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Clinical Development of RXI-109 to Reduce Dermal Scarring Pamela A. Pavco Chief Development Officer RXi Pharmaceuticals Corp. TIDES / Boston May 15, 2013 OTC: RXII Next Generation in RNAi ®

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Clinical Development of RXI-109

to Reduce Dermal Scarring

Pamela A. Pavco

Chief Development Officer

RXi Pharmaceuticals Corp.

TIDES / Boston

May 15, 2013

OTC: RXII

Next Generation in RNAi ®

2 Property of RXi Pharmaceuticals

Forward Looking Statements

This presentation contains forward-looking statements within the meaning of the

Private Securities Litigation Reform Act of 1995. Such statements include, but are not

limited to, statements about the future development of RXi Pharmaceuticals

Corporation’s (the “Company”) products. These forward-looking statements about

future expectations, plans and prospects of the development of the Company's

products are subject to a number of risks and uncertainties, including those identified

under “Risk Factors” in the Company’s most recently filed Annual Report on Form 10-

K, Quarterly Report on Form 10-Q and in other filings the Company periodically makes

with the U.S Securities and Exchange Commission. The Company 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 presentation.

3 Property of RXi Pharmaceuticals

Corporate History

Founded as RXI Pharmaceuticals in 2007

Named changed to Galena Biopharma, Inc. and then spun out as an

independent company in April 2012 (OTC:RXII)

Approximately $50 million invested to date to develop a broad-based

RNAi technology platform and our lead compound, RXI-109

RXi received FDA clearance to begin clinical trials with

RXI-109 in mid-2012

Conducted 2 Phase 1 clinical trials with RXI-109 between

June 2012 – February 2013

Progress in ophthalmology, neurology and liver fibrosis supported by

research grants and collaborative projects

Located in the greater Boston area – Westborough/Worcester, MA

4 Property of RXi Pharmaceuticals

sd-rxRNA Combines Features of RNAi and Antisense Technologies

sd-rxRNA therapeutic compounds with drug-like properties

Conventional Antisense

Clinically relevant,

validated PK/PD

Conventional RNAi

Potent, long-lasting

activity

Medicinal Chemistry

Improved cell uptake

and PK/PD

O

sd-rxRNA

Single compound, i.e., no

delivery vehicle required

Proven robust uptake &

silencing in multiple preclinical

models

Structural diversity = novel

intellectual property

Combining positives of RNAi &

antisense, while avoiding

negatives

Provides for broad pipeline of

RNAi drugs for unmet medical

needs

5 Property of RXi Pharmaceuticals

sd-rxRNA: Structural Highlights

Single chemically-modified RNA compound

No delivery formulation required

Efficient cellular uptake and gene silencing

Potent, stable, specific

Robust, long lasting in vivo efficacy in multiple

tissues

Manufactured under GMP

<15 bp duplex 6 nt & longer tail

= standard and modified bases

= phosphorothioate linkages

= various hydrophobic moieties

= other hydrophobic linkages

= phosphodiester linkages

6 Property of RXi Pharmaceuticals

RXi’s Lead Clinical Product

Candidate: RXI-109

FDA Clearance in June 2012 to Begin Clinical

Trials with RXI-109

7 Property of RXi Pharmaceuticals

Selection of Area of Focus: Dermal Scarring Attractive Therapeutic Opportunity

Unmet need with limited competition for truly effective therapies

No prescription drugs approved

Unproven cosmeceutical products sell well >$100 million annually in USA

Large underserved market (>$1 B) in scar prevention or revision

Clear development precedent with early efficacy endpoints (Excaliard/Pfizer antisense)

Partnership potential / larger market for additional therapeutic uses of CTGF silencing in diseases with a fibrotic component

Proliferative vitreoretinopathy, liver fibrosis, surgical adhesions, wet AMD, acute spinal injury, restenosis, etc.

