RXi Pharmaceuticals Reports Full Year 2013 Financial Results

RXi Pharmaceuticals Reports

Full Year 2013 Financial Results

WESTBOROUGH, Mass., March 28, 2014 /PRNewswire/ RXi Pharmaceuticals Corporation (NASDAQ: 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 full year 2013, and provided a business update.

RXi s proprietary self-delivering RNAi platform (sd-rxRNA ) provided a solid foundation

for our continued product development efforts in 2013, and continues to offer potential opportunities for future value creation, said Dr. Geert Cauwenbergh, President and CEO of the Company. He added that, Conservative use of our

available cash, combined with the professional strengths of our employees and the support of our shareholders, has been instrumental in moving RXI-109, our anti-scarring compound, into Phase 2 clinical studies, from which we expect to see the first

results in the course of 2014.

Fourth Quarter 2013 and Recent Company Highlights

Selected Full Year Financial Highlights

Cash and Cash Equivalents

2013, RXi had cash, cash equivalents, and short-term investments of approximately $14.4 million, compared with $5.1 million at December 31, 2012.

Net Loss and Net Loss Applicable to Common Stockholders

Net loss for the year ended December 31, 2013 was $20.9 million, including $2.0 million in non-cash share-based compensation expense, compared with a net

loss of $12.9 million, including $1.0 million in non-cash share-based compensation expense, for the year ended December 31, 2012. The increase in the net loss of $8.0 million was primarily attributable to a one-time non-cash charge of $12.3

million related to the fair value of common shares issued in exchange for certain RNAi-related assets from OPKO Health, Inc. as compared with a one-time non-cash charge of $6.2 million related to the fair value of common shares issued in exchange

for patent and technology rights for the same period in 2012.

Net loss applicable to common stockholders for the year ended December 31, 2013 was

$29.5 million compared with a net loss applicable to common stockholders of $25.7 million for the comparable period in 2012. The increase in net loss applicable to common stockholders of $3.8 million was primarily attributable to the aforementioned

increase in net loss as compared to prior year and an increase of $5.3 million related to the fair value of Series A and Series A-1 Preferred Stock offset by a decrease of $9.5 million related to a one-time charge for the beneficial conversion

feature of the Series A Preferred Stock recorded in the second quarter of 2012.

Total revenues for the year ended December 31, 2013 were $0.4 million as compared with $0.1 million for the comparable period in 2012. The increase in

total revenues for the year ended December 31, 2013 was due to the recognition of work completed on the Company s government grants during the period.

Research and Development Expenses

development expenses for the year ended December 31, 2013 were $17.7 million, compared with $10.5 million for the year ended December 31, 2012. The increase of $7.2 million was primarily due to increases of $6.1 million in expense related

to the fair value of common shares issued in exchange for patent and technology rights, $0.7 million in research and development expenses largely due to costs related to the manufacture of RXI-109 for use in the Company s on-going clinical

trials and $0.4 million in employee stock-based compensation expense.

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 2013 were $3.7 million, compared with $2.6 million for the comparable period in 2012.

The increase in general and administrative expenses of $1.1 million was primarily due to an increase of $0.6 in employee stock-based compensation and $0.5 million in general and administrative expenses due to an increase in employee headcount,

employee compensation and benefits, increases in Board fees, the annual Delaware franchise tax for 2013 and professional services such as outside contractors and consultants.

Series A and Series A-1 Preferred Stock and Dividends

Accretion of Series A and Series A-1 Preferred Stock and dividends was $8.6 million for the year ended December 31, 2013, compared with $12.8 million

accretion of Series A and Series A-1 Preferred Stock and dividends for the

comparable period in 2012. The decrease of $4.2 million is due to the one-time charge of $9.5 million related to the beneficial conversion feature of the Series A Preferred Stock during the same

period in the prior year offset by an increase of $5.3 million in Series A and Series A-1 Preferred Stock dividends due to changes in the Company s closing common stock price on the dividend payment dates and the number of preferred shares

earning dividends each year.

About RXi Pharmaceuticals Corporation

RXi Pharmaceuticals Corporation (NASDAQ: RXII) is a biotechnology company focused on discovering, developing and commercializing innovative therapies based on

its proprietary, self-delivering RNAi platform. Therapeutics that use RNA interference, or RNAi, have great promise because of their ability to down-regulate, the expression of a specific gene that may be over-expressed in a disease

condition. Building on the pioneering work of scientific founder and Nobel Laureate Dr. Craig Mello, a member of the RXi Scientific Advisory Board, RXi s first RNAi product candidate, RXI-109, targets connective tissue growth factor (CTGF)

to reduce dermal scarring (fibrosis), entered into human clinical trials in June 2012. For more information, please visit www.rxipharma.com.

Forward-Looking Statements

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 timing and future success of our clinical trials with RXI-109; our expectation that we will complete our Phase 2 clinical trials for RXI-109 within anticipated time periods and budgets; our ability to implement cost-saving measures and

statements about other future expectations. 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 the reduction of formation of surgical scars; 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; 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

Tamara McGrillen, 508-929-3646

RXi PHARMACEUTICALS CORPORATION

(A Development Stage Company)

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

RXi PHARMACEUTICALS CORPORATION

(A Development Stage Company)

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