Thursday, February 5, 2009

RXi gets $25M max equity deal

By Mass High Tech staff

RNA-interference (RNAi) focused biotech RXi Pharmaceuticals Corp. has landed a standby equity agreement with YA Global Investments for up to $25 million.

YA Global is a Yorkville Advisors fund, based in New Jersey, that manages about $1 billion in assets.

The deal enables Worcester-based RXi (Nasdaq: RXII) to sell common stock shares to Yorkville in $500,000 increments at a time, within two years, leading up to $25 million total for RXi. In turn, Yorkville cannot short sell the RXi stock. The agreement also notes that RXi may continue to raise funds and seek financing outside of the Yorkville equity deal.

To initiate the agreement, RXi has committed 58,398 common shares of stock, at a $250,000 value.

RXi is a developer of RNA interference drugs designed to block genes linked to disease from producing proteins. The company was launched in January 2007 with a scientific advisory board chaired by Craig Mello, winner of a 2006 Nobel prize for his research of RNAi. In October, RXi announced that it had acquired a technology license for an RNAi oral delivery platform, called Oral rxRNA, from the University of Massachusetts Medical School.