8 Property of RXi Pharmaceuticals

Connective Tissue Growth Factor A Central Factor in the Pathway to Fibrosis

RXI-109

Connective Tissue Growth Factor Central player in the balance between healthy

healing and excessive fibrosis

Cellular Effects

Pathologic Effects

Pulmonary

Fibrosis

Acute Spinal

Injury Restenosis

Ocular

Scarring

Liver

Fibrosis

Collagen Deposition Adhesion Migration Proliferation Differentiation

Excessive

Fibrosis

Tissue

Regeneration

Dermal

Anti-Scarring

Property of RXI Pharmaceuticals 8

9 Property of RXi Pharmaceuticals

RXI-109 Overview: Target Selection and Rationale

Numerous studies implicate Connective Tissue Growth

Factor (CTGF) overexpression in scarring and fibrotic

disease

RXI-109, an anti-CTGF sd-rxRNA compound, is uniquely

suited for local delivery, avoiding delivery challenges of

systemic RNA-based drugs

Preclinical data demonstrate potent, selective, dose-

dependent and long-lasting silencing of CTGF with RXI-109

Clinical validation with an anti-CTGF antisense

10 Property of RXi Pharmaceuticals

RXI-109 Efficiently Silences CTGF in vitro and in vivo

CTGF Silencing in vitro

• A549 cells were treated with RXI-109 and NTC

• Passive uptake 48 hours

• EC50 = 29.4 +/- 6.3 nM

Day 1 3 8

Harvest Excisional Wound

RXI-109 injections

0

20

40

60

80

100

120

0.01 0.025 0.05 0.1 0.5 1 NTC 1 uM

CT

GF

Exp

ressio

n, %

NT

C 1

NTC 1 uM

RXI-109 Concentration (mM)

• mRNA levels were quantified by QPCR on Day 8, normalized to the

housekeeping gene and set relative to PBS.

• **p=0.0015, ***0.0001 (relative to the dose-matched NTC)

• PBS = Phosphate Buffered Saline (Vehicle Control)

• NTC = Non-Targeting Control sd-rxRNA

NTC

(1 mM)

0

20

40

60

80

100

120

140

160

180

RXI-109 (21204.8)

300ug

RXI-109 (21204.8)

600ug

NTC (20489.6)

300ug

NTC (20489.6)

600ug

PBS

CT

GF

Exp

ressio

n, %

PB

S RXI-109 (21204.8) 300ug

NTC (20489.6) 300ug

PBS

51% 67%

300 mg 600 mg 300 mg 600 mg PBS

RXI-109 NTC

CTGF Silencing in vivo in Rat Skin

** ***

RXI-109

NTC

11 Property of RXi Pharmaceuticals

CTGF Silencing Does Not Delay Early Wound Healing in a Rodent Model

Dose ID 48 hr before

wound

Dose ID at wounding

Dose ID7 days post

wound

ExcisionalWound

Harvest Group 1

5 days post wound

Harvest Group 2

9 days post wound

Harvest Group 3

15 days post wound

Days

0

0.2

0.4

0.6

0.8

1

1.2

RXI-109 PBS

CT

GF

mR

NA

- R

ela

tiv

e t

o P

BS

Silencing of CTGF mRNA (Day 5 post wound)

0

20

40

60

80

100

120

Day 5 Day 15

% R

e-e

pit

helializati

on

Wound Re-epithelialization

RXI-109

PBS

*

0

10

20

30

40

50

60

70

80

90

100

6 7 8 Rela

tiv

e W

ou

nd

Wid

th (

% D

ay 0

)

Days Post Wounding

Wound Width

RXI-109

PBS

**

* * *

12 Property of RXi Pharmaceuticals

RXI-109 Phase 1: Clinical Development Plan

Study 1201 (First in Man):

Phase 1 single center, randomized, single dose, double-blind, ascending dose, within-subject controlled study of RXI-109 for the treatment of incision scars

Study 1202:

Phase 1 single center, randomized, multi-dose double-blind, ascending dose, within-subject controlled study of RXI-109 for the treatment of incision scars

Parameters evaluated:

- Safety & side effect assessment versus vehicle

- Pharmacokinetic parameters after local intradermal injection

- Photographic comparison versus vehicle

- Histological comparison of the scar sites versus vehicle

13 Property of RXi Pharmaceuticals

RXI-109-1201: Overview

RXI-109 vs. PBS administered on separate sides of the abdomen

Single intradermal dose

Dose levels: 5 cohorts of 3 subjects each

1, 2.5, 5, 7.5 and 10 mg per 2 cm incision site

Endpoints

PK Parameters

Safety assessed throughout the 3-month study period

Photographs

Biomarker / histology assessment at end of study, Day 84

Abdominoplasty on Day 84

14 Property of RXi Pharmaceuticals

RXI-109-1201: Abdominal Incision Layout

A o B

1

2

Wound

Addresses

Column

A

(Right)

Column

B

(Left)

Row 1 1A 1B

Row 2 2A 2B

• Four injections and incisions (2 cm in length) were made on the abdomen.

