NRx Pharmaceuticals secures $16 million in financing

RADNOR, Pa. - NRx Pharmaceuticals, Inc. (NASDAQ:NRXP), a clinical-stage biopharmaceutical company, has announced the procurement of up to $16 million in convertible debt financing from an institutional investor. The capital raised will fund the 2024 New Drug Applications for its leading products, NRX-100 and NRX-101, and will also allow the company to retire existing debt from Streeterville Capital.

The financing arrangement includes a settlement with Streeterville Capital, where all claims will be resolved from the proceeds of this new financing. This move is expected to streamline the company's balance sheet and reduce its annual interest costs.

The notes carry a 6% annual interest rate with a 15-month term and are convertible into shares of NRx Pharmaceuticals' common stock. Investors will also receive warrants equivalent to half of their investment, exercisable into common stock shares. Both the conversion price of the notes and the exercise price of the warrants are subject to customary adjustments.

Jonathan Javitt, Chairman and Chief Scientist of NRx Pharmaceuticals, expressed optimism about the investment, highlighting the potential of the company's drugs to meet significant medical needs in patients with suicidal depression. Amin Nathoo, Principal at Anson Funds, also noted the promising nature of NRx Pharmaceuticals' pipeline.

The company's NMDA platform focuses on treating central nervous system disorders, including suicidal bipolar depression, chronic pain, and PTSD. NRx Pharmaceuticals has been granted Fast Track Designation by the FDA for the development of ketamine (NRX-100) as part of a protocol to treat patients with acute suicidality.

EF Hutton LLC served as the exclusive placement agent for the financing. The securities involved have not been registered under the Securities Act of 1933 and are subject to certain restrictions on resale.

This financing announcement is based on a press release statement and does not constitute an offer to sell the securities mentioned. The company has an obligation to file a Current Report on Form 8-K with the U.S. Securities and Exchange Commission to further detail the terms of the notes and warrants.

In other recent news, NRx Pharmaceuticals is facing the risk of Nasdaq delisting due to failure to meet the Market Value of Listed Securities requirement. The pharmaceutical company now has until February 2025 to regain compliance. In a strategic move, NRx has plans to partially spin off its subsidiary, Hope Therapeutics, to advance business objectives.

The company has made substantial progress in its clinical trials and financial operations, reporting a reduction in net loss from operations by 41% year-over-year and improving access to working capital by $8 million. Additionally, NRx Pharmaceuticals has announced plans to file New Drug Applications for two leading drug candidates, NRX-101 and NRX-100, in 2024.

In another development, NRx Pharmaceuticals received clearance for the spinoff of 49% of its subsidiary, HOPE Therapeutics, allowing NRx shareholders to partake in potential value creation. The company also reached an agreement with the FDA on an initial Pediatric Study Plan for NRX-100, a treatment for suicidal depression in adolescents.

The company has outlined potential revenue streams and paths to profitability by 2025, including potential revenue from the operation of HOPE Therapeutics-branded clinics and sales of NRX-100 and NRX-101, pending FDA approval. These are the recent developments from NRx Pharmaceuticals.

InvestingPro Insights

As NRx Pharmaceuticals, Inc. (NASDAQ:NRXP) secures convertible debt financing to advance its drug applications, a glimpse into the company's financial health is provided by InvestingPro. The market cap of NRXP stands at $21.99 million, indicating the size of the company in the biopharmaceutical landscape.

Despite the optimism expressed by the company's leadership regarding its drug pipeline, the real-time data reflects some challenges. NRXP's price-to-earnings (P/E) ratio is currently negative at -0.64, and the adjusted P/E ratio for the last twelve months as of Q1 2024 is also negative at -0.9, underscoring the company's lack of profitability in the recent period.

InvestingPro Tips reveal that NRXP is quickly burning through cash and suffers from weak gross profit margins. These factors, combined with the fact that short-term obligations exceed liquid assets, present a potential risk for investors considering the company's financial stability. Analysts do not anticipate NRXP will be profitable this year, which aligns with the negative return on assets of -200.56% for the last twelve months as of Q1 2024. The stock performance has also been lackluster, with a 6-month price total return of -58.99%.

For investors seeking further insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/NRXP, which could offer a deeper understanding of NRXP's financial position and future prospects. As of now, the InvestingPro product includes a total of 9 tips for NRXP, providing a more comprehensive analysis for those interested in the company's performance and outlook.

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