Tamara McGrillen - Investor Relations Geert Cauwenbergh - President and CEO Caitlin Kontulis - Principal Accounting Officer Pamela Pavco - Chief Development Officer Alexey Eliseev - Chief Business Officer.

Keith Markey - Griffin Securities.

Welcome to today's webcast entitled RXi Pharmaceuticals’ Fourth Quarter and Year-End 2016 Financial Results Earnings Call. Today’s call is being recorded. At this time, it is my pleasure to turn the floor over to your host to Tamara McGrillen. Ma’am, the floor is yours..

Thank you, Operator. Good afternoon ladies and gentlemen and thank you for participating on our call today. We are joined by our President and CEO, Dr. Geert Cauwenbergh; our Chief Development Officer, Dr. Pamela Pavco; and our Chief Business Officer, Alexey Eliseev and our Principal Accounting Officer, Ms. Caitlin Kontulis.

I would like to remind listeners that this call will contain certain statements concerning RXi’s future expectations, plans, and processes which constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements and as a result of various important factors including those discussed in our most recent Form 10-K filed with the SEC.

In addition, any forward-looking statements represent our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. Now, I would like to turn the call over to our President and CEO, Dr. Cauwenbergh..

Thank you, Tammie. Good afternoon everybody. 2016 has been a busy year for our company both from the development point of view and M&A point of view. I will leave the specifics about our R&D efforts to Dr.

Pam Pavco, our Chief Development Officer Today I want to focus primarily on the activities that have been going on in RXI in relation to business development as well as M&A. As you will recall in May of 2016 we announced a major effort to identify companies that would be compatible with RXI from an M&A point of view.

In that process we reviewed about 60 companies, private and public, that were considered a potential match with our activities and our technology platform. After the initial diligence process we reduced this number to six and approached each of those individually and their CDA.

The end result of that intense effort was the selection of MirImmune an emerging company in the area of immunooncology and cell therapy. The rationale for the selection was obvious, two years earlier MirImmune had asked for and received a license for our self-delivering RNAi technological for use in cell therapy and immunooncology.

As noted by MirImmune and in the literature, other methods of our RNAi transfections such as lipid or nanoparticle delivery vehicles or direct operation result in poor transaction rates and/or for cell viability.

Our rxRNA technology has neither of these issues resulting in approximately 100% cell viability and approximately 100% transfection rates in cell cultures. In exchange for the license RXI had the option to receive equity in MirImmune as well as some modest milestones.

Fast forward based on our due diligence work it became clear that the area of therapeutic focus immunooncology was not only very attractive to the investment community but also that the scientific and medical community was looking very favorably at this major emerging field as potentially transformational for medicine.

In addition in less than 20 months MirImmune had achieved exciting results with an anti-PD-1 sd rxRNA. They showed tumor infiltrating lymphocytes isolated from melanoma of the patient and transfected with an sd-rxRNA PD-1 inhibitor resulted in a major boost in tumor cell killing activity as compared to an anti-PD-1 anti-body.

In addition like CAR T-cells alone they had demonstrated a statistically significant reduction in the growth rate of human ovarian tumors at one month in a mouse model following a single treatment with a mesothelin targeting CAR T-cell that have been transfected with our sd-rxRNA PD-1 inhibitor as compared to the untreated control tumors.

In that same study they established that the transfected CAR T-cells still showed almost 100% down regulation of PD-1 at one month when isolated from the mesothelin. Also MirImmune identifiedthe rxRNA compounds against six different checkpoint targets and has filed IT for those compounds that IP is now in the RXI portfolio.

Using these compounds they demonstrated that both extracellular as well as intracellular checkpoints could be down regulated, a major benefit over checkpoint inhabitant anti-bodies. Moreover they learned that the same cell batch could be transfected by at least four different checkpoint inhibitors simultaneously as effectively as individually.

Also a major benefit compared to antibodies for which combination therapy is not self-evident. As we came to the conclusion that this acquisition could become transformational for our RXI it was also clear that we needed to raise money to ensure that we would be able to quickly accelerate data generation for this new and exciting therapeutic area.

Consequently we raised 11.5 million in gross proceeds towards the end of 2016 allowing us to close on the acquisition of MirImmune in early January.

Alexey Eliseev, former CEO of MirImmune and RXI's new Chief Business Officer is going to provide more details in relation to our ongoing projects and expected timelines in the immunooncology space as well as our efforts to attract the best and brightest to collaborative efforts with academia and the industry.

Obviously people are wondering how a small biotech can manage projects in three different therapeutic areas. Our priorities for this year are to build research and clinical development program for immuneoncology while we complete our ongoing clinical trials in dermatology and ophthalmology.