• The A and B ‘columns’ were at least 4 cm lateral to the midline of the abdomen.

• Rows were spaced at least 4 cm apart.

• Treatment at each incision site was made by intradermal injection according to a predetermined randomization pattern for each subject.

• Half of the sites were treated with RXI-109, half with placebo.

15 Property of RXi Pharmaceuticals

RXI-109-1201: Preliminary Safety Summary

Comparison of Treatment-Related Adverse Events by Study Day

Local Skin

Assessment1

Study Day

Day 1 Day 2 Day 3 Day 5 Day 8 Day 12 Day 28 Day 56 Day 84

Erythema 14 (23%) 23 (38%) 52 (87%) 30 (50%) 46 (77%) 47 (78%) 60 (100%) 60 (100%) 60 (100%)

Tenderness 2 (3%) 16 (27%) 33 (55%) 14 (23%) 14 (23%) 16 (27%) 0 0 0

Induration 16 (27%) 11 (18%) 14 (23%) 0 0 0 0 0 0

Pain 0 0 4 (17%) 0 0 0 0 0 0

Urticaria/Pruritis 4 (7%) 1 (2%) 11 (18%) 16 (27%) 29 (48%) 21 (35%) 4 (7%) 6 (10%) 0

Systemic Adverse

Events2

Study Day

Day 1 Day 2 Day 3 Day 5 Day 8 Day 12 Day 28 Day 56 Day 843

Rash 1 (7%) 0 0 0 0 0 0 0 0

Xerostomia 1 (7%) 1 (7%) 1 (7%) 1 (7%) 1 (7%) 0 0 0 0

Fever 1 (7%) 0 0 0 0 0 0 0 0

Nausea 1 (7%) 0 0 0 0 0 0 0 0

Joint Pain 1 (7%) 0 0 0 0 0 0 0 0

1 Local skin assessments based on a total of 60 treatment sites (i.e., 15 subjects, 4 sites each) 2 Systemic AEs based on a total of 15 subjects. All systemic AEs are Grade 1, except for Fever (Grade 2).

3 Post Day 84: 1 wound infection 4 days post abdominoplasty (SAE, Grade 3) requiring hospitalization and parenteral

antibiotic treatment and 2 instances of seroma (Grade 1)

AEs are graded based on Common Terminology Criteria for Adverse Events (CTCAE)

16 Property of RXi Pharmaceuticals

0

10

20

30

D 1

D 2

D 3

D 5

D 8

D 12

D 28

D 56

D 84

D 1

D 2

D 3

D 5

D 8

D 12

D 28

D 56

D 84

D 1

D 2

D 3

D 5

D 8

D 12

D 28

D 56

D 84

D 1

D 2

D 3

D 5

D 8

D 12

D 28

D 56

D 84

D 1

D 2

D 3

D 5

D 8

D 12

D 28

D 56

D 84

Cohort 1 Cohort 2 Cohort 3 Cohort 4 Cohort 5

# o

f In

cid

en

ce

s

Day 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84

Cohort 1 Cohort 2 Cohort 3 Cohort 4 Cohort 5

ERYTHEMA TENDERNESS INDURATION PAIN

A. Summary of skin assessments, all grades

0

2

4

6

8

10

1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84 Day 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84 1 2 3 5 8 12 28 56 84

Cohort 1 Cohort 2 Cohort 3 Cohort 4 Cohort 5

B. Summary of skin assessments, ≥ Grade 2

# o

f In

cid

en

ce

s

(≥ G

rad

e 2

) RXI-109-1201: Preliminary Safety Summary by Cohort and Grade

17 Property of RXi Pharmaceuticals

Protocol RXI-109-1201: Pharmacokinetic Parameters Following Intradermal Dosing

0

50

100

150

200

250

0 20 40 60 80 100 120

ng

/ml

Hours

2 mg

5 mg

10 mg

15 mg

20 mg

Cohort Total Dose

(mg) Tmax (hr) Cmax (ng/mL) AUClast (hr*ng/mL)

1 2 10.0 ± 2.0 21.2 ± 8.8 579 ± 461

2 5 10.6 ± 1.1 81.6 ± 4.2 2409 ± 130

3 10 16.3 ± 7.5 108 ± 21.2 3485 ± 506

4 15 9.3 ± 1.2 141 ± 15.9 5060 ± 331

5 20 20.6 ± 7.4 155 ± 63.5 8671 ± 3394

18 Property of RXi Pharmaceuticals

Protocol RXI-109-1201: No Complement Activation After Intradermal Dosing

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

0.00 0.50 1.00 1.50 2.00

Po

st-

do

se

(B

b m

g/m

L)

Pre-dose (Bb mg/mL)

Individual Bb Levels

4

24

4 hr

24 hr

No evidence of an RXI-109-related increase in Bb in any subject at any dose level.

