Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-K

(Mark One)

 A

For the fiscal year ended December 31 2017, 2021

Or

For the transition period fromto

Commission FileNumber 001-36304

RXiPHIO PHARMACEUTICALS CORPORATIONCORP.

(Exact name of registrant as specified in its charter)

257 Simarano Drive, Suite 101, Marlborough, Massachusetts01752

(Address of principal executive offices and Zip Code)

(508) (508) 767-3861

(Registrant’s telephone number, including area code)

FORWARD-LOOKING STATEMENTS

This reportAnnual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “intends,” “believes,” “anticipates,” “indicates,” “plans,” “expects,” “suggests,” “may,” “would,” “should,” “potential,” “designed to,” “will”“will,” “ongoing,” “estimate,” “forecast,” “target,” “predict,” “could,” and similar references, although not all forward-looking statements contain these words. Forward-looking statements are neither historical facts nor assurances of future performance. These statements are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements as a result of a number of important factors, including, but not limited to:

The risks set forth above are not exhaustive and additional factors, including those identified in this Annual Report on Form10-K under the heading “Risk Factors”Factors,” for reasons described elsewhere in this Annual Report on Form 10-K and in other filings the CompanyPhio Pharmaceuticals Corp. periodically makes with the Securities and Exchange Commission.Commission, could adversely affect our business and financial performance. Therefore, you should not rely unduly on any of these forward-looking statements. Forward-looking statements contained in this Annual Report on Form10-K speak as of the date hereof and the CompanyPhio Pharmaceuticals Corp. does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this report.

PART I

Unless otherwise noted, (1) the term “RXi”“Phio” refers to RXiPhio Pharmaceuticals CorporationCorp. and our subsidiary, MirImmune, LLC and (2) the terms “Company,” “we,” “us” and “our” refer to the ongoing business operations of RXiPhio and MirImmune, LLC, whether conducted through RXiPhio or MirImmune, LLC.

Overview

RXi

Phio Pharmaceuticals CorporationCorp. (“Phio,” “we,” “our” or the “Company”) is seeking to address the biggest challenges in immuno-oncology by creating new pathways to a biotechnology company focused on discoveringcancer-free future for patients. We are developing therapeutics that leverage our INTASYL™ technology to target both tumor and developing immuno-oncology therapeuticsimmune cells by regulating genes to treat cancer based onstrengthen a patient’s immune system while weakening tumor defense mechanisms. With our INTASYL self-delivering RNAi technology, we aim to bring the benefits of RNA therapeutics into cancer care where other modalities may fall short.

Our Development Pipeline

We are developing a pipeline of immuno-oncology therapies using our INTASYL technology that has the ability to attack cancers in multiple ways. Our INTASYL-based therapeutics are used to: (1) strengthen immune cells, for example those administered as part of adoptive cell therapy (“sd-rxRNAACT”), and (2) directly modify cells in the tumor microenvironment (the “^®TME”) platform. to weaken a tumor’s defense. These two strategies allow for multiple therapeutic applications of our INTASYL products.

In contrast to other RNA technologies and platforms, the self-delivering nature of our INTASYL platform makes it ideally suited for use with ACT treatments, as well as for direct therapeutic use. By using INTASYL technology during the manufacturing of ACT cell products we can improve the phenotype and function of these cells, potentially leading to better therapeutic outcomes. Multiple inhibitory mechanisms restrain immune cells from effectively eradicating tumors, including immune checkpoints, reduced cell fitness and cell persistence. Furthermore, the immunosuppressive TME can pose a formidable barrier to immune cell infiltration and function. By using INTASYL based drugs administered directly, we can also reprogram cells in the TME to help overcome these immunosuppressive mechanisms.

INTASYL Use To Improve Adoptive Cell Therapy Products

ACT consists of the administration of immune cells with antitumor properties to patients to fight cancer after growing the cells in a lab to large numbers. These cells can be derived from unmodified (i.e. naturally occurring) immune cells, immune cells isolated from resected tumors or genetically engineered immune cells that recognize tumor cells. These cells have several shortcomings that inhibit their full therapeutic potential in patients with solid tumors.

There are several types of ACT, including: a.) non-engineered cell therapy in which immune cells are grown from the patient’s tumor or blood, such as tumor infiltrating lymphocytes (“TILs”), or from donor blood or tissue such as natural killer (“NK”) cells, dendritic cells (“DC”) and macrophages, and b.) genetically engineered immune cells that are genetically modified to recognize specific tumor proteins and to remain in an activated state (such as T cell receptor technology (“TCRs”), chimeric antigen receptor (“CAR”) T cells, or CAR-NK cells).

Multiple inhibitory mechanisms restrain immune cells used in ACT from effectively eradicating tumors, including immune checkpoints, reduced cell fitness and cell persistence, and other barriers to immune cell infiltration and function mainly in solid tumors. When used in ACT, we believe our INTASYL compounds can improve immune cell function, differentiation and metabolism, in order to make these immune cells more effective without the need for additional complicated manufacturing steps and/or genetic engineering.

Oursd-rxRNA approach builds on well-established methodologies of ACT and involves the treatment of immune cells with our INTASYL compounds ex vivo while they are grown in the lab and before administering them to the patient. In contrast to other RNA technologies, our INTASYL compounds do not require a delivery vehicle to penetrate into the cells, therefore we are able to enhance the function of these cells by merely adding our INTASYL compounds during the expansion process and without the need for genetic engineering, complex delivery vehicles or formulations, or additional complex manufacturing steps, which in themselves may be detrimental to the cells. By adding INTASYL to the cell culture media used during the cell expansion, we can reduce or eliminate the expression of genes that make the immune cells less effective. For example, with our INTASYL compounds, we can reduce the expression of immunosuppressive proteins by the therapeutic immune cells, potentially enabling them to overcome tumor resistance mechanisms and thus improving their ability to destroy the tumor cells. In various types of immune cells tested to date, INTASYL treatment results in potent silencing with close to 100% transfection efficiency and while maintaining cell viability and cell growth rate. After expanding these cells and enhancing them with INTASYL ex vivo, they are returned to the patient for treatment.

The table below sets forth the Company’s pipeline for its INTASYL product candidates for use in ACT:

Our lead product candidate, and our most advanced program being developed by the Company in ACT, is PH-762. PH-762 is an INTASYL compound that activates immune cells to better recognize and kill cancer cells by reducing the expression of the checkpoint protein PD-1, a clinically validated target for immunotherapy. Checkpoint proteins, such as PD-1, normally act as a type of “off switch” that prevent T cells, immune cells that protect the body from cancer cells and infections, from attacking certain cells in the body, such as cancer cells. The expression of PD-1 enables the cancer cell to evade the T cell. Reducing the expression of PD-1 can thereby reduce the ability of cancer cells to avoid T cell detection.

Data has shown that PH-762 silences PD-1 checkpoint expression in T cells, thereby removing the “off switch” and enabling T cells to overcome tumor resistance mechanisms, and thus improving their ability to destroy tumor cells. Preclinical studies show that PH-762 can silence the expression of PD-1 in target human T cells in a potent and durable manner and can increase their tumor cell-killing ability. Patient derived T cells treated with PH-762, in comparison to untreated T cells, were shown to have increased tumor killing potency against tumor cells of the same patient. As a result, we believe that PH-762 in ACT is well-positioned to enhance therapeutic responses in cancer.

In March 2021, the Company announced that it entered into a clinical development collaboration with AgonOx, Inc. (“AgonOx”), a private company developing a pipeline of novel immunotherapy drugs targeting key regulators of the immune response to cancer, in which the companies will collaborate on the development of novel T cell-based therapies using PH-762 and AgonOx’s “double positive” TIL (“DP TIL”) technology. Per the terms of the clinical development agreement, AgonOx will receive financial support from Phio to conduct a clinical trial in ACT with their DP TIL technology and PH-762, and Phio will be entitled to certain future development milestones and sales-based royalty payments from AgonOx’s DP TIL technology. AgonOx has demonstrated that their DP TIL enriched cell populations have increased tumor killing activity when compared to TILs that were not enriched prior to expansion. Preclinical data from our research collaboration with AgonOx has shown that treating DP TILs with PH-762 increases the tumor killing activity of the DP TILs even further (a two-fold increase). As a result, we expect the use of PH-762 treated DP TILs to enhance therapeutic responses in cancer. Based on these data, our clinical development collaboration will focus on conducting a clinical study for PH-762 treated DP TILs. The Company expects to start the clinical trial evaluating the use of PH-762 and DP TILs in ACT in the second quarter of 2022.

PH-762 use in ACT is not limited to TILs, but can also be used on other forms of T cell-based cell therapy. We recently presented in vivo data showing that PH-762 significantly enhanced the antitumor efficacy of HER2-targeted CAR-T cells (“HER2CART”) in solid tumors. Compared to untreated HER2CART cells, HER2CART cells treated with PH-762 showed a statistically significant and durable inhibition of tumor growth. Analysis of the PH-762 treated HER2CART cells isolated from the tumors suggest that PH-762 enhances CAR-T function through multiple mechanisms including enhanced efficiency, degranulation and promotion of memory/stem populations. We believe that this data provides proof of concept for the application of PD-1 checkpoint silencing with INTASYL in CAR-T cells prior to ACT to enhance the therapeutic efficacy of CAR-T cell therapy in solid tumors.

Our second product candidate in development for use in ACT is PH-894. PH-894 is an INTASYL compound that silences the epigenetic protein BRD4, which is an intracellular regulator of gene expression that impacts cell differentiation, and hence, cell function. Like other epigenetic targets, BRD4 is a protein that has been shown to be difficult to target with current drug modalities. Since BRD4 is an intracellular protein, antibody therapies cannot be used and small molecule inhibitors tested to date typically lack the required specificity. As our INTASYL compounds can target intracellular proteins as well as extracellular proteins with a high level of specificity, we believe that PH-894 has significant potential. In collaboration with the Karolinska Institutet in Sweden, PH-894 has been shown to improve T cell function and persistence by differentiating T cells into a more active state (stem-cell like memory phenotype). We have demonstrated that the application of PH-894 is shown to silence BRD4 in human T cells during expansion for ACT, which has the potential to confer superior anti-tumor activity.

