A Feb. 26, 2018 research note indicated that Zacks Small-Cap Research initiated coverage on RXi Pharmaceuticals Corp. (RXII:NASDAQ) and valued it at $20 per share, which compares to where the stock is trading today at around $2.72 per share, a greater than 600% upside. The target price is based on "our estimates for a 2023 launch of RXI-109 and a 2022 launch of Samcyprone, both through the efforts of a partner," noted analyst John Vandermosten. RXI-109 and Samcyprone are the company's most advanced assets, targeting potential use for certain dermal and ocular conditions.
Vandermosten explained that RXi "is developing its self-delivering interference RNA (sd-rxRNA) technology platform, which is able to silence the expression of proteins inside cells and thereby impact a substantially broad range of diseases."
RXI-109 is currently being evaluated in trials to treat dermal scarring and retinal scarring, Vandermosten reported. A phase 2 clinical trial in dermal scarring is done, with the next step being a Phase 2b study. Zacks anticipates approval and launch of RXI-109 in dermal scarring in 2023. In the latter indication, retinal scarring, which is in a later stage, analysis of data collected in a Phase 1/2 trial is underway. Zacks expects approval and launch of RXI-109 in retinal scarring in 2024.
As for the clinical progress of Samcyprone, data are being collected for the Phase 2a study in warts, or verruca vulgaris. Topline results should be released in H1/18. Zacks anticipates approval and launch of Samcyprone for warts in 2022.
RXi intends to obtain a partner to fund and further develop these three programs, two dermatologic and one ophthalmologic, and employ the capital generated from the transfer of rights to support its immuno-oncology efforts, Vandermosten noted. He purported that "a favorable investment and regulatory environment are supportive of immuno-oncology and should allow for rapid entry into the clinic."
As for RXi's immuno-oncology candidates, there are three, and all are in a development or preclinical stage. They are:
- RXI-762, an sd-rxRNA targeting PD-1 in solid tumors
- RXI-804, an sd-rxRNA targeting TIGIT in solid tumors
- An undisclosed agent, an sd-rxRNA targeting undisclosed targets in an undisclosed immuno-oncology indication.
"The company anticipates that it can place an oncology indication in the clinic in the next 12 to 18 months," Vandermosten wrote.
Along with all of the above sd-rxRNA immuno-oncology compounds , RXi has two others, for dermatological indications. They qualify as cosmetics under federal regulatory rules and, therefore, don't require pre-marketing approval. They are:
- RXI-231, an sd-rxRNA targeting tyrosinase for uneven skin tone/pigmentation, which is in the functional and safety testing phase
- RXI-185, an sd-rxRNA therapy targeting MMP1 for wrinkles/skin laxity, which is further along, in the consumer testing phase.
As for these candidates, other than RXI-109 and Samcyprone, in RXi's portfolio, they "may eventually generate revenues," wrote Vandermosten.
The analyst offered these main reasons to own RXi:
- A versatile platform with broad applicability and a distinctive delivery mode
- Multiple ways to general revenue, including in- and out-licensing
- An ample pipeline of sd-rxRNA candidates in several indications
- A compelling safety and efficacy profile in Phase 2 studies
- Significant end markets for warts
- Well-defined markets for scarring with minimal direct competitors
- Global rights to intellectual property.
Vandermosten concluded, "With multiple monetizable indications in dermatology, ophthalmology and warts, RXi is in a strong position to advance its lead sd-rxRNA candidates to approval and support its developmental oncology pipeline."
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Disclosures from Zacks Small-Cap Research, RXII Pharmaceuticals Inc., Feb. 26, 2018
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