine a statistically significant difference on this endpoint (i.e., ICU admission). This inpatient study has been paused while NRx evaluates whether to increase the sample size to this level or change the trial endpoint and possibly enrollment criteria or discontinue this study and focus the nebulized use of ZYESAMI in other patient populations.

Safety of ZYESAMI in treating COVID-19

In each of the intravenous studies described above, the dosing of ZYESAMI specified 3 successive days of one daily 12-hour infusion with escalating doses of 50/100/150 picomol/kg/hr from day 1 to day 3. The treatment emergent adverse event profile indicates that ZYESAMI is a drug that can be safely used for Critical COVID-19 patients in the context of critical case settings. The two most frequent side effects that have emerged are diarrhea (in approximately 1/3 of patients, which was significantly more frequent in the ZYESAMI group) and hypotension. ZYESAMI may cause hypotension, which is also frequently seen in critically-ill patients with COVID-19 and other disorders in the ICU, e.g., sepsis. However, hypotension is routinely managed in the intensive care unit with drugs (pressors) that raise blood pressure. ZYESAMI is not recommended in patients whose hemodynamic profile is critically low and unstable (e.g., Mean Arterial Pressure (MAP) cannot be maintained above 65 with a single pressor agent). Within those limitations, hypotension was seen in 26% of patients treated with ZYESAMI, compared to 21% of patients treated with placebo in our study – a difference that was not statistically significant. No safety signals were identified by the NRx Data Safety Monitoring Board (DSMB) during the NRx clinical trial or expanded access program and thus far, the NIH-sponsored TESICO DSMB has identified no new safety signals following enrollment of approximately 465 patients as of March 15, 2022. Similarly, no new safety signals were identified in the Expanded Access or Right to Try programs.

Extensive nonclinical and human safety data are in IND 149,152 and have been reviewed by the FDA. In pre- EUA meetings, the FDA has noted that toxicology data on file are sufficient for drug approval (REF ID 4650082). In brief, no specific toxicities have been identified across 4 nonclinical species and no lethal dose of VIP is identified in large mammals.

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Table 1 identifies the current safety database available for intravenous aviptadil in the treatment of COVID-19 Respiratory Failure.

Table 1: Available Safety Database for Intravenous Aviptadil in treatment of COVID-19

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As of March 15, 2022 across the clinical, expanded access and Right to Try programs, we estimate more than 850 patients with COVID-19 had been dosed with ZYESAMI. Of these, we estimate over 750 patients with Critical COVID-19 received at least one intravenous infusion of ZYESAMI. Such patients were being treated in ICUs or within a critical care setting. Physicians and other healthcare personnel were briefed on the use of the drug and the potential for adverse reactions of hypotension and diarrhea. Overall, the safety profile of ZYESAMI has been generally consistent across studies and has been manageable in a critical care setting.

Clinical Trials of Aviptadil in other lung conditions

Aviptadil’s mechanism is promising to help address other lung diseases, including Acute Respiratory Distress (“ARDS”) that is not due to COVID, and other acute and non-acute lung conditions. ARDS accounts for about 200,000 cases in the US. Clinical trials of aviptadil in preparations not formulated by NRx have been conducted and reported by others and are documented in the aviptadil Investigational Medicinal Products Dossier (“IMPD”). We are optimistic that the inhaled form of the drug may show benefit in other lung conditions as well. Phase II studies conducted in the 2008-time frame demonstrated statistically and clinically-significant benefits in the treatment of Sarcoidosis and brief changes in pulmonary arterial pressure in patients with Pulmonary Hypertension. Although initial trials in the treatment of pulmonary fibrosis failed, we intend to further explore treatment of both pulmonary and cystic fibrosis. In addition, we intend to explore other acute and/or chronic lung injury diseases.

ZYESAMI (Aviptadil) Mechanism of Action

Understanding the mechanism of VIP involves a basic understanding of how the lung transmits oxygen from the air to the blood and carbon dioxide from the blood back to the air. The large airways of the lung (bronchi) branch into smaller units (bronchioles), finally ending in miniscule sacs (alveoli) where oxygenation happens. Alveoli are only able to stay open

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because they are lined with a detergent-like fluid called surfactant and it is the surface tension of this fluid that allows alveoli to stay open, just like the detergent in a soap bubble allows a miniscule drop of water to maintain its structure. Without surfactant, the lung is incapable of oxygenating, causing a lethal condition called “Respiratory Distress.”

