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RXi Shares Begin Public Trading as Company Sets Goals for 2008, 2009

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Shares of RXi Pharmaceuticals, the RNAi drugs spinout of CytRx, began trading on the Nasdaq exchange this week, reaching $13.81 by midday on Thursday. The company’s shares began trading on Wednesday at $10.
 
Also this week, RXi’s President and CEO Tod Woolf said during a conference call that the company plans to file its first investigational new drug application in 2009. RXi is also aiming to have established a second clinical development program some time next year.
 
Woolf did not specify which of RXi’s preclinical programs would yield the IND filing, but about a year ago he indicated during a presentation at the BIO-CEO and Investor meeting in New York that the company’s amyotrophic lateral sclerosis therapeutic is one of its most advanced drug candidates (see RNAi News, 2/15/2007).
 
The ALS drug targets the gene SOD1, a mutant form of which is responsible for familial ALS. In preclinical testing conducted in 2006, siRNAs targeting mutant SOD1 were delivered into murine spinal columns with an implantable pump. After seven days of treatment, the company observed significant target inhibition.
 
During his presentation this week, Woolf noted that RXi is also developing RNAi therapeutics against undisclosed neurological, high cholesterol, and cancer targets, as well as RIP140, a ligand-dependent transcriptional repressor linked to fat burning, for type II diabetes and obesity.
 
RXi is also expecting to ink at least two corporate partnerships by the end of 2009, Woolf said, with the first slated for sometime this year.
 
The debut of RXi’s stock on the public market comes as CytRx distributed shares of the new company to its own stockholders, cutting its stake in RXi to approximately 49 percent from 85 percent. About 15 percent of RXi’s shares are held by its founders and scientific advisors.
 
According to CytRx, its shareholders received one share of RXi common stock for every 20.05 shares of CytRx owned. In total, CytRx distributed roughly 4.5 million shares of RXi, about 36 percent of the spinout’s total outstanding shares.
 
Rather than distribute fractional shares, the aggregate of all RXi fractional shares awarded in the dividend will be sold through a distribution agent on behalf of stockholders in the open market at prevailing prices, CytRx said.
 
As first reported by RNAi News, CytRx had been planning for almost two years to spin out its RNAi drugs operations into an independent, publicly traded firm in order to better align it with competitors such as Alnylam Pharmaceuticals (see RNAi News, 11/11/2005). A little over a year ago, CytRx officially established RXi as a majority-owned subsidiary (see RNAi News, 1/11/2007).