Our INTASYL compound PH-804 is also being developed for use in ACT. PH-804 targets the suppressive immune receptor TIGIT, which is a checkpoint protein present on immune cells, such as T cells and NK cells. Similar to PD-1, cancer cells can suppress the activity of these immune cells by activating TIGIT. This triggers an “off switch,” resulting in tumor immune evasion, which can be prevented by blocking or silencing TIGIT. PH-804 provides powerful dose-dependent silencing of TIGIT that can be seen in both T cells and NK cells and we have shown that PH-804 can silence the expression of TIGIT in these cells, overcoming their “off switch” and thereby becoming “weaponized” to kill cancer cells.

Direct Therapeutic Use of INTASYL Towards the Tumor Microenvironment

Cancer cells have evolved natural defenses that can suppress the immune system surrounding the tumor, in an area called the tumor microenvironment, which decreases the effectiveness of many traditional immunotherapies. Reprogramming different cell types in the TME, such as cancer cells and immune cells, may overcome these natural tumor defenses and decrease resistance to immunotherapy. An optimal treatment therapy should have the ability to address targets both inside and on the surface of tumor and immune cells, creating multiple ways to prevent tumors from evading immune detection. Our INTASYL compounds can target both intracellular and extracellular targets, and are also being developed for use as direct therapeutics to reprogram the TME, for example, by in situ transfection and activation of immune cells in the TME. Therefore, INTASYL-based drug therapy is a novel way of fighting cancer by reprogramming the cells in the TME to make cancer more responsive to a patient’s immune system and to other anti-cancer drugs.

The table below sets forth the Company’s pipeline for its direct-to-tumor INTASYL product candidates:

Our most advanced program being developed by the Company in our direct to tumor therapy programs, is PH-762. We have shown that we can reprogram the TME with PH-762 and achieve local activation of immune cells. Preclinical studies conducted by the Company showed that local administration of PH-762 through intratumoral injection resulted in potent anti-tumoral effects. Treated animals showed a complete and statistically significant inhibition of tumor growth, whereas placebo treated animals displayed exponential tumor growth. Recently announced in vivo data showed that intratumoral treatment with PH-762 inhibits tumor growth in a dose dependent fashion in PD-1 responsive and refractory models. Furthermore, on target efficacy was supported by modulation of immune cell populations toward anti-tumor phenotypes. Importantly, local administration of PH-762 resulted in activity against distal untreated tumors, indicative of a systemic anti-tumor response. The Company believes this data further supports the potential for PH-762 to provide a strong local immune checkpoint blockade without the dose immune-related adverse effects seen with systemic antibody therapy.

In January 2022, the Company was granted clinical trial authorization (CTA) by the French National Agency for the Safety of Medicines and Health Products to proceed with our first-in-human clinical trial for PH-762 to treat patients with melanoma at the Gustave Roussy Institute, one of the largest cancer centers in Europe. This first clinical trial with PH-762 will be a Phase 1b study to evaluate the safety, tolerability, pharmacokinetics and anti-tumor activity of PH-762 in a neoadjuvant setting in subjects with advanced melanoma. Currently, there are no neoadjuvant treatment options approved for these patients. The clinical study will feature a dose escalation of PH-762 monotherapy and is designed to allow for a data driven evaluation of the recommended Phase 2 dose. The Company expects to start patient enrollment in the first quarter of 2022.

Our second direct to tumor product candidate is PH-894. In a study conducted in collaboration with the Karolinska Institutet, we demonstrated that PH-894 resulted in a strong, concentration dependent and durable silencing of BRD4 in T cells, and in various cancer cells. Data published with PH-894 in a hepatocellular carcinoma model showed potent and statistically significant anti-tumoral effects when administered locally. These data show that our PH-894 compound can reprogram T cells and other cells in the TME to provide enhanced immunotherapeutic activity. Recent in vivo data showed that local administration of PH-894 also resulted in a systemic anti-tumor response, similar to PH-762. PH-894 shows the power of our INTASYL compounds to modulate the expression of intracellular and/or commonly considered “undruggable” targets, a limitation for small molecule and antibody therapies. The Company currently expects to finalize investigational new drug (“IND”)-enabling studies for PH-894 in the second half of 2022. 

We are also investigating the use of INTASYL to target multiple genes in a single formulation. New study data showed that PH-3861, a dual-targeting INTASYL towards PD-1 and BRD4, elicited complete cure of tumors in an in vivo hepatoma model and outperformed the efficacy of the small molecule and antibody control treatments toward the same targets. In addition, local INTASYL therapy was shown to induce a systemic anti-tumor response with clearance of untreated distal tumors. The animals which showed complete cure of their tumors were then rechallenged over two months after the original treatment of PH-3861 by re-implanting hepatoma cancer cells at a different location to the original tumor. All of the mice that were rechallenged with new tumors were cured again without requiring further treatment, while tumors grew steadily in the control group as expected. We believe that these data demonstrate that local administration of PH-3861 provides a durable and systemic anti-tumor immune response that can combat tumor growth.

Our INTASYL Platform

Our development efforts are based on our broadly patented INTASYL technology platform. Our INTASYL compounds do not require a delivery vehicle to penetrate into tissues and cells and are designed to “silence,”“silence” or down-regulate the expression of a specific gene that may bewhich is over-expressed in a disease condition. This provides RXi with a distinct advantage in adoptive cell therapy, the Company’s initial focus and approach to immuno-oncology.cancer.

Prior to our acquisition of MirImmune Inc. (“MirImmune”) in January 2017, the Company’s principal activities consisted of the preclinical and clinical development of oursd-rxRNA compounds and topical immunotherapy agent in the areas of dermatology and ophthalmology. With the acquisition of MirImmune, the Company completed a thorough review of its business operations, development programs and financial resources and made a strategic decision to focus solely on immuno-oncology to accelerate growth and in turn support a return on investment for its stockholders. As a result, the Company will seek to monetize its valuable dermatology and ophthalmology franchises through out-licensing or partnerships, thereby enabling a streamlined focus of the Company’s resources on the development of our immuno-oncology program, with a focus on adoptive cell transfer.

Oursd-rxRNA Platform

Introduction to RNAi

DNA carries the genetic information of a cell and consists of thousands of genes. Each gene is highly unique and acts as instructions for making protein molecules. Proteins perform important tasks and are required for the structure, function and regulation of the body’s tissues and organs. In order for proteins to be made, the genes are first transcribed into RNA and the RNA is then translated into proteins. Overall, RNA is involved in the synthesis, regulation and processing of proteins.

Diseases are often related to the wrong protein being made, excessive amounts of a specific protein being made, or the correct protein being made but at the wrong location or time. Overall, RNA is involved in the synthesis, regulation and expression of proteins. RNA interference (“RNAi’) is a biological process in which specific RNA molecules inhibit gene expression or translation into proteins by preventing certain RNA from being read.proteins. RNAi offers a novel approach to the drug development process because RNAi compounds can potentially be designed to targetsilence any one of the thousands of human genes, many of which are “undruggable” by other modalities. SupportedThe potential of RNAi as a powerful drug development platform has been shown by numerous gene-silencing reports and our own research, we believe that this sequence information can be used to designseveral RNAi compounds to interfere withbased drugs becoming approved over the expression of almost any specific gene.last few years.

Our RNAi Therapeutic Platform

The first design of RNAi compounds to be pursued for the development of human therapeutics were short, double-stranded RNAs that included limited modifications, known as small-interfering RNA (“siRNA”). Since the initial discovery of RNAi, drug delivery has been the primary challenge in developing RNAi-based therapeutics. One conventional solution to the delivery problem involves encapsulation of siRNA into a lipid-based particle,formulations, such as a liposome,liposomes, to improve circulation time and cellular uptake.

RXi Pharmaceuticals Corporation overcame the early challenges associated with RNAi-based therapeutics by developing Another approach is to use chemical conjugations of a ligand, such as GalNAC, for cell specific delivery limited to hepatocytes. We have developed an alternative approach where delivery and drug-like properties wereare built directly into the RNAi compound itself.itself, whereby the RNAi uptake is neither dependent on complex formulation nor limited to addressing a specific cell type. These novel compounds are termed self-delivering RNAi compounds, orsd-rxRNA.sd-rxRNAs INTASYL.

Our INTASYL compounds are hybrid oligonucleotide compounds that the Company believes combines the beneficial properties of both conventional RNAi and

antisense technologies. Traditional, single-stranded antisense compounds have favorable tissue distribution and cellular uptake properties. However, they do not have the intracellular potency that is a hallmark of double-stranded RNAi compounds. Conversely, the duplex structure and hydrophilic character of traditional RNAi compounds results in poor tissue distribution and cellular uptake. In an attempt to combine the best properties of both technologies,sd-rxRNA INTASYL compounds have a single-stranded phosphorothioate region, a short duplex region, and contain a variety of nuclease-stabilizing and lipophilic chemical modifications. The combination of these features allowssd-rxRNA INTASYL compounds to achieve efficient spontaneous cellular uptake and potent, long-lasting intracellular activity.

We believe that our next generationsd-rxRNA compounds offer significant advantages over siRNAs used by other companies developing RNAi therapeutics, highlighted by the following characteristics:

The route by which an RNAi therapeutic is brought into contact with the body depends on the intended organ or tissue to be treated. Delivery routes can be simplified into two major categories: (1) local (when a drug is delivered directly to the tissue of interest); and (2) systemic (when a drug accesses the tissue of interest through the circulatory system). The key to therapeutic success with RNAi lies in delivering intact RNAi compounds to the target tissue and the interior of the target cells. To accomplish this, we developed a comprehensive platform that includesour chemically synthesized RNAiINTASYL compounds that are optimized for stability and efficacy and have unique properties that improve tissue and cell uptake. To date, we have shown safety and efficacy in a clinical setting with oursd-rxRNA compoundRXI-109 using a local delivery approach via direct injection in the skin and eye with no additional delivery vehicle required.

In adoptive cell transfer (“ACT”), immune cells are isolated from specific patients or retrieved from allogeneic immune cell banks. The immune cells are then expanded and modified before being returned and used to treat the same patient. We believe oursd-rxRNA compounds are ideally suited to be used in combination with ACT, in order to make these immune cells more effective. Our approach involves the treatment of the immune cells with oursd-rxRNA compounds during the expansion and modification phase. Because oursd-rxRNA compounds do not require a delivery vehicle to penetrate into the cells, we are able to enhance these cells (for example by inhibiting the expression of immune checkpoint genes) by merely adding oursd-rxRNA compounds during their expansion process. After enhancing these cellsex-vivo, they are returned to the patient for treatment. In various types of immune cells tested to date, thesd-rxRNA treatment results in potent silencing while maintaining close to 100% transfection efficiency and nearly full cell viability.

