RXi Shakes Up Its Strategy, Management
PHOTO/COURTESY
Mark Ahn, RXi's new president and CEO.
The recent purchase by Worcester-based RXi Pharmaceuticals of a company specializing in cancer therapies has some wondering if the company is moving away from its bread-and-butter technology, which was discovered in Worcester.
RXi Pharmaceuticals is a biotech company born out of the work of Craig Mello, a University of Massachusetts Medical School molecular biologist who won a Nobel Prize for his RNA interference discovery. RNAi can be used to turn genes on and off, and in theory treat diseases like cancer.
But earlier this year RXi replaced CEO Noah Beerman and purchased a company, named Apthera, which has very little to do with RNAi technology.
While the acquisition puts RXi much closer to launching a product and generating revenues, Mark Ahn, the company’s new president and CEO, dismisses the notion that the company is giving up on RNAi.
Evolving Technology
“We remain committed to RNAi, its strategic arc and its importance in addressing new targets,” said Ahn, who called RNAi technology “exquisite and exciting.”
Still, he admits, there have been issues in the RNAi field. The biggest is a deployment problem.
The technology works to target specific genes, which requires therapies to get inside cells. Researchers are struggling with how to get the therapy not only inside the body, but to the right tissue, the right cells, and then into the right parts of the cells.
Ahn said RXi’s technology, in part, solves that problem. The company’s most advanced RNAi drug is RXI-109, a topical anti-scarring medication.
It eliminates the issue of deployment because the drug is applied directly to the wound.
But RXI-109 is still in the pre-clinical stage, years away from reaching the market. And in the meantime RXi has shareholders that are hungry for revenues.
RXi’s stock is trading below a dollar from a two-year high of $6.84 in March of last year.
The Apthera purchase, Ahn argues, gives the company a strong drug candidate that is closer to reaching the market than RXI-109.
Analysts who follow the company like the move.
“I think, in a sense, it’s good for investors,” said Keith Markey, scientific director for Griffin Securities in New York City, who tracks RXi Pharmaceuticals. “It moves the company into a more advanced stage of therapeutic development.”
But the move also raises some more questions for RXi.
Phase III clinical trials, which Apthera hopes to enter by next year, are costly. Will the money required to run the trials on the Apthera drug hamper the company’s ability to fund RNAi activities?
RXi might look to outside help to fund the RNAi research.
The company received a half-million dollar grant from the Massachusetts Life Sciences Center at the end of April, in conjunction with the University of Massachusetts Medical School, to use RNAi technology to find a cure for ALS, a deadly central nervous system disease.
RNAi technology still has a place within RXi and can “absolutely” be a beneficial medical therapy, and make a profitable business platform, according to Markey. The only issue is that it might take time.
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