NRx Pharmaceuticals, Inc. Announces Pricing of $1.5 Million Underwritten Public Offering of Common Stock Together with investor Commitment for Additional $1 million
- NRx Pharmaceuticals priced its public offering at $0.30 per share, generating approximately $1.5 million in gross proceeds.
- The company plans to use the funds for working capital, general corporate purposes, and to service current debt obligations.
- The offering includes an option for underwriters to purchase additional shares, with EF Hutton LLC acting as the sole book-runner.
- An existing investor committed to investing $1 million on the same terms separately from the public offering.
- Chairman Jonathan Javitt emphasizes the strategic use of funds to extend the company's runway, launch HOPE Therapeutics, and service debt obligations.
- The offering is expected to close on February 28, 2024, pending customary closing conditions.
- None.
The pricing of NRx Pharmaceuticals' underwritten public offering at $0.30 per share, with aggregate gross proceeds of approximately $1.5 billion, is a significant financial event for the company. This capital raise is particularly noteworthy given the small price per share, which suggests a substantial increase in the number of shares outstanding and could indicate a highly dilutive event for current shareholders. The company's decision to avoid the use of warrants, which are often used to entice investors by offering the potential for additional purchase at a set price, is unconventional in the current market and signifies a strategic move to attract a certain investor base.
Furthermore, the commitment from an existing investor to inject an additional $1 million on the same terms is an affirmation of confidence in the company's prospects. The stated use of proceeds for working capital, general corporate purposes and servicing debt obligations in cash rather than stock is a strategic decision aimed at mitigating selling pressure on the company's securities. This move could potentially stabilize the stock price post-offering, which is a critical consideration for investors assessing the short-term and long-term implications of this capital raise.
The announcement by NRx Pharmaceuticals of its intent to use the net proceeds from the offering to launch HOPE Therapeutics is an indication of the company's strategic direction and its potential impact on the market. The development and commercialization of new therapies are pivotal moments for biopharmaceutical companies, often serving as catalysts for significant changes in market valuation. The anticipation of HOPE generating its first revenue by the end of Q2 2024 provides a clear timeline for investors and could influence market expectations.
It is also important to note the context in which this offering takes place. The biotechnology sector is known for its volatility and high cash burn rates, making the financial health and capital strategy of companies like NRx Pharmaceuticals critical to their ability to sustain operations and fund research and development activities. The company's emphasis on avoiding hedge fund transactions and warrant coverage is a strategic positioning that differentiates it from peers who often rely on such mechanisms for fundraising, which could affect investor perception and the company's reputation in the investment community.
The offering's reliance on a 'shelf' registration statement is a common legal mechanism that allows companies to prepare for capital raising activities in advance and then issue shares at opportune times. The effectiveness of the registration statement and the subsequent filing of a prospectus supplement with the SEC are standard regulatory steps that ensure transparency and legal compliance. These filings provide investors with detailed information about the offering, the company's financial status and risk factors, which are essential for making informed investment decisions.
In addition, the company's careful language to clarify that the press release does not constitute an offer to sell securities is a standard legal disclaimer to comply with securities law. This language underscores the importance of the formal prospectus in the offering process and serves to protect the company from potential legal claims related to the sale of securities.
EF Hutton LLC is acting as the sole book-runner for the offering.
In parallel, the company has received a commitment from an existing investor to invest
NRx Pharmaceuticals intends to use the net proceeds from the offering for working capital and general corporate purposes. The Company additionally plans to use the net proceeds from the offering to service current debt obligations, rather than conveying stock for that purpose.
"Investors have asked management to provide context for this transaction and other recent events," said Jonathan Javitt, the Company's Chairman. "Over the past two weeks, management has announced financing transactions that in aggregate create
The securities are being offered by the Company pursuant to a "shelf" registration statement on Form S-3 (File No. 333-265492), including a base prospectus, filed with the
The offering is being made only by means of a prospectus supplement and accompanying prospectus. A prospectus supplement describing the terms of the public offering will be filed with the SEC and will form a part of the effective registration statement. A preliminary prospectus supplement and accompanying prospectus relating to this offering have been filed with the SEC.
Copies of the prospectus supplement and the accompanying prospectus relating to this offering may be obtained, when available, on the SEC's website at http://www.sec.gov or by contacting EF Hutton LLC Attention: Syndicate Department, 590 Madison Avenue, 39th Floor,
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offer, if at all, will be made only by means of the prospectus supplement and accompanying prospectus forming a part of the effective registration statement.
About NRx Pharmaceuticals
NRx Pharmaceuticals is a clinical-stage biopharmaceutical company developing therapeutics based on its NMDA platform for the treatment of central nervous system disorders, specifically suicidal bipolar depression, chronic pain and PTSD. The Company is developing NRX-101, an FDA-designated investigational Breakthrough Therapy for suicidal treatment-resistant bipolar depression and chronic pain. NRx has partnered with Alvogen and Lotus around the development and marketing of NRX-101 for the treatment of suicidal bipolar depression. NRX-101 additionally has potential to act as a non-opioid treatment for chronic pain, as well as a treatment for complicated UTI.
NRx has recently announced plans to submit a New Drug Application for HTX-100 (IV ketamine), through Hope Therapeutics, in the treatment of suicidal depression, based on results of well-controlled clinical trials conducted under the auspices of the US National Institutes of Health and newly obtained data from French health authorities, licensed under a data sharing agreement. NRx was awarded Fast Track Designation for development of ketamine (NRX-100) by the US FDA as part of a protocol to treat patients with acute suicidality.
About HOPE Therapeutics, Inc.
HOPE Therapeutics, Inc. (www.hopetherapeutics.com) is a wholly owned subsidiary of NRX Pharmaceuticals focused on development and marketing of an FDA-approved form of intravenous ketamine for the treatment of acute suicidality and depression together with a digital therapeutic-enabled platform designed to augment and preserve the clinical benefit of NMDA-targeted drug therapy.
Notice Regarding Forward-Looking Statements
The information contained herein includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, among others, statements regarding the proposed public offering, and the timing of the offering. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as "may," "will," "should," "would," "expect," "plan," "believe," "intend," "look forward," and other similar expressions among others. These statements relate to future events or to the Company's future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company's control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company's current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's most recent Annual Report on Form 10-K and other filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC's website at http://www.sec.gov. Except as may be required by applicable law, the Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, whether as a result of new information, future events or otherwise.
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SOURCE NRx Pharmaceuticals, Inc.
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