Copyright © 2020: NeuroRx, Inc., all rights reserved

Surfactant is produced by a small population of cells that comprise only 5% of the lining of the lung, called “Alveolar Type II” (“ATII”) cells. These ATII cells nourish the 95% of the lung cells that are largely passive in their function. ATII cells are specifically targeted by the coronavirus because they have a specific receptor on their surface (“ACE2”) that binds to the spike of the virus. Once the virus binds to the ACE2-receptor, it enters the cell, takes over the nucleus of the cell and makes millions of copies of itself. The virus causes the cell to make inflammatory cytokines, which have lethal effects throughout the body. The virus ultimately causes the cell to rupture (cytopathy), thus releasing millions of virus particles that go on to infect more ATII cells and other cells elsewhere in the body.

VIP’s potential mechanism may be uniquely targeted to protect the ATII cell. Every species of mammal makes an identical form of VIP, suggesting that it has been essential for protecting the lung throughout evolution. In animal models, VIP protects the lung against smoke injury, against acid and other caustic chemicals, and against various infections. It does so by binding to a specific receptor on the ATII cell (“VPAC1”). In the context of the coronavirus, as illustrated in a manuscript by Jonathan Javitt and Jihad G. Youssef, VIP blocks the replication of the SARS-CoV-2 virus in the ATII cell and the production of cytokines, prevents cell death and increases the cell’s production of surfactant.

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VIP in detail

As life evolved from aquatic to terrestrial environments, the respiratory epithelium — responsible for exchange of oxygen and carbon dioxide — was required to adapt from contact with a nontoxic aqueous environment to constant contact with atmospheric gasses that are rapidly toxic to epithelial cells. This was achieved via the development of a surfactant layer that lines the air sacs of the lung and both protects the pulmonary epithelium from direct exposure to air while simultaneously maintaining patency of the air sac by creating the biological equivalent of a soap bubble inside each alveolus. The surfactant layer is maintained entirely by the ATII cell and dysfunction or death of this cell population rapidly leads to alveolar collapse. Indeed, the first pulmonary manifestations of COVID-19 are characterized by a ground glass appearance on chest x-ray, indicative of alveolar collapse accompanied by blood oxygen desaturation, well before the lung begins to fill with inflammatory transudates and debris.

COVID-19 pneumonitis and respiratory failure is caused by selective attack of the SARS-CoV-2 virus on ATII cells via their ACE2 surface receptors which are not present in alveolar type I cells (Figure 9). ATII cells occupy just 5% of the pulmonary lining but produce all of the surfactant required to maintain surface tension and achieve oxygenation. Viral replication triggers cytokine production and cytopathy (cell rupture), thus unleashing a lethal “cytokine storm.” Conventional anti-cytokine (particularly anti-IL6 monoclonal antibody “mAb”) drugs have only shown limited ability to absorb this cytokine load once produced, which is a possible explanation for their limited efficacy and in advanced forms of COVID-19.

The pleomorphic role of VIP in protecting the lung

Although named “Vasoactive Intestinal Peptide,” 70% of VIP is concentrated in the human lung, where it plays a number of protective roles. VIP has been conserved throughout evolution such that all mammals make VIP and there are no known variants. VIP plays a key role in human response to both inflammatory and caustic challenges to epithelium, particularly the pulmonary epithelium. The role of VIP in preventing or mitigating numerous forms of experimental lung injury is extensively documented and human trials have demonstrated an effect of VIP in treating ARDS related to sepsis, pulmonary Sarcoidosis, Pulmonary Hypertension, and various forms of asthma/allergy.