The outcome of each round will help us to determine our path forward for the coming years. For example whether to continue with internal development or to secure partnering opportunities.

Indeed we have very valuable assets with our clinical development candidates, the clinical studies that are ongoing as well as the [indiscernible] supports those assets.

In the meantime we will commit to balanced assessment of our current therapeutic areas that really involve evaluation of a number of parameters including timing cost of continued development, medical relevance of the project as it relates to unmeant patient needs, market potential, regulatory risks and potential for partnering in the context of our very broad and strong IP platform.

This assessment is going to provide the metrics for priority setting and will help us to make the right decisions and the best choices for value appreciation in our company. We expect to update our shareholders and potential new investors with the results of this strategic assessment by mid-year.

And now I want to hand the call over to Caitlin for the review of our Q4 and year-end financials of our company.

Caitlin?.

Thank you., Geert. Good afternoon everyone. Today the company filed its annual report on Form 10-K with that SEC. The annual report includes detailed information on the company's financial performance for the 2016 fiscal year. During the call today I will focus on selected financial highlights. First, the company's cash flows for the year.

The company's net cash used in operating expenses was $7.7 million for the year ended December 31, 2016 as compared with $7.3 million during the same period of the prior year.

The increase from the prior year was attributable to changes in non-cash expenses and changes in our working capital primarily related to payments made for the RXI-109 drug manufacturing in the first quarter of 2016.

Net cash provided by investing activities was $5.3 million for the year ended December 31, 2016 as compared with $5.6 million of net cash used in investing activities for the year ended December 31, 2015.

The increase from the prior year was primarily related to net purchases and maturities of our short term investments offset by capital expenditures and the issuance of promissory notes to MirImmune as part of the option agreement the company signed with them in October 2016.

Net cash provided by financing activities was $10.2 million for the year ended December 31, 2016 as compared with $9.5 million during the same period of the prior year.

The increase is due to net proceeds received in connection with the company's December 2016 public offering as compared to the net proceeds received from the company's public offering in 2015.

Total cash outflows for the year were approximately $8 million which is inline with the company's historical burn rate of $2 million and operating spending per quarter.

The company strengthened its balance sheet with the completion of an underwritten public offering which was completed in December 2016, the company issued approximately $3.8 million Class A units which also includes the over-allotment option exercised by the underwriters and 882 Class B units.

Each Class A unit consisted of one share of common stock and a five year warrants purchased one share of common stock. Each Class B unit consisted of one share of Series B preferred stock which is convertible into about 1011 shares of common stock and 1011 five year warrant.

The total net proceeds of the offering including the exercise of the overallotment option was $10.1 million. With the close on the offering the company had cash of $12.9 million at December 31, 2016. We believe that our existing cash should be sufficient to fund operations for at least the next 12 months.

Next turning to the statement of operations, research and development expense for the quarter ended December 31, 2016 was $1.3 million as compared with $1.7 million for the quarter ended December 31, 2015.

Research and development expense for the year ended December 31, 2016 was $5.4 million as compared with $6.9 million for the same period of the prior year.

Research and development expense decreased for both the quarterly and annual period primarily due to manufacturing expenses to make RXI-109 drug products and cash and equity fees that were payable to Hapten upon the close of the Samcyprone licensing agreement both of which occurred during 2015.

The company also saw further decrease in stock based compensation expense due to the full vesting of stock options this year from option awards that have been granted in 2012. Our stock options generally have a four year investing period.

General and administrative expenses for the quarter ended December 31, 2016 was $1 million as compared with $0.9 million for the quarter ended December 31, 2015. General and administrative expense for the year ended December 31, 2016 was $3.6 million as compared with $3.3 million for the year ended December 31, 2015.

The increase in general and administration expense quarter over quarter and year over year was primarily due to the company's focus on business development activities and an increase in legal expenses arising from the company's acquisition of MirImmune.

The increase in G&A expense during these periods was offset by decreases in stock based compensation expense due to option grants that fully vested in the year from stock options that have been granted in 2012.

As a result of these changes in R&D and G&A expenses the companies total operating expenses decreased quarter over quarter and year over year. The company's net loss applicable to common stock holders for the quarter ended December 31, 2016 was $4.4 million compared with $2.6 million for the quarter ended December 31, 2015.

Net loss applicable to common stockholders for the year-ended December 31, 2016 was $11.1 million compared with $10.4 million for the same period of the prior year. The company's net loss applicable to common stockholders includes the company's net loss plus certain expenses related to our series of preferred stock.

