RADNOR, Pa. - NRx Pharmaceuticals, Inc. (NASDAQ:NRXP), a clinical-stage biopharmaceutical company, announced today the pricing of its public offering of common stock at $0.30 per share, aiming to raise approximately $1.5 million before fees and discounts. The offering is expected to close tomorrow, subject to customary closing conditions.
The company has also granted underwriters a 45-day option to purchase up to an additional 750,000 shares to cover any over-allotments. EF Hutton LLC is serving as the sole book-runner for the transaction.
Concurrently, NRx Pharmaceuticals has secured a commitment from an existing investor to contribute an additional $1 million under the same terms, in a separate arrangement.
Funds from this offering are designated for general corporate purposes, including working capital. The company also plans to allocate part of the proceeds to service existing debt obligations in cash, which is anticipated to alleviate selling pressure on its securities.
Jonathan Javitt, Chairman of NRx Pharmaceuticals, explained that these financial moves are expected to generate $7.5 million in working capital with minimal shareholder dilution. He highlighted the absence of hedge funds and warrants in the transaction, which is unusual in the current biotech market, and expressed gratitude towards EF Hutton for attracting fundamental retail investors.
The capital is projected to support the company beyond upcoming clinical trial readouts and assist in the launch of HOPE Therapeutics. Javitt also mentioned the potential for HOPE Therapeutics to start generating revenue by the end of the second quarter of 2024.
NRx Pharmaceuticals is known for developing therapies targeting central nervous system disorders, and its product NRX-101 has received FDA Breakthrough Therapy designation for suicidal bipolar depression and chronic pain. The company is also advancing its ketamine-based treatment, HTX-100, for suicidal depression.
The securities are offered pursuant to a shelf registration statement filed and declared effective by the SEC in June 2022. The prospectus supplement and accompanying prospectus detailing the offering terms will be filed with the SEC.
The information is based on a press release statement.
InvestingPro Insights
In light of NRx Pharmaceuticals' recent public offering, current and potential investors might find the following data and insights from InvestingPro particularly illuminating. As of the latest metrics, NRXP has a market capitalization of $36.13 million, indicating the size of the company in the competitive biopharmaceutical landscape. The company's performance over the last three months has been robust, with a 32.88% price total return, reflecting a positive investor sentiment in the short term.
Nevertheless, it's important to consider that analysts do not expect NRx Pharmaceuticals to be profitable this year, as indicated by one of the InvestingPro Tips. This aligns with the company's reported operating income, which is adjusted to a loss of $33.07 million for the last twelve months as of Q1 2023. Additionally, the firm's P/E ratio stands at -0.87, further underscoring the current lack of profitability.
Investors should also note that NRXP is navigating through some financial challenges. The company is quickly burning through cash and its short-term obligations exceed liquid assets, which could present liquidity risks. This is particularly relevant given the company's current efforts to raise capital and service its debt obligations.
For those interested in deeper financial analysis and additional insights, there are more InvestingPro Tips available, which can be explored at https://www.investing.com/pro/NRXP. These tips include details on valuation, cash flow yield, and debt levels, among others. For access to these comprehensive insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are a total of 11 InvestingPro Tips listed for NRXP, offering a broader view of the company's financial health and market potential.
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