Full Press Release Details
RXi Pharmaceuticals Reports Financial
Results for the Third Quarter of 2012
Westborough, MA, November 14, 2012 RXi Pharmaceuticals Corporation (OTC: RXII), a biotechnology company focused
on discovering, developing and commercializing innovative therapies addressing major unmet medical needs using RNA-targeted technologies, today reported its financial results for the quarter ended September 30, 2012.
We have continued to execute according to plan in the third quarter of 2012, with the final reports for our first Phase 1 study due
in Q1 2013, said Dr. Geert Cauwenbergh, President and CEO of RXi Pharmaceuticals. He added that, The excellent safety profile observed with RXI-109 in our single dose Phase 1 study has helped us to finalize the preparations and dose
selections for our next Phase 1 study, which will focus on multiple dosing in volunteers. We expect this study to start before the end of 2012. All this has been done with a cash burn completely in line with our projections and assets. As a new
independent company, we are very pleased with our continued transition from a technology platform company into a company developing commercially viable assets.
Quarterly Financial Highlights:
Cash and Cash Equivalents
At September 30, 2012, RXi had cash and cash equivalents of approximately $6.3 million, compared with $0.5 million at December 31, 2011. The increase in cash and cash equivalents is
primarily attributable to the net proceeds of approximately $8.1 million received from the issuance of the Company s convertible preferred stock upon completion of the spin-off from the Company s former parent company, Galena
Biopharma, Inc. on April 27, 2012.
Net Loss Applicable to Common Stockholders
Net loss applicable to common stockholders for the third quarter of 2012 was $2.9 million, or $0.02 per basic and diluted share, compared
with a net loss applicable to common stockholders of $2.0 million, or $0.05 per basic and diluted share, for the comparable period in 2011. The increase in net loss applicable to common stockholders was primarily attributable to the fair value of
the non-cash dividend of $1.3 million payable to the Company s preferred shareholders.
Revenues for the quarter ended September 30, 2012 were $0.1 million as compared with no revenues for the same period in the prior
year. Revenues during the quarter related to the recognition of work completed on the Company s government grants.
Research and Development Expense
Research and development expenses for the third quarter of 2012 were $1.2 million, compared with $1.1 million for the third quarter of
2011. The increase of $0.1 million as compared to the prior year period was primarily due to an increase of $0.05 million in research and development expenses to run the clinical trial for the Company s RXI-109 program and an increase of $0.06
million in employee stock based compensation expense.
General and Administrative Expenses
General and administrative expenses for the third quarter of 2012 were $0.5 million, compared with $1.0 million for the third quarter of
2011. The decrease of $0.5 million was primarily due to a decrease of $0.3 million in general and administrative expenses due to lower personnel related costs, board fees and expenses, and professional outside services and a decrease of $0.2 million
in employee stock based compensation.
Preferred Stock Accretion and Dividends
Accretion of Series A Preferred Stock and dividends was $1.3 million for the third quarter of 2012 compared with no accretion of Series A
Preferred Stock and dividends for the third quarter of 2011. The $1.3 million relates to the fair value of the dividends paid to preferred shareholders during the third quarter of 2012.
Corporate Highlights
Scientific Achievements
RXi Pharmaceutical s first clinical program centers around RXI-109, a self-delivering RNAi
compound (sd-rxRNA ) developed by RXi for the reduction of dermal scarring in planned surgeries. RXI-109 is
designed to reduce the expression of CTGF (connective tissue growth factor), a critical regulator of several biological pathways involved in fibrosis, including scar formation in the skin. The first clinical trial of RXI-109, initiated in June 2012,
has been designed to evaluate the safety and tolerability of several dose levels of RXI-109 in humans and may
provide preliminary evidence of surgical scar reduction. As there are currently no FDA-approved drugs to prevent scar formation, a therapeutic of this type could have great benefit for trauma and
surgical patients (especially relating to raised or hypertrophic scarring), as a treatment during the surgical revision of existing unsatisfactory scars, and in the treatment, removal and inhibition of keloids (scars which extend beyond the original
About RXi Pharmaceuticals Corporation
RXi Pharmaceuticals Corporation (OTC: RXII) is a biotechnology company focused on discovering, developing and commercializing innovative
therapies based on its proprietary, next-generation RNAi platform. Therapeutics that use RNA interference, or RNAi, have great promise because of their ability to silence, or down-regulate, the expression of a specific gene
that may be overexpressed in a disease condition. Building on the pioneering work of scientific founder and Nobel Laureate Dr. Craig Mello, RXi s first RNAi product candidate, RXI-109, which targets CTGF (connective tissue growth factor),
entered into a human clinical trial in June 2012 to evaluate its safety, tolerability and potential efficacy for scar prevention. For more information, please visit www.rxipharma.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as:
intend, believe, expect, may, should, designed to, will and similar references. Such statements include, but are not limited to, statements about: our ability to
successfully develop RXI-109 and our other product candidates; the future success of our first clinical trial with RXI-109; our expectation that our next Phase 1 study in RXI-109 will start before the end of 2012; and our ability to implement
cost-saving measures. Forward-looking statements are neither historical facts nor assurances of future performance. Instead they 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 and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these
forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others: the risk that our clinical trial with
RXI-109 may not be successful in evaluating the safety and tolerability of RXI-109 or providing preliminary evidence of surgical scar reduction; the successful and timely completion of clinical studies; uncertainties regarding the regulatory
process; the availability of funds and resources to pursue our research and development projects, including our clinical trials with RXI-109; general economic conditions; and those identified under Risk Factors in the Company s most
recently filed Annual Report on Form 10-K, Quarterly Report on Form 10-Q and in other filings the Company periodically makes with the SEC. The Company does not undertake to update any of these forward-looking statements to reflect a change in its
views or events or circumstances that occur after the date of this press release.