VIP binds to ATII cells via the VPAC1 surface receptor. Its pharmacokinetics are short-lived. Recent data from the Oswaldo Cruz Institute in Rio de Janeiro Brazil showed that VIP inhibits SARS-CoV-2 replication in infected human Calu-3 cells and monocytes. VIP significantly reduced the SARS-CoV-2 RNA synthesis, achieving 33% and 45% inhibition at 5 nM and 10 nM, respectively (Figure 10). VIP at 1 nM completely blocked the SARS-CoV-2-mediated cytopathic effect, as measured by LDH levels in the cell culture supernatant.

Conditioned media from infected monocytes treated with VIP was administered to SARS-CoV-2 infected Calu-3 cells and resulted in a 50% reduction of virus replication in these cells. This finding suggests that VIP induced monocytes to release antiviral factors which may increase the resistance of neighboring cells to SARS-CoV-2 growth.

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Figure 9: Infection of human type II cells with SARS-CoV. Human type II cells were cultured at an air-liquid interface so as to maintain their state of differentiation and infected with SARS-CoV-1. The viral particles (white arrows) are seen in vesicles near normal-appearing lamellar bodies and mitochondria. (courtesy of R Mason, National Jewish Hosp.)

Figure 10: Effect of VIP on inhibition of SARS-CoV-2 replication in Calu-3 cells with statistically significant inhibition seen at 1 and 5 nM concentration (left). Effect of VIP in preventing cytopathy as measured by supernatant LDH levels in SARS infected Calu-3 cells (right). Source: Temerozo (2020)

Inhibition of Cytokine Synthesis: There is an extensive literature on the role of VIP in blocking cytokine synthesis in the ATII cell and VIP is shown to reduce production of TNFα in both ARDS and Sarcoid. Infected monocytes and Calu-3 cells produce large amounts of IL-6, IL-8, TNFα, and MIF relative to uninfected cells (15,4,12, and 18 times more). Treatment with VIP resulted in 66%, 50%, 66%, and 50% reduction (respectively) in those proinflammatory cytokines in vitro, implying that VIP may offer critical protection to inflamed lungs infected by the coronavirus. As noted above, morbidity and mortality in COVID-19 is widely believed to be associated with release of inflammatory cytokines, particularly IL-6. Across all patients and sites of care in our study, those treated with placebo showed a ten-fold increase in blood IL-6 levels within 7 days of treatment, while those treated with ZYESAMI showed a 2-fold increase (P<.02). Preventing this rise in IL-6 was statistically correlated with improved survival in ZYESAMI- treated patients (P<.0001).

Preservation of Surfactant: If the mechanism of acute lung injury (“ALI”) in SARS-CoV-2 infection was driven by cytokine-induced inflammation alone, steroids and other anti-inflammatory drugs might be expected to have some salutary effect. Lung injuries seen in COVID-19 are increasingly recognized as similar to those in premature infants where loss of surfactant, secreted by ATII cells leads to demise of premature infants despite mechanical ventilation. VIP increases the incorporation of methyl-choline into phosphatidylcholine — the major component of pulmonary surfactant — by enhancing the activity of the enzyme choline-phosphate cytidylyltransferase.

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Inhibition of Cytopathy: In addition to empirical observations that VIP blocks coronavirus-induced cytopathy, there is substantial literature which demonstrates that VIP is a proven inhibitor of activation-induced perforin, as well as of granzyme B and therefore actively contributes to the reduction of deleterious proinflammatory and cell death-inducing processes, particularly in the lungs. Caspase-3, has been identified as a key mediator of apoptosis in mammalian cells via its role in cleaving a variety of substrate proteins and inducing DNA fragmentation. In animal models of ALI, caspase activity is significantly increased compared to its activity in normal lungs and VIP is shown to suppress caspase activation.

Supporting Data Suggestive of Biological Effect

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Phase I and II Clinical Data on the use of VIP in Pulmonary Disease

A Phase I study in patients with ARDS related to sepsis, a condition associated with high mortality and/or complications, demonstrated clinical improvement in seven of eight patients and long-term survival in six (with the seventh dying from an unrelated myocardial infarction). Additionally, there were meaningful reductions in circulating TNF-α and improvement in blood oxygenation while on ventilator (Youssef et. al. 2021).

