Case 1:22-cv-00066-UNA Document 1 Filed 01/18/22 Page 1 of 18 PageID #: 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`CRISTIAN DAL BOSCO, Individually and on
`Behalf of All Others Similarly Situated,
`
`
`Plaintiff,
`
`
`
`
`
`Case No.
`
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`
`
`v.
`
`
`NRX PHARMACEUTICALS, INC.,
`JONATHAN C. JAVITT, and WILLIAM
`FRICKER,
`
`
`
`Defendants.
`
`CLASS ACTION COMPLAINT
`
`Plaintiff Cristian Dal Bosco (“Plaintiff”), individually and on behalf of all others similarly
`
`situated, by Plaintiff’s undersigned attorneys, for Plaintiff’s complaint against Defendants, alleges
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`the following based upon personal knowledge as to Plaintiff and Plaintiff’s own acts, and
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`information and belief as to all other matters, based upon, inter alia, the investigation conducted
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`by and through Plaintiff’s attorneys, which included, among other things, a review of the
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`Defendants’ public documents, conference calls and announcements made by Defendants, United
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`States (“U.S.”) Securities and Exchange Commission (“SEC”) filings, wire and press releases
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`published by and regarding NRx Pharmaceuticals, Inc. (“NRx” or the “Company”), analysts’
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`reports and advisories about the Company, and information readily obtainable on the Internet.
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`Plaintiff believes that substantial additional evidentiary support will exist for the allegations set
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`forth herein after a reasonable opportunity for discovery.
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`
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`1
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`Case 1:22-cv-00066-UNA Document 1 Filed 01/18/22 Page 2 of 18 PageID #: 2
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`NATURE OF THE ACTION
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`1.
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`This is a federal securities class action on behalf of a class consisting of all persons
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`and entities other than Defendants that purchased or otherwise acquired NRx securities between
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`June 1, 2021 and November 4, 2021, both dates inclusive (the “Class Period”), seeking to recover
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`damages caused by Defendants’ violations of the federal securities laws and to pursue remedies
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`under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and
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`Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
`
`2.
`
`NRx is a clinical-stage small molecule pharmaceutical company that develops
`
`various therapeutics for the treatment of central nervous system disorders and life-threatening
`
`pulmonary diseases. The Company’s products include, among others, ZYESAMI, an
`
`investigational pre-commercial drug for COVID-19 related respiratory failure.
`
`3.
`
`In June 2021, NRx announced that it filed an application with U.S. Food and Drug
`
`Administration (“FDA”) requesting Emergency Use Authorization (“EUA”) for ZYESAMI
`
`(Aviptadil-acetate) to treat critically ill COVID-19 patients suffering with respiratory failure (the
`
`“ZYESAMI EUA Application”).
`
`4.
`
`Throughout the Class Period, Defendants made materially false and misleading
`
`statements regarding the Company’s business, operations, and compliance policies. Specifically,
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`Defendants made false and/or misleading statements and/or failed to disclose that: (i) the
`
`ZYESAMI EUA Application contained insufficient data regarding the potential benefits and risks
`
`of ZYESAMI; (ii) accordingly, the FDA was unlikely to approve the ZYESAMI EUA Application
`
`in its present form; and (iii) as a result, the Company’s public statements were materially false and
`
`misleading at all relevant times.
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`
`
`2
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`5.
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`On November 4, 2021, NRx issued a press release “announc[ing] that the [FDA]
`
`has declined to issue an [EUA] for ZYESAMI® (aviptadil). The FDA stated that it was unable to
`
`issue the EUA at this time due to insufficient data regarding the known and potential benefits of
`
`the medicine and the known and potential risks of ZYESAMI in patients suffering from Critical
`
`COVID-19 with respiratory failure.”
`
`6.
`
`On this news, NRx’s stock price fell $2.27 per share, or 25.45%, to close at $6.65
`
`per share on November 5, 2021.
`
`7.
`
`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
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`significant losses and damages.
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`JURISDICTION AND VENUE
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`8.
`
`The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of
`
`the Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the
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`SEC (17 C.F.R. § 240.10b-5).
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`9.
