Phio Pharmaceuticals Corp (PHIO)

[sabaidii2]

View From a Cynical Long

The 446,360-share (5.1%) stake by OPK is undeniably positive. I admit I'm at a loss as to why OPK did this - especially considering its previous RXI investment in March 2013 (http://bit.ly/2kgxR7c) has basically evaporated: $16.4 million for 113 million shares. Back-of-the-envelope calculation after the 1-for-30 and 1-for-10 reverse splits would reduce that share count to 376,667 shares, which at $0.70/share = $263,667. A 98% loss.

Ouch!

So let's look at RXI. Expected clinical test results in H2 (ie, sometime between July 1 - Dec 31 2017):

1) RXI-109 for hypertrophic scarring cohorts 3 & 4 (cohorts 1 & 2 results were a bust)

2) RXI-109 for both retina and corneal scarring.

3) Samcyprone for dermal warts

4) RXI-231 Cosmeceutical for skin hyper pigmentation reduction

Personally, I suspect RXI-109 will not produce significant results. I have no opinion on the retina and corneal tests. Samcyprone might work well, but it's small potatoes. RXI-231 would be a major major money-maker if it works well. Too soon to comment

And then we come to the utterly bizarre / desperate acquisition of MirImmune; a discovery-stage drug company. RXI has ZERO money to spend on MirImmune.

MirImmune's CEO was Alexey Eliseev, whose new role is now Chief Business Officer (CBO) for MirImmune's immunotherapy program. In plain English, Eliseev will be dialing for dollars - which is probably what he was doing at MirImmune. And the best deal he came up then was to be acquired by RXI. (Honest, I'm not making this up.)

Now ask yourself: Why would Big Pharma pony up money for development-stage drugs whose only purpose is to demonstrate a proof-of-concept that multiple biological targets can be hit within a single drug? I can hear it now "This is a virtually new miracle platform destined to transform medicine as we know it" (OK, my cynical words, but still, isn't that RXI's claim to fame?)

Considering that Big Pharma prefers phase 3 ready drugs (and even those can fail), do they really want to bet on MirImmune's and/or RXI's offerings?

Is RXI hoping for a buyout? Other than token purchases, insiders have not really bought shares on the open market.

So why did OPK buy another stake in RXI? I have no idea.