RXi Pharmaceuticals Initiates Development Program for Dermal Anti-Scarring Product Candidate

RXi Pharmaceuticals Corporation (Nasdaq: RXII), a recognized leader in RNAi-based therapeutic discovery and development, today announced further details regarding RXI-109, the company’s dermal anti-scarring candidate.

RXi has initiated its development program for RXI-109 with a goal of submitting an IND in the second half of 2011. The company is beginning manufacturing activities with an experienced cGMP oligonucleotide manufacturer to support its IND enabling toxicology program, and is preparing a pre-IND package for submission to the FDA. In addition, pending FDA review, the company intends to employ an innovative clinical trial design to study safety and tolerability as well as initial efficacy in its first clinical trial targeted for 2012. In this clinical trial, RXi plans to evaluate RXI-109 for the reduction of dermal scarring in planned surgeries. The company believes this clinical trial has the potential to generate a meaningful data set while keeping the trial size to a minimum.

"We are pleased with the progress the company is making with RXI-109 and continue to be on track to file an IND in the second half of this year,” said Pamela Pavco, Ph.D., Vice President of Pharmaceutical Development. "Our plans for the manufacturing and toxicology work are progressing nicely. By evaluating RXI-109's effect on scar formation in this proposed trial, not only will we be able to gather safety and tolerability data, we believe we may also be able to obtain an early histological assessment of clinical efficacy within the first year of initiating this trial.”

RXI-109 is a self-delivering RNAi compound (sd-rxRNA™) designed to reduce the expression of CTGF (connective tissue growth factor). CTGF is known to be a critical regulator of several biological pathways involved in fibrosis and thus may be applicable in the treatment of numerous indications with a fibrotic component, including scar formation in the skin.

"As part of our anti-scarring program, we evaluated and screened multiple targets thought to be implicated in excessive fibrosis and selected CTGF,” said Anastasia Khvorova, Ph.D. RXi’s Chief Scientific Officer. "In addition to our work to identify and characterize RXI-109, there is supportive preclinical and recent clinical data in the literature showing that the modulation of CTGF plays an important role in the reduction of fibrosis and scarring. We are excited to be moving forward with our first development candidate that utilizes RXi’s proprietary sd-rxRNA technology platform.”

About Dermal Anti-Scarring and CTGF

Scarring is a result of the natural process of wound repair. In the initial phase of this healing process, the wound is closed quickly to prevent infection and often results in visible scar tissue composed primarily of collagen. Dermal scars can range from fine lines to pronounced, painful scars that constrict the area and/or interfere with motion. Scar prevention and reduction is a therapeutic area of unmet medical need, with no universal standard of care and no approved drugs for the prophylactic reduction of scarring. The US potential market for skin scarring is estimated to be up to $4 billion with approximately 42 million surgical procedures conducted annually.

Anti-scarring/anti-fibrotic treatments are being developed to help prevent unsightly and debilitating dermal scars as well as to treat other medical conditions where excess scarring and/or fibrosis may occur. For the skin, these prophylactic treatments involve agents that are administered locally at the time of surgery or injury, and may lead to long-term improvements in scarring.

CTGF is an extracellular matrix (ECM) associated protein that plays a key role in many cellular processes. The ECM is a complicated cellular microenvironment involved in regulation of all cellular interactions and communications. CTGF modulates signals from a wide range of factors in the cell and in this way controls critical cellular pathways including proliferation, adhesion, migration, angiogenesis and scar tissue remodeling.

CTGF has been studied by academic and industry groups for many years, and diverse pre-clinical data support its critical role in all forms of chronic and acute fibrotic disease where improper scarring leads to organ or tissue dysfunction. Recent early clinical efficacy data demonstrate the benefit of antisense oligonucleotide mediated CTGF down-regulation in reduction of collagen formation and dermal scarring. Other disorders and diseases which include the involvement of a fibrotic component may also benefit from CTGF modulation and restoration of the ECM balance.

About Self-delivering rxRNA™ (or sd-rxRNA)

RXi’s sd-rxRNA compounds are designed for therapeutic use and have drug-like properties, such as high potency, target specificity, serum stability, reduced immune response activation, and efficient cellular uptake. They are hybrid oligonucleotide molecules which the Company believes combine the beneficial properties of both conventional RNAi and antisense technologies. sd-rxRNAs have a single-stranded phosphorothioate region, a short duplex region, and contain a variety of nuclease-stabilizing and lipophilic chemical modifications. The combination of these features has the potential to allow sd-rxRNAs to achieve efficient spontaneous cellular uptake and potent, long-lasting intracellular activity.

About RXi Pharmaceuticals Corporation

RXi Pharmaceuticals is a recognized leader in RNAi-based therapeutics with a comprehensive platform that includes both RNA interference (RNAi) compounds and delivery technologies. The company is leveraging this broad and integrated platform to build a pipeline of RNAi therapeutic candidates for the treatment of a number of disease areas, including its core focus of developing treatments for dermal anti-scarring and retinal disorders as well as a continued interest in oncology and indications accessible by spinal cord delivery. RXi Pharmaceuticals believes it is well positioned to compete successfully in the RNAi therapeutics market based on the strength of its next generation RNAi platform, experienced management team, accomplished Scientific Advisory Board, including Nobel Laureate, Dr. Craig Mello, and its broad 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, plans and future development of RXi Pharmaceutical Corporation’s products, technologies and partnering efforts. These forward-looking statements about future expectations, plans and prospects of the development of RXi Pharmaceutical Corporation’s products and technologies and corporate partnerships involve significant risks, uncertainties and assumptions, including the risk that RXi and third parties may not be able to successfully develop technologies that are the subject of collaborations with such third parties, the risk that the development of our RNAi-based therapeutics may be delayed or may not proceed as planned, may not be safe and that 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 and the possibility that other companies or organizations may assert patent rights that prevent us from developing our products. 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.