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`This Court has jurisdiction over the subject matter of this action pursuant to 28
`
`U.S.C. § 1331 and Section 27 of the Exchange Act.
`
`10.
`
`Venue is proper in this Judicial District pursuant to Section 27 of the Exchange Act
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`(15 U.S.C. § 78aa) and 28 U.S.C. § 1391(b). NRx is headquartered in this Judicial District,
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`Defendants conduct business in this Judicial District, and a significant portion of Defendants’
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`actions took place within this Judicial District.
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`11.
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`In connection with the acts alleged in this complaint, Defendants, directly or
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`indirectly, used the means and instrumentalities of interstate commerce, including, but not limited
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`3
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`Case 1:22-cv-00066-UNA Document 1 Filed 01/18/22 Page 4 of 18 PageID #: 4
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`to, the mails, interstate telephone communications, and the facilities of the national securities
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`markets.
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`PARTIES
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`12.
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`Plaintiff, as set forth in the attached Certification, acquired NRx securities at
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`artificially inflated prices during the Class Period and was damaged upon the revelation of the
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`alleged corrective disclosures.
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`13.
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`Defendant NRx is incorporated in Delaware with principal executive offices
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`located at 1201 Orange Street, Suite 600, Wilmington, Delaware 19801. NRx’s common stock
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`and warrants trade in an efficient market on the Nasdaq Stock Market (“NASDAQ”) under the
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`trading symbols “NRXP” and “NRXPW”, respectively.
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`14.
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`Defendant Jonathan C. Javitt (“Javitt”) has served as NRx’s Chief Executive
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`Officer at all relevant times.
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`15.
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`Defendant William Fricker (“Fricker”) has served as NRx’s Chief Financial Officer
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`at all relevant times.
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`16.
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`Defendants Javitt and Fricker are sometimes referred to herein as the “Individual
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`Defendants.”
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`17.
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`The Individual Defendants possessed the power and authority to control the
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`contents of NRx’s SEC filings, press releases, and other market communications. The Individual
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`Defendants were provided with copies of NRx’s SEC filings and press releases alleged herein to
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`be misleading prior to or shortly after their issuance and had the ability and opportunity to prevent
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`their issuance or to cause them to be corrected. Because of their positions with NRx, and their
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`access to material information available to them but not to the public, the Individual Defendants
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`knew that the adverse facts specified herein had not been disclosed to and were being concealed
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`4
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`from the public, and that the positive representations being made were then materially false and
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`misleading. The Individual Defendants are liable for the false statements and omissions pleaded
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`herein.
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`18.
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`NRx and the Individual Defendants are collectively referred to herein as
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`“Defendants.”
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`SUBSTANTIVE ALLEGATIONS
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`Background
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`19.
`
`NRx is a clinical-stage small molecule pharmaceutical company that develops
`
`various therapeutics for the treatment of central nervous system disorders and life-threatening
`
`pulmonary diseases. The Company’s products include, among others, ZYESAMI, an
`
`investigational pre-commercial drug for COVID-19 related respiratory failure.
`
`20.
`
`In June 2021, NRx announced that it filed an application with FDA requesting EUA
`
`for ZYESAMI (Aviptadil-acetate) to treat critically ill COVID-19 patients suffering with
`
`respiratory failure.
`
`Materially False and Misleading Statements Issued During the Class Period
`
`21.
`
`The Class Period begins on June 1, 2021, when NRx issued a pre-market press
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`release announcing that it filed the ZYESAMI EUA Application with the FDA. The press release
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`stated, in relevant part:
`
`NRx [. . .] today announced it has filed an application with [FDA] requesting [EUA]
`for ZYESAMI™ (Aviptadil-acetate), to treat Critically Ill COVID-19 patients
`suffering with respiratory failure. Consistent with previously announced top-line
`data, the study identified a statistically significant increase in the likelihood that
`patients treated with ZYESAMI™ would be alive and free of respiratory failure at
`60 days, compared to those treated with placebo, and identified a significantly
`shorter median hospital stay.[] The clinical study report filed with FDA further
`documents statistically significant advantages for ZYESAMI™ on all major
`secondary endpoints.