RXi PHARMACEUTICALS CORPORATION (REGISTRANT) AND PREDECESSOR (RNAi)
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
| RXi (Registrant) | Predecessor (RNAi) and RXi (Registrant) | RXi (Registrant) | Predecessor (RNAi) and RXi (Registrant) | |||||||||||||
| For the Three Months Ended September 30, 2012 | For the Three Months Ended September 30, 2011 | For the Nine Months Ended September 30, 2012 | For the Nine Months Ended September 30, 2011 | |||||||||||||
| Total revenue | $ | 57 | $ | $ | 57 | $ | ||||||||||
| Research and development expense | 1,214 | 1,126 | 9,314 | 5,074 | ||||||||||||
| General and administrative expense | 539 | 1,041 | 2,006 | 5,206 | ||||||||||||
| Operating loss | (1,696 | ) | (2,167 | ) | (11,263 | ) | (10,280 | ) | ||||||||
| Interest income (expense) | (1 | ) | 1 | (29 | ) | 1 | ||||||||||
| Other income | 53 | 123 | 124 | 2,513 | ||||||||||||
| Net loss | (1,644 | ) | (2,043 | ) | (11,168 | ) | (7,766 | ) | ||||||||
| Accretion of Series A convertible preferred stock and dividends | (1,277 | ) | (11,897 | ) | ||||||||||||
| Net loss applicable to common stockholders | $ | (2,921 | ) | $ | (2,043 | ) | $ | (23,065 | ) | $ | (7,766 | ) | ||||
| Net loss per common share applicable to common stockholders: | ||||||||||||||||
| Basic and diluted loss per share | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.18 | ) | $ | (0.23 | ) | ||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic and diluted | 157,155,222 | 41,970,481 | 130,032,178 | 33,697,704 |
RXi PHARMACEUTICALS CORPORATION (REGISTRANT)
(A Development Stage Company)
CONDENSED BALANCE SHEETS
| RXi (Registrant) | RXi (Registrant) | |||||||
| September 30, 2012 | December 31, 2011 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 6,278 | $ | 503 | ||||
| Restricted cash | 53 | 53 | ||||||
| Due from Parent | 597 | |||||||
| Prepaid expenses and other current assets | 144 | 186 | ||||||
| Total current assets | 6,475 | 1,339 | ||||||
| Equipment and furnishings, net | 235 | 355 | ||||||
| Other assets | 2 | |||||||
| Total assets | $ | 6,712 | $ | 1,694 | ||||
| LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 155 | $ | 387 | ||||
| Accrued expenses and other current liabilities | 877 | 544 | ||||||
| Deferred revenue | 370 | 816 | ||||||
| Current maturities of capital lease obligations | 9 | 29 | ||||||
| Total current liabilities | 1,411 | 1,776 | ||||||
| Convertible notes payable | 500 | |||||||
| Capital lease obligations, net of current maturities current portion | 5 | |||||||
| Total liabilities | 1,411 | 2,281 | ||||||
| Commitments and contingencies | ||||||||
| Total convertible preferred stock | 9,575 | |||||||
| Total stockholders deficit | (4,274 | ) | (587 | ) | ||||
| Total liabilities, convertible preferred stock and stockholders deficit | $ | 6,712 | $ | 1,694 |