RXI Pharma Announces Expansion of Clinical Pipeline with Exclusive License for Second Phase 2 Clinical Compound

RXi Pharmaceuticals Corporation

, a biotechnology company focused on discovering, developing and commercializing innovative therapies addressing major unmet medical needs using RNA-targeted technologies, today announced that it has entered into an assignment and exclusive global license agreement with Hapten Pharmaceuticals, LLC for the therapeutic use of Samcyprone™. Samcyprone™ is a proprietary gel formulation of diphenylcyclopropenone (DPCP), an immunomodulating agent that works by initiating a T-cell response. Although DPCP is not a registered drug, it is used successfully by dermatologists as a topical immunomodulator to treat dermatological diseases. Samcyprone™ is expected to demonstrate an improved safety and use profile over DPCP as currently applied. A Phase 2a trial to evaluate the efficacy and safety of Samcyprone™ for the treatment of viral warts has been completed and Phase 2a trials for the treatment of cutaneous metastases of various cancers including melanoma and for the treatment of alopecia areata are underway. Logo - http://photos.prnewswire.com/prnh/20130917/NE80755LOGO "Because of its proprietary gel formulation, Samcyprone™ is expected to demonstrate an improved safety and usage profile over DPCP as currently used," said Dr. William Levis, Lifetime Professor of Dermatology at Rockefeller University. He further added, "Published reports on clinical results with the use of DPCP as an experimental tool for treatment of these three difficult to treat skin conditions support the efficacy of the compound, substantially reducing the clinical risk of the ongoing product development effort." Under the terms of the Agreement, Hapten will sell and assign to RXi certain patent rights and related assets and rights to Samcyprone™. The Agreement will become effective at a closing that is scheduled to occur in early 2015 and which is subject to the satisfaction of certain closing conditions. Once the Agreement is effective, Hapten will receive an upfront payment payable in cash and common stock, will be entitled to receive future milestone payments tied to the achievement of certain clinical and commercial objectives and will receive royalties based on product sales. "Following the release reporting the Company's good progress in our Phase 2a program with RXI-109, our sd-rxRNA® compound for treatment of hypertrophic scars and keloids, I am very pleased to also announce the acquisition by RXi Pharmaceuticals of Samcyprone™, a Phase 2a product. Samcyprone™ is a proprietary formulation of DPCP, a new chemical entity (NCE), being evaluated in clinical trials in the USA for treatment of alopecia areata, warts, and cutaneous metastases of malignant melanoma," said Dr. Geert Cauwenbergh, President and CEO of RXi Pharmaceuticals. He added that, "Samcyprone™, currently in clinical development by Hapten Pharmaceuticals, provides RXi with a second Phase 2 asset for its development pipeline. The published therapeutic benefits of DPCP in the targeted diseases dramatically increase the likelihood of a successful development pathway for Samcyprone™ which should result in favorable safety and efficacy as well as providing for adequate exclusivity once the product is marketed." At closing, the assignment and exclusive license of Samcyprone™ to RXi will immediately add a second clinical development candidate that comes with some unique features: 1. Many world class academic dermatology centers use DPCP topically as an unregulated experimental tool in alopecia areata, warts and cutaneous metastases of malignant melanoma. This experience supports the efficacy of DPCP as the active ingredient and should significantly increase the likelihood of successful clinical development of Samcyprone^™ as a drug product; 2. DPCP is a new chemical entity under a U.S. IND. Samcyprone^™, the proprietary formulation of DPCP, should provide a favorable safety profile while providing a consistent cGMP formulation. It is expected to achieve market exclusivity post approval; and 3. Multiple synergies exist between RXi's sd-rxRNA® platform and Samcyprone™. The mechanism of action of Samcyprone™ is linked to DPCP's ability to alter the expression of multiple genes and miRNAs involved in the immune response. These gene targets may be modulated by an RNAi approach, utilizing sd-rxRNAs, to further enhance Samcyprone's™ efficacy and response rates. Additionally, this approach may result in the discovery and development of sd-rxRNA or other drugs that are more potent and selective for treatment of alopecia areata, warts or cutaneous metastases of malignant melanoma. In addition, the Company announced that it has entered into a new purchase agreement with Lincoln Park Capital Fund, LLC, a Chicago-based institutional investor, whereby LPC is committed to purchase an aggregate of up to $10.8 million in shares of RXi common stock over a 28-month term. Prior to entering this new agreement, the Company and LPC mutually agreed to terminate the prior purchase agreement that was in place, with respect to the $18 million unsold balance. The Company plans to use the proceeds from this new agreement with LPC to support the development of Samcyprone™, as well as the advancement of the Company's ophthalmology and dermatology franchises and for other general corporate purposes. Additional information is available within a shareholder Q&A document that may be found on the "Investors" section of the Company's website, www.rxipharma.com.