Phio Pharmaceuticals Reports Fourth Quarter and Year End 2018 Financial Results and Corporate Highlights Gerrit Dispersyn Appointed as President and Chief Executive Officer Cash Position Expected to Provide

Pharmaceuticals Reports Fourth Quarter and Year End 2018 Financial Results and Corporate Highlights

Mass., March 27, 2019 /PRNewswire/ - Phio Pharmaceuticals Corp. (NASDAQ: PHIO), a biotechnology company developing the

next generation of immuno-oncology therapeutics based on its proprietary self-delivering RNAi (sd-rxRNA )

therapeutic platform, today reported its financial results for the fourth quarter and year ended December 31, 2018 and

provided a business update.

of the Company's major accomplishments during the year was the successful transition to focus on developing

novel immuno-oncology treatments, a strategic decision made in early 2018," said Dr. Gerrit Dispersyn, President and

CEO of Phio Pharmaceuticals. "Based on our internal R&D, and together with our corporate and academic partners, we have been

demonstrating the potential of using our self-delivering RNAi platform in immuno-oncology applications. Our results to date

suggest that we can improve existing and developing forms of adoptive cell therapies (ACT) based on T-cells and on NK cells.

In addition, through direct intratumoral use of self-delivering RNAi compounds, we showed that we have the potential to

reprogram the tumor micro-environment. With this latter approach, we hope to lower the barriers that hamper ACT success in

solid tumors, a significant clinical unmet need. Based on these successes, we now have three well defined immuno-oncology

R&D pipeline programs that may provide compelling alternatives to other therapeutic approaches such as antibody therapy

and/or genetic engineering. Our progress laid the groundwork for us to successfully complete an equity offering in October,

providing us the capital to confidently execute our R&D pipeline programs towards clinical development and

further partnerships."

Review and Recent Corporate Updates

Select Financial Results

At December 31, 2018, the Company had cash

of $14.9 million as compared with $3.6 million at December 31, 2017.

Revenues for the year ended December 31,

2018 were $138,000, as compared with $15,000 for the year ended December 31, 2017. Revenues for the years ended 2018 and 2017 related

to the work performed by the Company as a sub-awardee under the government grant awarded to BioAxone Biosciences, Inc. for the

development of a novel sd-rxRNA compound, BA-434, that targets PTEN for the treatment of spinal cord injury.

Research and Development Expenses

Research and development expenses for the

year ended December 31, 2018 were $4.3 million as compared with $5.4 million for the year ended December 31, 2017. The decrease

was primarily due to the completion of the work in the Company's dermatology and ophthalmology programs, including clinical

trial-related and manufacturing-related expenses, and a decrease in payroll expenses due to a reduction in headcount as compared

with the prior year period.

Acquired In-process Research and

Development Expenses

The Company recorded acquired in-process

research and development expense of $4.7 million during the year ended December 31, 2017. The expense related to the fair value

of consideration given, which includes transaction costs, liabilities assumed and cancellation of notes receivable, and the deferred

tax impact of the Company's acquisition of MirImmune. The Company had no such expense during the year ended December 31,

General and Administrative Expenses

General and administrative expenses for

the year ended December 31, 2018 were $3.2 million as compared with $4.0 million for the year ended December 31, 2017. The decrease

was primarily due to a decrease in payroll expenses due to a reduction in headcount as compared with the prior year period, as

well as a decrease in professional fees for legal-related services.

The Company had no income tax benefit or

expense for the year ended December 31, 2018. The Company recognized an income tax benefit of $1.6 million for the year

ended December 31, 2017 due to the tax-related impact of the Company's acquisition of MirImmune.

Net loss for the year ended December 31,

2018 was $7.4 million, or $1.04 per share, compared with $12.5 million, or $5.52 per share, for the year ended December 31, 2017. The

decrease was primarily due to a decrease in acquired in-process research and development expense and the changes in operating expenses,

About Phio Pharmaceuticals

Phio Pharmaceuticals Corp. (NASDAQ: PHIO)

is a biotechnology company developing the next generation of immuno-oncology therapeutics based on its self-delivering RNAi (sd-rxRNA )

therapeutic platform. The Company's discovery and research efforts are focused on developing sd-rxRNA therapeutic compounds to

be used in the context of adoptive cell transfer by targeting checkpoints or other gene targets, or to be used in immunotherapy

following intratumoral injection. We aim to maximize the power of our sd-rxRNA therapeutic compounds by weaponizing therapeutic

immune effector cells to attack cancer, and to make tumors more susceptible to such attacks, and ultimately provide patients battling

cancers with a powerful new treatment option that goes beyond current treatment modalities. For additional information, visit

the Company's website, www.phiopharma.com.

Forward-Looking Statements

press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking

statements are neither historical facts nor assurances of future performance. These statements are based only on our current beliefs,

expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events

and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject

to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our

control. Our actual results may differ materially from those indicated in the forward-looking statements as a result of a

number of important factors, including, but not limited to, the safety and efficacy of our product candidates, future success of

our clinical trials and scientific studies, expected duration of available cash runway, our ability to enter into strategic partnerships

and the future success of these strategic partnerships, the availability of funds and resources to pursue our research and development

projects and general economic conditions. Our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q

include detailed risks under the caption "Risk Factors" that may affect our business, results of operations and financial

condition. Readers are urged to review these risk factors and to not act in reliance on any forward-looking statements, as actual

results may differ from those contemplated by our forward-looking statements. Phio does not undertake to update forward-looking

statements to reflect a change in its views, events or circumstances that occur after the date of this release.

Phio Pharmaceuticals Corp.

PHIO PHARMACEUTICALS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share data)

PHIO PHARMACEUTICALS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)