NeuroRX verklagt Relief auf 185 Millionen Dollar Schadensersatz !!
3
had a record of disciplinary action with the Financial Industry Regulatory Authority (FINRA).
(NeuroRx had been familiar with Dr. Selvaraju as a financial analyst covering biotechnology
stocks backed by an active investment-banking house; his checkered past came as a surprise.)
NeuroRx also learned that Relief had associated itself with one Adam Gottbetter, a former lawyer
who had been sent to jail and disbarred after pleading guilty to a felony for violating the federal
securities laws by manipulating penny stocks. Later, NeuroRx also learned that Relief had retained
John Paul Waymack as a consultant; Waymack had been fined by the Israel Securities Authority
(Israels equivalent of the Securities and Exchange Commission (SEC)), and had taken the Fifth
when subpoenaed by the SEC in the United States.
7. Having set out on a path to develop a potentially life-saving drug, NeuroRx took
steps to save the trial and distance itself from Relief by converting the parties relationshipwhich
had been on a course toward a possible mergerto an arms-length business relationship. On Sep-
tember 18, 2020, it executed a Collaboration Agreement with Relief.
8. The Collaboration Agreement was supposed to reset the parties relationship, so
that NeuroRx would continue to develop aviptadil, Relief would pay for all costs of development,
and the parties would divide profits. Thus, the Collaboration Agreement provided that NeuroRx
would lead and have control over the U.S. clinical effort to develop aviptadil for treatment of
COVID-19, while Relief would provide [c]ash or cash equivalents required to continue providing
sole funding of the Collaboration. NeuroRx gave up its promised stake in Relief and agreed to
divide net profits from the Product, defined as aviptadil developed by NeuroRxif Relief pro-
vided the funding. The Collaboration Agreement expressly permitted NeuroRx to bring other in-
vestors to the project should Relief fail to meet its funding obligations.
9. For a period of time, Relief did provide funding. But in March 2021, less than six
CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.) INDEX NO. UNASSIGNED
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/10/2022
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 5 of 59
4
months after signing the contract, Relief announced that NeuroRx had missed the pandemic and
pretextually and incorrectly claimed that NeuroRx was failing to provide certain clinical test data
to Relief. Relief said that it wont pay a dime for further development.
10. True to that threat, Relief stopped funding and abandoned the development of the
drug in the middle of the clinical trial, putting both the study participants and the trial integrity at
risk. NeuroRx had no choice but to raise money from investors and brought the trial to a successful
conclusion. After Relief repudiated the contract, the National Institutes of Health selected
ZYESAMI for inclusion in Operation Warp Speed based on the strong body of previous research
performed by NeuroRx.
11. Seven months later, in October 2021, the pandemic was far from over and the need
for a COVID-19 drug was clearly apparent. Relief regretted its abandonment of the project and
decided to try to reclaim the benefits of the contract by suing NeuroRx while continuing to with-
hold payments. Now that NeuroRx had paid for the research and the end of the pandemic appears
as distant as ever, Relief decided to pay the victim, suing NeuroRx and its CEO, Jonathan Chaim
Javitt (misidentified in Reliefs complaint (Complaint) as Jonathan Cogswell Javitt), for breach of
contract and demanding that the contract be enforced so that it can reap the profits expected from
commercialization of the drug without paying its own obligations under the contract.
12. Relief also spread defamatory lies about NeuroRx in press releases and, most re-
cently, in Reliefs application to the SEC for approval to issue American Depositary Receipts
(ADRs). Relief has falsely stated that NeuroRx misled its own investors. Relief has falsely stated
that NeuroRx improperly withheld information from Relief to the detriment of patients, that Neu-
roRx unreasonably inflated payment requests, and that NeuroRx failed to substantiate expenses
with valid invoices. Reliefs defamation has impaired the value of NeuroRxs share capital and
CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.) INDEX NO. UNASSIGNED
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/10/2022
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 6 of 59
5
caused severe injury to its reputation.
13. The truth here is simple. Relief failed to perform; and NeuroRx did perform. Neu-
roRx is entitled to damages for Reliefs breach. NeuroRx seeks reliance damagesthe value of
what it gave up in reliance on Reliefs contract promises. That amount is measured by the value,
at the time of the contract, of the Relief common stock that NeuroRx relinquished in reliance on
Reliefs contract promisesat least $185 million. NeuroRx also seeks additional compensatory
damages for Reliefs defamation.
14. Reliefs conduct was so egregious that it warrants the imposition of punitive dam-
ages. Reliefs conduct included false accusations of ethical and regulatory violations; ugly de-
mands that NeuroRx treat gravely ill patients with a drug that Relief knew or should have known
would have caused harm; and repeatedly misleading its own shareholders about its ownership of
intellectual and physical property (including a fraudulently obtained patent and a cancelled and
pilfered IND, as well as a phantom supply of drug substance). Relief was willing to endanger
patients lives and mislead the public because it had a strategy to profit from doing so. Relief was
willing to extort financial concessions from NeuroRx because it had a strategy to profit from doing
so. The people who drove this strategy, as NeuroRx eventually learned, had a serial history of
misconduct for which they have been sanctioned, suspended, disbarred, fined, and, in one case,
imprisoned. For Relief and this cadre of bandits, the pandemic was just another looting oppor-
tunity, and NeuroRx provided them with a cloak of legitimacy. This is the kind of wanton dishon-
esty and criminal indifference to civil obligations aimed at the public that warrants punitive dam-
ages.
