RXi Pharmaceuticals (RXII) is a highly volatile biotechnology stock in which the underlying company has developed a robust self-delivering RNAi-based technology platform. The robust technology platform sd-rxRNA provides a strong foundation to build a leading Immuno-oncology company, with a short-term focus using Adoptive Cell Transfer technology.
This is a development stage company, and as such as been burning cash. Still, there is promise, as sd-rxRNA offers unprecedented flexibility in targeting immunosuppressive pathways with the potential to modulate multiple checkpoint genes in a single therapeutic treatment. There are many potential applications, but the stock continues to suffer:
Source: Yahoo finance
As you can see this is one ugly chart. That said, there have been opportunities in the past month to trade this name successfully:
Source: Yahoo finance
Today the stock is getting hammered, mostly because there was little communication from management after reporting earnings. This comes despite relatively solid results financially showing far less money being burnt than anticipated. Let us discuss.
Briefly, the company doesn’t bring in a dime generally, but a key partner did acquire a $15,000 grant, so we are including this in the top line. However, bear in mind that the top-line will be zero unless there are other funding sources like grants, or product sales. However, the latter is not possible as there are no FDA approved products for this developmental stage company. Therefore, we have to watch for expenses, and then data releases. The stock has suffered as the latter has been lacking. What about expenses?
Research and development expense for the quarter was $1.2 million, as compared with $1.3 million for the quarter ended December 31, 2016. The decrease was due to lower spending on clinical trial-related expenses as subject visits in each of the company’s ongoing clinical trials came to an end.