Following this acute care finding in Phase I, the sponsor at the time (Biogen) elected to focus on chronic lung disease and initiated Phase II human studies in sarcoidosis, pulmonary fibrosis, and pulmonary hypertension. Substantial reduction in cough and dyspnea was documented in sarcoidosis with inhaled aviptadil four times daily. A significant reduction in TNF-α, release from bronchial washing T cells was measured, along with a statistically significant reduction in CD4/CD8 ratio, a well-accepted measurement of immune response. Intravenous safety data is detailed in the IMPD and is on file with the FDA.

In brief, the No Adverse Effect Level as accepted by the FDA is 200μg/kg/day. The doses of aviptadil contemplated in this study are less than 10μg/kg/day, yielding a 20x threshold between the contemplated dose and the lowest possible toxic dose. The IMPD documents numerous safety studies in normal volunteers and efficacy studies in aviptadil, showing that aviptadil has the potential to lower blood pressure and to cause diarrhea, both of which may be dose limiting side effects in some patients but are readily managed in an ICU / critical care setting.

Human Case-Control Study of VIP Association with COVID-19 Survival

Plasma levels of VIP are elevated in patients with severe forms of COVID-19, compared to normal controls and elevation in VIP is correlated with severity of COVID-19 inflammation (r2 0.16; P<.01; Figure 11, Temerozo 2020) A case-control study was undertaken at the Oswaldo Cruz Institute in Rio de Janeiro in 25 patients with critical COVID-19 and respiratory failure. VIP levels were correlated in survivors (n=12) vs. non-survivors (n=13) of those who received maximal intensive care with ventilation COVID-19 respiratory failure. A significantly higher level of VIP is documented among survivors (P<.05).

Figure 11: Case-control study (i.e., non-intervention study) of endogenous circulating VIP levels COVID-19 in survivors and non-survivors in a single ICU. Note the statistically significant higher level of circulating VIP among survivors (P<.05). Source: Temerozo (2020)

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Non-Clinical Safety Studies of Aviptadil Overview

We were granted rights to toxicology, clinical pharmacology and pharmacokinetics data assessed in humans and in four other species by Relief Therapeutics. These nonclinical data have been deemed by the FDA in written communication to be sufficient to support an NDA.

Relief Therapeutics’ predecessor company, Mondo Biotech, undertook development of aviptadil in partnership with Biogen and took joint advice from the FDA and EMEA. Three Type B meetings were conducted with the FDA between 2006 and 2010, which resulted in a complete package of nonclinical studies produced in four species (mice, rats, dogs, and primates) to support intravenous and inhaled use of aviptadil. Those studies, which have been filed under FDA IND 149,152 include pharmacokinetics, pharmacodynamics, safety pharmacology (cardiovascular), acute toxicity, repeat dose toxicity, reproductive toxicity, and local tolerance. The FDA has agreed in writing that all NDA-clearing non-clinical studies have been performed and has agreed to accept the non-clinical data on a rolling basis in advance of clinical safety and efficacy data.

Source and Manufacture of Drug Substance

Our initial source of drug substance for ZYESAMI of aviptadil was supplied by Bachem Americas (Torrance, CA). A Drug Master File (DMF)has been established with the FDA by Bachem Americas to which we have been granted Right of Reference. We contracted with Bachem Americas to supply 1 KG of aviptadil during the first quarter of 2021. We have additionally contracted with the Polypeptide Group to supply aviptadil. The Polypeptide Group’s material has not yet been qualified by the FDA for human use and this qualification is anticipated as part of our NDA for ZYESAMI. We have contracted with the Polypeptide Group for 7 KG of aviptadil and, as of the date of this annual report, 4 KG have been released to us.

On October 8, 2021, the Company submitted an updated manufacturing module to its IND that contained documentation confirming that Nephron Pharmaceuticals, Inc. is in a position to provide commercial supply of ZYESAMI. On November 8, 2021, the FDA communicated with the Company that the manufacturing update had been reviewed and that no “clinical hold” items had been identified (this is the regulatory language that allows an investigational product to be given to patients). This module will now be used as part of the FDA’s rolling review process supporting a potential NDA for ZYESAMI.