`
`
`
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`5
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`“The patients enrolled in our study were in the ICU, having exhausted all approved
`treatments for COVID-19,” said [Defendant Javitt]. “We look forward to working
`as quickly as possible with the FDA in hopes of providing critically ill patients with
`a new medicine that will increase their chances of recovery and survival, enabling
`them to leave the hospital and return to their families significantly sooner.”
`
`22.
`
`On June 15, 2021, NRx issued a press release announcing, among other updates,
`
`
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`that positive data from its ZYESAMI™ (Aviptadil) Expanded Access Protocol (“EAP”) “are
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`Congruent with the Randomized Control Phase 2b/3 ZYESAMI™ (Aviptadil) Trial Data
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`Submitted to [FDA] in Support of [EUA]” and that the “EAP Data [is] to be Submitted to [the]
`
`FDA in Support of [the] EUA Filing[.]”
`
`23.
`
`On July 19, 2021, NRx issued a press release entitled, “NRx Pharmaceuticals
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`Presents Evidence ZYESAMI™ (aviptadil) Helps Prevent “Cytokine Storm” in Patients with
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`COVID-19.” The press release stated, in relevant part:
`
`
`
`
`
`***
`
`
`
`
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`The presentation identifies a statistically significant effect of ZYESAMI™
`(aviptadil) in preventing the sharp rise in cytokines, commonly associated with
`mortality in patients with COVID-19. In the recently-completed phase 2b/3 trial,
`patients treated with placebo experienced a statistically significant elevation in
`interleukin 6 (IL-6) cytokine levels, whereas those treated with ZYESAMI™ had
`a minimal increase in IL-6. Change in cytokine level was a prespecified endpoint
`of the study.
`
`
`
`The cytokine data were collected as part of the phase 2b/3 trial of ZYESAMI™
`(aviptadil) compared to placebo, in critically ill patients with COVID-19
`respiratory failure. The effect was noted across a diverse set of patients, suffering
`different levels of COVID-19 severity and treated in both tertiary care and
`community hospitals.
`
`NRx has submitted these findings to the US Food and Drug Administration (FDA)
`as a supplement to its pending application for Emergency Use Authorization,
`(EUA) and is submitting a biomarker letter of intent to the FDA as part of its
`biomarker program, authorized under the 21st Century Cures Act.
`
`“At a time when hospital admissions for COVID are rising worldwide, these
`placebo-controlled biomarker data suggest that aviptadil may play a critical role in
`preventing the sudden elevation of cytokines that is associated with mortality,” said
`
`
`
`6
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`[Defendant Javitt.] “This linkage between the clinical effect of aviptadil on survival
`and recovery and a measurable biologic change in cytokine levels provides a basis
`for seeking a biomarker-based regulatory path as envisioned by the 21st Century
`Cures Act. The lethal impact of “cytokine storm” is associated with mortality in a
`variety of lethal conditions including Acute Respiratory Distress Syndrome, a
`common cause of death in sepsis, and amniotic fluid embolus, a primary cause of
`maternal death during pregnancy.”
`
`NRx continues to respond to FDA information requests for additional data in
`support of the currently pending EUA application for ZYESAMI™ in treating
`critically-ill patients with COVID-19.
`
`24.
`
`On July 22, 2021, NRx issued a press release entitled, “NRx Pharmaceuticals
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`Announces First Successful Commercial Formulation for ZYESAMI™ (aviptadil), Enabling
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`Volume Manufacture, Shipping, and Stockpiling of COVID-19 Medication Subject to Regulatory
`
`Approval.” The press release stated, in relevant part:
`
`NRx [. . .] announced today it has validated the first commercial formulation of
`ZYESAMI™ (aviptadil) for
`intravenous use, allowing for high volume
`manufacture, with an anticipated one year or greater stability, under appropriate
`storage conditions. Simultaneously, NRx has achieved a 30-to-50-fold increase in
`its manufactured lot size of aviptadil, with a concurrent 90% reduction in the cost
`of its peptide supply. These two developments position NRx to potentially deliver
`millions of doses of ZYESAMI™ as potential regulatory approvals are obtained in
`various regions worldwide.
