Health & Fitness
Health and Fitness
Health and Fitness
Thu, February 5, 2009 RXi Pharmaceuticals Secures $25 Million Committed Standby Equity Agreement
WORCESTER, Mass.--([ BUSINESS WIRE ])--RXi Pharmaceuticals Corporation (Nasdaq: RXII), a biopharmaceutical company pursuing the development and commercialization of proprietary therapeutics based on RNA interference (RNAi), today announced that it has entered into a committed standby equity agreement with YA Global Investments, a Yorkville Advisors fund (Yorkville). Under the terms of this agreement RXi has the option, at its sole discretion, to sell to Yorkville newly issued common shares, subject to certain conditions, in increments of up to $500,000 each over a two-year period for a total of up to $25 million in proceeds to RXi.
Tod Woolf Ph.D., President and CEO of RXi Pharmaceuticals noted, "This agreement is particularly well suited to provide RXi with the financial flexibility to move our product programs towards the clinic, while we continue to develop and expand our therapeutic platform. While we have no immediate intention to draw on this equity facility, we are pleased to have access to potential capital that could strengthen our financial position as we continue our partnering negotiations. We are gratified that, despite the challenging financing climate, a well established, well capitalized fund such as Yorkville has committed to invest in RXi under favorable terms for us. We believe this a reflection of the strength of RXi's team and our RNAi therapeutics platform."
Dr. Michael J. Nowak, Head of the Healthcare Group at Yorkville and Managing Director at Yorkville, a New Jersey based fund with $1 billion of assets under management, led the investment into RXi Pharmaceuticals. Dr. Nowak, stated: "Yorkville provides innovative financing tools for public growth technology companies. Given the promise and excitement generated by recent developments in RNAi, we're especially delighted to be able to work with RXi, a leader in the space and in the Massachusetts biotech community."
The principle features of the agreement are as follows:
- Following the effectiveness of a registration statement covering the resale of any shares purchased by Yorkville, RXi will be entitled to sell, and Yorkville is obligated to buy, up to $500,000 of newly issued RXi common shares in any five day period during the term of the agreement.
- The price for the newly issued common shares will be calculated on the basis of the lowest daily volume weighted average price of RXi's stock over a period of five consecutive trading days following the date of RXi's notice to Yorkville that it intends to sell shares under the facility, less a 5% discount.
- Yorkville is not permitted to short sell or enter into any hedging transactions related to RXi's stock.
- There are no warrants or any other derivative instruments issued by RXi under this agreement, and RXi is not required to pay any banking fees or commissions as part of this agreement.
- Should RXi's market price fall below a minimum price equal to 85% of the volume weighted average price of RXi's stock for the day before RXi delivers a selling notice to Yorkville on any individual day during the period when the subscription price is being determined, the pro rata subscription for that day will not be executed, unless Yorkville has sold shares during such excluded day, in which case, such shares will be sold at such minimum price.
- There are no restrictions on RXi's ability raise funds from other sources during the term of the agreement, and RXi will continue to explore potential additional financing opportunities.
- RXi has issued 58,398 common shares valued at $250,000 to Yorkville as a one-time commitment fee, as well as a legal and structuring fee of $25,000.
About RXi Pharmaceuticals Corporation
RXi Pharmaceuticals is a discovery-stage biopharmaceutical company pursuing the development and potential commercialization of proprietary therapeutics based on RNA interference (RNAi) for the treatment of human diseases. RXi Pharmaceuticals' rxRNA™ compounds are distinct from the siRNA compounds used by many other companies developing RNAi therapeutics and are very active and potent (10-100pM activity in cell culture) based on the company's internal research, in addition to being nuclease resistant and readily manufactured. RXi Pharmaceuticals believes it is well positioned to compete successfully in the RNAi-based therapeutics market with its accomplished scientific advisors, including Dr. Craig Mello, recipient of the 2006 Nobel Prize for his co-discovery of RNAi; a management team that is experienced in developing RNAi products; and a strong early intellectual property position in RNAi chemistry and delivery. [ www.rxipharma.com ]
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future expectations, plan and future development of RXi Pharmaceutical Corporation's products and technologies and the Company's financing plans. These forward-looking statements about future expectations, plans and prospects of the development of RXi Pharmaceutical Corporation's products and technologies involve significant risks, uncertainties and assumptions, including the risk of delays in satisfying the conditions to selling any of the securities to Yorkville and the potential adverse impact on the market price of our securities due to resales by Yorkville of securities purchased from the Company, the risk that we may be unable to secure all of the capital needed to support our operations from the Yorkville equity agreement or from other sources, the risk that the development of our RNAi-based therapeutics may be delayed or may not proceed as planned and we may not be able to complete development of any RNAi-based product, the risk that the FDA approval process may be delayed for any drugs that we develop, risks related to development and commercialization of products by our competitors, risks related to our ability to control the timing and terms of collaborations with third parties, the possibility that other companies or organizations may assert patent rights that prevent us from developing our products and the risk that we may not be able to obtain sufficient financing to develop our product candidates on favorable terms or at all. Actual results may differ materially from those RXi Pharmaceuticals Corporation contemplated by these forward-looking statements. RXi Pharmaceuticals Corporation does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this release.
