rxi investor event oct 21 final for thomson use this...

RXi PharmaceuticalsRXi Pharmaceuticals

Investor EventInvestor EventInvestor EventOctober 21, 2008

Investor EventOctober 21, 2008

Next Generation in RNAiNext Generation in RNAi

AgendaAgenda

Breakfast and Registration 8:00-8:30

Welcome and Introduction Tod Woolf, Ph.D.President & CEO 8:30-8:45

RNAi Technology Overview Craig Mello, Ph.D.Founder & SAB Chairman 8:45-9:15

Update on RXi’s R&D Programs Pamela Pavco, Ph.D. 9:15 9:35Update on RXi s R&D Programs ,VP of Pharmaceutical Development 9:15-9:35

Overview of Intellectual Property Tod Woolf, Ph.D. 9:35-10:05

Business & Financial Overview Stephen DiPalma 10:05 10:15Business & Financial Overview pChief Financial Officer 10:05-10:15

Closing Remarks / Q&A Tod Woolf, Ph.D. 10:15-10:30

2

Forward Looking StatementsForward Looking Statements

Thi t ti t i f d l ki t t t ithi th i fThis 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 Pharmaceutical Corporation’s products These forward-lookingRXi Pharmaceutical Corporation s products. These forward-looking statements about future expectations, plans and prospects of the development of RXi Pharmaceutical Corporation’s products involve significant risks, uncertainties and assumptions. Actual results may differ g , p ymaterially from those RXi Pharmaceuticals Corporation contemplated by these forward-looking statements as a result of the risk factors discussed in RXi reports on file with the U.S. securities and exchange commission including, but not limited to, the Annual Report on Form 10-K filed with the SEC. RXi Pharmaceuticals Corporation does not undertake to update any of these forward-looking statements to reflect a change in its views or events or i t th t ft th d t f thi di l

3

circumstances that occur after the date of this disclosure.

Company OverviewCompany Overview

New Class of Drugs: RNAi TherapeuticsNew Class of Drugs: RNAi Therapeutics

Began operations Q1 07 in Massachusetts

Co-founded by world-leading RNAi researchers

Began trading March 12th, 2008 (Nasdaq: RXII)

RXi is one of few public pure-plays in RNAi Therapeutics

4

RNAi: From Basic Science to TherapeuticsRNAi: From Basic Science to Therapeutics

D R hiD M llDrs. Woolf,

Wi d h lt & M ll D C h & O t ffDr. Ambros

di Dr. Rana achieves systemic delivery

in in vivo model

Dr. Mello co-invents RNAi Therapeutics

Wiederholt & Mello Develop STEALTHRNAi at Sequitur

Drs. Czech & Ostroff achieve oral delivery of RNAi

co-discovers natural RNAi (microRNAs)

1997 2005 20071993 2001 2002 20082000 2006

Dr. Hannon publishes shRNAi

Dr. Pavco files first IND with chemically modified RNAi at Sirna

RXi DevelopsNext Generation rxRNA™

5

Growth in Value of RNA FieldGrowth in Value of RNA Field

$1.6 billion in cash spent on RNAi deals

RNA Alliance Total DollarsAcquisitions RNAi PublicationsAcquisitions

$1B$250M

Eyetech

$1B$5B*

$1B$250M $1B$4B

$3B

$2B

$1B

6

Agilent (*$ include all potential pre-clinical milestones)

RXi: Next Generation RNAi TherapeuticsRXi: Next Generation RNAi Therapeutics

Accomplished RNAi Product Focused TeamAccomplished RNAi Product Focused Team

RNAi: Potential Paradigm Changing Approach

Advanced Therapeutic PlatformNext Generation rxRNA

Local, Systemic and Oral Delivery

Discovery Pipeline

Early and Broadly Filed Intellectual Property

Business and Financial Overview

7

Business and Financial Overview

RXi Senior Corporate ManagementRXi Senior Corporate Management

Tod Woolf Ph D CEO

St h DiP l MBA CFO

Tod Woolf, Ph.D., CEOFounded-CEO of Sequitur, an RNAi company acquired by Invitrogen (IVGN) Co-invented and commercialized Stealth™ RNAiCo-invented two of RPI's (now Sirna-Merck) main RNA technologies