Our Pipeline

Our Immuno-Oncology Pipeline

In January 2017,We believe that our INTASYL platform uniquely positions the Company entered into a Stock Purchase Agreement pursuant to which it acquired 100% of the issued and outstanding shares of capital stock of MirImmune for an aggregate of 275,036 shares of common stock of the Company and 1,118,224 shares of the Company’s Series C Convertible Preferred Stock. With the approval of the Company’s stockholders at our 2017 Annual Meeting of Stockholders, every ten shares of the Series C Convertible Preferred Stock outstanding were automatically converted into one share of common stock.

Prior to our acquisition of MirImmune, the Company’s principal activities consisted of the preclinical and clinical development of oursd-rxRNA compounds and topical immunotherapy agent in the areas of dermatology and ophthalmology. With the acquisition of MirImmune, the Company completed a thorough review of its business operations, development programs and financial resources and made a strategic decision to focus the Company’s development portfolio solely on the field of immuno-oncology with a near term emphasis on ACT. The Company believes this will accelerate growth and, in turn, support a return on investment for its stockholders.

ACT includes a number of different types of immunotherapy treatments. These treatments all use immune cells, such asT-cells, that are grown in a lab to large numbers, followed by administering them to the body to fight the cancer cells. Sometimes, immune cells that naturally recognize a tumor are used, while other times immune cells are modified or “engineered” to make them recognize and kill the cancer cells. There are several types of ACT, including: a.) endogenous cell therapy in which immune cells are grown from the patient’s tumor or blood, such as tumor infiltrating lymphocytes (“TILs”) and natural killer (“NK”) cells, and b.) engineeredT-cells in whichT-cells are genetically modified to recognize specific tumor proteins and to remain in an activated state (such as CART-cells and TCRs).

Our approach to immunotherapy builds on well-established methodologies of ACT. As shown below, immune cells are isolated from specific patients or retrieved from allogeneic immune cell banks and then expanded and sometimes processed to express tumor-binding receptors. Our method introduces a new and important step inex vivo processing of immune cells. This step uses oursd-rxRNA technology to reduce or eliminate the expression of genes that make the immune cells less effective. For example, with oursd-rxRNA technology we can reduce the expression of immunosuppressive receptors or proteins by the therapeutic immune cells, potentially enabling them to overcome tumor resistance mechanisms and thus improving their ability to destroy the tumor cells.

Our method provides some key advantages. One major advantage is thatpre-treatment with our targeted compounds allows multiple immune checkpoints to be attenuated within the same therapeutic cell, an improvement which could dramatically increase their tumor cell killing capability. In addition, these therapeutic immune cells may lack some known side effects associated with the checkpoint inhibitor toxicity, while potentially improving efficacy over current immunotherapy approaches.

The main issue with ACT is that the cells are very susceptible to the cancer signals that turn down the immune response. Also, continuous activation of these cells causes them to become exhausted. These factors, among others, may reduce their efficacy and lifespan. A technology that can reprogram the immune cells using ACT is of key interest now in the immuno-oncology world. We believe that oursd-rxRNA therapeutics are uniquely positioned in the immuno-oncology field for the following reasons:

We currently have discovery and preclinical programs to develop oursd-rxRNA targetingPD-1, TIGIT and other undisclosed checkpoints in ACT for treatment of solid tumors. We are also developingsd-rxRNA against multiple undisclosed targets that influence cell differentiation and metabolism for use in ACT to treat hematologic cancers and solid tumors.

Our most advanced immuno-oncology programs areRXI-762 andRXI-804,sd-rxRNA compounds that suppress the expression of immune checkpoint proteinsPD-1 and TIGIT, respectively, which, when used in ACT, can result in an improved efficacy to the targeted tumors. In August 2017, the Company announced the selection of these twosd-rxRNA compounds for preclinical development in ACT for solid tumors. We expect to enter clinical development withRXI-762 as part of an ACT therapy for solid tumors within the next 12 – 18 months.

We are advancing these compounds and our other discovery and preclinical ACT compounds towards clinical development, both independently and with our strategic collaborations. We plan to focus our internal resources on therapeutic areas where research and development is appropriate for the size and financial resources of the Company and to secure partners in therapeutic areas with the requisite expertise and resources to advance our product and research candidates through clinical development. We have established the following collaborations with several cancer research institutions and companies:

The Company is collaborating with the Center for Cancer Immune Therapy (CCIT) at Herlev Hospital, a leading European center for use of TILs for ACT, to evaluate the potential of oursd-rxRNA technology platform in TILs for use in treatment for a number of cancer types, including melanoma and ovarian cancer. CCIT has carried out numerous clinical trials based on a direct translation of the discoveries from the laboratory.

Gustave Roussy is a leading comprehensive cancer center in Europe. Our collaborative research agreement is evaluating the potential of oursd-rxRNA technology platform for use in cancer treatments. The agreement covers research to design and evaluate oursd-rxRNA compounds in a human xenograft model. If the results are positive, this may lead to further development of these compounds for treatment of cancer.

Medigene AG is a German biotechnology company developing highly innovative, complementary treatment platforms to target various types and stages of cancer. Medigene AG’s concentration is on the development of personalizedT-cell-based immunotherapies. We are exploring the potential synergies of oursd-rxRNA technology in combination with Medigene’s recombinant TCRs to develop modifiedT-cells with enhanced efficacy and/or safety with the ultimate goal to further improve Medigene’sT-cell therapies for the treatment of cancer patients. The research teams at each company will work closely together to explore potential advantages of transient down regulation of certain genes to prevent negative regulation ofT-cells expressing a recombinant TCR directed against a predefined tumor antigen. The two complementing technologies could lead to synergistic effects that might further sharpen and improve the therapeutic effects of Medigene’s receptor modifiedT-cells.

Our preclinical research collaboration with PCI Biotech is evaluating the compatibility and synergy of oursd-rxRNA with PCI Biotech’s fimaNActechnology based onin vivo studies. The Company is evaluating the results from this research collaboration to explore the potential for a further partnership.

One aspect of our ongoing strategy is to build upon these current collaborations to add additional partnerships to our immuno-oncology pipeline. If results from these collaborations and others are positive, the synergies between the Company’s technology and its partners technology and expertise may provide multiple avenues for human clinical testing of the Company’ssd-rxRNA compounds in ACT within the next 12 – 18 months.

Prior to our acquisition of MirImmune, they used oursd-rxRNA technology to demonstrate in vitro that multiplesd-rxRNA compounds can be used alone or in combination to target and silence extracellular and intracellular checkpoints in immune cells. Additional in vitro data demonstrated thatPD-1 silencing bysd-rxRNA in patient-derived TILs resulted in enhanced killing of melanoma tumor cells from the same patient in culture. MirImmune also showed in a mouse model of human ovarian cancer thatin vivo treatment with mesothelin-targeting CART-cells transfected with aPD-1 targetingsd-rxRNA significantly reduced the rate of tumor growth as compared to vehicle control. Furthermore, the silencing ofPD-1 in the CART-cells isolated from these tumors persisted for at least one month.

We have demonstrated silencing of a number of undisclosed immunosuppressive targets in NK cells using oursd-rxRNA compounds. This adds to a remarkable set of immune checkpoint modulation studies in humanT-cells, including CART-cells and TILs. In immune cells tested to date,sd-rxRNA treatment results in potent silencing while maintaining close to 100% transfection efficiency and nearly full cell viability. Moreover, the silencing effect has been validated in a number of clinically used cell treatment protocols.

We have identified leadsd-rxRNA compounds for each of several different checkpoints, includingPD-1, TIGIT,CTLA-4 and other extracellular and intracellular targets. We are continuing to build on the work in immuno-oncology that MirImmune began, and we are initially focusing on furthering our efforts to inhibit checkpoints with CART-cell therapy and TILs in melanoma and ovarian cancer.

Our Dermatology and Ophthalmology Pipelines

In January 2018, the Company announced that its business strategy will focus solely on immuno-oncology therapeutics utilizing our proprietarysd-rxRNA technology. The Company plans to complete its current ongoing clinical trials in dermatology and ophthalmology withRXI-109 and Samcyprone™ and intends to partner and/orout-license these programs to continue the clinical development and commercialization. Successfully completing these transactions should allow the Company to monetize its valuable clinical assets to promote growth in our immuno-oncology focus area and extend our financial runway.

Dermatology Franchise

RXI-109 – Hypertrophic Scarring

The Company’s lead product candidate and first RNAi clinical product candidate,RXI-109, is asd-rxRNA that commenced human clinical trials in 2012.RXI-109 is designed to reduce the expression of connective tissue growth factor (“CTGF”), a critical regulator of several biological pathways involved in fibrosis, including scar formation in the skin and eye. Two Phase 1 clinical trials completed by the Company demonstrated the safety and tolerability ofRXI-109 in ascending single and multi-doses and also provided the first evidence of clinical activity in a surgical setting. The Phase 1 clinical trials provided the desired profile to enable the initiation of a Phase 2a clinical trial. Positive results from Study 1402, our Phase 2a clinical trial withRXI-109 in hypertrophic scars, were reported in December 2017.RXI-109 demonstrated an improved visual appearance for the treated scar over the control scar in one of the treatment arms. Statistically significant results were shown using the Investigator Scar Assessment Scale, which enables a structured clinical evaluation of scar quality, as well as using the Visual Analog Scale, a qualitative measure of overall scar appearance, for allfollow-up time points in the same treatment arm. As an exploratory endpoint, patient reported outcome for scar ranking was evaluated. For the same treatment arm, 88% of the patients and 86% of the investigators indicated that theRXI-109 treated scar looked better over the control scar.RXI-109 was safe and well tolerated in all treatment arms. There were no drug-related serious adverse events and most other treatment emergent adverse events were those commonly found with intradermal injections, such as injection site pain and injection site erythema.RXI-109 can confidently be moved to Phase 2b of clinical development.

Samcyprone™—Warts

Samcyprone™, the Company’s second clinical candidate, is a proprietary topical formulation of the small molecule diphenylcyclopropenone (“DPCP”), an immunomodulator that works by initiating aT-cell response. The use of Samcyprone™ allows sensitization using much lower concentrations of DPCP than are used with existing compounded DPCP solutions, avoiding hyper-sensitization to subsequent challenge doses. Samcyprone™ is currently being evaluated in a Phase 2a clinical trial, Study 1502, for the clearance of common warts.

