NRx Responds to Relief’s Allegations of January 14, 2022

Rhea-AI Summary

NRx Pharmaceuticals (NRXP) has responded to allegations by Relief Therapeutics concerning false statements and failure to provide financial records. NRx asserts that it has not accused Relief's management of criminal behavior, clarifying misunderstandings around previous statements. Asserting compliance, NRx indicates that it provided over 1,000 pages of financial documents before the mediation date. NRx anticipates mediation on February 22, 2022, to address claims of breach of contract by Relief, arguing that the latter's accusations are attempts to distract from its obligations under their collaboration agreement.

Positive

• NRx provided over 1,000 pages of financial records to Relief prior to mediation.
• NRx anticipates mediation to resolve disputes with Relief Therapeutics concerning contractual obligations.

Negative

• Relief's allegations indicate a potential legal battle that could distract from NRx's primary business focus.
• Claims of false statements can damage NRx's reputation and investor confidence.

• Neither NRx nor Jonathan Javitt accused current Relief management or board of a criminal past. The lawsuit identifies FINRA actions against Dr. Sevelraju, prior securities investigation, and civil fines against Dr. John Paul Waymack, and a prior securities fraud conviction, incarceration, and SEC fines against Adam Gottbetter.
  
• NRx provided all financial records to Relief on December 6, 2021, yet Relief advised the SEC on December 16, 2021, that it received no records from NRx.
• NRx looks forward to meeting Relief in mediation on February 22, 2022.
  

RADNOR, Pa., Jan. 14, 2022 (GLOBE NEWSWIRE) -- NRx Pharmaceuticals (NASDAQ: NRXP), a clinical-stage biopharmaceutical company, responded to today’s press release issued by Relief Therapeutics.

Allegations of securities violations and criminal behavior

Relief has accused NRx and its CEO of issuing false and misleading statements about the past actions of Relief’s Board and Management. Relief has clearly misread those statements. At no time has NRx accused any member of Relief’s board of current or past criminal activity. NRx has documented past history of FINRA disciplinary action against Dr. Raghuram Selvaraju, which may readily be verified on the FINRA Brokercheck website¹. At least one of those disciplinary events may be connected to Selvaraju’s former association in his role with TYME Technologies with Adam Gottbetter, who was ultimately convicted of securities fraud, incarcerated, fined by the SEC, and banned from the penny stock industry for life.²³ Mr. Gottbetter introduced himself to NRx as Relief’s head of mergers and acquisitions. The complaint filed by NRx also identifies Relief’s Regulatory Consultant, John Paul Waymack, MD, ScD, as having been investigated by the Israel Securities Agency (ISA), settled for civil fines with the ISA, and having pled his fifth amendment rights before the US SEC in connection with Kitov Pharmaceuticals.⁴⁵ NRx further notes that Peter DeSvastich, who was a founding director of Relief’s board, similarly served as Chairman of TYME Technologies and worked with Mr. Gottbetter and Dr. Selvaraju in that capacity.

Allegations of failure to deliver financial records

Relief has alleged that NRx failed to deliver promised detailed financial records in time for Relief to attend the mediation on January 5, 2022, to which Relief acknowledges it committed to attend. Relief acknowledged receipt on December 6, 2021, of more than 1000 pages of detailed financial information to support research and development costs associated with the development of ZYESAMI. This information was delivered more than 30 days in advance of the January 5, 2022 mediation date. Yet, inexplicably on December 16, 2021, Relief filed a form 20F with the US SEC in which Relief stated (P. 66) over the signatures of Mr. Weinstein and Dr. Selvaraju that “we note that we have not received invoices from NeuroRx that are anywhere close to the amounts that NeuroRx claims are allegedly due. Relief continues to have no idea of how the amount allegedly owed that is set forth in NRx’s SEC filings are calculated.”

The crux of the matter

Relief persists in issuing false and misleading press releases in order to attempt to obscure several basic truths, as outlined in NRx’s complaint before the New York State Supreme Court.

Rather than fund the development of ZYESAMI (aviptadil) as required by the collaboration agreement, Relief breached and repudiated its obligations under the agreement and resorted to malicious defamation of NRx and its CEO in order to distract from a simple breach of contract matter.

NRx looks forward to mediating this matter on February 22, 2022.

