Relief Therapeutics (OTC:RLFTF) partner NeuroRx (NRXP) is uplisting to the NASDAQ through a SPAC merger with Big Rock Partners Acquisition (BRPA).
Under the terms of the transaction, Big Rock and NeuroRx will merge and the company is expected to continue to trade on the Nasdaq Stock Market under the symbol “NRXP.” The transaction is expected to occur in the first or second quarter of 2021.
As a public Nasdaq-listed company, NeuroRx expects to have increased access to capital to continue development of its innovative drug pipeline targeting Central Nervous System (CNS)/Psychiatry and Respiratory Disease.
Under the terms of the transaction, Big Rock will issue to NeuroRx’s current equity holders an aggregate of 50 million shares of Big Rock common stock for their interests in NeuroRx, representing $500 million of equity consideration, assuming a value of $10.00 per common share.
Subject to certain conditions, an aggregate of 25 million additional shares of Big Rock common stock will be issued to NeuroRx pre-merger equity holders if, prior to December 31, 2022, (1) RLF-100 receives emergency use authorization by the FDA and (2) the FDA accepts the Company’s filing of its application to approve RLF-100.
In addition, subject to certain conditions, a $100 million cash earnout may be payable to NeuroRx pre-merger equity holders if, prior to December 31, 2022, either (1) FDA approval of the Company’s COVID-19 Drug is obtained and the Company’s COVID-19 Drug is listed in the FDA’s “Orange Book” or (2) FDA approval of the Company’s Antidepressant Drug Regimen is obtained and the Company’s Antidepressant Drug Regimen is listed in the FDA’s “Orange Book”.
The Boards of Directors of both NeuroRx and Big Rock have unanimously approved the proposed transaction. Completion of the transaction is subject to approval by stockholders of NeuroRx and Big Rock and other customary closing conditions.
What does this mean for Relief Therapeutics (OTC:RLFTF)?
NeuroRx’s up listing is highly beneficial to both companies. I predict in the future that NeuroRx may acquire Relief Therapeutics since both companies are already integrated with research and development. Based on how the sales of the drug goes this could propel an acquisition by NeuroRx to remove the limits on the partnership agreement.
Overview of Partnership agreement
Profits from sales will be allocated to Relief and NeuroRx on a 50/50 basis in the U.S., Canada and Israel, 85/15 (in favor of Relief) in Europe, and 80/20 (in favor of Relief) in all other territories.
The two companies have now taken steps to increase manufacturing of the aviptadil drug substance and are in the final stages of contracting with a fill/finish manufacturer, along with a national distribution partner.
By January 2021, Relief and NeuroRx expect to have manufacturing, distribution and logistics capacity in place to deliver sufficient drug quantities to treat 150,000 patients per month with RLF-100.
The companies continue to anticipate reporting top-line data from the ongoing randomized, double-blinded, placebo-controlled trial of intravenously-administered RLF-100 before the end of 2020. The trial of inhalation-administered RLF-100 is slated to begin enrollment within the coming weeks.
As part of their agreement, Relief and NeuroRx intend to pursue the issuance of trademarks on RLF-100. NeuroRx shall prosecute such trademarks in the U.S., Canada and Israel, while Relief shall prosecute trademarks in all other territories.