In connection with our recent public offering in December of last year, the company issued shares of Series B preferred stock.

The increase in net loss applicable to common stockholders for both the quarter and year ended December 31, 2016 as compared with the same periods in the prior year was due to this one time charge related to the beneficial conversion feature on the Series B preferred stock. This was offset by a decrease in operating expenses as previously discussed.

All shares of the company's Series B preferred stock issued in connection with the 2016 financing has been converted into common stock such that no shares of Series B preferred stock currently are issued or outstanding. Lastly I'll address the company's current share price and its effect on our listing on the NASDAQ exchange.

On February 2, 2017 the company received notice from NASDAQ that our share price had fallen below, the minimum bid price of $1 from 30 consecutive days and was no longer in compliance with the price requirements for continued listing on the exchange.

In order to regain compliance the company's share price will need to have a closing share price of at least $1 for 10 consecutive days at any time prior to August 1, 2017. And the answers [ph] our share price is not above $1 the company will work with NASDAQ to gain an additional extension or to take the necessary steps to regain compliance.

While we're hopeful that we will not need to complete a reverse stock split a part of those necessary steps, we cannot rule out this option.

We have a number of upcoming milestones this year in each of our programs which may provide for their appreciation of our share price above $1 prior to this deadline and what we cannot predict the result we are working hard to meet these milestones.

With that I will turn the call over to Pam who will provide an update on the company's R&D activities..

Thank you, Caitlin and hello everyone. I will be providing a brief update on our ongoing clinical trials and will hand off to Dr. Alexey Eliseev, to give an update on recent research and plans in the oncology area. As you know our first clinical sd-rxRNA, RXI-109 is currently being evaluated in two different clinical studies.

A Phase 2 study in dermatology and a Phase 1/2 study in ophthalmology. In the dermatology study 1402 RXI-109 is being evaluated for the management of hypertrophic scars after scar revision surgery. All four cohorts in this study are completely involved and the first two cohorts have been closed.

The second two cohorts, cohort three and four were added in early 2016, all of these subjects have now completed the dosing period and the final subjects are in their three month observation period. Originally two different doses were evaluated in a three month treatment regimen in cohorts one and two.

Based on an interim analysis we have determined that there was no benefit to 10 mg/cm over 5 mg/cm. An early look at these data at the three month time point was previously presented and the data at six and nine months also bears this out.

At the end of 2016 we conducted a blinded assessment of paired clinical photographs taken at 3, 6 and 9 months for these first two cohorts which we manage approximately 12,000 observations.

The data confirm the positive differentiation from untreated surgery incisions in hypertrophic scars previously presented for a subset of subjects treated with the five mg/cm RXI-109 at three months.

In addition these data extend this observation to all time points including the post-treatment follow-up period through nine months post-surgery which is six months after dosing.

Given the choices of whether one scar was better not different from or worse than its parent scar the reviewers selected the RXI-109 treated sites as better more than 64% of the time at all time points. Remarkably this differentiation was maintained even at six months after the last dose.

RXI-109 was safe and well tolerated in adverse events being typical to the healing process following scar revision surgery and intradermal injections. These included mild to moderate redness, pain and tenderness. There were no RXI-109 related serious adverse events.

To extend the findings in the study two cohorts were added to evaluate a six month treatment regimen. As compared to six doses in cohorts one and two, these new cohorts included either nine doses cohort three or eight doses cohort four through the first six months followed by a three month observation period.

As of the interim analysis last year there were a small subset of subject that had reached the three month time point. As expected the limited set of three months data available from cohorts three appear to align with that of cohorts one and two as these subjects all have the same dosing schedule through month three.

The last enrolled subject in study 1402 is projected to complete the nine month study in Q3 2017. So the complete readout of the whole study including all four cohorts with follow up until nine months post-surgery is planned for the second half of 2017.

At that time the complete data set will also include conclusions based on scar evaluations from the principle investigator, demographics and comparison across cohorts in time.

Off note a patent was recently granted in Japan to RXI which covers our lead compound RXI-109 for its use as a therapeutic for fibrotic disorders including dermal and ocular scarring. The issuance of the Japanese patent further strengthens our IP estate and supports commercial development of RXI-109 in Japan as well and as in the U.S.

for the hypertrophic dermal scarring indication currently being evaluated as well as for ocular indications which I will review now.

In ophthalmology studies 1501 is being conducted to evaluate the safety and tolerability of intraocular injections of RXI-109 in patients with advanced wet age related macular degeneration and associated retinal scarring.

