Phio Pharmaceuticals Reports Second Quarter 2019 Financial Results and Provides Business Update

Phio Pharmaceuticals Reports Second

Results and Provides Business Update

Mass., August 12, 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 second quarter ended June 30, 2019, and provided a business update.

"Our focus in 2019 remains on execution of our new development

strategy, as we continue to advance and expand our immuno-oncology pipeline," said Dr. Gerrit Dispersyn, Phio's President

and CEO. "During the first half of the year, we've continued to accelerate our R&D efforts and have made significant

progress with our lead candidates. We are now are on track to initiate up to three clinical programs in 2020. Our novel sd-rxRNA

for silencing PD-1 receptor expression by T cells is approaching the clinic for both ex vivo application to enhance adoptive

cell transfer efficiency and for direct local administration into the tumor micro-environment. In parallel, we are advancing our

sd-rxRNA compound designed to overcome immune exhaustion and activate T cells and natural killer cells. As we complete clinical

translation for these lead assets, we also expect to announce additional pipeline updates in the near future."

The Company's next pipeline product, PH-804,

is designed to silence the expression of immune exhaustion target TIGIT by NK cells and T cells resulting in them becoming "weaponized."

To date, Phio has shown that reduction of TIGIT by PH-804 leads to an increase in the cytotoxic capacity of NK cells. The Company

plans to enter the clinic with PH-804 in the second half of 2020.

To further support the development of Phio's

immuno-oncology pipeline, the Company is working to validate and prioritize additional pipeline products focusing on adoptive cell

therapy, the tumor micro-environment, as well as direct tumor applications. The Company's additional pipeline products include

sd-rxRNA compounds that impact the PD-1/PD-L1 axis and compounds that otherwise increase immune cell activity, for example by improving

cell metabolism (e.g. increased spare respiratory capacity) and by impacting cell differentiation. We expect to advance additional

sd-rxRNA candidates into preclinical and clinical development in the second half of 2019.

Select Quarterly Financial Results

At June 30, 2019, the Company had cash

of $10.8 million as compared with $14.9 million at December 31, 2018. The Company expects its cash to provide funding for at least

the next twelve months.

Research and Development Expenses

Research and development expenses for the

quarter ended June 30, 2019, were $1.1 million as compared with $1.2 million for the quarter ended June 30, 2018. The decrease

was primarily due to a reduction in licensing fees.

General and Administrative Expenses

General and administrative expenses for

the quarter ended June 30, 2019, were $0.9 million as compared with $0.8 million for the quarter ended June 30, 2018. The increase

was primarily due to an increase in legal fees.

Net loss for the quarter ended June

30, 2019, was $2.0 million or $0.08 per share, compared with $1.9 million or $0.46 per share for the quarter ended June 30,

2018. The increase was primarily due to changes in operating expenses, as discussed above.

About Phio Pharmaceuticals Corp.

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 efforts are focused on silencing tumor-induced suppression of the immune system through our

proprietary sd-rxRNA platform with utility in immune cells and/or the tumor micro-environment. Our goal is to maximize the power

of our sd-rxRNA therapeutic compounds by weaponizing immune effector cells to overcome tumor immune escape providing patients 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) (Unaudited)