Study 1502, initiated in December 2015, included a sensitization phase in which a spot on the subject’s upper arm and one or more warts was treated with Samcyprone™. After being sensitized in this way, the subjects entered into the treatment phase where up to four warts were treated on a once weekly basis for ten weeks with aten-fold lower concentration of Samcyprone™ than in the sensitization phase. During the trial, the warts were scored, photographed and measured to monitor the level of clearance.

In December 2016, the Company announced the results from a preliminary review of sensitization and wart clearance data from a subset of subjects that completed theten-week treatment phase of Study 1502. Results showed that greater than 90% of the subjects demonstrated a sensitization response, a prerequisite to be able to develop a therapeutic response. Additionally, more than 60% of the subjects responded to the treatment by exhibiting either complete or greater than 50% clearance of all treated warts with up to ten weekly treatments. Samcyprone^™ treatment has been generally safe and well tolerated and has had drug-related adverse events relating to local reactions, which are typically expected for this type of treatment due to the sensitization and challenge responses in the skin. The Company added a second cohort to the study to explore the opportunity to reduce the sensitization dose level, which will be more convenient to physicians and subjects. Enrollment and subject participation is complete and data analysis is currently ongoing. The Company expects to complete a readout of the final study before the end of the first half of 2018.

Cosmetic Development

Cosmetics are compounds that affect the appearance of the skin and make no preventative or therapeutic claims. These compounds may be developed more rapidly than therapeutics, therefore the path to market may be much shorter and less expensive. In October 2015, we announced the selection of leadsd-rxRNA compounds targeting tyrosinase (“TYR”) and collagenase (“MMP1”) as ingredients in the development of cosmetic products. TYR is a key enzyme in the synthesis of melanin. Melanin is produced by melanocytes and is the pigment that gives human skin, hair and eyes their color. The inhibition of TYR can play a key role in the management of skin conditions including cutaneous hyperpigmentation disorders such as lentigines (freckles, age spots and liver spots) and possibly melanoma. MMP1 is a key enzyme involved in the breakdown of extracellular matrix. Reduction of MMP1 may be beneficial in the treatment of skin aging disorders, arthritis, acne scarring, blistering skin disorders, corneal erosions, endometriosis and possibly cancer metastasis.

RXI-231 – Uneven Skin Tone and Pigmentation

RXI-231, ansd-rxRNA compound targeting TYR, is in development as a cosmetic ingredient that may improve the appearance of uneven skin tone and pigmentation. Three studies were performed under the consumer testing program. The first two studies in volunteers determined that theRXI-231 gel formulation does not cause irritation and sensitization when applied to the skin. The third study investigated the potential ofRXI-231 to impact a skin melanin content (pigmentation) increase induced by UV exposure in a study design similar to one well documented in peer-reviewed journal articles and used by various cosmetic companies. Specific spectroscopic results showed that application of RXI-231 containing gel, as compared to a vehicle gel, can reduce a change of skin tone triggered by UV. These results not only validate our preclinical data about the effect ofRXI-231 on skin pigmentation, but also provide important information on the capabilities of our proprietary topical formulation for the use of oursd-rxRNA based cosmetic ingredients in the consumer care space.

RXI-185 – Wrinkles and Skin Laxity

RXI-185, ansd-rxRNA compound targeting MMP1, is in development as a cosmetic ingredient that may improve the appearance of wrinkles or skin laxity. Results from studies by the Company have shown a pronounced reduction in MMP1 mRNA levels that correspond to a similar reduction in MMP1 enzyme activity in cell culture in vitro.

Ophthalmology Franchise

RXI-109 – Retinal Scarring

As in dermal scarring,RXI-109 can also be used to target CTGF in the eye, where CTGF is known to be involved in retinal scarring. Building on the work in our dermal clinical program, the Company initiated a Phase 1/2 clinical trial to evaluate the safety and clinical activity ofRXI-109 in reducing the progression of retinal scarring. Study 1501 is a multi-dose, dose escalation study conducted in subjects with wetage-related macular degeneration (“AMD”) with evidence of subretinal fibrosis. Each subject received four doses ofRXI-109 by intraocular injection atone-month intervals for a total dosing period of three months. The safety and tolerability ofRXI-109, as well as the potential for clinical activity, was evaluated over the course of the study using numerous assessments to monitor the health of the retina and to assess visual acuity. To date, there have been no safety issues that would have precluded continuation of dosing. Enrollment and subject participation is complete and data analysis is currently ongoing. The Company expects to complete a readout of the final study in the first half of 2018.

Intellectual Property

We protect our proprietary information by means of United States and foreign patents, trademarks and copyrights. In addition, we rely upon trade secret protection and contractual arrangements to protect certain of our proprietary information and products. We have pending patent applications that relate to potential drug targets, compounds we are developing to modulate those targets, methods of making or using those compounds and proprietary elements of our drug discovery platform.

Much of our technology and many of our processes depend upon the knowledge, experience and skills of key scientific and technical personnel. To protect our rights to our proprietaryknow-how and technology, we require all employees, as well as our consultants and advisors when feasible, to enter into confidentiality agreements that require disclosure and assignment to us of ideas, developments, discoveries and inventions made by these employees, consultants and advisors in the course of their service to us, and we vigorously defend that position with partners, as well as with employees who leave the Company.us.

We have also obtained rights to various patents and patent applications under licenses with third parties, which require us to pay royalties, milestone payments, or both. The degree of patent protection for biotechnology products and processes, including ours, remains uncertain, both in the United States and in other important markets, because the scope of protection depends on decisions of patent offices, courts and lawmakers in these countries. There is no certainty that our existing patents or others, if obtained, will afford us substantial protection or commercial benefit. Similarly, there is no assurance that our pending patent applications or patent applications licensed from third parties will ultimately be granted as patents or that those patents that have been issued or are issued in the future will stand if they are challenged in court. We assess our license agreements on an ongoing basis and may from time to time terminate licenses to technology that we do not intend to employ in our technology platforms, or in our product discovery or development activities.

Patents and Patent Applications

We are actively seeking protection for our intellectual property and are prosecuting 36a number of patents and pending patent familiesapplications covering our compounds and technologies, includingsd-rxRNA for use in ACT for the treatment of cancer,RXI-109 and Samcyprone™.technologies. A combined summary of these patents and patent applications is set forth below in the following table:

Our RNAi portfolio includes 84122 issued patents, 2385 of which cover our self-delivering RNAiINTASYL platform. There are 1417 patent families broadly covering both the composition and methods of use of our self-delivering platform technology and uses of oursd-rxRNAs targeting CTGF for the treatment of fibrotic disorders (includingRXI-109 for the treatment of dermal and ocular fibrosis), as well assd-rxRNAs INTASYL compounds targeting immune checkpoint, cellular differentiation and metabolism targets forex vivo cell-based cancer immunotherapies. These patents are scheduled to expire between 2029 and 2035.2040. Furthermore, there are 7869 patent applications, encompassing what we believe to be important new RNAi compounds and their use as therapeutics, and/or cosmetics, chemical modifications of RNAi compounds that improve the compounds’ suitability for therapeutic uses (including delivery) and compounds directed to specific targets (i.e., that address specific disease states).

The patents and any patents that may issue from these pending patent applications will, if issued, be set to expire between 2022 and 2036,2040, not including any patent term extensions that may be afforded under the Federal Food, Drug, and Cosmetic Act (“FFDCA”) (and the equivalent provisions in foreign jurisdictions) for any delays incurred during the regulatory approval process relating to human drug products (or processes for making or using human drug products).

The Samcyprone™ portfolio includes 1 issued patent and 5 patent applications. The patent and patent applications cover both the compositions and methods of use of Samcyprone™ for the treatment of warts, human papilloma virus (HPV) skin infections, skin cancer (including melanoma) and immunocompromised patients. The patent and any patents that may issue from the pending applications will be set to expire between 2019 and 2036, not including any patent term extensions that may be afforded under the Federal Food, Drug, and Cosmetic Act (and the equivalent provisions in foreign jurisdictions) for any delays incurred during the regulatory approval process relating to human drug products (or processed for making or using human drug products).

Key Intellectual Property License Agreements

We have secured exclusive andnon-exclusive rights to develop therapeutics by licensing key RNAi technologies, Samcyprone™ and patent rights from third parties. These rights relate to chemistry and configuration of compounds, delivery technologies of compounds to cells and therapeutic targets.

As we continue to develop our own proprietary compounds, we continue to evaluate both ourin-licensed portfolio as well as the field for new technologies that could bein-licensed to further enhance our intellectual property portfolio and unique position in the RNAi and immuno-oncology space.intellectual property position.

Advirna LLC. InOn September 24, 2011, we entered into an agreement with Advirna, LLC (“Advirna”) pursuant to which Advirna assigned to us its existing patent and technology rights related tosd-rxRNA the INTASYL technology in exchange for our agreement to issueand we granted back to Advirna a license for use of the assigned patent and technology rights outside of human therapeutics and diagnostics. Under the terms of the agreement, in April 2012, the Company issued to Advirna shares of common stock equal to 5% of the Company’s fully-diluted shares payoutstanding at the time of issuance and paid a one-time milestone payment of $350,000 in 2014 upon the issuance of the first patent under the agreement. The Company also pays to Advirna an annual maintenance fee of $100,000 and pay aone-time milestone payment of $350,000 upon the issuance of the first patent with valid claims covering the assigned technology. The common shares of the Company were issued to Advirna in 2012 and theone-time milestone payment was paid in 2014. Additionally, we will beis required to pay a 1%low single-digit royalty to Advirna on any license revenue received by usthe Company with respect to future licensing of the assigned Advirna patent and technology rights. We also granted backTo date, royalties owed to Advirna a license under the assigned patent and technology rights for fields of use outside human therapeutics and diagnostics.have been minimal.

Our rights under the Advirna agreement will expire upon the later of: (i) the expiration of thelast-to-expire of the “patent rights” (as defined therein) or (ii) the abandonment of thelast-to-be abandoned of such patents, unless earlier terminated in accordance with the provisions of the agreement.

We may terminate the Advirna agreement at any time upon 90 days’ written notice to Advirna, and Advirna may terminate the agreement upon 90 days’ prior written notice in the event that we cease using commercially reasonable efforts to research, develop, license or otherwise commercialize the patent rights or “royalty-bearing products” (as defined therein), provided that we may refute such claim within such90-day period by showing budgeted expenditures for the research, development, licensing or other commercialization consistent with other technologies of similar stage of development and commercial potential as the patent rights or royalty-bearing products. Further, either party at any time may provide to the other party written notice of a material breach of the agreement. If the other party fails to cure the identified breach within 90 days after the date of the notice, the aggrieved party may terminate the agreement by written notice to the party in breach.