While enrollment in the study slowed in the last three months we have only two more subjects to enroll to complete the third cohort. Subjects in the study received four doses on a monthly schedule followed by a four month observation period.

The first two dose levels were very well tolerated and the first subject in the third cohort also has not had any drug related issues and has gone on to receive all four doses.

We believe that we can recruit all the subjects and completely enroll this cohort soon in order to complete the subject participation portion of this study prior to the end of the year as planned.

As this is primarily a safety study numerous evaluations are being conducted to ensure the continued health of the patient and effect on the study using a variety of imaging parameters. As a preliminary evaluation of activity we are following visual acuity as well as measuring the size of the original scar overtime.

If the untreated contra-lateral eye also includes sub-retinal fibrosis, comprehensive exams in imaging and measurements of this eye and the scar will also be conducted.

As it is known that approximately half of the patients with wet AMD who received anti-VEGF treatment developed retinal scars within two years of initiating their treatment it is possible that we'll see changes in scar size over the seven months study.

In those subjects with scars in both eyes there's an opportunity to even in the short duration safety study to observe that there's a slowing of the scar growth in the treated eye compared to the untreated eye.

We are also progressing on track in the area of consumer health, efficacy and toxicity testing in cell culture had been successfully completed for RXI-231 and sd-rxRNA that targets tyrosinase [ph] a key player in the production of melanin.

A gel formulation has been developed at RXI that allows this compound to penetrate beyond the stratum corneum barrier of the skin to the epidermal dermal junction where the melanin producing cells reside. RXI-231 has been manufactured in a large scale gel formulation is planned to support consumer testing activities. We are coordinating with the U.S.

clinical testing site to conduct human testing of the formulated compound very soon. The first two studies in volunteers will focus on standard safety testing of RXI-231 in a topical gel formulation applied to the skin.

These types of tests usually involve first applying the compound to the skin to determining any sensitivity and using a pattern in monitoring any irritation reaction that may develop over time.

After these initial safety studies is confirmed by testing in human volunteers RXI-231 can be evaluated in a streamlined consumer evaluation designed to rapidly show proof of concept in human skin. While the ultimate goal for the use of RXI-231 is to improve areas of existing hyperpigmentation.

One way to more rapidly show proof of activity is to demonstrate that the compound can prevent hyperpigmentation from occurring.

So the reason you get a sun tan is because a UV exposure from the sun up regulates tyrosinase and causes the melanin content of your skin to increase resulting in a darkened area For our testing we can expose small areas of skin to UV light and treat with RXI-231 or a controlled formulation to determine if the usage of RXI-231 reduces the darkening effect.

The difference in color of the UV exposed areas can easily be quantified and the differences between RXI-231 and control treated areas following UV exposure can be used as a surrogate readout for preventing the melanin deposit that leads to hyperpigmentation. Study SCP-1502 is also going.

In this study we are evaluating our proprietary topical formulation of the small molecule DPCP which we call Samcyprone Sansa prone in a study for the treatment of cutaneous wart. At the last earnings call we had decided to add a second cohort into this study in order to reduce the sensitization dose and to alter the timing of it.

I'm happy to say that we have submitted this protocol amendment and all documentation required to initiate a new cohort and enrollment into this cohort has begun. We learned quite a few things from the first cohort of subjects in study 1502.

A preliminary review of sensitization and work clearance dated from the subset of subjects that had completed the 10 week treatment phase of the study was performed in December of 2016.

First of all results show that greater than 90% of the subjects demonstrated desensitization response, a prerequisite to the ability to develop a therapeutic response.

In addition more than 60% of the subjects in the analysis responded to the treatment by exhibiting either a complete or greater than 50% clearance of all treated warts with up to 10 weekly treatments.

Samcyprone treatment in this study has been generally safe and well tolerated with drug related adverse events being most typically the expected local reactions due to sensitization and challenge responses in the skin as expected.

Cohort one of study 1502 is completely enrolled and we are now enrolling into cohort two, because the sensitization rate was so high in cohort one greater than 90%. The initial sensitization dose concentration could be reduced for cohort two.

Also as there were no reactions to the vehicle dose in cohort one, the vehicle dose has been removed allowing the trial to be shortened a bit. These patient friendly changes support a more streamlined trial. Even though we have added the second cohort our goal is still a readout from the study in the second half of 2017.

In summary our three ongoing trials are progressing on track and we are very close to initiating consumer testing of a compound to improve skin pigmentation.

Lastly as you know our newest program area is immunooncology, to give more detail about the work initiated by MirImmune and the directions that we are moving into this area I'd like to introduce Dr. Alexey Eliseev.

