PHIO — Phio Pharmaceuticals Corp.

Summary of RXi Pharmaceuticals Q3 2018 Earnings Call

1. Key Financial Results and Metrics

• Net Loss: Q3 2018 net loss was $1.5 million, a reduction from $2.5 million in Q3 2017.
• Grant Revenues: Generated $57,000 in grant revenues, a new source compared to zero in Q3 2017.
• Expenses:
  • R&D expenses decreased to $0.8 million from $1.5 million year-over-year, attributed to reduced clinical trial costs and headcount.
  • General and administrative expenses fell to $0.7 million from $1 million in the prior year.
• Cash Position: Cash on hand was $3.2 million as of September 30, 2018, down from $3.6 million at the end of 2017. Following a public offering on October 3, 2018, the company raised approximately $13.3 million, extending its cash runway into the second half of 2020.

2. Strategic Updates and Business Highlights

• Name Change: The company announced a rebranding from RXi Pharmaceuticals to Phio Pharmaceuticals Corporation, effective immediately, to reflect its focus on immuno-oncology.
• Leadership Transition: Dr. Gerrit Dispersyn was promoted to President and COO, with plans for him to eventually become CEO.
• Asset Sales: The company is actively seeking to sell or out-license its dermatology and ophthalmology assets, with interest noted in both sectors.
• R&D Progress: Advancements in immuno-oncology and adoptive cell therapy (ACT) were highlighted, particularly with natural killer (NK) cells and collaborations with academic institutions.

3. Forward Guidance and Outlook

• Cash Burn Rate: Expected to maintain a burn rate of approximately $2 million per quarter, with anticipated increases as clinical trials commence towards the end of 2019.
• Clinical Trials: Plans to initiate the first clinical trial in immuno-oncology, with further developments expected in 2020.
• Collaboration Goals: Anticipated expansion in collaborations to enhance product development and accelerate timelines in immuno-oncology.

4. Bad News, Challenges, or Points of Concern

• NASDAQ Compliance: The company’s share price has fallen below $1, triggering a compliance notice from NASDAQ. The company must regain compliance by May 13, 2019, or risk delisting.
• Market Sentiment: Concerns were raised about the potential negative impact of reverse stock splits on investor confidence and share price stability.
• Cash Position: Although the recent financing extended the cash runway, the company is still reliant on successful asset sales and collaborations for future funding.

5. Notable Q&A Insights

• Cash Management: Analysts inquired about future cash burn and expense management, with expectations for increased spending as clinical trials begin.
• Collaboration Developments: Questions regarding the timeline for results from collaborations, particularly with the Karolinska Institute, indicated an expectation for initial data in early 2019.
• Market Positioning: The leadership emphasized the unique positioning of their RNAi technology in the immuno-oncology space and the importance of strategic partnerships to enhance development efforts.
• Investor Relations: Management discussed efforts to attract long-term investors and mitigate the effects of short-selling on stock performance.

This summary encapsulates the key points from the earnings call, providing a balanced view of RXi Pharmaceuticals' financial health, strategic direction, and the challenges it faces moving forward.