19 Property of RXi Pharmaceuticals

RXI-109-1201: Examples of Preliminary Blinded Histology Data

12 Weeks Post-Treatment

Normal Skin 1A

2A

1B

2B

• Preliminary blinded data

• Trichrome staining of incision sites

from one of three subjects in Cohort 4

• Single injection of 7.5 mg

• Images taken at 20X magnification

• Full analysis will provide wound area

assessments on all subjects

20 Property of RXi Pharmaceuticals

RXI-109-1201, Single Dose Cohort 4: Area (mm2) of Scar Tissue (BLINDED)

A and B sides are treated with RXI-109 or placebo – Blinded data

Average of 31% Difference between Sides

Example of blinded data from the lower 2 sites on each subject

(reported as sum of area from three sections per site)

8.14

11.97

17.29

15.94

9.62

13.34

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

8.14

15.94

11.97

9.62

17.29

13.34

Sca

r A

rea

(m

m2

)

01-18 01-19 01-20

A B A B A B

21 Property of RXi Pharmaceuticals

RXI-109-1201: Example of Preliminary Blinded Biomarker Data

2A

Trichrome

CTGF

a-SMA

2B

• Treatment per side is still blinded

• Smaller wound area appears to track

with lower CTGF expression levels

• Images of CTGF and Trichrome taken at

20X magnification

• a-SMA image collected at 40X

magnification and from adjacent

sections

Subject 01-18

Cohort 4

22 Property of RXi Pharmaceuticals

RXI-109-1202: Overview

RXI-109 vs. PBS administered on separate sides of the abdomen

Three intradermal doses over 2 weeks

Dose levels: 3 cohorts of 3 subjects each

2.5, 5 and 7.5 mg per 2 cm incision site

Endpoints

PK parameters after 1st and 3rd dose

Safety assessed throughout the 3-month study

Photographs

Biomarker / histology assessment early (after 2 week dosing period) and late (at end of study, Day 84)

23 Property of RXi Pharmaceuticals

RXI-109-1202: Abdominal Incision Layout

Wound

Addresses

R

(Right)

L

(Left)

Row 1 1R 1L

Row 2 2R 2L

• 8 injections and incisions (2 cm in length) were made on the abdomen – each incision received 3 injections over a given time period.

• The R and L incisions were at least 4 cm lateral to the midline of the abdomen.

• Rows were spaced at least 4 cm apart.

• Treatment at each incision site was made by intradermal injection according to a predetermined randomization pattern for each subject.

• Half of the sites were treated with RXI-109, half with placebo.

R o L

1

2

24 Property of RXi Pharmaceuticals

RXI-109-1202: Preliminary Safety Summary

Dose escalation study w/ three doses and twice the number of sites compared to the first study

To date:

Local skin observations are not increased in number or severity over a single dose

Mild bilateral erythema is common

No skin assessment observations >Grade 1

1 AE (Grade 1): folliculitis (resolved with medication)

No SAEs

25 Property of RXi Pharmaceuticals

Preliminary Plan for Phase 2 Program for RXI-109

2-3 randomized, double-blind, within-subject controlled studies

Potential indications include:

Hysterectomy scar revision

Cesarean section scar revision

Scar revision following cosmetic breast surgery

Bilateral keloid scar revision

Study objectives include:

Determination of optimal dose and schedule

Demonstration of safety and efficacy

Planned initiation in H2 of 2013

26 Property of RXi Pharmaceuticals

RXI-109 Phase 1: Summary of Observations to Date

First studies aimed at showing safety and initial indications of clinical efficacy within 12-18 months of study initiation with limited number of subjects

First P1 single dose study started in June 2012; last dose administered in September 2012

Multi-dose volunteer P1 study started December 2012; last dose administered February 2013

Tolerance and safety considered excellent by investigators & volunteers. No negative effect of RXI-109 on wound healing.