In November 2021, the Company announced receipt of the FDA’s response to NRx’s October 8, 2021 submission of updated manufacturing information for ZYESAMI. The completion of this review, without the imposition of any clinical hold by the FDA, enables NRx to distribute ZYESAMI, produced at commercial scale, under Good Manufacturing Practices (GMP) for clinical trials and other future purposes approved in future regulatory actions. NRx will continue working with the FDA to complete the chemistry, manufacturing, and controls (CMC) review that will ultimately be required for any potential drug approval.

The Company has initiated a parallel manufacturing process to provide a second source of supply in the US and to conform to EU and UK standards. In October 2021, the Company announced that a European Qualified Person (“QP”) audit was conducted, and no major deficiencies were identified, thus clearing ZYESAMI’s use in EU investigational programs. NRx is awaiting a QP Declaration that is required by the EU regulatory authorities for the release of ZYESAMI as an investigational drug in Europe. The audit was completed in preparation for submission of European Union (EU)-standard ZYESAMI to EU and United Kingdom health regulatory authorities. Under EU law, a QP Auditor is responsible for certifying that each batch of a medicinal product meets all required provisions when released from a manufacturing facility within the EU or imported into the EU.

Basis for Formulation and Initial Stability

Originally, aviptadil was supplied in normal saline for human use and, in this form, has demonstrated clinical benefit in open-label studies (Figure 12). The inventor, Dorian Bevec, MD, a former consultant to our Company, led the inhaled

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use trials for sarcoidosis, asthma/allergy, and pulmonary hypertension, and observed the intravenous Phase I trial. However, the lyophilized formulation that includes Polysorbate 80, sucrose, and mannitol is believed to result in peptide aggregation and was abandoned by Mondo Biotech in 2009. Addition of citrate buffer and EDTA causes decreased potency and purity by 28 weeks.

Figure 12: Purity and potency of aviptadil in saline vs buffer systems over 18 months

Bachem’s stress test data on aviptadil stated that aviptadil in saline is stable for at least 77 weeks at 5°C. These data were not successfully replicated by NRx using modern, validated chromatography techniques at two different cGMP manufacturers. In January 2021, we advised Relief Therapeutics that we were abandoning Relief’s original formulation approach and embarking on a new approach in conjunction with Nephron Pharmaceuticals and Nextar, Ltd. in order to develop a long-term stable liquid formulation of ZYESAMI.

Future approaches to manufacturing and delivery of ZYESAMI

Although we believe that we have created viable approaches to the delivery of ZYESAMI suitable for intravenous use, we continue to search for additional approaches that will render ZYESAMI more convenient for patients, including inhaled use in an outpatient setting. On August 2, 2021 we announced a development relationship with Mannkind, Inc. (“MNKD”) under which we will explore the use of MNKD’s Technosphere® platform for the formulation of ZYESAMI. This platform has successfully been implemented to develop an FDA-approved form of inhaled insulin (Afrezza^®) that is currently marketed in the U.S. and globally.

Digital Health Solutions for decentralized clinical trials of ZYESAMI

During the COVID pandemic, conduct of clinical trials evolved to include rapidly deployable capabilities to remotely manage challenges associated with traditional in-person monitoring, study site management and patient monitoring. As we contemplate future trials of inhaled ZYESAMI in the outpatient setting, we require solutions that track patient use of our inhaled medication. In addition, the Company expanded its digital technology capabilities to encompass remote tracking of pulse oxymetry after nebulized delivery of medication via the Company’s contract with PillTracker Ltd., a related party.

CNS Product Portfolio: Acute Suicidal Ideation and Behavior in Bipolar Disorder

Background of the CNS Portfolio

Our CNS 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 ongoing 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 Daniel Javitt’s original discovery, it was learned that NMDA inhibition is the mechanism by which ketamine, dextromethorphan, and other NMDA antagonists exert their antidepressant effects. Daniel Javitt

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subsequently made the seminal observation that when an NMDA antagonist, specifically 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. Daniel Javitt explicated the mechanism of this synergy 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.