`
`“When we began developing aviptadil for treatment of COVID-19, we discovered
`that the original RLF-100 formulation and manufacturing method had only a few
`weeks of stability, leaving hospitals unable to stock the investigational medicine in
`pharmacies, and leaving aviptadil out of consideration for national strategic
`stockpiles. Moreover, the high cost of peptide and an inability to manufacture more
`than 100 grams a month limited the commercial utility of aviptadil,” said
`[Defendant Javitt]. “We have now turned the corner and can produce both the
`aviptadil peptide and finished medicine in million dose quantities. We have also
`developed and validated the first modern chromatography assays required to ensure
`the purity and stability of the drug product. The new formulation method and high-
`speed manufacturing process adapts to the fragile nature of vasoactive intestinal
`peptide.”
`
`
`
`The successful new formulation and manufacturing scaleup of ZYESAMI™ allows
`NRx to relaunch its Expanded Access and Right to Try programs as it continues to
`
`
`
`
`
`
`
`
`
`***
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`
`
`7
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`

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`Case 1:22-cv-00066-UNA Document 1 Filed 01/18/22 Page 8 of 18 PageID #: 8
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`seek Emergency Use Authorization in the United States. These programs are
`designed to afford patients at highest risk of death from COVID-19, and who have
`no other therapeutic options, the ability to access ZYESAMI™ on an
`investigational basis.
`
`25.
`
`On August 16, 2021, NRx issued a press release announcing a second quarter 2021
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`financial update. That press release quoted Defendant Javitt, who stated, in relevant part, that
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`“[w]e have continued to make substantial progress as a company with the filing of an EUA request
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`for ZYESAMI in the US on May 31st.”
`
`26.
`
`On August 17, 2021, NRx hosted an earnings call with investors and analysts to
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`discuss the Company’s Q2 2021 results (the “Q2 2021 Earnings Call”). During the scripted portion
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`of the Q2 2021 Earnings Call, Defendant Javitt stated, in relevant part:
`
`Given the urgency in finding new therapeutic options for the treatment of severe
`COVID-19, we have rapidly moved ZYESAMI for a robust clinical development
`plan consisting of one recently completed and three ongoing clinical trials. Data
`from a phase 2b/3 randomized controlled trial studying intravenous ZYESAMI in
`patients with critical COVID-19, has shown a statistically significant difference in
`the primary endpoint of patients being alive and free of respiratory failure at day
`60. These are patients who started out in the ICU when controlling for baseline
`severity and also controlling for whether they were treated in a tertiary versus a
`regional hospital.
`
`Without controlling for the site of care for the type of hospital, we were able to
`demonstrate a twofold increased odds of survival across all patients and all
`hospitals in the study at a statistically significant level. Moreover, the patients who
`received placebo demonstrated a tenfold increase in the level of IL-6 cytokine, that's
`the inflammatory cytokine that we discussed earlier by day seven, compared to only
`a twofold increase in IL-6 cytokine among those who are treated with ZYESAMI,
`irrespective of the site of care or the patient's baseline severity.
`
`Those who suffered this cytokine storm, as is commonly known, were more likely
`to die from COVID in the ICU than those who did not suffer this cytokine storm.
`This, the EUA submission that's pending before the FDA suggests that a significant
`biological effect was seen across all patients, a significant effect on survival was
`seen across all patients without regard to site of care, and the end points of whether
`patients have both survived and recovered by day 60 requires controlling for
`whether patients were hospitalized in tertiary care or community hospitals. The data
`has been submitted for peer review publication.
`
`
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`8
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`The findings in tertiary care hospitals with ZYESAMI neared the six fold difference
`in mortality and recovery that was observed in a 45 patient administratively
`controlled open-label study at the Houston Methodist Hospital, one of the nation's
`Top 10 Tertiary Care Hospitals. Based on these encouraging trials, the National
`Institutes of Health selected ZYESAMI and it's ACTIV-3b Critical Care clinical
`trial, also called TESICO.
`
`27.