Alexey joined RXI from MirImmune as a Chief Business Officer and he will give an overview of this new exciting area of research for our RXI.

Alexey?.

Thank you, Pam. Hello everyone. Immunooncology is a new area of focus for RXI. It came with the acquisition of MirImmune which was formally closed on January 6 this year. I will give you an overview of the status of the research program that came with MirImmune and outline our plans for the near future.

To create new products for immunotherapy cancer we are applying RXI's RNA technology platform to adopt the cell transfer. We're rapidly developing area of immuno-oncology. Industry leading programs in this area developed by other companies are CAR T-cells which are expected to receive FDA approval this year.

At [indiscernible] transfer in both isolation of immune cells from patients' blood or tumor samples their treatment [indiscernible] to improve their ability to kill tumor cells and reinjection back to the patients. CAR T-cells have been extremely effective in the treatment of hematological cancers such as some lymphomas.

But they have so far been much less effective for solid tumors. One of the reasons for that is that the is the immune suppressive tumor microenvironment insulin tumors.

These days companies involved in adaptive cell transfer try to address this problem by blocking immune checkpoints with monoclonal antibodies or knocking out checkpoints from therapeutic cells by gene aided techniques such as CRISPR. RXI is taking a different approach to enabling therapeutic cells to destroy solid tumors.

Our sd-rxRNA compounds are highly efficient in transfecting immune cells ex-vivo and silencing immune check points. Unlike monoclonal antibodies sd-rxRNA can be used in combination to modulate multiple checkpoints in a single therapeutic treatments.

Unlike gene editing we are not introducing [indiscernible] modifications in the cell genome and thus avoid potential long term issues. As Geert already mentioned MirImmune generated lead sd-RXRNA compounds for six major checkpoint targets both extracellular and intracellular.

We achieved initial proof of concept results in two different systems with tumor infiltrating lymphocytes or TILs used for melanoma treatments and with CAR T-cells targeting the anti-gen [indiscernible] expressed in solid tumors. Inspired by these results RXI had embarked on the continuation of this program.

Having successfully incorporated MirImmune's assets we have identified several priority areas where we believe our technology can be particularly effective in the creation of new and more effective cell based immunotherapies. Our plan for this year is to generate key preclinical results both in the [indiscernible] in each of these areas.

This will allow us to sell that program for internal development to move it into the clinic next year and potentially result in preclinical technology based deals with leading players in the immuno-oncology field. One area is the continued development of CAR T targeting solid tumors.

Our proof of concept results were generated with just one sd-rxRNA compound in PD-1. We're now starting to test combinations of several sd-rxRNA compounds with different types of CARs applied to several solid tumor indications. Part of this work is done internally in the company while another part is outsourced the special like CROs.

We're also establishing an academic collaboration with some leading players in the CAR T space. The second area is the improvement of already existing standard of care cell therapies with the aid of our sd-rxRNA.

Patients with hematological cancers commonly received donor stem cell transplants while highly effective in rebuilding the patient's immune system after chemotherapy. These transplanted cells also have the ability to destroy the little tumors.

Our academic advisors and collaborators believe that our sd-rxRNA compounds can improve the efficacy of the transplanted cells. We're planning to tell this concept in syngeneic in a mouse models of transplants. In other area where we believe sd-rxRNA can make a difference is the modulation of cytokines released syndrome.

This common side effect has become a major concern in the industry after the death of five patients in the CAR T clinical trials conducted by Juna. We have designed sd-rxRNA compounds against particular targets in this pathway to suppress this effect and will be testing them their efficacy in big clinical models.

We are also initiating academic collaborations that will allow us to explore the application of sd-rxRNA for different types of cell based treatments such as NK cells.

These immuno-oncology programs are at an early stage but if successful may have a major impact on the development of cell-based immunotherapy and generate a lot of value for the company. We are committed to bringing the best in immuno-oncology experts to work with RXI as advisors and collaborators. To that end we have attracted two new SAB members.

James Griffin, Head of Medical Oncology at Dana-Farber Cancer Institute and Rolf Kiessling, a leading European immuno-oncologist and Professor at the Karolinska Institute in Sweden. I will now turn the call back to Tamara..

Thank you, Alexey. This now concludes the formal presentation for today and at this time operator we would like to pull for questions please..

[Operator Instructions]. Our first question comes from Keith Markey. Keith, go ahead..

I was just wondering you've given us some guidance regarding your use of cash for 2017, I gather but I was wondering it looks like you either are going to be increasing your cash burn rate possibly as the year goes on or you're going to go easily into 2018, is that a reasonable way of thinking about it?.