NMDAR-based treatment for bipolar depression

NRX-101 is a dual-targeted sequential therapy regimen (the “NRx Pharmaceuticals Sequential Therapy”) consisting of an initial treatment with NRX-100 (intravenous ketamine) followed by 6-week treatment with NRX-101 (combined DCS and lurasidone). The treatment is intended for rapid stabilization of individuals with acute suicidal ideation and behavior related to acute exacerbation of depressive symptoms in individuals with bipolar disorder, followed by longer term stabilization to permit resolution of the crisis. The drug is intended for treatment of both depression and acute suicidal ideation and behavior (“ASIB”) in individuals with an acute depressive decompensation in bipolar disorder.

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 46,000 deaths in 2020 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 10-30 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, ECT, 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, and lurasidone) 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 lurasidone, 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 suicidality. In our Phase IIb/III registrational study, acutely suicidal and depressed bipolar patients will receive a single low dose of IV ketamine to determine clinical response. Patients who respond with an acute improvement of suicidality and depressive symptoms to ketamine (NRX-100), in a separate study will receive NRX-101 orally twice daily for up to six

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weeks to determine if NRX-101 may prolong the resolution of depressive symptoms and time to clinical relapse versus lurasidone.

Rationale for Developing NRX Sequential Treatment

NRX-100, an IV infusion of ketamine to induce acute response, is taken in conjunction with NRX-101, a fixed-dose combination oral capsule composed of DCS and lurasidone to maintain remission from acute suicidality in acutely depressed bipolar patients. Congruent with our strategy of applying innovative science to known molecules, the NRx Sequential Therapy takes advantage of the unique synergistic confluence of three FDA-approved drugs with long histories of safety: DCS, lurasidone and ketamine.

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. 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.

High-dose (>500 mg) DCS was subsequently shown to reduce persistent depressive symptoms in patients with MDD despite adequate 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 13), 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 depression in adults and pediatric patients (10-17 years old) as a monotherapy and as an adjunctive therapy with lithium or valproate in adults.

Ketamine HCl is a dissociative, rapid-acting general anesthetic for intravenous or intramuscular injection, approved for surgical anesthesia. Ketamine has been shown in multiple randomized clinical trials the potential to rapidly reduce depressive symptoms and also 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. While the long-term repeat use of ketamine for psychiatric indications may be concerning to some, 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.

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Figure 13: Effect of DCS on persistent depressive symptoms in MDD, when added to existing anti-depressants (Heresco-Levy et. al. 2013).

Preclinical observations

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.

NRX-101 Safety

Figure 14: Rodent neurotoxicity study showing “Olney lesions” induced by the NMDAR channel blocker MK-801 (light green regions). No significant neurotoxicity was observed for DCS.

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 14) 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.

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Figure 15. Relative effects of DCS and ketamine on rodent self-administration, showing a significant difference between ketamine and DCS, and no significant difference between DCS and saline. Source: Psychogenics,

Inc.

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 have been advanced indicating that such agents also bind to 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 15). 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.

NRx Pharmaceuticals 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 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.

Dosing: Target doses were used of 950 mg for DCS and 66 mg for lurasidone. Both compounds were titrated upwards over the initial 5-d of treatment. Flexible dosing was permitted to allow dose reduction for side effects, or dose increases for agitation.

Endpoints: 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.

Study results:

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 were 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=.032) in a last-observation carried forward (“LOCF”) analysis. In a parallel MMRM analysis, a statistical difference of p=.09 was observed between groups. In addition, there were no relapses during NRX-101 treatment (0/12, 0%) vs. 2 relapses

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in the lurasidone alone group (2/5, 40%). The between-group significance level of p=.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=.02) and for CGI-SS (p=.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 =.11; p=.15) on MMRM analysis.

Figure 16: Change in depression score during Stage 1 and Stage 2 of the STABIL-B study. All subjects improved significantly in Stage 1. In Stage 2, subjects assigned to NRX-101 showed no significant worsening of depression, or reversion toward pre-Study 1 baseline. By contrast, significant worsening was observed in the lurasidone alone group. The mean difference in BDM score through day 42 was 7.7 points (p=.032 between groups), which was considered a statistically large effect (d=1.60). Source: NRx Pharmaceuticals

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.