`
`Further, when asked when the Company will “get EUA,” Defenadnt Javitt
`
`responded:
`
`Well, as biotech investors know, the approval conversation with FDA, it's a
`dynamic scientific interaction. And we're far from the only company in this EUA
`dialogue with FDA. But we're encouraged that FDA asked its first questions of us
`within a few weeks of our EUA submission. We continue to engage with FDA in
`providing additional statistical analyses in order to support the review, given the
`limited therapeutic options that are available to patients with critical COVID-19,
`we remain firm in our belief that the results of our Phase 2b/3 study demonstrates
`clearer and significant -- statistically significant improvement in patient survival
`and warranted grants of emergency use.
`
`28.
`
`The statements referenced in ¶¶ 21-27 were materially false and misleading because
`
`
`
`Defendants made false and/or misleading statements, as well as failed to disclose material adverse
`
`facts about the Company’s business, operations, and compliance policies. Specifically,
`
`Defendants made false and/or misleading statements and/or failed to disclose that: (i) the
`
`ZYESAMI EUA Application contained insufficient data regarding the potential benefits and risks
`
`of ZYESAMI; (ii) accordingly, the FDA was unlikely to approve the ZYESAMI EUA Application
`
`in its present form; and (iii) as a result, the Company’s public statements were materially false and
`
`misleading at all relevant times.
`
`The Truth Emerges
`
`29.
`
`On November 4, 2021, NRx issued a press release “announc[ing] that the [FDA]
`
`has declined to issue an [EUA] for ZYESAMI® (aviptadil). The press release stated, in relevant
`
`part:
`
`
`
`9
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`The FDA stated that it was unable to issue the EUA at this time due to insufficient
`data regarding the known and potential benefits of the medicine and the known and
`potential risks of ZYESAMI in patients suffering from Critical COVID-19 with
`respiratory failure. In its letter, the FDA noted that so far, it has reviewed safety in
`only 131 randomized patients treated with ZYESAMI. NRx will attempt to
`coordinate a review by the FDA of the 150 or more additional patients already
`treated with ZYESAMI in the NIH ACTIV-3b trial. Last week, the study’s Data
`Safety and Monitoring Board reviewed the ongoing NIH ACTIV-3b trial and found
`no new safety issues.
`
`“Yesterday, more than 1,500 Americans and many more around the world died
`lonely deaths from COVID-19, isolated from their loved ones in ICUs despite
`widespread vaccination and currently-available approved treatments,” said
`[Defendant Javitt.] “We believe that ZYESAMI has demonstrated a high degree of
`safety and a two-fold increase in the odds of surviving the ICU. Patients treated at
`the nation’s top hospitals with ZYESAMI had a four-fold increase in odds of
`survival. We will work actively with the FDA to deliver the data it has requested
`so that we may offer those patients another chance at life, and have asked the FDA
`for a Type A meeting that will include the experience of physicians who have
`witnessed the effects of our medicine firsthand and the experience of patients who
`are alive today because they were given one last chance at life. In the meantime,
`we are actively engaged with regulators and potential partners on multiple
`continents to advance ZYESAMI towards regulatory approval. Now that we have
`completed the Chemical and Manufacturing Controls (CMC) required for
`traditional approval pathways, we will move towards filing for accelerated approval
`based on the unexpectedly strong biomarker results seen in our two clinical trials.”
`
`30.
`
`On this news, NRx’s stock price fell $2.27 per share, or 25.45%, to close at $6.65
`
`per share on November 5, 2021.
`
`31.
`
`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.
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`PLAINTIFF’S CLASS ACTION ALLEGATIONS
`
`32.
`
`Plaintiff brings this action as a class action pursuant to Federal Rule of Civil
`
`Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or otherwise
`
`acquired NRx securities during the Class Period (the “Class”); and were damaged upon the
`
`revelation of the alleged corrective disclosures. Excluded from the Class are Defendants herein,
`
`
`
`10
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`the officers and directors of the Company, at all relevant times, members of their immediate
`
`families and their legal representatives, heirs, successors or assigns and any entity in which
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`Defendants have or had a controlling interest.
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`33.