There is a reasonable way of thinking about it. Our cash burn may go up a little but we expect our current cash burn in the past has been about 2 million a quarter, we expect that to be between 2 million and 2.5 million a quarter so we will still be below $10 million on an annual basis..

And then just a housekeeping question, can you tell us approximately how many fully diluted shares you have outstanding at this point?.

We have about 38 million shares that will be outstanding with all of our option preferred stock warrants were converted and exercised..

And then I just was wondering if you could tell us a little bit about what you expect your clinical trials of the checkpoint inhibitors might look like for instance would you go into just T-cells initially or possibly look at both the T-cell NK cell inhibitor and then what would you be monitoring in terms of the biomarkers and that sort of thing..

Right now we're looking at multiple options, of course T-cells are the most popular form of cell based immuno-therapies and most CAR T-cells [indiscernible] and other treatments are based on the modified patients T-cells so that probably would be our likely focus.

Having said that we are also exploring NK cells and we have developed a number of compounds that can target NK cells. In terms of the design of the clinical trials we will likely be following the protocols that have been tested before with these particular cell therapies.

Of course Phase 1 would be primarily be designed for safety but it would also look at some important biomarkers cytokines that are typically looked at in these trials..

So this would be a patient population probably that has fairly advanced disease in the initial safety study is it fair to say assume that?.

That's correct, these studies are typically conducted in late stage cancer patients and our criteria would involve the typical indications that express particular indigence, for example if we continued with [indiscernible] targeting CAR T-cells those would involve pancreatic, ovarian and some other related cancers.

We will go to the next question, next question comes from Justin Foster. Sir, go ahead..

First of all congratulations on the MirImmune acquisition or merger. I'm also very impressed by your posting of the recent presentations, the wonderful charts and interesting information.

My question however has to do with trading, I've noticed maybe three times in the last year and a half that multiples of your float trade is most recently in one day but before that over a five to eight day period.

So obviously shares are being shuffled back and forth by high frequency or algorithmic guys and they are taking their quarter penny profit on each trade and it's undermining your status and it's undermining the original purpose of the capital markets.

I'm just wondering I know that one company going to FINRA [ph] or SEC, NASDAQ might not have a lot of strength behind it but have you ever thought about contacting similarly situated small cap companies to make a presentation to FINRA in an attempt to outlaw some of the kind of manipulative trading that's going on and that undermines the status of the capital markets because small companies can't raise money anymore or not as much and it's not the market that was intended..

Those are very good questions. We've seen obviously those large volumes as well.

Just to make it clear at some point for instance in December it was a multiple I think three times our shares outstanding which is awkward but if you look at the most recent one of three days ago that is about the number of common shares that are tradable today that changed hand but still that is 100% which is incredible.

I agree with you that in -- it gives the impression that people are manipulating it, we have been in contact with NASDAQ as recent as this morning and they promised to provide us with some information. They were also going to check back with Datawatch or Market Watch group.

At first sight as the lady was looking at the detailed trades and she was reading certain things from us, things seem to have been not of a malicious or predatory situation. It seems to have been just electronic trading and use of algorithms but not in a specifically coordinated manner, that’s what she told us.

We're aware of it, we have in the past reached out a few times to even SEC and FINRA and of course with SEC they are more of a policy agent. FINRA has been looking a few times that was at a time that we still had our preferred shareholder having a substantial amount of preferred shares and converting them.

In each of those instances no follow-up has been provided meaning that they have not been able to pinpoint any wrongdoing. I know that Tammie and maybe Tammie you can speak for that, you've your connections with the biotech industry and I suppose you will also be checking with peers if they have similar things and if something can in a joint action..

Certainly. There is ways that we can potentially look to some organizations to try and bring us to the attention to the SEC who would be the people to put policies and place to help protect companies like ourselves with such a small market cap and in our share price to help us try and combat these issues..

And if I can just follow-up a little bit, I think the problem is greater than just illegitimate trading but it's the legitimate algorithmic kind of trading that may mean through legislation can be restrained or restricted to a kind of stock and so it means going one step beyond and trying to get the very type of trading that stills legal but still just undermines and serves no purpose in terms of formation of capital and the origin and sustaining of small companies.

It just doesn't serve a purpose anymore and one more thing and thank you for hearing me out here. I know that membership of the NASDAQ is important but there is an OTC, QX and QB biotech small companies that fulfill all the SEC requirements.

They posted their quarterly earnings every three months, they do everything that you do and being a member of NASDAQ has not protected you from this kind of trading and they have last reverse split you know which knocks you up to $3 of course the same shorting traders are going to knock you right back down again and if you do another reverse split the same thing's going to happen, you're going to be at $8 let's say and they're going to knock you down.