Hapten Pharmaceuticals, LLC. In December 2014, the Company entered into an Assignment and License Agreement with Hapten Pharmaceuticals, LLC (“Hapten”) under which Hapten agreed to sell and assign to us certain patent rights and related assets and rights, including an investigational new drug application and clinical data, for Hapten’s Samcyprone™ products for therapeutic and prophylactic use. Under the Assignment and License Agreement and upon the closing which occurred in February 2015, Hapten received aone-time upfront cash payment of $100,000 and we issued to Hapten 2,000 shares of common stock of the Company. Pursuant to the Assignment and License Agreement, Hapten will be entitled to receive: (i) future milestone payments tied to the achievement of certain clinical and commercial objectives (all of which payments may be made at our option in cash or through the issuance of common stock) and (ii) escalating royalties based on product sales by us and any sublicensees.

We have certain customary diligence obligations under the Assignment and License Agreement requiring us to use commercially reasonable efforts to develop and commercialize one or more products covered by the Assignment and License Agreement, which obligations, if not performed, could result in rights assigned or licensed to us reverting back to Hapten.

In addition to the license agreements listed above, the Company has entered into and may enter into other license agreements that may benefit us as we develop our therapeutic pipelines.

Other Agreements

OPKO Health, Inc. In March 2013, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with OPKO Health, Inc. (“OPKO”), in which we acquired substantially all of its RNAi-related assets, which included patents and patent applications, licenses, clinical and preclinical data and other related assets. In exchange for the assets that we purchased from OPKO, we issued 16,667 shares of our common stock and agreed to pay, if applicable: (i) up to $50 million in development and commercialization milestones for the successful development and commercialization of each “Qualified Drug” (as defined therein) and (ii) royalty payments equal to: (a) amid-single-digit percentage of “Net Sales” (as defined therein) with respect to each Qualified Drug sold for an ophthalmologic use during the applicable “Royalty Period” (as defined therein) and (b) alow-single-digit percentage of Net Sales with respect to each Qualified Drug sold for anon-ophthalmologic use during the applicable Royalty Period.

We have certain customary diligence obligations under the Asset Purchase Agreement requiring us to use commercially reasonable efforts to develop and commercialize one or more products covered by the Asset Purchase Agreement, which obligations, if not performed, could result in assets transferred and rights assigned or licensed to us reverting back to OPKO.

Thera Neuropharma, Inc. In May 2016, RXi granted an exclusive license to Thera Neuropharma, Inc. (“Thera”) to the Company’s novel and proprietarysd-rxRNA platform to develop therapeutics for neurodegenerative diseases. Under the terms of the agreement, Thera will be responsible for all research, development, manufacturing, regulatory and commercialization activities for the licensed products. Thera’s initial focus will be onsd-rxRNA compounds targeting superoxide dismutase 1 (SOD1) for use in developing innovative treatments for amyotrophic lateral sclerosis (ALS), commonly known as Lou Gehrig’s disease. Upon execution of the license agreement, RXi was issued shares of common stock of Thera and was granted a five-year warrant to purchase additional shares of common stock of Thera pursuant to the terms of the license agreement. The Company is eligible to receive future cash, additional equity and royalties based on the achievement of certain milestones.

Research and Development

Our research and development expense primarily consists of compensation-related costscompensation and benefits for our employees dedicated to research and development personnel, facility-related expenses, supplies, external services, costs to acquire technology licenses, expenses associated with preclinical and clinical development activities fees related to our Scientific Advisory Board members, expenses related to our ongoing research and development efforts including laboratory supplies and services for our research programs, our clinical trials, drug manufacturing, outside contract services, licensing fees and patent fees.other operating costs.

Total research and development expense for the years ended December 31, 20172021 and 20162020 was $5,370,000$8,886,000 and $5,415,000,$3,716,000, respectively.

Acquired In-Process Research and Development

Assets purchased in an asset acquisition transaction are expensed as in-process research and development unless the assets acquired have an alternative future use. Acquired in-process research and development payments are immediately expensed and include upfront payments, as well as transaction fees and subsequent milestone payments. Development costs incurred after the acquisition are expensed as incurred.

Total acquired in-process research and development expense for the year ended December 31, 2017 was $4,696,000. This expense related to the fair value of consideration given, which includes transaction costs, liabilities assumed and cancellation of notes receivable, and the deferred tax impact of the Company’s acquisition of MirImmune in January 2017. There was no in-process research and development expense for the year ended December 31, 2016.

Competition

The biotechnology and pharmaceutical industries, including the immuno-oncology field, are a constantly evolving landscape with rapidly advancing technologies and significant competition. There are a number of competitors in the immuno-oncology field including large and small pharmaceutical and biotechnology companies, academic institutions, government agencies and other private and public research organizations.

A variety of cell-based autologous and allogeneic approaches are being researched and developed for the treatment of cancer. We believe that competitors developing TIL-based and NK cell-based therapies in this field, our initial areas of focus in ACT, include, but are not limited to, Acepodia Inc., Achilles Therapeutics plc, AgonOx, Inc., Artiva Biotherapeutics, Inc., Caribou Biosciences, Inc., Century Therapeutics, Inc., Cytovia Therapeutics, Inc., Editas Medicine, Inc., Fate Therapeutics, Inc., Gamida Cell Ltd., Glycostem Therapeutics B.V., Instil Bio, Inc., Iovance Biotherapeutics, Inc., KSQ Therapeutics, Inc., Lyell Immunopharma, Inc., MiNK Therapeutics, Inc., Nkarta, Inc., ImmunityBio, Inc., NKGen Biotech, Inc., ONK Therapeutics Limited, Sanofi S.A., Shoreline Biosciences, Inc., Sorrento Therapeutics, Inc., SQZ Biotechnologies Company, Takeda Pharmaceutical Company Limited and Turnstone Biologics Corp. All of these companies are larger than us and have greater financial resources and human capital to develop competing products.

A number of companies have taken the direct therapeutic approach to modulating gene expression in the field of immuno-oncology and are conducting research and development. We believe that competitors in this field include, but are not limited to, Juno Therapeutics, Inc. (a Celgene Company), Kite Pharma, Inc. (a Gilead Company), Cellectis S.A., Adaptimmune Therapeutics plc, Iovance Biotherapeutics,Portage Biotech Inc., BellicumCytovation ASA, Targovax ASA, Lytix Biopharma AS, Checkmate Pharmaceuticals, Inc., and NantKwest, Inc. Many larger pharmaceutical companies such as Novartis International AG, Celgene Corporation, PfizerIdera Pharmaceuticals, Inc., GlaxoSmithKline plc, Amgen,SillaJen, Inc., Johnson & Johnson, Gilead Sciences, Inc. and EMD Serono, Inc. have entered the field through major deals with biotechnology companies and academia.

We believe that other companies currently developing anti-scarring therapies in the areasDuet Therapeutics, a wholly owned subsidiary of dermatology and ophthalmology include CoDa Therapeutics,Scopus Biopharma Inc., Sirnaomics, Inc., FirstString Research, Inc., Promedior, Inc., FibroGen, Inc., miRagen Therapeutics, Inc., Ophthotech Corporation, Vascular BioSciences, Allergan plc,OncoSec Medical Incorporated and Suneva Medical, Inc.Philogen S.p.A.

Government Regulation

Review and Approval of Drugs in the United States

The United States and many other countries extensively regulate the preclinical and clinical testing, manufacturing, labeling, storage, record-keeping, advertising, promotion, export, marketing and distribution of drugs and biologic products. The U.S. Food and Drug Administration (“FDA”) regulates pharmaceutical and biologic products under the Federal Food, Drug, and Cosmetic Act,FFDCA, the Public Health Service Act and other federal statutes and regulations.

To obtain approval of our future product candidates from the FDA, we must, among other requirements, submit data supporting safety and efficacy for the intended indication as well as detailed information on the manufacture and composition of the product candidate. In most cases, this will require extensive laboratory tests and preclinical and clinical trials. The collection of these data, as well as the preparation of applications for review by the FDA involve significant time and expense. The FDA also may require post-marketing testing to monitor the safety and efficacy of approved products or place conditions on any approvals that could restrict the therapeutic claims and commercial applications of these products. Regulatory authorities may withdraw product approvals if we fail to comply with regulatory standards or if we encounter problems at any time following initial marketing of our products.

The first stage of the FDA approval process for a new biologic or drug involves completion of preclinical studies and the submission of the results of these studies to the FDA. These data, together with proposed clinical protocols, manufacturing information, analytical data and other information submitted to the FDA in an investigational new drug (“IND”) application, must become effective before human clinical trials may commence. Preclinical studies generally involve FDA regulated laboratory evaluation of product characteristics and animal studies to assess the efficacy and safety of the product candidate.

After the IND becomes effective, a company may commence human clinical trials. These are typically conducted in three sequential phases, but the phases may overlap. Phase 1 trials consist of testing the product candidate in a small number of patients or healthy volunteers, primarily for safety at one or more doses. Phase 2 trials, in addition to safety, evaluate the efficacy of the product candidate in a patient population somewhat larger than Phase 1 trials. Phase 3 trials typically involve additional testing for safety and clinical efficacy in an expanded population at multiple test sites. A company must submit to the FDA a clinical protocol, accompanied by the approval of the Institutional Review Board (“IRB”) at the institutions participating in the trials, prior to commencement of each clinical trial.

To obtain FDA marketing authorization, a company must submit to the FDA the results of the preclinical and clinical testing, together with, among other things, detailed information on the manufacture and composition of the product candidate, in the form of a new drug application (“NDA”), or, in the case of a biologic, a biologics license application (“BLA”).

The amount of time taken by the FDA for approval of an NDA or BLA will depend upon a number of factors, including whether the product candidate has received priority review, the quality of the submission and studies presented, the potential contribution that the compound will make in improving the treatment of the disease in question and the workload at the FDA.

The FDA may, in some cases, confer upon an investigational product the status of a fast track product. A fast track product is defined as a new drug or biologic intended for the treatment of a serious or life-threatening condition that demonstrates the potential to address unmet medical needs for this condition. The FDA can base approval of an NDA or BLA for a fast track product on an effect on a surrogate endpoint, or on another endpoint that is reasonably likely to predict clinical benefit. If a preliminary review of clinical data suggests that a fast track product may be effective, the FDA may initiate review of entire sections of a marketing application for a fast track product before the sponsor completes the application.

