After a long period of trading in a narrow range, the share price of biotechnology company RXi Pharma (NASDAQ: RXII) increased more than 1%, closing at $2.49 on April 20, raising the company’s hopes of meeting its NASDAQ Capital Market’s listing requirements.
The modest gain was no accident as RXi Pharma had made some significant moves over the last few days. On Monday, April 18 the clinical-stage RNAi firm did a reverse split of its common shares with a 1:10 ratio and the next day also announced it had been granted a major patent application.
The company announced on Tuesday, that the U.S. Patent Office had issued a Notice of Allowance for both the methods of use and composition of matter for the company’s self-delivering RNAi compounds targeting CTGF which will not expire until 2031. The patent covers RXI-109, RXi Pharma’s lead clinical candidate which is used to lower scar formation in the eye and skin, and is already being assessed in multiple clinical studies.
Scientists at RXi Pharma (NASDAQ: RXII) are also working on advanced proprietary and unique RNAi compounds which will have improved properties for therapeutic use. These will provide stability, lower potential for immune stimulation, efficient natural cellular uptake and potent intracellular activity. In addition, RXI-109, which is a major factor in tissue repair and regeneration CTGF, is currently in the development phase to inhibit or reduce scar formation in the eyes and skin.
Reverse Stock Split
To protect itself from the current depressed share prices in the biotech and pharmaceutical sectors, RXi Pharma (NASDAQ: RXII) has also followed in the footsteps of several other small biotech companies by holding a reverse stock split. This was done to help maintain its share price to ensure that it can meet NASDAQ’s listing requirements. RXi Pharma’s post-split stock has been trading on NASDAQ since Monday, April 18 under the Company’s existing trading symbol “RXII”, but with a new CUSIP number.
The reverse 1:10 split reduces RXi Pharma’s issued and outstanding common stock to approximately 6.5 million shares from the previous 65.3 million shares. To regain compliance with the Nasdaq’s minimum bid price requirement, the companies’ common stock must have a minimum bid per share price of at least $1.00 for 10 consecutive business days. In RXi Pharma’s case, the Company currently has until May 2, to meet this requirement.
Timing is Everything
Although the reverse split could raise the RXi Pharma’s (NASDAQ: RXII) common stock bid price, there is no assurance that the move will have the desired effect of sufficiently increasing its share price for the required period of 10 days. Therefore, the patent protection news could not have come at a better time, as the patent protection for its self-delivering RNAi technology could significantly improve the company’s revenue generation and boost the firm’s commercial development possibilities in several fields, including the areas of dermal and ocular scarring and liver fibrosis making it a potentially attractive investment opportunity.