So the reverse split for me for a company that's not making money I think statistically is a destructive process and if you accept it instead saying we don't need NASDAQ it's not protecting us, I think you can convince your lenders these days since the OTC has kind of replaced the old pink sheet illegitimacy, that you can survive very well not being a member of NASDAQ and you don't have to make yourself pray to what's going to happen once you do reverse split..

I will give a brief reply on both parts. I totally agree with you that the trading systems have evolved faster than the control systems that have evolved.

It is like -- it's probably not a right comparison but it's like a thief having a sports car and the people who have to check on it a keystone golf car and that needs to be addressed, they need to make sure the surveillance systems are as sophisticated as the systems that perform the trading. I can't change that.

I hope that people in the IP world are listening and can do something about it. The second thing about OTC and NASDAQ that is a good point you're making, we actually originally were on the OTC and we were very happy with the management of the OTC markets, they were very approachable and they were treated very well and traded very well.

At a given point it was felt that upgrading to NASDAQ it could have a benefit, at the same time we are seeing things evolve in the small cap biotech and a lot more, many more small cap biotech's coming that the situation may have changed.

It is something I'm not saying or promising or indicating that we're going to do this but it's certainly something that occasionally in our internal meetings is being brought and considered..

Our next question comes from Keith Markey. Keith, go ahead..

I have a couple of follow-ups, I was just wondering can you tell us approximately whether the checkpoint inhibitors that you've developed are good -- if some of them are good for both T and NK cells?.

Yes, some of them are. I would not go into the specifics of this point, but we're testing at least two compounds I would say that are relevant for both T and NK cells..

Okay. And then I was wondering how do you plan to test the blocker for cytokine release syndrome.

Obviously most patients hopefully don't experience it so you know really what do you look for?.

Well you know this is again an early pre-clinical program and what we are planning to do now is to generate a compound that targets -- or signs that particular target that I cannot disclose at the moment and the clinical models..

I understand that from a preclinical sort of perspective that makes a lot of sense. But I was just wondering how do you intend to if thought about it going into that clinic whether you would possibly combine that with one of your checkpoint inhibitors just for the sake of safety purposes, just nothing else..

Well you know our strategy is to partner with leading players in the CD-19 CAR T area, right, so those people who actually experienced the issues in the clinic.

I would not really contemplate a particular design at this point but I can see how in Phase 1 it can be tested with a patient population where those cost have been used and had problems previously..

Our next question comes from Steven Fletcher. Steven, go ahead..

I'm a little curious about the RXI-231 is still a light year.

I was under the impression from the 2016 into your discussion you are the patient or volunteer testing would begin right after the new year, so did I misunderstand or some comment on that?.

We were planning to start in the first quarter of the year and actually everything is in place except we haven't started the actual study so it should be starting within the month of April for sure.

We did have the compound manufactured but we also had the next step is to make it into a formulation so that has been done in the first part of this year. So now we have all the pieces in place to initiate this consumer testing.

It should go fairly quickly the place that we're doing this is they block and roll the subjects, so basically they bring all the subjects in the course of a few days get them all started at the same time and then so obviously they finish all roughly at the same time. So it should go very quickly once we actually get started early in April..

Okay.

Would it still take approximately six months from that April date to that conclusion?.

I think within that time we should be able to get in conclusion. I would predict it will be quicker than that..

Our next question comes from Joshua Lane. Joshua, go ahead..

My question is whether or not there is any timeline for any particular results of a test in the oncology, in the demagogical field there are a number of due dates -- is there anything that we can look forward to with any specificity in the immuno-oncology space?.

So we have a rough timelines that we will be able to announce any model results from a couple of problems later this year.

Late summer or in the fall and meanwhile we are trying to generate news flow with some additional more yearly studies like we are running a number of in-vitro studies that show note down of promising targets and their effects on cell culture. So that is the plan..

Can you can you comment on how your presentation yesterday was received at the at the conference I think it was in Cambridge?.

Right it was received very well, the audience was very scientifically oriented and we had a number of good questions in particular about the modifications that were of our RNI compounds, the design for [indiscernible], the potential other ways of administration of the compound for example direct injections into the tumors.

Really good questions that we keep asking ourselves all the time..

Might that lead to collaborations, were other companies maybe larger companies players in the field there?.

So the presentation in Cambridge that was given yesterday was oriented more to the scientific audience and there were no major players in this field. But the day before yesterday we presented at the SEC Conference in New York where we had a lot of meetings with potentially interested players in the cell therapy field..