Study interpretation

Overall, these results support continued development of NRX-101 for maintenance of clinical benefit in both depression and suicidality following initial successful treatment with IV ketamine. Significant between group differences were observed on LOCF analysis for both depressive symptoms, which was the prespecified primary endpoint, and for suicidality, which was a pre-specified key secondary endpoint. For suicidality, significant LOCF differences were observed not only for formal suicidality ratings, but also for clinical impression, suggesting clinically meaningful effect.

Although the differences were not significant in the MMRM analyses, the magnitude of between-group differences suggested that a sample size of 72 subjects would be sufficient to achieve clinical significance given similar magnitude of effect. In addition, the study supported feasibility of the sequential NRX-100/ NRX-101 treatment approach and supported continued use of the combined DCS/lurasidone formulation.

Ongoing Phase IIb/III clinical trial

Our Phase IIb/III study is aimed at investigating the effects of NRx Pharmaceuticals Sequential Therapy with IV ketamine (NRX-100) following by combined DCS + lurasidone (NRX-101) vs. ketamine-lurasidone alone. 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., 2015 study and STABIL-B trial showing rapid remission of symptoms on initial ketamine treatment, followed by maintained improvement throughout the 6-week NRX-101 treatment period. The primary hypotheses are that NRX-101 will be superior to lurasidone alone in maintenance of remission following initial successful ketamine treatment, 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. The study is

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being conducted under a SPA with the FDA, and the treatment has been granted breakthrough status. The study’s targeted enrollment of 72 subjects aged between 18-65 who will be randomized 2:1 to NRX-101 vs. lurasidone. Recruitment was halted in February 2020 due to concerns about COVID-19. Because of this pause, and our upcoming readiness of commercial drug supply, we anticipation initiating a new study with the same protocol with this new drug supply in the second half of this year.

Clinical Objectives

Our clinical objective is to offer patients the clinical benefit of rapid reduction in symptoms of depression and suicidal ideation that has been observed with intravenous ketamine, while maintaining that benefit with a daily oral agent that does not have ketamine’s potential for abuse and psychosis, and/or required supervised administration. NRX-101 is designed to offer an oral, rapid-onset and sustained home-use therapy that can significantly extend ketamine’s proven anti-suicidal and antidepressant benefits without the drawbacks of ketamine.

We believe that NRX-101 possesses potential development advantages over competing solutions. These include:

​

Additional Potential Psychiatry Products

Our intellectual property estate enables us to pursue additional combinations of known molecules. The majority of patients with depression have 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, which we expect to pair a fixed dose combination of DCS with Mirtazapine, a currently-approved antidepressant. In the 2013 Phase II 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 continue 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

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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 in order 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.

BriLife Vaccine for COVID-19

​

On July 11, 2021, the Company entered into a Memorandum of Understanding (the “MOU”) with the Ministry of Defense of the State of Israel that granted NRx the right to negotiate an exclusive worldwide license to develop and market the BriLife^TM vaccine, which has been developed by Israel Institute for Biological Research (“IIBR”). However, after investigating the manufacturing requirements of the vaccine, the expected regulatory path for approval in Israel and the EU, the commercial opportunity, and the financial commitment required for development of the vaccine, the Company decided not to continue with the project. We plan to effect a transition in consultation with the IIBR. This decision was communicated to the IIBR in a letter dated March 20, 2022.

​

As part of the Company’s consideration of the vaccine project, the Company entered into a Shareholder Agreement, dated October 15, 2021 (the “Agreement”), with Shimshon Hen and David Sepiashvili, each an Israeli citizen (the “Consultants”), under which the Consultants agreed to provide certain consulting services, and which set out a framework for establishing a potential joint venture between the Consultants and the Company that would have been responsible for the development and commercialization of the BriLife vaccine. Pursuant to the terms of the Agreement, the Company issued an aggregate of 4,000,000 shares of the Company’s Common Stock to the Consultants on October 20, 2021 under the Company’s 2021 Omnibus Incentive Plan. The Company is evaluating its options with respect to the Consultants.