Stephen DiPalma, MBA, CFOFounded and served as President and CEO of Catalyst OncologyFormerly CFO at Milkhaus Laboratory, Phytera and Athena DiagnosticsSuccessfully turned around publicly traded Aquila Biopharmaceuticals

Dmitry Samarsky, Ph.D., VP of Technology DevelopmentRecently served as Director of Technology Development at DharmaconFormer Business Development Manager at Invitrogen (IVGN)Opinion leader in the field of RNAi

Donna Falcetti, Director of Investor RelationsServed as Product Manager of RNAi Technologies at InvitrogenBroad experience with RNAi in numerous assays and model systemsOver 15 years of management experience

8

RXi Senior Scientific ManagementRXi Senior Scientific Management

P l P Ph D VP f Ph ti l D l tPamela Pavco, Ph.D., VP of Pharmaceutical DevelopmentBrought Sirna's lead RNAi candidate to Phase I in under 12 monthsThree additional RNA drug candidates through IND at Sirna (RPI)Managed Sirna's Allergan and Huntington Disease collaborations

Anastasia Khvorova, Ph.D., Chief Scientific OfficerServed as CSO at Dharmacon, a ThermoFisher Scientific CompanyDesigned and commercialized RNAi compounds targeting virtually all the known human genesDeveloped self delivering RNAi

Joanne Kamens, Ph.D., Director of DiscoveryMore than 15 years of experience in immunology and inflammationFormerly group leader at Abbott Laboratories

Developed self delivering RNAi

Extensive experience with RNAi in complex model systems

9

RXi Founders & Scientific AdvisorsRXi Founders & Scientific Advisors

Craig Mello, Ph.D. (SAB Chairman)• 2006 Nobel Prize in Medicine for RNAi

Blais University Chair in Molecular Medicine UMMC• Blais University Chair in Molecular Medicine, UMMC• Co-discovered RNAi and invented RNAi therapeutics • Howard Hughes Medical Institute Investigator • Member of the National Academy of Sciences

Mi h l C h Ph DMichael Czech, Ph.D.• Professor and Chair, Program in Molecular Medicine, UMMC• American Diabetes Association's Eli Lilly Award for Diabetes • Banting Award for scientific achievement

Tariq Rana, Ph.D.• Professor and Director, Program for RNAi Biology, Burnham Institute• Discovered key parameters to stabilize RNAi• Developed RXi's Nanotransporter technology

Greg Hannon, Ph.D. • HHMI Investigator at Cold Spring Harbor Laboratory• Discovered mechanism of RNAi in human cells

D l d th id l d hRNAi

10

• Developed the widely used shRNAi• Identified the p21, p15 and p16 as tumor suppressor genes

Scientific Advisors: Drug DevelopmentScientific Advisors: Drug Development

Victor R. Ambros, Ph.D.P f f M l l M di i UMMS

N i U Ph D

• Professor of Molecular Medicine, UMMS • Discovered the first microRNA, lin-4• In 2008 received the Gairdner International Award,

the Benjamin Franklin Medal and the Lasker Prize

Nassim Usman, Ph.D.• CEO of Catalyst Biosciences• Held positions of CSO and COO at Sirna• Negotiated Lilly, Allergan and GSK alliances• 130 patents and patent applications: Main RNAi synthesis chemistry

Robert H. Brown, Jr., M.D., Ph.D.• Chair of the Department of Neurology at UMMC• Former Professor of Neurology at Harvard Medical School• Founder of the Day Neuromuscular Lab at MGH

Id tifi d SOD1’ l i f ili l ALS

Nicholas Dean, Ph.D.• Founder and CSO of Excaliard Pharmaceuticals, Inc.• Held VP positions in oncology and pharmacology at ISIS

• Identified SOD1’s roles in familial ALS

• Over 100 patents and publications in RNA therapeutics• Managed $100M budget for Isis - Eli Lilly collaboration

11

Building the Pipeline: Initial FocusBuilding the Pipeline: Initial Focus

Metabolic DiseaseMetabolic DiseaseHigh cholesterol targetRIP140 for obesity and type 2 diabetes

InflammationInflammationOral delivery to inflammatory cells (macrophages)

NeurologyALS (Lou Gehrig’s Disease)ALS (Lou Gehrig s Disease)Alzheimer’s (undisclosed target)

Other therapeutic areas may be pursued through partnershipspartnerships

12






Discovery Pipeline


Business and Financial OverviewBusiness and Financial Overview

13

RNAi: From Mechanism to Medicine

RNAi: From Mechanism to Medicineto Medicineto Medicine

Craig C Mello Ph DCraig C Mello Ph DCraig C. Mello, Ph.D.