15. Finally, NeuroRx is entitled to a declaratory judgment that it is free of any contract
obligation to Relief as a consequence of Reliefs own breaches and repudiation.
CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.) INDEX NO. UNASSIGNED
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/10/2022
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 7 of 59
6
FACTS
The Drug
16. Aviptadil, a generic drug ingredient, is a synthetic form of a natural peptide hor-
mone, Vasoactive Intestinal Peptide (VIP), discovered in the 1970s and studied extensively by
Professor Sami Said of Stony Brook University School of Medicine. For decades, VIP could only
be isolated in tiny quantities from animal sources. Around 2000, Bachem AG developed a syn-
thetic form of VIP, which it named aviptadil. Today, aviptadil is a non-patented drug ingredient,
just like insulin. Anyone can buy it from one of several vendors. Nonetheless, while no one can
own or have proprietary rights in aviptadil, one can own or have proprietary rights in certain of its
formulations. ZYESAMI® and RLF-100 are proprietary names to denote the proprietary formu-
lation of aviptadil developed by NeuroRx.
17. Starting in 1998, Prof. Said and his colleagues at Stony Brook conducted and pub-
lished a Phase I clinical study of aviptadil for use in the treatment of Acute Respiratory Distress
Syndrome (ARDS) with sepsis. Prof. Said found that aviptadil showed promise for the treatment
of ARDS, but his research was not continued after his death in 2013.
18. Despite Prof. Saids promising early work, aviptadil was never successfully devel-
oped into a drug, partly because the peptide is highly unstable and degrades quickly in pharma-
ceutical solutions and partly because the diseases to which aviptadil was initially targeted were
orphan diseases that are of limited commercial attraction to the pharmaceutical industry. All of
that changed with the outbreak of the COVID-19 pandemic.
The Original Partnership
19. In February 2020, an executive of Reliefs largest shareholder approached NeuroRx
to assess the scientific merit of an idea proposed by Reliefs Dr. Yves Sagot, who thought that
aviptadil might have therapeutic benefit in the treatment of COVID-19. Reliefs annual reports
CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.) INDEX NO. UNASSIGNED
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/10/2022
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 8 of 59
3
had a record of disciplinary action with the Financial Industry Regulatory Authority (FINRA).
(NeuroRx had been familiar with Dr. Selvaraju as a financial analyst covering biotechnology
stocks backed by an active investment-banking house; his checkered past came as a surprise.)
NeuroRx also learned that Relief had associated itself with one Adam Gottbetter, a former lawyer
who had been sent to jail and disbarred after pleading guilty to a felony for violating the federal
securities laws by manipulating penny stocks. Later, NeuroRx also learned that Relief had retained
John Paul Waymack as a consultant; Waymack had been fined by the Israel Securities Authority
(Israels equivalent of the Securities and Exchange Commission (SEC)), and had taken the Fifth
when subpoenaed by the SEC in the United States.
7. Having set out on a path to develop a potentially life-saving drug, NeuroRx took
steps to save the trial and distance itself from Relief by converting the parties relationshipwhich
had been on a course toward a possible mergerto an arms-length business relationship. On Sep-
tember 18, 2020, it executed a Collaboration Agreement with Relief.
8. The Collaboration Agreement was supposed to reset the parties relationship, so
that NeuroRx would continue to develop aviptadil, Relief would pay for all costs of development,
and the parties would divide profits. Thus, the Collaboration Agreement provided that NeuroRx
would lead and have control over the U.S. clinical effort to develop aviptadil for treatment of
COVID-19, while Relief would provide [c]ash or cash equivalents required to continue providing
sole funding of the Collaboration. NeuroRx gave up its promised stake in Relief and agreed to
divide net profits from the Product, defined as aviptadil developed by NeuroRxif Relief pro-
vided the funding. The Collaboration Agreement expressly permitted NeuroRx to bring other in-
vestors to the project should Relief fail to meet its funding obligations.
9. For a period of time, Relief did provide funding. But in March 2021, less than six
CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.) INDEX NO. UNASSIGNED
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/10/2022
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 5 of 59
4
months after signing the contract, Relief announced that NeuroRx had missed the pandemic and
pretextually and incorrectly claimed that NeuroRx was failing to provide certain clinical test data
to Relief. Relief said that it wont pay a dime for further development.
10. True to that threat, Relief stopped funding and abandoned the development of the
drug in the middle of the clinical trial, putting both the study participants and the trial integrity at
risk. NeuroRx had no choice but to raise money from investors and brought the trial to a successful
conclusion. After Relief repudiated the contract, the National Institutes of Health selected
ZYESAMI for inclusion in Operation Warp Speed based on the strong body of previous research
performed by NeuroRx.
