Mello RNAi Firm RXi Pharmaceuticals Has Wild Ride on First Day of Trading
Shares of Worcester, MA-based RXi Pharmaceuticals (NASDAQ: RXII) hopped on a bit of a roller coaster this morning when the company—which was spun out of Los Angeles’ CytRx to develop RNAi-based treatments for human diseases—made its debut on the NASDAQ Capital Market. After being distributed to CytRx shareholders last night, the stock began trading at $6.01 and quickly climbed as high as $23.95, before falling back to around $10.50 in the early afternoon.
RXi, formed as a subsidiary of CytRx (NASDAQ: CYTR) in January 2007, was founded by a group of four RNAi researchers, including UMass Medical School professor Craig Mello, who won the 2006 Nobel Prize in medicine for co-discovering RNAi. The company joins Cambridge, MA’s Alnylam (NASDAQ: ALNY) and Boston-based Dicerna Pharmaceuticals on what many believe will be a growing list of local firms focusing on turning RNAi’s gene-silencing abilities into treatments for a host of diseases. (See Dicerna founder John Rossi’s take on the field’s potential, for instance, or Alnylam CEO John Maraganore’s.) RXi’s IP portfolio includes a suite of patents licensed from UMass, Cold Spring Harbor Laboratory, and the Carnegie Institution of Washington.
CytRx’s own stock climbed yesterday from $1.59 to $1.87, and followed RXi up a bit further this morning before dropping back down to around $1.70. As a result of last night’s distribution, the California company now owns approximately 49 percent of RXi’s outstanding shares.