Galena Biopharma said this week that it has taken the “final steps” to complete its planned spinout of RNAi subsidiary RXi Pharmaceuticals.
According to the firm, it is paying a dividend of one share of RXi stock for each outstanding share of Galena stock. Following the transaction, RXi will operate as an independent company trading on the over-the-counter bulletin board.
Galena was formed when immunotherapeutics firm Apthera merged with RXi last year (GSN 4/7/2011). The post-merger company was put under control of Apthera's management, which retained the RXi name and said it remained committed to RXi's RNAi technology and programs.
A few months later, however, the new company changed to Galena and shifted all its RNAi assets into a subsidiary, which was given the RXi name. Galena said at the time that it would retain the Nasdaq listing that had belonged to RXi before the Apthera merger and that it would spin the subsidiary off as a public company trading on the over-the-counter market as a penny stock (GSN 12/15/2011).
Since then, a number of investment groups that had taken equity positions in Galena sued the company for allegedly failing to meet contractual obligations to buy back millions in devalued warrants. Last month, Galena said it had made payments to the investors in order to settle the matter (GSN 3/29/2012).
None of the lawsuits have yet been withdrawn.