About NRx Pharmaceuticals

NRx Pharmaceuticals (NRx) draws upon more than 300 years of collective, scientific, and drug-development experience to bring improved health to patients. The Company is developing the BriLife™ Covid vaccine, developed by the Israel Institute for Biological Research, under an exclusive license from the Israel Ministry of Defense. NRx is additionally developing ZYESAMI® (aviptadil) for patients with COVID-19, and has been granted Fast Track designation by the US Food and Drug Administration (FDA), and is currently undergoing phase 3 trials funded by the US National Institutes of Health, the Biomedical Advanced Research and Development Authority (BARDA) of the US Department of Health and Human Services, and the Medical Countermeasures program, part of the US Department of Defense. The FDA has additionally granted Breakthrough Therapy Designation, a Special Protocol Agreement, and a Biomarker Letter of Support to NRx for NRX-101, an investigational medicine to treat suicidal bipolar depression. NRX-101 is currently in Phase 3 trials, with readouts expected in 2022.

NRx is led by executives who have held senior roles at Allergan, J&J, Lilly, Novartis, Pfizer, and the US FDA. NRx is chaired by Prof Jonathan Javitt, MD, MPH, who has held leadership roles in six biotechnology startup companies with public exits and been appointed to advisory roles in four US Presidential Administrations. The NRx board includes Dr. Sherry Glied, former US Assistant Secretary for Health (ASPE), Daniel E. Troy, JD, former Chief Counsel of the US FDA, Chaim Hurvitz, former director of Teva and President of the Teva International Group, and General H.R. McMaster, Ph.D. (US Army, Ret.) the 26th United States National Security Advisor.

Cautionary Note Regarding Forward-Looking Statements

This announcement of NRx Pharmaceuticals, Inc. includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the US Private Securities Litigation Reform Act of 1995, which may include, but are not limited to, statements regarding our financial outlook, product development, business prospects, and market and industry trends and conditions, as well as the Company’s strategies, plans, objectives, and goals. These forward-looking statements are based on current beliefs, expectations, estimates, forecasts, and projections of, as well as assumptions made by, and information currently available to, the Company’s management.

The Company assumes no obligation to revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Accordingly, you should not place reliance on any forward-looking statement, and all forward-looking statements are herein qualified by reference to the cautionary statements set forth above.

CORPORATE CONTACT:
Whit Clay – Co-CEO, Sloane & Company
wclay@sloanepr.com 

INVESTOR RELATIONS:
egoldstein@lifesciadvisors.com 

^{______________________________
1} RAGHURAM SELVARAJU - Broker at H.C.WAINWRIGHT & CO., LLC (finra.org)
² https://www.justice.gov/usao-nj/pr/new-york-securities-lawyer-and-owner-registered-broker-dealer-sentenced-18-months-prison#:~:text=Gottbetter%2C%2046%2C%20of%20New%20York,today%20in%20Newark%20federal%20court. 
³ https://www.sec.gov/litigation/admin/2015/34-75266.pdf
⁴ https://content.edgar-online.com/ExternalLink/EDGAR/0001213900-20-007156.html?hash=06cb54d27ada7d789196b7ba35c32ca2cccfcfeb0bae64ca9ad33c6ee9a4af9c&dest=F20F2019EX2-21_KITOV_HTM#F20F2019EX2-21_KITOV_HTM
⁵ https://www.sec.gov/litigation/litreleases/2018/lr24271-application.pdf

FAQ

What allegations did Relief Therapeutics make against NRx Pharmaceuticals?

Relief Therapeutics accused NRx and its CEO of issuing false and misleading statements regarding the past actions of Relief's Board and Management.

What was NRx Pharmaceuticals' response to Relief's accusations?

NRx Pharmaceuticals clarified that it has not accused any Relief management members of criminal activity and that their statements were misinterpreted.

When is the mediation between NRx Pharmaceuticals and Relief Therapeutics scheduled?

The mediation is scheduled for February 22, 2022.

Did NRx Pharmaceuticals deliver the requested financial records to Relief?

Yes, NRx provided over 1,000 pages of detailed financial records to Relief on December 6, 2021.

What is the significance of the lawsuit between NRx and Relief?

The lawsuit centers around allegations of breach of contract by Relief, as well as defamation claims from NRx in response to Relief's accusations.