`
`The members of the Class are so numerous that joinder of all members is
`
`impracticable. Throughout the Class Period, NRx securities were actively traded on the
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`NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time and can
`
`be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds or
`
`thousands of members in the proposed Class. Record owners and other members of the Class may
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`be identified from records maintained by NRx or its transfer agent and may be notified of the
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`pendency of this action by mail, using the form of notice similar to that customarily used in
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`securities class actions.
`
`34.
`
`Plaintiff’s claims are typical of the claims of the members of the Class as all
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`members of the Class are similarly affected by Defendants’ wrongful conduct in violation of
`
`federal law that is complained of herein.
`
`35.
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`Plaintiff will fairly and adequately protect the interests of the members of the Class
`
`and has retained counsel competent and experienced in class and securities litigation. Plaintiff has
`
`no interests antagonistic to or in conflict with those of the Class.
`
`36.
`
`Common questions of law and fact exist as to all members of the Class and
`
`predominate over any questions solely affecting individual members of the Class. Among the
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`questions of law and fact common to the Class are:
`
`whether the federal securities laws were violated by Defendants’ acts as alleged
`herein;
`
`whether statements made by Defendants to the investing public during the Class
`Period misrepresented material facts about the business, operations and
`management of NRx;
`
`•
`
` •
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`
`
`
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`11
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`Case 1:22-cv-00066-UNA Document 1 Filed 01/18/22 Page 12 of 18 PageID #: 12
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`whether the Individual Defendants caused NRx to issue false and misleading
`financial statements during the Class Period;
`
`whether Defendants acted knowingly or recklessly in issuing false and misleading
`financial statements;
`
`whether the prices of NRx securities during the Class Period were artificially
`inflated because of the Defendants’ conduct complained of herein; and
`
`whether the members of the Class have sustained damages and, if so, what is the
`proper measure of damages.
`
` •
`
`
`
` •
`
`
`
` •
`
`
`
` •
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`
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`37.
`
`A class action is superior to all other available methods for the fair and efficient
`
`
`
`adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the
`
`damages suffered by individual Class members may be relatively small, the expense and burden
`
`of individual litigation make it impossible for members of the Class to individually redress the
`
`wrongs done to them. There will be no difficulty in the management of this action as a class action.
`
`38.
`
`Plaintiff will rely, in part, upon the presumption of reliance established by the fraud-
`
`on-the-market doctrine in that:
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
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`Defendants made public misrepresentations or failed to disclose material facts
`during the Class Period;
`
`the omissions and misrepresentations were material;
`
`NRx securities are traded in an efficient market;
`
`the Company’s shares were liquid and traded with moderate to heavy volume
`during the Class Period;
`
`the Company traded on the NASDAQ and was covered by multiple analysts;
`
`the misrepresentations and omissions alleged would tend to induce a reasonable
`investor to misjudge the value of the Company’s securities; and
`
`Plaintiff and members of the Class purchased, acquired and/or sold NRx
`securities between the time the Defendants failed to disclose or misrepresented
`material facts and the time the true facts were disclosed, without knowledge of
`the omitted or misrepresented facts.
`
`
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`12
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`Case 1:22-cv-00066-UNA Document 1 Filed 01/18/22 Page 13 of 18 PageID #: 13
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`39.
`
`Based upon the foregoing, Plaintiff and the members of the Class are entitled to a
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`presumption of reliance upon the integrity of the market.
`
`40.
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`Alternatively, Plaintiff and the members of the Class are entitled to the presumption
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`of reliance established by the Supreme Court in Affiliated Ute Citizens of the State of Utah v.
`
`United States, 406 U.S. 128, 92 S. Ct. 2430 (1972), as Defendants omitted material information in
`
`their Class Period statements in violation of a duty to disclose such information, as detailed above.
`
`COUNT I
`
` (Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Promulgated Thereunder
`Against All Defendants)
`
`
`41.
`
`Plaintiff repeats and re-alleges each and every allegation contained above as if fully
`
`set forth herein.
`
`42.
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`This Count is asserted against Defendants and is based upon Section 10(b) of the
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`Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC.
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`43.