We anticipate that our products will be manufactured by our strategic partners, licensees or other third parties. Before approving an NDA or BLA, the FDA will inspect the facilities at which the product is manufactured and will not approve the product unless the manufacturing facilities are in compliance with the FDA’s current good manufacturing practice regulations (“cGMP”), which are regulations that govern the manufacture, holding and distribution of a product. Manufacturers of biologics also must comply with the FDA’s general biological product standards. Our manufacturers also will be subject to regulation under the Occupational Safety and Health Act, the Nuclear Energy and Radiation Control Act, the Toxic Substance Control Act and the Resource Conservation and Recovery Act and other applicable environmental statutes. Following approval, the FDA periodically inspects drug and biologic manufacturing facilities to ensure continued compliance with the cGMP. Our manufacturers will have to continue to comply with those requirements. Failure to comply with these requirements subjects the manufacturer to possible legal or regulatory action, such as suspension of manufacturing or recall or seizure of product. Adverse patient experiences with the product must be reported to the FDA and could result in the imposition of marketing restrictions through labeling changes or market removal. Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following approval.

The labeling, advertising, promotion, marketing and distribution of a drug or biologic product also must be in compliance with FDA and Federal Trade Commission requirements which include, among others, standards and regulations foroff-label promotion, industry sponsored scientific and educational activities, promotional activities involving the internet, anddirect-to-consumer advertising. We also will be subject to a variety of federal, state and local regulations relating to the use, handling, storage and disposal of hazardous materials, including chemicals and radioactive and biological materials. In addition, we will be subject to various laws and regulations governing laboratory practices and the experimental use of animals. In each of these areas, as above, the FDA has broad regulatory and enforcement powers, including the ability to levy fines and civil penalties, suspend or delay issuance of product approvals, seize or recall products and deny or withdraw approvals.

We will also be subject to a variety of regulations governing clinical trials and sales of our products outside the United States. Whether or not FDA approval has been obtained, approval of a product candidate by the comparable regulatory authorities of foreign countries and regions must be obtained prior to the commencement of marketing the product in those countries. The approval process varies from one regulatory authority to another and the time may be longer or shorter than that required for FDA approval. In the European Union, Canada and Australia, regulatory requirements and approval processes are similar, in principle, to those in the United States.

Review and Approval of Drugs in the European Union Including France

In order to market any pharmaceutical product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions governing, among other things, research and development, testing, manufacturing, quality control, safety, efficacy, clinical trials, marketing authorization, packaging, storage, record keeping, reporting, export and import, advertising and other promotional practices involving pharmaceutical products, as well as commercial sales, distribution and post-approval monitoring and reporting of our products. Whether or not it obtains FDA approval for a pharmaceutical product, the company would need to obtain the necessary approvals by the comparable foreign regulatory authorities before it can commence clinical trials or marketing of the pharmaceutical product in those countries or jurisdictions. The approval process ultimately varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer and far more difficult than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

The United Kingdom (“UK”) formally left the European Union (“EU”) on January 31, 2020 and the transition period, during which EU laws continued to apply to the UK, expired on December 31, 2020. This means EU laws now only apply to the UK in respect of Northern Ireland as laid out in the Protocol on Ireland and Northern Ireland. Following the end of the transition period, the EU and the UK concluded a trade and cooperation agreement (“TCA”), which applied provisionally from January 1, 2021 and entered into force on May 1, 2021.

The TCA includes provisions affecting the life sciences sector (including on customs and tariffs) but areas for further discussion between the EU and the UK remain. In addition, there are some specific provisions concerning pharmaceuticals. These include the mutual recognition of Good Manufacturing Practice (“GMP”) and issued GMP documents. The TCA does not, however, contain wholesale mutual recognition of UK and EU pharmaceutical regulations and product standards.

Since January 1, 2021, the EU laws which have been transposed into UK law through secondary legislation continue to be applicable in the UK as “retained EU law”. As there is no general power to amend these regulations, the UK government has enacted the Medicines and Medical Devices Act 2021. The purpose of the act is to enable the existing regulatory frameworks in relation to human medicines, clinical trials of human medicines, veterinary medicines and medical devices to be updated. The powers under the act may only be exercised in relation to specified matters and must safeguard public health.

Specified provisions of the Medicines and Medical Devices Act 2021 entered into force on February 11, 2021. The remaining provisions came into effect within two months of February 11, 2021 or will otherwise come into effect as stipulated in subsequent statutory instruments. The Medicines and Medical Devices Act 2021 supplements the UK Medical Devices Regulations 2002 (UK Regulations), which are based on the EU Medical Devices Directive as amended to reflect the UK’s post-Brexit regulatory regime. Notably, the UK Regulations do not include any of the revisions that have been made by the EU Medical Devices Regulation (EU) 2017/745, which, since May 26, 2021, now applies in all EU Member States.

The UK’s Medicines and Healthcare products Regulatory Agency (“MHRA”) conducted a comprehensive consultation between September and November 2021 on proposals to develop a new UK regime for medical devices in the UK. The proposals include more closely aligning definitions for medical devices and in vitro medical devices with internationally recognized definitions and changing the classification of medical devices according to levels or risk. The proposals are intended to improve patient and public safety and increase the appeal of the UK market. The new regime is planned to come into force on July 1, 2023, which will align with the date from which the UK is due to stop accepting CE marked medical devices and require UKCA (UK Conformity Assessed) marking. It is envisaged that, in Northern Ireland, the amended regime could run in parallel with any existing or future EU rules in accordance with the Protocol on Ireland and Northern Ireland.

Drug Development Process

The conduct of clinical trials is currently governed by the EU Clinical Trials Directive 2001/20/EC (Clinical Trials Directive), and will be gradually replaced by the EU Clinical Trials Regulation (EU) No. 536/2014 (“CTR”). The CTR introduces a complete overhaul of the existing regulation of clinical trials for medicinal products in the EU. It entered into force on January 31, 2022.

Under the current regime, which will expire after a transition period of one or three years, respectively, as outlined below in more detail, before a clinical trial can be initiated, it must be approved in each EU Member State in which the clinical trial is to be conducted. The approval must be obtained from two separate entities: the National Competent Authority (“NCA”) and one or more Ethics Committees. The NCA of the EU Member States in which the clinical trial will be conducted must authorize the conduct of the trial, and the independent Ethics Committee must grant a positive opinion in relation to the conduct of the clinical trial in the relevant EU Member State before the commencement of the trial. Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be submitted to or approved by the relevant NCA and Ethics Committees. Under the current regime all suspected unexpected serious adverse reactions to the investigated drug that occur during the clinical trial must be reported to the NCA and to the Ethics Committees of the EU Member State where they occur.

A more unified procedure applies under the new CTR, which came into force on January 31, 2022. A sponsor is able to submit a single application for approval of a clinical trial through a centralized EU clinical trials portal. One national regulatory authority (the reporting EU Member State proposed by the applicant) takes the lead in validating and evaluating the application consult and coordinate with the other concerned Member States. If an application is rejected, it may be amended and resubmitted through the EU clinical trials portal. If an approval is issued, the sponsor may start the clinical trial in all concerned Member States. However, a concerned EU Member State may in limited circumstances declare an “opt-out” from an approval and prevent the clinical trial from being conducted in such Member State. The CTR also aims to streamline and simplify the rules on safety reporting, and introduces enhanced transparency requirements such as mandatory submission of a summary of the clinical trial results to the EU Database. While Member States will work in CTIS immediately after the system has gone live, the CTR provides for two transition periods for sponsors: For one year, until January 31, 2023, clinical trial sponsors can still choose whether to submit an initial clinical trial application in line with the current system (Clinical Trials Directive) or via CTIS. From January 31, 2023, submission of initial clinical trial applications via CTIS becomes mandatory, and by January 31, 2025, all ongoing trials approved under the current Clinical Trials Directive will be governed by the new Regulation and have to be transitioned to CTIS.

Under both the current regime and the new CTR, national laws, regulations, and the applicable Good Clinical Practice and Good Laboratory Practice standards must also be respected during the conduct of the trials, including the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use guidelines on Good Clinical Practice (“GCP”) and the ethical principles that have their origin in the Declaration of Helsinki.

Marketing Authorization Procedures

In the EU and in Iceland, Norway and Liechtenstein (together, the European Economic Area or “EEA”), after completion of all required clinical testing, pharmaceutical products may only be placed on the market after obtaining a Marketing Authorization (“MA”). To obtain an MA of a drug under European Union regulatory systems, an applicant can submit a Marketing Authorization Application (“MAA”) through, amongst others, a centralized or decentralized procedure.

The centralized procedure provides for the grant of a single MA by the European Commission (“EC”) that is valid for all EU Member States and, after respective national implementing decisions, in the three additional EEA Member States. The centralized procedure is compulsory for specific medicinal products, including for medicines developed by means of certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products (“ATMP”) and medicinal products with a new active substance indicated for the treatment of certain diseases (AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases).

For medicinal products containing a new active substance not yet authorized in the EEA before May 20, 2004 and indicated for the treatment of other diseases, medicinal products that constitute significant therapeutic, scientific or technical innovations or for which the grant of a MA through the centralized procedure would be in the interest of public health at EU level, an applicant may voluntarily submit an application for a marketing authorization through the centralized procedure.

Under the centralized procedure, the Committee for Medicinal Products for Human Use (“CHMP”), established at the European Medicines Agency (“EMA”), is responsible for conducting the initial assessment of a drug. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization. Under the centralized procedure, the timeframe for the evaluation of an MAA by the EMA’s CHMP is, in principle, 210 days from receipt of a valid MAA. However, this timeline excludes clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP, so the overall process typically takes a year or more, unless the application is eligible for an accelerated assessment. Accelerated assessment might be granted by the CHMP in exceptional cases when a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation. On request, the CHMP can reduce the time frame to 150 days if the applicant provides sufficient justification for an accelerated assessment. The CHMP will provide a positive opinion regarding the application only if it meets certain quality, safety and efficacy requirements. However, the EC has final authority for granting the MA within 67 days after receipt of the CHMP opinion.

The decentralized procedure permits companies to file identical MA applications for a medicinal product to the competent authorities in various EU Member States simultaneously if such medicinal product has not received marketing approval in any EU Member State before. This procedure is available for pharmaceutical products not falling within the mandatory scope of the centralized procedure.

The competent authority of a single EU Member State, known as the reference EU Member State, is appointed to review the application and provide an assessment report. Under this procedure, an applicant submits an application based on identical dossiers and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference EU Member State and concerned EU Member States. The reference EU Member State prepares a draft assessment report and drafts of the related materials within 120 days after receipt of a valid application. Subsequently each concerned EU Member State must decide whether to approve the assessment report and related materials. If an EU Member State cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the EC, whose decision is binding for all EU Member States.