Side effects minimal with injection site redness as possibly drug related; the redness was NOT dose related

Based on human and animal exposure intradermal injection provides <5% maximum systemic exposure as compared to intravenous injection

Differences between R & L sites can be seen but studies are still blinded

27 Property of RXi Pharmaceuticals

RXi Pharmaceuticals - 2013 Milestones

Q2 2013: Unblinded data on RXI-109 single dose Phase 1 (safety, side effects, PK, clinical & histology)

mid-2013: Unblinded data on RXI-109 multi-dose Phase 1:

H2 2013: Start Phase 2 studies with RXI-109 in scar revision

Partnering activities in additional areas

28 Property of RXi Pharmaceuticals

RXi’s Product Pipeline

Program Discovery Preclinical Clinical

Anti-Scarring

(RXI-109)

Ophthalmology

(PVR)

Liver disease / Liver

fibrosis

(RXI-209)

Ophthalmology

(Macular Degeneration)

Ophthalmology

(Retinoblastoma)

CNS

(ALS)

core focus strategic interest projected next steps

Phase 1 Phase 2 Phase 3

29 Property of RXi Pharmaceuticals

sd-rxRNA: Delivery Technology Results in Robust Cellular Uptake in vitro and in vivo

Hepatocytes primary mouse

ARPE-19 retinal pigment

epithelium Macrophages primary mouse

Keratinocytes human primary

SH-SY5Y neuroblastoma

Skin Eye Liver Spinal column

Delivery and silencing demonstrated in many different cell types Human, Primate, Rat, Mouse, Adherent, Non-adherent, Primary, Transformed

Efficient delivery of sd-rxRNA to multiple tissues in vivo upon

local and systemic administration

Alveolar macrophages

30 Property of RXi Pharmaceuticals

sd-rxRNA Conventional Placebo

siRNA

Mouse

immediately

post-dose

Mouse at

24 hours

post-dose

Mouse at

24 hours

post-dose

Rabbit at

24 hours

post-dose

• Dosing by intravitreal injection to mouse

or rabbit eye with Dy547-labeled sd-

rxRNA, conventional siRNA or placebo

sd-rxRNA: Improved Retinal Delivery vs. Stabilized RNAi Compounds

sd-rxRNA chemistry is

required for robust uptake

to the cells of the eye

No overt toxicity observed

after sd-rxRNA treatment

to the eye

31 Property of RXi Pharmaceuticals

sd-rxRNA: Extended Silencing in vivo in the Rodent Eye

• 3 mg PPIB or NTC administered by intravitreal injection (in 1 ml) to mouse eyes

• mRNA levels were quantified by Quantitative PCR (QPCR) and normalized to b-actin

• Data assembled from 5 different studies to enable sufficient ‘n’ for each data point (n=5-8); graphed +/- SD relative to PBS in each study

• PBS = Phosphate Buffered Saline (Placebo)

• NTC = Non-Targeting Control sd-rxRNA

• PPIB = Anti-cyclophilin B sd-rxRNA

20

30

40

50

60

70

80

90

100

110

120

1 2 4 7 14 21 28

PP

IB E

xp

res

sio

n, %

of

NT

C

Time after injection, days

PBS

NTC

PPIB

↓51%

** ↓45%

** ↓32%

** ↓22%

**

Duration of Silencing Induced by PPIB Targeting sd-rxRNA

* p ≤ 0.05

** p ≤ 0.01

32 Property of RXi Pharmaceuticals

Acknowledgements

RXi Pharmaceuticals

Geert Cauwenbergh – CEO

Pamela Pavco – CDO

Karen Bulock – VP Research

Lyn Libertine – VP Medical Affairs/Safety Assessment

Michael Byrne – Scientist II

Pathi Pandarinathan – Scientist II

James Cardia – Manager, Platform Technology

Katherine Holton – Associate Scientist

Tamara McGrillen – Manager, Operations and Administration

Caitlin Kontulis – Controller, Finance

Scientific Advisory Board

Craig Mello – UMass Medical School

Leroy Young – General / Plastic Surgery, Director BodyAesthetic Research Center, PI for RXI-109-1201

Jeannette Graf – Clinical and Research Dermatologist, Assistant Clinical Professor of Dermatology, Mount Sinai School of Medicine