RXi Licenses Novel, Targeted Cancer Vaccine for Gynecological Cancers (RXII)

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RXi Licenses Novel, Targeted Cancer Vaccine for Gynecological Cancers

Grant Zeng, CFA

On September 21, 2011, RXi Pharmaceuticals Corporation (RXII) announced that it has licensed worldwide rights to develop and commercialize a Folate Binding Protein-E39 (FBP) targeted vaccine to prevent recurrence in gynecological cancers such as ovarian and endometrial adenocarcinomas. The FBP vaccine was licensed from The University of Texas M D Anderson Cancer Center and Henry M. Jackson Foundation for the Advancement of Military Medicine, Inc. (HJF).

FBP has been granted Investigational New Drug (IND) by the FDA to enter clinical trials. Institutional Review Board (IRB) approval has also been received. RXi plans to initiate Phase I trials by the end of 2011.

The FBP vaccine consists of the E39 peptide combined with the immune adjuvant granulocyte macrophage colony stimulating factor (GM-CSF). FBP is over-expressed (20-80 fold) in more than 90% of ovarian and aggressive endometrial cancers, as well as 20–50% of breast, lung, colorectal, and renal cell carcinomas. FBP has very limited tissue distribution and expression in non-malignant tissue and has many years of validation as an ideal immunotherapy target.

The broad overexpression of FBP in a wide variety of cancers indicates that FBP vaccine has a potential targeting multiple cancer indications.

The market for FBP vaccine is huge. Ovarian cancer occurs in over 22,000 patients per year in the U.S. alone and is the most lethal gynecologic cancer. Endometrial cancer is the most common gynecologic cancer and occurs in over 43,000 women in the US annually. If developed successfully, FBP vaccine could be an important option for physicians to target ovarian and endometrial cancers.

We think the acquisition is positive to RXi. The license of FBP vaccine doubles RXi's oncology pipeline which includes NeuVax (E75).

Earlier this month, RXi received official notification from the U.S. Food and Drug Administration (FDA) that the Chemistry, Manufacturing, and Controls (CMC) partial clinical hold has been lifted. RXi has satisfied all requirements specified by the FDA and has initiated a clinical trial material manufacturing plan to remain on schedule to meet the planned trial start date.

NeuVax is expected to initiate its Phase III PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) study in the first half of 2012 under a Special Protocol Assessment (SPA).

We think RXi is making great progress in building its cancer pipeline and in the advancement of its lead candidate NeuVax for breast cancer. We maintain our Outperform rating on RXII and reiterate our 12-month price target of $2.50 per share.

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