Can I ask one more question? Good. Can I -- one last question; in the slides that you presented, I think in Boston; you have undisclosed targets in one of them, I think in Slide 13.

Have you -- is the target undisclosed because its proprietary to you and you don't want to disclose it or is it -- or is it -- well, I guess why is it undisclosed?.

Yes, I understand the question. The target -- what targets are not proprietary to us. These are the targets that are actively explored by the community; the reason why they are not disclosing those is that we cannot file our team..

I see. Okay, thank you very much..

Sure..

And we have a question from Steven Fletcher [ph]. Steven go ahead..

I have one additional question about the cosmoceutical product, the RXI-185 for a skin laxate. I remember there was some kind of discussion that trying to make a topical formulae is a bit more challenging rather than so that you don't have to use [indiscernible] to penetrate the skin because the target is deeper within the skin.

Can you comment on the progress or anything?.

Yes, actually that has been part of -- and Pam was alluding to it. That has been part of the slight delivery that in getting the study started. We wanted to make sure that the product was properly delivered where it has to be delivered.

Since we're working with volunteers and healthy consumers that means they have an intact stratum corneum and the stratum corneum is something that is really protecting against the influx of compounds. So we've worked on the delivery of that with the formulation, and we are now a formulation which nicely delivers upto the dermal, epidermal junction.

What we need to do is get now a formulation with using punctures that also delivers through the dermal and epidermal junction. When we think about RXI-185 for instance which is the anti-collagenase; collagenase plays role in the dermis, so that is the area that is under the epidermis.

And whereas for pigmentation, most of the melanocytes, you can find that when they start producing melanin, they are at the dermal-epidermal junction and in the epidermis; so that is why we're going first with 231.

So we have some interesting work that been done in the collagenase space but it's too early to provide details on that, we hope to be able to come out with that information in a first in one of the upcoming conferences..

Okay, thank you very much. I guess I wanted to get that cleared up. Thank you..

Thank you..

And our next question comes from Mike [ph]. Mike go ahead..

Hello?.

Yes, we can hear you..

Okay, hi, thank you for taking my call. I just have a couple of quick questions.

Do you guys have any idea how many shares you guys have at slope currently?.

So our current shares outstanding right now are around $22 million -- not $22 million, I'm sorry, 22 million shares, fully diluted, were close to $38 million..

And how about the current flow? So that's attracting institutional owners and current insiders?.

So I wouldn't have that number off the top of my head to disclose at this time..

So can you disclose it possibly within the next couple of days or is that something that you guys can't do?.

No, if you reach out to us we can start and like provide that answer for you which we still have it right in front of us right now..

Okay, thank you so much.

And then in regards to your patent portfolio; understanding at that patent from Japan but how about the current ones in the U.S.?.

The current ones, the ones that we have a number of patents that have been filed and actually we didn't bring with us to terms of late in what regions the patents we have published that or made that public on a regular basis. I suspect it will also be in our annual report because that's usually where it goes in.

We have everything that we -- we have filed a number of things and regularly we get approvals. And I'm sure I understand the exact nature of the question. There is a lot that is….

Yes, so my question is, I know you have to file several like you send in the past; do you guys expect to get approved anytime this year or you guys are looking for more next year, this can [indiscernible]?.

I'm sure we are excited. I don't -- I didn't bring anything about patents to this call but I'm sure we will get the reactions from the U.S. PTO.

The thing is that in contrast to the FDA, they are not subject to under the filing fee, so they go at their own pace and sometimes when they provide you with questions which regularly happens; that is just a second there is something wrong with this claim, that claim, you can't do that, then we have to go, get back in the them.

So it's not as streamlined as an FDA review often..

Okay, thank you so much..

One of the things if you -- the envelope of course had some patents routed, important patents that have been already approved. And just to give you an idea, the core patent for cell delivering technology which by the way makes us unique in the RNAi space, the core patent expires in 2029 and that has been sanctioned.

As we create new compounds with different sequences, these go on top of the core patents with now with also composition of matter protection, meaning that we're now in 2017; if we file the new compounds, yes they are of course protected by our core patent but the new patents for specificity for those compounds will go until 2033 or 2034.

If you see what I'm trying to say, it's like the layers of an object [ph]. The core patent protects our state until 2029 and we can move from there..

That's fine. I think he disconnected. That's okay, well thank you.

Operator, I don't know if there is any more questions at this time?.

No more questions at this time..

I'd like to thank everybody for participating on our call. And we would like to end our call..

Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time and have a great day..