Founder and Scientific Advisory Board Chairman, RXi Pharmaceuticals

Bl i U i it Ch i i M l l M di i

Craig C. Mello, Ph.D.

Founder and Scientific Advisory Board Chairman, RXi Pharmaceuticals

Bl i U i it Ch i i M l l M di i

14

Blais University Chair in Molecular Medicine, UMMC

Blais University Chair in Molecular Medicine, UMMC

RNAi Targets Protein Production in CellsRNAi Targets Protein Production in Cells

www.nature.com/focus/rnai/animations/index.html 15

RNAi Leads to Slicing of Target RNAsRNAi Leads to Slicing of Target RNAs

16

RNA Interference:A “Search Engine” For Disease Causing GenesRNA Interference:A “Search Engine” For Disease Causing Genes

dsRNA target mRNA

AAAAAAAAAA

cell driven scanning of target

AAAAAAAAAA

target RNA is cut and destroyed,ta get s cut a d dest oyed,blocking deleterious protein expression

AAAAAAAAAA

17

Potent catalytic destruction of target RNA sequenceMello & Fire (1998); Hannon et al (2002)

RNAi is an ACTIVE Process!(1994-1997)

RNAi is an ACTIVE Process!(1994-1997)

Cat alyt ic model of RNAi

Inject ed dsRNA

Degradat ion

Foreign dsRNA Recognition

Transport into the cellsTarget t issueTransport

RNA-dependentRNA degradat ion

pre - mRNA

RNA-degradat ion

Silencing

Accumulat ion of RNAi act ive molecules in the target t issue

18

Hiroaki’s Screen for RNAi Deficient Mutants (1998-1999)Hiroaki’s Screen for RNAi Deficient Mutants (1998-1999)

P0

Mutagenize

P0

F2Feed dsRNA F2

Hiroaki T b

Feed dsRNA(Lisa Timmons)

Tabarawt RNAi induced

dead eggsRNAi-deficientviable progeny dead eggsab e p oge y

19

A Model for mRNA SlicingA Model for mRNA Slicing

Ji-Joon Song et al., 2004

20

Alla Grishok Discovery of RNAi Machinery in Mammals and Other SpeciesAlla Grishok Discovery of RNAi Machinery in Mammals and Other Species

Alla Grishok

RDE-1cePRG-1cePRG-2

ceCSR-1

Niraj H. Tolia and Leemor Joshua-Tor

21

The Discovery of Natural RNAi (microRNAs)The Discovery of Natural RNAi (microRNAs)

Victor AmbrosL t l 1993

WT dcr-1 alglin-4Lee et al., 1993

Gary RuvkunReinhart et al 2000 pre miRNApre miRNA

lin-4let-7

Reinhart et al., 2000Pasquinelli et al., 2000

pre-miRNApre-miRNA

ALG-1/ALG-2

Alla Grishokd A P i lliand Amy Pasquinelli

Grishok et al, 2001 miRNAmiRNA21 ntmature miRNA

22

Micro RNAs Play Major Roles in BiologyMicro RNAs Play Major Roles in Biology

iRNAiRNA

micro RNAsdrive

gene silencing pre-miRNApre-miRNA

Dicer

gene silencing during

normal developmentnormal developmentAND Cancer

miRNAmiRNA

23

microRNA Inhibitors Block Brain Tumor Growth in Mice! microRNA Inhibitors Block Brain Tumor Growth in Mice!

Control miRNAInhibitor

Day 2

Day 4

Anna M Krichevsky

Day 6

Anna M. Krichevsky Brigham and Womens

&Khalid Shah

GDay 6 MGH.

