Today we are going to put our focus into a company that I think investors should consider looking into more closely because of its enormous potential. Rxi Pharmaceuticals (NASDAQ:RXII) is expected to release results of its phase 2a trial in patients with hypertrophic scars within the next few months. We think investors should closely monitor this situation as positive phase 2a results in hypertrophic scars using RXI-109 practically validates the entire pipeline full of clinical candidates.  The trial is known as RXI-109-1301 and is recruiting patients with hypertrophic scars that undergo elective surgery to compare the difference between RXI-109 and a placebo drug. We believe that a positive result from this study should boost the share price to a new valuation as analysts conclude the possible potential future revenue which is estimated to be around $2 to $5 billion dollars. The share price currently trades around $3.30 per share at the time of this writing but with a good gene knockdown seen in the hypertrophic scar of patients it will be a huge game changer for RNAi and Rxi pharmaceuticals as a company.

To understand RXI-109 we have to understand what type of compound it is. RXI-109 is an RNAi compound that is being developed to suppress CTGF (Connective Tissue Growth Factor) and achieve the most efficient possible gene knockdown. We have been confused though because there are many inexperienced writers that have been hounding Rxi pharmaceuticals asking " Why is the company only achieving a 50% mRNA CTGF knockdown and not 97% gene knockdown like Alnylam Pharmaceuticals (NASDAQ:ALNY) in their RNAi treatment for TTR-Mediated Amyloidosis. So we are going to set the record straight so hopefully the critics of Rxi can fully understand why. When it comes to scarring Rxi uses RXI-109 at minimal doses matter in fact the doses are 30 times smaller than other RNAi company doses like Alnylam. This is because Rxi wants to reduce the CTGF proteins of the patient with the scar but if they did a gene knockdown of 97% not only would the results be a failure but the patient would be left with an open wound. Rxi's job is to find a common ground that means to be some where in the middle , thus gene knockdown results of 50% and not higher gene knockdown. Quite honestly it is a simple concept yet critics are throwing around that the gene knockdown is not sufficient as we can see that is incorrect.

Rxi Pharmaceuticals chose RXI-109 for a couple of reasons, for starters it deals with scarring which is a huge unmet medical need considering there are zero FDA approved drugs for hypertrophic scars or keloids. This means the company can be first to market and have the entire market to itself. Secondly the compound is de-risked because Pfizer (NYSE:PFE) Excaliard reported positive phase 2 results using RNA antisense oligonucleotides (No RNAi at all) against CTGF. Thus Rxi Pharmaceuticals in the phase 1 single dose trial reported positive phase 1 results achieving a big difference from RXI-109 and placebo achieving a p-value of p = 0.02 which means the trial met statistical significance.

If that validation wasn't enough Rxi Pharmaceuticals is currently selling their RXI-109 drug compound in Europe under a "Specials" Provision. A specials provision is where a company can sell its compound in Europe even before approval if it satisfied an unmet medical need and is safe for distribution. This was possible because Rxi made a deal with Ethicor in which Ethicor is licensed to distribute RXI-109 to doctors for use with patients. Under the deal the revenue will be split in half, but this gives Rxi an indication for the market once their product passed all clinical trials and is ultimately approved. The RXI-109 clinical product utilizes the company's flagship technology known as the sd-rxRNA platform. This platform makes use of the good concepts of RNAi and the good concepts of RNA and leaves out the bad abilities of the two. This technology also allows the drug to be sent through the skin, eye, and tissue without a delivery vehicle. It is able to do so because it is formed as a drug compound and is able to achieve amazing cellular uptake compared to RNAi and RNA just by themselves.

Final validation came just a few days ago when the company reported pre-clinical results for RXI-109 in its ophthalmology studies in monkeys. The study was established as a dose ranging study to establish the dosing needed to move on to human clinical trials. The results indicated that RXI-109, which is currently also used for scarring, was found to lower CTGF in the retina. Even more important the compound was so substantial it was able to also target the CTGF of the Cornea as well. This early result seen also validates RXI-109 as a substantial compound and greatly de-risks the company forward. We think that Rxi Pharmaceuticals is a great small-cap biotechnology company for investors to take a look at. Results of the phase 2a hypertrophic scar data should be out within the next few months, and we think investors should be ready in anticipation.  With its enormous potential, and validated data in humans to date, we think that this company should have a great future moving forward.