All new MAAs must include a Risk Management Plan (“RMP”), describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the MA. RMPs and Periodic Safety Update Reports (“PSURs”) are routinely available to third parties requesting access, subject to limited redactions.

Marketing Authorizations have an initial duration of five years. After these five years, the authorization may subsequently be renewed on the basis of a reevaluation of the risk-benefit balance. Once renewed, the MA is valid for an unlimited period unless the EC or the national competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with only one additional five-year renewal. Applications for renewal must be made to the EMA at least nine months before the five-year period expires.

Data and Market Exclusivity in the European Union

As in the United States, it may be possible to obtain a period of market and/or data exclusivity in the European Union that would have the effect of postponing the entry into the marketplace of a competitor’s generic, hybrid or biosimilar product (even if the pharmaceutical product has already received an MA) and prohibiting another applicant from relying on the MA holder’s pharmacological, toxicological and clinical data in support of another MA for the purposes of submitting an application, obtaining MA or placing the product on the market.

New medicinal products authorized in the European Union, qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity. The overall ten-year period of market exclusivity can be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.

The data exclusivity period prevents generic or biosimilar applicants from relying on the preclinical and clinical trial data contained in the dossier of the reference medicinal product when applying for a generic or biosimilar marketing authorization in the European Union during a period of eight years from the date on which the reference product was first authorized in the European Union. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the European Union until 10 years have elapsed from the initial authorization of the reference product in the European Union.

Post-approval Regulation

Similar to the United States, both marketing authorization holders and manufacturers of pharmaceutical products are subject to comprehensive regulatory oversight by the EMA, the EC and/or the competent regulatory authorities of the EU Member States.

The holder of an EU marketing authorization for a pharmaceutical product must also comply with EU pharmacovigilance legislation and its related regulations and guidelines, which entail many requirements for conducting pharmacovigilance, or the assessment and monitoring of the safety of pharmaceutical products.

Failure by us or by any of our third-party partners, including suppliers, manufacturers and distributors to comply with EU laws and the EU Member State laws implementing Directive 2001/83/EC on pharmaceutical products for human use and other core legislation relating to pharmaceutical products, and other EU Member State laws that apply to the conduct of clinical trials, manufacturing approval, marketing authorization of pharmaceutical products and marketing of such products, both before and after grant of marketing authorization, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties. These penalties could include delays or refusal to authorize the conduct of clinical trials or to grant marketing authorization, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the marketing authorization, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.

Pricing and Reimbursement Environment

Even if a pharmaceutical product obtains a marketing authorization in the European Union, there can be no assurance that reimbursement for such product will be secured on a timely basis or at all. The EU Member States are free to restrict the range of pharmaceutical products for which their national health insurance systems provide reimbursement, and to control the prices and reimbursement levels of pharmaceutical products for human use. An EU Member State may approve a specific price or level of reimbursement for the pharmaceutical product, or alternatively adopt a system of direct or indirect controls on the profitability of the company responsible for placing the pharmaceutical product on the market, including volume-based arrangements, caps and reference pricing mechanisms.

To obtain reimbursement or pricing approval in some countries, including the EU Member States, we may be required to conduct studies that compare the cost-effectiveness of our product candidates to other therapies that are considered the local standard of care. There can be no assurance that any country will allow favorable pricing, reimbursement and market access conditions for any of our products, or that we will be feasible to conduct additional cost-effectiveness studies, if required.

European Union Data Laws

The collection and use of personal health data and other personal information in the European Union is governed by the provisions of the General Data Protection Regulation (“GDPR”), which came into force in May 2018, and related implementing laws in individual EU Member States. In addition, following the United Kingdom’s formal departure from the European Union on January 31, 2020 and the end of the transition period on December 31, 2020, the United Kingdom has become a “third country” for the purposes of EU data protection law. A “third country” is a country other than the EU Member States and the three additional European Economic Area countries (Norway, Iceland and Liechtenstein) that have adopted a national law implementing the GDPR. However, the TCA includes a provision, whereby the transfer of personal data from the EU to the United Kingdom will not be considered as a transfer to a “third country” for a period of four months starting from the entry into force of the TCA. This period will be extended by two further months, unless the EU or the United Kingdom objects. Under the GDPR, personal data can only be transferred to third countries in compliance with specific conditions for cross-border data transfers. Appropriate safeguards are required to enable transfers of personal data from the EU Member States. This status has a number of significant practical consequences, in particular for international data transfers, competent supervisory authorities and enforcement of the GDPR. The GDPR increased responsibility and liability in relation to personal data that we process.

The GDPR imposes a number of strict obligations and restrictions on the ability to process (processing includes collection, analysis and transfer of) personal data, including health data from clinical trials and adverse event reporting. The GDPR also includes requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals prior to processing their personal data or personal health data, notification of data processing obligations to the national data protection authorities and the security and confidentiality of the personal data. The GDPR also prohibits the transfer of personal data to countries outside of the European Union that are not considered by the EU to provide an adequate level of data protection, except if the data controller meets very specific requirements. These countries include the United States, and following the end of the six month period as laid out in the TCA, it may include the United Kingdom if no adequacy decision is given prior to this. Following the Schrems II decision of the Court of Justice of the European Union on July 16, 2020, there is uncertainty as to the general permissibility of international data transfers under the GDPR. In light of the implications of this decision we may face difficulties regarding the transfer of personal data from the European Union to third countries. The European Data Protection Board has adopted draft recommendations for data controllers and processors who export personal data to third countries regarding supplementary measures to ensure compliance with the GDPR when transferring personal data outside of the EU. These recommendations were submitted to public consultation until December 21, 2020, however it is unclear when and in which form these recommendations will be published in final form.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU Member States may result in significant monetary fines, other administrative penalties and a number of criminal offenses (punishable by uncapped fines) for organizations and in certain cases their directors and officers as well as civil liability claims from individuals whose personal data was processed. Data protection authorities from the different EU Member States may still implement certain variations, enforce the GDPR and national data protection laws differently, and introduce additional national regulations and guidelines, which adds to the complexity of processing personal data in the European Union. Guidance developed at both EU level and at the national level in individual EU Member States concerning implementation and compliance practices are often updated or otherwise revised.

There is, moreover, a growing trend towards required public disclosure of clinical trial data in the European Union which adds to the complexity of obligations relating to processing health data from clinical trials. Such public disclosure obligations are provided in the new EU Clinical Trials Regulation, EMA disclosure initiatives and voluntary commitments by industry. Failing to comply with these obligations could lead to government enforcement actions and significant penalties against us, harm to our reputation, and adversely impact our business and operating results. The uncertainty regarding the interplay between different regulatory frameworks, such as the Clinical Trials Regulation and the General Data Protection Regulation, further adds to the complexity that we face with regard to data protection regulation.

New Legislation and Regulations

From time to time, legislation is drafted, introduced and passed in the European Union, its Member States and other states of Europe that could significantly change the statutory provisions governing the testing, approval, manufacturing, marketing, coverage and reimbursement of pharmaceutical products. In addition to new legislation, pharmaceutical regulations and policies are often revised or interpreted by the EMA and national agencies in ways that may significantly affect our business and our products.

Environmental Compliance

Our research and development activities involve the controlled use of potentially harmful biological materials as well as hazardous materials, chemicals and various radioactive compounds. We are subject to federal, state and local laws and regulations governing the use, storage, handling and disposal of these materials and specific waste products. We are also subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling ofbio-hazardous materials. The cost of compliance with these laws and regulations could be significant and may adversely affect capital expenditures to the extent we are required to procure expensive capital equipment to meet regulatory requirements.

Employees

Human Capital Management

As of March 15, 2018,December 31, 2021, we had fifteentwelve full-time employees.and no part-time employees at our facility in Marlborough, Massachusetts. None of our employees are represented by a labor union or covered by a collective bargaining agreement, nor have we experienced any work stoppages.

We expect to add additional employees in fiscal year 2022 to increase our expertise and resources available in our preclinical and clinical research and development. We continually evaluate our business needs and weigh the use of in-house expertise and capacity with outsourced expertise and capacity. The Company currently outsources substantial preclinical and clinical trial work to third party contract research organizations and drug manufacturing contractors.

Our ability to identify, attract, retain and integrate additional qualified key personnel is also critical to our success and the competition for skilled research, product development, regulatory and technical personnel is intense. To attract qualified applicants to the Company, we offer a total rewards package consisting of base salary and cash target bonus based on geography and size of company, a comprehensive benefit package and equity compensation for every employee. Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility. Actual bonus payout is based on performance.

A large majority of Phio’s employees have obtained advanced degrees in their professions and we support our employees’ further development with individualized development plans, mentoring, coaching, group training, conference attendance and financial support including tuition reimbursement.

Corporate Information

RXi was

We were incorporated in the state of Delaware in 2011.2011 as RXi Pharmaceuticals Corporation. On November 19, 2018, the Company changed its name to Phio Pharmaceuticals Corp., to reflect its transition from a platform company to one that is fully committed to developing groundbreaking immuno-oncology therapeutics. Our executive offices are located at 257 Simarano Drive, Suite 101, Marlborough, MA 01752, and our telephone number is (508)767-3861.

The Company’s website address ishttp://www.rxipharma.comwww.phiopharma.com. We make available on our website, free of charge, copies of our annual reports on Form10-K, our quarterly reports on Form10-Q and our current reports on Form8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) as soon as reasonably practicable after these reports are filed electronically with, or otherwise furnished to, the Securities and Exchange Commission (the “SEC”). We also make available on our website the charters of our audit committee, compensation committee and nominating and corporate governance committee, as well as our corporate code of ethics and conduct.

You may read and copy any materials the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding RXiPhio and other issuers that file electronically with the SEC. The SEC’s website address ishttp://www.sec.gov. The contents of these websites are not incorporated by reference into this report and should not be considered to be part of this report.

Risks Relating to Our Business and Industry

We recently made a strategic decision

Our business and operations may be materially and adversely affected by the coronavirus pandemic.

