Swiss biopharmaceutical company Relief Therapeutics (OTCMKTS:RLFTF) is up 31% today after its U.S. commercial partner NRx Pharmaceuticals (NASDAQ:NRXP) filed for emergency-use authorization with the U.S. Food and Drug Administration (FDA) for its Covid-19 treatment.
In a news release, NRx Pharmaceuticals said that it has submitted an application for EUA to the FDA for the use of its drug Zyesami. The company developed it for patients with Covid-19 who are at immediate risk of death from respiratory failure. The emergency-use authorization application is good news for Relief Therapeutics, which has a partner relationship with NRx Pharmaceuticals in the U.S.
What Happened With RLFTF Stock
Today’s jump higher is great news for RLFTF stock, which has fallen 70% in the last 12 months. Should NRx receive emergency-use authorization, it will be a big boost for both it and Relief Therapeutics.
NRx Pharmaceuticals says that its Covid-19 treatment has been developed specifically for people who are in end-stage respiratory failure despite having been treated with other approved therapies such as Remdesivir and who are ineligible for enrollment in clinical trials. NRx Pharmaceuticals says that preliminary studies indicate a four-fold increase in the odds of someone surviving 60 days or longer when treated with its Covid-19 therapy.
Why It Matters
Both RLFTF and NRXP are penny stocks that trade in volatile patterns. Wilmington, Delaware-based NRx Pharmaceuticals is focused on developing medicines and vaccines for respiratory conditions, suicidal depression, and post traumatic stress disorder (PTSD). Geneva, Switzerland-based Relief Therapeutics is focused almost exclusively on developing treatments for lung diseases.
Being granted emergency-use authorization for Zyesami would be a major victory for both companies and could provide some much-needed revenue. The prospect of gaining FDA approval is helping both stocks in the near term. NRXP stock has declined 80% over the last year.
What’s Next for Relief Therapeutics
Shares of both Relief Therapeutics and NRx Pharmaceuticals are getting a big boost today on the prospect of the FDA granting emergency-use authorization for their Covid-19 treatment. However, any gains are likely to be short-lived if FDA approval does not materialize. Given that RLFTF stock and NRXP stock have each declined more than 70% in the last 12 months, investors should proceed with caution with these names.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.