NRx Pharmaceuticals Withheld COVID-19 Drug Approval Info from Investors, Class Action Alleges
Dal Bosco v. NRx Pharmaceuticals, Inc. et al.
Filed: January 18, 2022 ◆§ 1:22-cv-00066
A class action alleges NRx Pharmaceuticals was not forthcoming to investors with regard to the prospects of a purported COVID-19 treatment being approved for emergency use.
NRx Pharmaceuticals faces a proposed class action that alleges the company was not forthcoming to investors with regard to the prospects of a purported COVID-19 treatment being approved for emergency use by the U.S. Food and Drug Administration.
The 18-page case claims the clinical-stage small molecule pharma company made false and/or misleading statements, and/or failed to disclose, to investors that its FDA emergency use authorization application for the COVID-19 respiratory failure drug Zyesami contained “insufficient data” on the treatment’s potential benefits and risks. The lawsuit also alleges NRx falsely and/or misleadingly withheld from investors the fact that the FDA was thus unlikely to approve the Zyesami emergency use authorization in its present form.
The foregoing, the lawsuit says, caused NRx’s stock price to drop more than 25 percent per share on November 5, 2021, injuring investors financially.
“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” the case claims.
The filing describes Zyesami as an investigational pre-commercial drug designed to treat COVID-19-related respiratory failure. Per the suit, NRx announced in June 2021 that it had filed an emergency-use application for Zyesami with the FDA, upon whose approval the drug could be used to treat critically ill COVID-19 patients suffering from respiratory failure, according to the filing.
On November 4, 2021, however, NRx stated in a press release that the FDA had declined to approve Zyesami for emergency use due to there being insufficient data with regard to the drug’s known and potential benefits and risks, the suit relays. Upon this news, NRx’s share price fell 25.45 percent on November 5, 2021, the case says.
As the lawsuit tells it, NRx and its co-defendants made throughout the relevant time period “various untrue statements of material facts” amid an apparent “plan, scheme, conspiracy and course of conduct” intended to “deceive the investing public” and artificially inflate and maintain the company’s stock price.
“Information showing that Defendants acted knowingly or with reckless disregard for the truth is peculiarly within Defendants’ knowledge and control,” the case says of NRx’s individual co-defendants. As the senior managers and/or directors of NRx, the Individual Defendants had knowledge of the details of NRx’s internal affairs.”
The lawsuit looks to represent all persons and entities who purchased or otherwise acquired NRx securities between June 1 and November 4, 2021.
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