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Fri. 14 Jan 2022, 2:36pm ETBenzinga
In: News, Legal

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.