May 10, 2016
By Alex Keown, BioSpace.com Breaking News Staff
MARLBOROUGH, Mass. – Shares of RXi Pharmaceuticals are down more than 6 percent this morning after the company announced it is in the process of strategic options that could include a merger or acquisition to enhance shareholder value.RXi said it is exploring several options that could include M&A, as well as business development opportunities to grow the company. Geert Cauwenbergh, president and chief executive officer of RXi, said the company is in “active discussions regarding a potential merger transaction that, if successful, would be expected to bring substantial synergies to the combined business and significantly advance our clinical pipeline.”
Cauwenbergh said the move was prompted, at least in part, by the recent split of the company’s stock and the full conversion of its preferred stock at the end of 2015. He said the company successfully reset the company’s capital structure and as a result, RXi is in a position to execute one or more options to advance the company.
“Although there can be no assurance that the exploration of any alternatives will result in RXi entering into or consummating a transaction, we are committed to enhancing our growth through this type of transactions, and are actively engaged in activities to arrive at this goal,” Cauwenbergh said in a statement.
RXi said the company will not provide updates on its strategic plans unless it determines that disclosure is necessary or required. RXI Pharmaceuticals secured Griffin Securities, Inc. to help guide the company though the process.
RXi Pharmaceuticals Corporation is a clinical-stage RNAi company developing therapeutics in dermatology and ophthalmology that address significant unmet medical needs. RNA interference is a natural mechanism of gene silencing. Much of the interest in RNAi is based on the fact that the RNAi mechanism operates upstream of protein production by silencing the mRNA that codes for such proteins, thereby preventing the disease-causing proteins from being made in the first place.
Earlier this month the company secured a patent from the European Patent Office for the company’s self-delivering RNAi platform, sd-rxRNA. In April, RXi announced trial data showing the successful topical delivery of a fluorescent analog of RXI-109, the company’s most advanced clinical compound, for dermal scarring and subretinal fibrosis associated with late stage age related macular degeneration.
In December, RXi Pharmaceuticals initiated a Phase II clinical trial in dermatology for RXI-SCP-1502, which will evaluate the safety and clinical activity of Samcyprone on the clearance of cutaneous warts.
RXi has a market cap of $1 million, according to Seeking Alpha. The company executed a 1-for-10 reverse split of its common stock about a month ago. The split was initiated to help the company regain compliance with the Nasdaq Stock Market’s minimum bid price requirement.
Nearby RNAi competitor Alnylam is also in the process of its own strategic maneuvers, recently breaking ground on a new $200 million manufacturing facility as part of its plans on becoming a multi-product company by 2020. The new site is expected to manufacture Alnylam’s RNAi-based therapeutics for clinical trials, as well as drugs for commercialization when the company ushers its first product to market.
