Shares of NRx Pharmaceuticals (NRXP 2.58%) were sinking 18.9% as of 11:07 a.m. EDT on Thursday. The decline came after the drugmaker announced a private placement stock offering of more than 2.7 million shares and an equal number of stock options.
The share price for investors in NRx's private placement offering is $11. That's 21% below the closing price for the biotech stock on Wednesday. With this lower share price and the accompanying dilution in the value of existing shares, it's not surprising that NRx stock is falling today.
However, the company picked a pretty good time to issue new shares and options. Its share price jumped on Wednesday after NRx announced that the Data Safety Monitoring Board in a late-stage study of Zyesami combined with Veklury found no new safety issues.
The private placement is expected to raise gross proceeds of around $30 million. NRx Pharmaceuticals CEO Jonathan Javitt said that these proceeds will be used to advance its pipeline candidates and help transition COVID-19 drug Zyesami into commercialization pending regulatory approvals.
NRx's next major milestone could be U.S. Emergency Use Authorization for Zyesami. The company filed its EUA submission in May. Zyesami has already received EUA in the country of Georgia.