11. Seven months later, in October 2021, the pandemic was far from over and the need
for a COVID-19 drug was clearly apparent. Relief regretted its abandonment of the project and
decided to try to reclaim the benefits of the contract by suing NeuroRx while continuing to with-
hold payments. Now that NeuroRx had paid for the research and the end of the pandemic appears
as distant as ever, Relief decided to pay the victim, suing NeuroRx and its CEO, Jonathan Chaim
Javitt (misidentified in Reliefs complaint (Complaint) as Jonathan Cogswell Javitt), for breach of
contract and demanding that the contract be enforced so that it can reap the profits expected from
commercialization of the drug without paying its own obligations under the contract.
12. Relief also spread defamatory lies about NeuroRx in press releases and, most re-
cently, in Reliefs application to the SEC for approval to issue American Depositary Receipts
(ADRs). Relief has falsely stated that NeuroRx misled its own investors. Relief has falsely stated
that NeuroRx improperly withheld information from Relief to the detriment of patients, that Neu-
roRx unreasonably inflated payment requests, and that NeuroRx failed to substantiate expenses
with valid invoices. Reliefs defamation has impaired the value of NeuroRxs share capital and
CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.) INDEX NO. UNASSIGNED
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/10/2022
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 6 of 59
5
caused severe injury to its reputation.
13. The truth here is simple. Relief failed to perform; and NeuroRx did perform. Neu-
roRx is entitled to damages for Reliefs breach. NeuroRx seeks reliance damagesthe value of
what it gave up in reliance on Reliefs contract promises. That amount is measured by the value,
at the time of the contract, of the Relief common stock that NeuroRx relinquished in reliance on
Reliefs contract promisesat least $185 million. NeuroRx also seeks additional compensatory
damages for Reliefs defamation.
14. Reliefs conduct was so egregious that it warrants the imposition of punitive dam-
ages. Reliefs conduct included false accusations of ethical and regulatory violations; ugly de-
mands that NeuroRx treat gravely ill patients with a drug that Relief knew or should have known
would have caused harm; and repeatedly misleading its own shareholders about its ownership of
intellectual and physical property (including a fraudulently obtained patent and a cancelled and
pilfered IND, as well as a phantom supply of drug substance). Relief was willing to endanger
patients lives and mislead the public because it had a strategy to profit from doing so. Relief was
willing to extort financial concessions from NeuroRx because it had a strategy to profit from doing
so. The people who drove this strategy, as NeuroRx eventually learned, had a serial history of
misconduct for which they have been sanctioned, suspended, disbarred, fined, and, in one case,
imprisoned. For Relief and this cadre of bandits, the pandemic was just another looting oppor-
tunity, and NeuroRx provided them with a cloak of legitimacy. This is the kind of wanton dishon-
esty and criminal indifference to civil obligations aimed at the public that warrants punitive dam-
ages.
15. Finally, NeuroRx is entitled to a declaratory judgment that it is free of any contract
obligation to Relief as a consequence of Reliefs own breaches and repudiation.
CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.) INDEX NO. UNASSIGNED
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/10/2022
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 7 of 59
6
FACTS
The Drug
16. Aviptadil, a generic drug ingredient, is a synthetic form of a natural peptide hor-
mone, Vasoactive Intestinal Peptide (VIP), discovered in the 1970s and studied extensively by
Professor Sami Said of Stony Brook University School of Medicine. For decades, VIP could only
be isolated in tiny quantities from animal sources. Around 2000, Bachem AG developed a syn-
thetic form of VIP, which it named aviptadil. Today, aviptadil is a non-patented drug ingredient,
just like insulin. Anyone can buy it from one of several vendors. Nonetheless, while no one can
own or have proprietary rights in aviptadil, one can own or have proprietary rights in certain of its
formulations. ZYESAMI® and RLF-100 are proprietary names to denote the proprietary formu-
lation of aviptadil developed by NeuroRx.
17. Starting in 1998, Prof. Said and his colleagues at Stony Brook conducted and pub-
lished a Phase I clinical study of aviptadil for use in the treatment of Acute Respiratory Distress
Syndrome (ARDS) with sepsis. Prof. Said found that aviptadil showed promise for the treatment
of ARDS, but his research was not continued after his death in 2013.
18. Despite Prof. Saids promising early work, aviptadil was never successfully devel-
oped into a drug, partly because the peptide is highly unstable and degrades quickly in pharma-
ceutical solutions and partly because the diseases to which aviptadil was initially targeted were
orphan diseases that are of limited commercial attraction to the pharmaceutical industry. All of
that changed with the outbreak of the COVID-19 pandemic.
The Original Partnership
19. In February 2020, an executive of Reliefs largest shareholder approached NeuroRx
to assess the scientific merit of an idea proposed by Reliefs Dr. Yves Sagot, who thought that
aviptadil might have therapeutic benefit in the treatment of COVID-19. Reliefs annual reports
CAUTION: THIS DOCUMENT HAS NOT YET BEEN REVIEWED BY THE COUNTY CLERK. (See below.) INDEX NO. UNASSIGNED
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/10/2022
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 8 of 59