What happened

Shares of NRx Pharmaceuticals (NASDAQ:NRXP) were trading 70.1% higher as of 11:58 a.m. EDT on Thursday after the company announced that it had validated a formulation for COVID-19 drug candidate Zyesami that provides at least one year of stability. NRx also said that it has "achieved a 30-to-50 fold increase" in the manufactured lot size of the drug.

So what

Investors were obviously excited by NRx's news -- but why was the biotech company's update so well received?

Earlier formulations of Zyesami were only stable for a few weeks. That held the potential to create major headaches for hospitals since they wouldn't be able to keep much inventory of the drug in stock. Also, NRx's initially small manufacturing lot size meant higher production costs.

Healthcare professionals providing care to patients in hospital beds.

Image source: Getty Images.

It appears the company has now resolved those issues. As a result, NRx will be able to relaunch its programs that allow Zyesami to be offered on an investigational basis to COVID-19 patients at the highest risk levels who don't have another therapeutic alternative.

Now what

The next goal for NRx will be to win an emergency use authorization (EUA) for Zyesami. The company applied to the Food and Drug Administration for an EUA in June. It also recently reported positive data that indicates that Zyesami could help prevent the sudden rise in inflammatory cytokines referred to as cytokine storms that are linked to severe cases of COVID-19.

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