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Summary of NRx Material In-licensing Obligations

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NRX-100/101

Glytech Development and License Agreement (“Glytech DLA”)

We have entered into the Glytech DLA, dated May 2, 2016, which amended and restated an earlier agreement dated August 6, 2015, and which was further amended on four occasions by written agreements dated October 19, 2016, June 13, 2018, April 16, 2019 and December 31, 2020.

The License

Pursuant to the Glytech DLA, Glytech granted to NRx 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 August 6, 2022, (i) the value of the Glytech equity holdings in NRx (the “Glytech Equity”) has an aggregate liquidity 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). NRx believes the criteria have been met pending the registration of Glytech shares.

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.

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

NRx entered into an Exclusive License Agreement with SHMH, dated April 16, 2019 (the “SHMH License Agreement”).

The License

The SHMH License Agreement grants NRx 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) 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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Milestone Payments

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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 the Licensed Patents 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 any product that is covered by at least one Valid Claim in the country or region in which such product is manufactured or sold (a “Licensed Product”).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 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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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 judgement 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.

Aviptadil/ZYESAMI

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State University of New York License and Option Agreement

We have entered into a written License and Option Agreement as described below with the Research Foundation for the State University of New York (the “Foundation”), dated September 1, 2020 (the “SUNY License Agreement”).

The License

Pursuant to the SUNY License Agreement, the Foundation has granted to us a revocable, non-exclusive, worldwide license, without the right to sublicense, with royalties paid for two (2) years, to use Foundation Subject Matter (as defined below) to develop, manufacture and offer for sale products and/or services for the therapeutic treatment of COVID-19 in humans and/or COVID-19 associated respiratory failure. Although the license is non-exclusive, the Foundation has agreed in writing that it will not grant any other licenses to Foundation Subject Matter that would allow any third-party to manufacture or offer for sale products or services for the treatment of COVID-19 during the term of the SUNY License Agreement.

“Foundation Subject Matter” means the technical information and material that are owned by Foundation, and all other intellectual property, including scientific and clinical information and data, protocols, trademarks, and trade secrets associated with or relating to (a) the therapeutic uses of the Foundation Subject Matter to treat COVID-19 in humans and/or COVID-19 associated respiratory failure (the “Primary Field Use”) and (b) the therapeutic or prophylactic uses of the Foundation Subject Matter to treat other human pulmonary disorders, including adult respiratory distress syndrome (“ARDS”) and sepsis (the “Alternative Field Use”). Such technical information and materials include know-how, formulations, knowledge, compositions, methods, processes, and procedures pertaining to the isolation, preparation, formulation, and/or administration of VIP for the treatment of a human disorder, which includes the IND application entitled “Vasoactive Intestinal Peptide (VIP) in the Adult Respiratory Distress Syndrome”, Hussein Foda, MD, Investigator; State University of New York at Stony Brook, Sponsor.

The term of the SUNY License Agreement is two (2) years from the date of the agreement (the “Term”) during which period, the parties are expected to negotiate a superseding royalty-bearing license for the Primary Field Use. The royalty rate and other terms and conditions contained in any such superseding license will be negotiated by the parties taking into

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account the prevailing circumstances and consistent with industry standards. If the parties are unable to reach agreement on the terms and conditions of the superseding license, the current license will terminate at the end of the Term unless otherwise agreed.

The Option

The SUNY License Agreement also grants an exclusive option to NRx to negotiate for a commercial royalty-bearing, worldwide license with the right to sublicense, to manufacture and offer for sale products and/or services that encompass the Foundation Subject Matter for the Alternative Field Use. During the Term, the Foundation has agreed to refrain from offering any commercial rights whatsoever in Foundation Subject Matter for the Alternative Field Use to any third party. However, if NRx exercises its option and the parties are unable to agree to terms and conditions for a royalty bearing commercial license within 60 days, the option will automatically terminate and NRx will have no rights to Foundation Subject Matter in the Alternative Field Use.

NRx Obligations

The SUNY License Agreement imposes certain obligations on NRx in order to maintain the license, including the following: