Japan Patent Decision Rockets RXi Pharmaceuticals Corp (NASDAQ:RXII)

RXi Pharmaceuticals Corp (NASDAQ:RXII)

News that RXi Pharmaceuticals Corp (NASDAQ:RXII) was granted a patent by the Japan Patent Office (JPO) sent shares of RXII soaring in pre-market trading. Shares gapped up to open at $1.06 from Tuesday’s close of $0.76. Pre-market volumes were massive. RXII has a listed average daily volume of 980,000 but RXII exchanged hands over 1.78 million times in the pre-market alone.

Marlborough, MA-based RXi Pharmaceuticals Corp (NASDAQ:RXII) is a clinical-stage RNAi firm that discovers and develops therapies in the fields of dermatology and ophthalmology. RXi continues the work of its Scientific Advisory Board Chairman and Nobel Laureate Dr. Craig Mello. RXi has developed a proprietary method of delivering RNAi compounds. They term it “self-delivering” RNAI compounds, also known as sd-rxRNA. This method of delivering RNAi compounds to the tissue of choice differentiates itself by building drug-like properties into the RNAi compound itself. It is this delivery method, sd-rxRNA, that was awarded a patent from the JPO. The patent will last until 2031.

RXi Pharmaceuticals Corp (NASDAQ:RXII) has been making headlines in 2017. In January RXi completed its acquisition of MirImmune which had achieved some success in using RXi’s cancer immunotherapy platform. Soon after that, RXi announced that OPKO Health, a $4.5 billion biotech firm, had established a +5% stake in RXi Pharmaceuticals Corp (NASDAQ:RXII).

Today investors awoke to learn of the patent award for sd-rxRNA. RXI-109 is RXi’s lead product candidate and an sd-rxRNA therapeutic compound. Sd-rxRNA claims some advatages over exiting delivery methods for RNAi therapies. Scientists at RXi Pharmaceuticals Corp (NASDAQ:RXII) modified the chemicals in RNAi compounds so that the new compound will have, intrinsically, drug-like properties that have equal potency and are more stable. Accordingly, these compounds, in themselves, deliver the needed treatment and do not require a delivery system.

In 2017, the President and CEO of RXi Pharmaceuticals Corp (NASDAQ:RXII), Dr. Geert Cauwenbergh, purchased over 400,000 shares of RXII. Institutions have increased their position in RXII by over 26% and now hold 24% of the shares. Insiders own 14.2% of the total shares. Institutions owning shares in a company with a market-cap of less than $10 million is not rare, but it is not commonplace either. No doubt the gravitas, Nobel Laureate, that comes with the Chairman of its Scientific Advisory Board had some influence on the amount of coverage RXi Pharmaceuticals Corp (NASDAQ:RXII) receives in both the investment and scientific sectors. On a contrary note, RXII shares are heavily shorted. 43% of the float is represented by shares held short.

Prior to this morning price action, RXII was trading almost 70% below its 52-week high of $3.27 but 68% above its 52-week low of $0.60. Investors looking at RXII as a long-term hold should review their history of dilutive share offerings.

3/28/2017
Ticker Symbol RXII
Last Price a/o 9:20 AM EST  $                    1.02
Average Volume                    980,400
Market Cap (mlns)  $                      5.14
Sales (mlns) $0.02
Shares Outstanding (mlns) 6.76
Share Float (mlns) 3.26
Shortable Yes
Optionable No
Inside Ownership 14.20%
Short Float 43.04%
Short Interest Ratio 1.43
Quarterly Return 5.39%
YTD Return 6.34%
Year Return -71.10%

Disclaimer – I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

Author: Steve Clark

Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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