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`During the Class Period, Defendants engaged in a plan, scheme, conspiracy and
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`course of conduct, pursuant to which they knowingly or recklessly engaged in acts, transactions,
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`practices and courses of business which operated as a fraud and deceit upon Plaintiff and the other
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`members of the Class; made various untrue statements of material facts and omitted to state
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`material facts necessary in order to make the statements made, in light of the circumstances under
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`which they were made, not misleading; and employed devices, schemes and artifices to defraud in
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`connection with the purchase and sale of securities. Such scheme was intended to, and, throughout
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`the Class Period, did: (i) deceive the investing public, including Plaintiff and other Class members,
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`as alleged herein; (ii) artificially inflate and maintain the market price of NRx securities; and (iii)
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`cause Plaintiff and other members of the Class to purchase or otherwise acquire NRx securities
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`and options at artificially inflated prices. In furtherance of this unlawful scheme, plan and course
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`of conduct, Defendants, and each of them, took the actions set forth herein.
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`44.
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`Pursuant to the above plan, scheme, conspiracy and course of conduct, each of the
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`Defendants participated directly or indirectly in the preparation and/or issuance of the quarterly
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`and annual reports, SEC filings, press releases and other statements and documents described
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`above, including statements made to securities analysts and the media that were designed to
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`influence the market for NRx securities. Such reports, filings, releases and statements were
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`materially false and misleading in that they failed to disclose material adverse information and
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`misrepresented the truth about NRx’s finances and business prospects.
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`45.
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` By virtue of their positions at NRx, Defendants had actual knowledge of the
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`materially false and misleading statements and material omissions alleged herein and intended
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`thereby to deceive Plaintiff and the other members of the Class, or, in the alternative, Defendants
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`acted with reckless disregard for the truth in that they failed or refused to ascertain and disclose
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`such facts as would reveal the materially false and misleading nature of the statements made,
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`although such facts were readily available to Defendants. Said acts and omissions of Defendants
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`were committed willfully or with reckless disregard for the truth. In addition, each Defendant
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`knew or recklessly disregarded that material facts were being misrepresented or omitted as
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`described above.
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`46.
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`Information showing that Defendants acted knowingly or with reckless disregard
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`for the truth is peculiarly within Defendants’ knowledge and control. As the senior managers
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`and/or directors of NRx, the Individual Defendants had knowledge of the details of NRx’s internal
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`affairs.
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`47.
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`The Individual Defendants are liable both directly and indirectly for the wrongs
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`complained of herein. Because of their positions of control and authority, the Individual
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`Defendants were able to and did, directly or indirectly, control the content of the statements of
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`NRx. As officers and/or directors of a publicly-held company, the Individual Defendants had a
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`duty to disseminate timely, accurate, and truthful information with respect to NRx’s businesses,
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`operations, future financial condition and future prospects. As a result of the dissemination of the
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`aforementioned false and misleading reports, releases and public statements, the market price of
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`NRx securities was artificially inflated throughout the Class Period. In ignorance of the adverse
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`facts concerning NRx’s business and financial condition which were concealed by Defendants,
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`Plaintiff and the other members of the Class purchased or otherwise acquired NRx securities at
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`artificially inflated prices and relied upon the price of the securities, the integrity of the market for
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`the securities and/or upon statements disseminated by Defendants, and were damaged thereby.
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`48.
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`During the Class Period, NRx securities were traded on an active and efficient
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`market. Plaintiff and the other members of the Class, relying on the materially false and misleading
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`statements described herein, which the Defendants made, issued or caused to be disseminated, or
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`relying upon the integrity of the market, purchased or otherwise acquired shares of NRx securities
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`at prices artificially inflated by Defendants’ wrongful conduct. Had Plaintiff and the other
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`members of the Class known the truth, they would not have purchased or otherwise acquired said
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`securities, or would not have purchased or otherwise acquired them at the inflated prices that were
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`paid. At the time of the purchases and/or acquisitions by Plaintiff and the Class, the true value of
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`NRx securities was substantially lower than the prices paid by Plaintiff and the other members of
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`the Class. The market price of NRx securities declined sharply upon public disclosure of the facts
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`alleged herein to the injury of Plaintiff and Class members.
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`49.
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`By reason of the conduct alleged herein, Defendants knowingly or reck