Business context and reporting period
The filing is RXi Pharmaceuticals Corporation’s unaudited Form 10-Q for the quarter ended March 31, 2015. The company describes itself as a biotechnology developer focused primarily on dermatology and ophthalmology, including RNAi candidate RXI-109 and topical immunomodulator Samcyprone. The filing names RXi Pharmaceuticals Corporation, while the request metadata names Phio Pharmaceuticals Corp.; investors should verify the entity and filing identity.
Financial results and liquidity
| Metric | Q1 2015 | Q1 2014 / comparison |
|---|---|---|
| Revenue, all from grants | $34,000 | $29,000; up $5,000 (17%) |
| Research and development expense | $2.107 million | $1.476 million; up 43% |
| General and administrative expense | $873,000 | $843,000; up 4% |
| Total operating expense | $2.980 million | $2.319 million |
| Operating loss | $2.946 million | $2.290 million |
| Net loss | $2.945 million | $2.284 million |
| Net loss applicable to common stockholders | $3.130 million | $4.039 million |
| Basic and diluted loss per share | $0.13 | $0.32 |
| Operating cash used | $1.972 million | $2.380 million |
Revenue was immaterial relative to expenses; operating margins are not meaningful for assessing this development-stage company. The smaller loss applicable to common stockholders versus 2014 primarily reflects preferred-stock dividends of $185,000, down from $1.755 million, rather than improved operating performance.
Cash and cash equivalents were $6.580 million at March 31, 2015, down from $8.496 million at December 31, 2014. The company reported $50,000 of restricted cash. Net cash declined by $1.916 million during the quarter; investing activities used $8,000, and financing activities provided $64,000. No debt is reported on the balance sheet. Current liabilities were $1.556 million, compared with current assets of $6.981 million.
Management said cash on hand and potential proceeds from its equity facility with Lincoln Park Capital (LPC) should fund operations for at least the next 12 months. The facility permits up to $10.8 million of stock sales, subject to conditions and limitations; the company sold 50,000 shares for net proceeds of $64,000 in the quarter.
Material changes and operating developments
- R&D expense rose by $631,000, primarily from ocular preclinical toxicology work, fees for three ongoing clinical trials, and Samcyprone-related costs. The quarter included $100,000 cash and $228,000 fair value of stock issued to acquire Samcyprone assets and rights; the amounts were recorded as R&D expense.
- RXI-109 was being evaluated in three Phase 2a studies. Enrollment in two studies was complete; enrollment in the third was more than 50% complete. Management reported preliminary observations suggesting reduced keloid recurrence in treated sites, while noting the study remained ongoing.
- Following a March 2015 expert-panel review of preliminary keloid-study observations, the company planned a longer treatment regimen and an additional keloid trial by year-end 2015.
- The company planned an IND filing in mid-2015 for RXI-109 in retinal scarring, subject to completion of ongoing eye toxicology testing. It also expected to start another Phase 2a Samcyprone wart trial by year-end 2015. Samcyprone received FDA Orphan Drug Designation for stage IIb–IV malignant melanoma in March 2015.
- In March 2015, RXi licensed its sd-rxRNA technology to MirImmune for ex-vivo cancer immunotherapies. Potential licensing fees, milestones, royalties, and an equity interest are contingent; management did not expect significant near-term milestones or royalties.
- Common shares issued and outstanding were 31.22 million at March 31, versus 21.98 million at December 31, reflecting preferred-stock conversions and other issuances. After quarter-end, 2,026 Series A preferred shares converted into 4,938,515 common shares. The filing reports 36,160,113 common shares outstanding as of May 8.
Outlook, risks, and contingencies
RXi had not generated product revenue and stated it might not do so in the foreseeable future, or at all. It expected significant operating losses and R&D spending to remain substantial as programs advance. Management cautioned that trial success, timing, regulatory outcomes, funding availability, and development costs are uncertain; if additional funding is unavailable on acceptable terms, the company could scale back or terminate operations or seek a merger or acquisition.
On May 7, 2015, after quarter-end, Nasdaq notified the company that its share price did not meet the $1.00 minimum bid-price requirement. RXi had until November 3, 2015 to regain compliance, with potential additional time subject to Nasdaq rules. A delisting, if it occurred, could adversely affect share liquidity, financing access, and operations. The company reported no legal proceedings, no off-balance-sheet arrangements, and effective disclosure controls as of quarter-end.
Important facts for investors to verify
- Confirm the registrant’s identity and relationship to the Phio Pharmaceuticals Corp. name in the request metadata.
- Track cash burn, actual use and availability of the LPC equity facility, and whether management’s stated 12-month funding outlook remains supportable.
- Review RXI-109 and Samcyprone trial progress and results; the keloid observations cited were preliminary, not definitive efficacy findings.
- Verify the status of the planned retinal IND and additional clinical trials, including timing, regulatory requirements, and funding needs.
- Monitor Nasdaq bid-price compliance and the effect of preferred-stock conversions and other share issuances on dilution and share count.