RXi Pharmaceuticals Reports Financial Results for the Third Quarter of 2012
<0> RXi Pharmaceuticals CorporationTamara McGrillen, 508-929-3646 </0>
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.”
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 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 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 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.
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.
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 skin injury).
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 .