RXi Pharmaceuticals Corp. said it plans to split into two publicly traded companies later this year, separating its oncology and gene therapy businesses.
The biotechnology company will change its name to Galena Biopharma but will continue to trade under the ticker symbol RXII until the completion of the spinoff of RXi Pharmaceuticals. After the split, Galena will focus on cancer therapies, while RXi will develop therapies that use RNA interference, which help stem the expression of a specific gene that may be overexpressed in a disease.
Institutional investors have agreed to invest $9.5 million in RXi preferred stock and $2.5 million in Galena common stock. The RXi preferred stock is convertible to 83% of RXi's equity on the completion of the spinoff.
Galena holders will receive one RXi share and one Galena after the spinoff. Galena will retain a 4% equity position in RXi while Advirna, LLC, a private company and key licensor of RXi, will acquire 5% of the equity.
Galena Biopharma President and Chief Executive Mark Ahn said the planned spinoff will provide "a sharper strategic focus for both of the company's key programs."
Galena will focus on its lead product NeuVax, a cancer immunotherapy for preventing relapses of breast cancer. RXi will advance its anti-scarring and anti-fibrosis product, RXI-109, as well as its next generation RNAi platform.
A number of companies have unveiled plans to split in recent months to better focus on individual products.
Shares closed Friday at 99 cents each and were inactive in recent premarket trading. The stock is down 62% this year.