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Why NRx Pharmaceuticals Stock Is Sinking Today

By Keith Speights – Aug 19, 2021 at 11:44AM

Key Points

  • NRx plans to sell more than 2.7 million shares and stock options to investors in a private placement deal.
  • The offering is expected to raise around $30 million in gross proceeds, which NRx intends to use to advance its pipeline candidates and market COVID-19 drug Zyesami.

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The company announced a price placement for more than 2.7 million new shares and stock options.

What happened

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.

So what

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.

$1 bill folded into an arrow pointing down.

Image source: Getty Images.

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.

Now what

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.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

NRx Pharmaceuticals, Inc. Stock Quote
NRx Pharmaceuticals, Inc.
$1.42 (2.58%) $0.04

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