What happened
Shares of COVID-19 stock NRx Pharmaceuticals (NRXP -12.24%) fell 24% Monday after soaring last week.
So what
Last week, NRX Pharmaceuticals stock nearly tripled in response to a positive clinical trial readout for its lead candidate, Zyesami, and a potential solution to a serious logistics problem. On Monday, the stock was sliding back as investors realized the news that drove the stock through the roof last week isn't such a big deal.
Image source: Getty Images.
On July 19, NRx Pharmaceuticals rose after reporting positive biomarker data from a late-stage clinical trial with Zyesami. Patients given Zyesami exhibited significantly reduced immune system activity as measured by circulating cytokine levels.
High cytokine concentrations go hand in hand with inflammatory overreactions in the lungs that can make it impossible for severe CODID-19 patients to breathe. Unfortunately, this doesn't tell us anything about patient outcomes, which is of far greater importance to the FDA.
On July 22, the stock shot up again after the company told investors it validated a new commercial formulation that has a much better shelf life than Zyesami used in clinical trials. Unfortunately, proving clinical equivalence between the product the company plans to sell and the one used in trials isn't as easy as investors would like it to be. In fact, larger, more established pharmaceutical companies get tripped up on manufacturing issues like bioequivalence data all the time.
Now what
Trying to catch this falling knife doesn't seem like a great idea right now. If a pending emergency use authorization request for Zyesami doesn't receive a green light from the FDA, this company will have to go back to relying on NRX-101, an experimental drug for the treatment of suicidal bipolar depression. Readouts for an ongoing pivotal study with NRX-101 aren't expected until next year.