Our business and operations may be materially and adversely affected by the ongoing coronavirus pandemic. From the first signs of the pandemic, we have taken proactive measures to focusprotect the health and safety of our development solely on immuno-oncology,employees, such as working remotely and flexible scheduling, and our facilities have remained largely operational. The implementation of preventative and precautionary measures that we, companies we do business with and government authorities have taken to mitigate the spread of coronavirus have impacted, and may further impact or disrupt our business and operations. The effects of these measures and the anticipated benefitsextent of their impact will depend, in part, on the length and severity of the restrictions and the limitations on our ability to conduct our business in the ordinary course. These and future measures may negatively affect our business, results of operations, financial condition and cash flows.

As a result of the coronavirus pandemic, limited availability of certain services and supplies required for our preclinical programs significantly impacted our operations, causing delays to our clinical program timelines. The Company has undertaken efforts to mitigate potential future impacts by identifying and engaging alternative third-party service providers, however, if measures to overcome the pandemic continue or are insufficient, the availability of required services and supplies could be further delayed, which may in turn further slow or delay our preclinical and clinical activities. Additionally, the commencement of new clinical trials and the enrollment of patients in clinical trials have been affected by the coronavirus pandemic and while the steps to initiate our clinical trials are continuing and ongoing, the Company does not yet know the full extent of similar potential delays on our clinical trial activities.

We cannot predict the impact that the progression of the pandemic will have on future operations or financial results due to a number of factors including, but not limited to, the health and safety of our employees, the ability of the Company’s third-party providers to continue to operate, the availability of services and supplies for our programs, the ability to commence our clinical trials and the clinical sites to enroll patients, and the length of the coronavirus pandemic. The extent to which the coronavirus impacts our business, preclinical studies and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted, including new strategic focusinformation which may not be realized.emerge concerning the severity of COVID-19, including mutations or variants, and the actions to contain the pandemic or treat its impact, among others. As a result, we may experience additional disruptions that could severely impact our business, preclinical studies and clinical trials, including delays in regulatory approvals to initiate any planned clinical trials, delays or difficulties in enrolling patients, interruptions or delays in preclinical studies due to limited operations at our facilities or the companies we do business with, and lack of availability or delays in supplies needed to conduct our preclinical and clinical activities.

We acquired MirImmune, a privately-held immuno-oncology company,

The pandemic has impacted and may further impact the global economy and capital markets. Moreover, it has led to significant uncertainty and increased volatility in the past yearcapital markets. If these conditions in the capital markets continue it may reduce the Company’s ability to access capital and are undertakingnegatively affect our future liquidity. As a result, we may be compelled to divesttake actions to preserve our current dermatologycash flow.

The coronavirus pandemic continues to evolve and ophthalmology programs. In January 2018,change rapidly. The ultimate impact of the coronavirus pandemic, or a similar public health emergency, is highly uncertain and subject to change. The Company completed a thorough reviewdoes not yet know the full extent of potential delays or impacts on its business, financing activities, preclinical studies, clinical trial activities or the global economy as a whole. However, these effects could have a material impact on the Company’s liquidity, results of operations development programs and financial resources and announced its strategic decision to solely focus the Company’s development portfoliocondition.

We are dependent on the fieldsuccess of immuno-oncology. There is no assurance that the Company will be able to consummate any strategic transactions for the dermatologyour INTASYL technology platform, and ophthalmology programs or that we will be able to be successful in implementing our new focus as an immuno-oncology product development company.

The approach we are taking to discover and develop novel therapeutics using RNAicandidates based on this platform, which is unproven and may never lead to approved and marketable products.

Our research and development efforts and our future success ishave been focused on the development of product candidates based on oursd-rxRNA INTASYL technology platform. We have invested, and we expect to continue to invest, significant financial resources and efforts developing our product candidates. The use of RNA interferenceability to generate revenue is a relatively new scientific discovery and to date, no company has receivedhighly dependent on the successful development, regulatory approval and commercialization of our INTASYL product candidates by us or by collaborative partners, which may not occur for the foreseeable future, if ever, and is highly uncertain and depends on a number of factors, many of which are beyond our control. Therefore, it is difficult to market therapeutics utilizing RNA interference. The scientific evidence to supportaccurately predict challenges we may face with our product candidates as they move through the feasibility of developing drugs based on these discoveries is both preliminarydiscovery, preclinical and limited.clinical development stages. We may spend large amounts of money trying to develop oursd-rxRNA INTASYL platform technology and may never succeed in doing so. In addition, any compoundsour research methodology may be unsuccessful in identifying product candidates and results from preclinical and clinical studies may not predict the results that we develop may not

demonstratewill be obtained in subjects the chemical and pharmacological properties ascribed to them in laboratory studies, and theylater phase trials of our product candidates or our product candidates may interact with human biological systemspatients in unforeseen ineffective or even harmful ways.ways that may make it impractical to manufacture, market or receive regulatory approval. If we are not successful in developing abringing an INTASYL product candidate usingto market, it could negatively impact oursd-rxRNA technology, business and financial condition and we may not be able to identify and successfully implement an alternative product development strategy.

We have limitedOur product candidates are in an early stage of development and we may fail, experience as a companysignificant delays, never advance to the clinic or not be successful in immuno-oncology.our efforts to identify or discover additional product candidates, which may materially and adversely impact our business.

Prior to the Company’s acquisition of MirImmune Inc. in January 2017, the Company’s efforts were focused

Our success depends heavily on the successful development of therapeuticsour product candidates, which may never occur. Our product candidates could be delayed, not advance into the clinic, or unexpectedly fail at any stage of development. Our ability to identify, develop and commercialize product candidates is dependent on extensive preclinical and other non-clinical tests in order to support an investigational new drug (“IND”) application in the areasUnited States, or the equivalent with regulatory authorities in other jurisdictions. These research programs to identify new product candidates require substantial financial and human resources, are difficult to design and can take many years.

We cannot be certain of dermatology and ophthalmology. We are currently conducting multiple discovery and preclinicalthe outcome of our research studies using oursd-rxRNA technology for use in developing immuno-oncology therapeutics and we have limited experience as a company in developing such immuno-oncology technologies. Because of the number of companies and intense competition in immuno-oncology, we may not have the ability to successfully overcome many of the risks and uncertainties that companies face in this field.

If we are not successful in identifying and developing product candidates, we will not be able to commence clinical trials in humans or obtain approval for our product candidates.

Oursd-rxRNA technology has been subject to only limited clinical testing with our first product candidate,RXI-109, for dermatologic and ophthalmic uses. We have identified lead compounds for preclinical development with oursd-rxRNA technology in immuno-oncology but have not yet commenced clinical testing. We may not be able to advance these or future product candidates through the preclinical stage into clinical trials. Additionally, we may not be able to identify data that would support entering these or future candidates into clinical trials. Furthermore, even if we successfully enter into clinical studies in immuno-oncology, the results from preclinical testing of a drug candidatethese studies may not predict the results that will be achievedobtained in human clinical trials. There is no assurance that we will be able to successfully develop any product candidate(s)later stages of development and we may focus our efforts and resources on product candidates that may prove to be unsuccessful.

We are dependent on the success of our product candidates, which may not receive regulatory approval or be successfully commercialized.

We have no commercial products and currently generate no revenue from product sales or collaborations and may never be able to develop marketable products. The FDA or similar foreign governmental agencies must approve our products in development before they can be marketed. The process for obtaining FDA approval is both time consuming and costly, with no certainty of a successful outcome. Before obtaining regulatory approval for the sale of any drug candidate, we must conduct extensive preclinical tests and successful clinical trials to demonstrate the safety and efficacy of our product candidates in humans. A failure of any preclinical study or clinical trial can occur at any stage of testing. The results of preclinical and initial clinical testing of these products may not necessarily indicate the results that will be obtained from later or more extensive testing. Preliminary observations made in early stages of clinical trials with small numbers of subjects are inherently uncertain. Initial clinical trial results are not necessarily indicative of results that will be obtained when full data sets are analyzed or in subsequent clinical trials.

While there have been a number of immunotherapy drugs approved by the FDA, there have been no FDA drug approvals using the approach that we are taking. We will be subjected to thorough regulatory review by the FDA and there is limited experience in this area with a few precedents. The FDA may require additional information from the Company regarding our current or planned clinical trials at any time and such information may be costly to provide or cause potentially significant delays in development. There is no assurance that we will be able to successfully develop any of our product candidates, and we may spend large amounts of money tryingforego opportunities with certain product candidates or for indications that later prove to resolve these issues and may never succeed in doing so.

A number of different factors could prevent us from obtaining regulatory approval or commercializinghave greater commercial potential. If we are not able to successfully develop our product candidates, we may be forced to abandon or delay our development efforts, which may materially and adversely affect our business, financial condition, and results of operations.

We are dependent on a timely basis, or at all.collaboration partners for the successful development of our adoptive cell therapy product candidates.

As we do not have direct access to the patient or donor cells used in cell therapy, we are not considered a cell therapy company and expect to depend on third-party collaborators to support the clinical development of our ACT product candidates. We have entered into a clinical collaboration development agreement with AgonOx, Inc. for the FDA or other applicable regulatory authorities, or an IRB may suspend clinical trialsdevelopment of a drugour PH-762 product candidate in ACT and have entered into research agreements with our academic and industry collaborators, each of which is terminable by the relevant party at any time, subject to applicable notice periods. The success of our collaborations depends upon the efforts of our collaboration partners, and their performance in achieving the development activities to the extent they are responsible under our collaboration agreements. Each of our partners may not be successful in performing these activities, including completing the required preclinical studies and other information to be included in an IND application (or foreign equivalent), obtaining approval to initiate clinical trials, conducting the necessary clinical trials and arranging for various reasons,the manufacturing or contract research organization (“CRO”) relationships and obtaining marketing authorization. Our partners work with other companies, potentially including ifsome of our competitors, and their corporate objectives may not align with ours, they may change their strategic focus or pursue alternative technologies. If our collaborations are not successful or a partner terminates our collaboration agreement, our business, financial condition, results of operations could be materially and adversely affected.

Further, we may not be successful in negotiating agreements with these collaborators or they believewith future collaborators for the subjects participatingdevelopment and commercialization of our ACT product candidates through collaborations such as joint development or licensing agreements. Our ability to successfully negotiate such agreements will depend on, among other things, potential partners’ evaluation of the superiority of our technology over competing technologies, the quality of preclinical data that we have generated, the perceived risks specific to developing our product candidates and our partners’ own strategic and corporate objectives. If we fail to negotiate these agreements, we may not be able commence clinical trials with our ACT product candidates or we may be required to obtain licenses from cell therapy companies and our business, financial condition, and results of operations could be materially and adversely affected.  

If we experience delays or difficulties in suchidentifying and enrolling patients in clinical trials, are being exposedit may lead to