24

Potential Applications of RNAiPotential Applications of RNAi

Research tool to determine gene function in disease

Natural RNAi’s are involved in many disease states

RNAi TherapeuticsBlock the expression of disease causing genesBlock the expression of disease causing genes

Increase the expression of beneficial genes (antigomers)(antigomers)

25

Discovery of a Diabetes and Obesity Target with RNAi: RIP140

Discovery of a Diabetes and Obesity Target with RNAi: RIP140

Czech et al (2006) J Clin Invest; exclusive therapeutic license to RXi

Synthetic siRNA Screening

A high-throughput screen using siRNA-mediated gene silencing toidentify genes that regulate insulin signaling in 3T3-L1 adipocytes

S ll l l t ti i i t i d 5 f ld f t d d t h i•Small scale electroporation - miniaturized 5 fold from standard techniques•Select 3000 candidate genes from Affymetrix gene profiling•Dharmacon SMART pool siRNA--mixture of 4 sequences per gene•Assays conducted in 96 well plates

Fat CellsTargetsiRNA: F….A B C D E

96-well plate

•Glucose Transport Assay•Oxygen Consumption Assay

p

Powelka et al JCI 200626

Discovery of a Diabetes and Obesity Target with RNAi: RIP140Discovery of a Diabetes and Obesity Target with RNAi: RIP140

Czech et al (2006) J Clin Invest; exclusive therapeutic license to RXi

27

Diabetes and Obesity Target: RIP140Diabetes and Obesity Target: RIP140Czech et al (2006) J Clin Invest; Leonardson et al (2004) Proc Natl Acad Asi USA

Metabolism(RNAi knockdown in cell culture) Body fat

RIP140

400

500

600

700

ry U

nits

inguinal MRI

(RNAi knockdown in cell culture) Body fat

control

0

100

200

300

Arb

itrar

total body fat

Time (sec)KO = RIP140genetic knockout

E l i Th ti Li t RXiExclusive Therapeutic License to RXi

28

Potential Applications of RNAiPotential Applications of RNAi

RNAi Therapeutics

Block the expression of disease causing genes

Increase the expression of beneficial genes

(antigomers)(a t go e s)

29

RNAi Potential AdvantagesRNAi Potential Advantages

High potency (low doses)Low toxicity, natural mechanism of action High specificity for target genesAbility to interfere with the expression of any geneAccelerated lead generation

rapid

RNAi

rapid lead ID &

optimization

Prone to Failure

clinicaltrials

animalstudies

leadoptimization

target discovery

validation

HTSassay

lead ID

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Time ConsumingExpensive

Prone to Failure

Traditional Drug Development

Pharmacokinetics: A Development Hurdle for Duplex RNAPharmacokinetics: A Development Hurdle for Duplex RNA

Oligonucleotides have poor in vivo PKOligonucleotides have poor in vivo PK parameters following systemic administration

Short half life in circulationShort half life in circulationRapid elimination by the kidneysLimited tissue exposurep

Local delivery is one solutionLonger tissue exposureMultiple applications

Nanoparticles for systemic deliveryStructure can dictate organ exposure

31

Systemic in vivo Delivery with RXi NanoparticlesSystemic in vivo Delivery with RXi Nanoparticlespp

Rana et al (2007) ACS Chemical Biol

<80 nm complex size

Readily formulated

Does NOT induce interferon

Charge and ligands can be varied

Demonstrated in vivo activity in animal modelsDemonstrated in vivo activity in animal models

Delivery to multiple organs in animal models

32

RNAi SummaryRNAi Summary

Fast pace of scientific and commercialFast pace of scientific and commercial applications

Natural Mechanism: Promoted by cellularNatural Mechanism: Promoted by cellular machinery

Understanding mechanism allows for design ofUnderstanding mechanism allows for design of advanced RNAi compounds

Delivery vehicles are expanding the potential ofDelivery vehicles are expanding the potential of RNAi therapeutics

33

Collecting more medals!Collecting more medals!

Thank You!Thank You!

34

UMass Advanced Therapeutics CenterUMass Advanced Therapeutics Center

35






Discovery Pipeline



36

rxRNA: Potential Therapeutic AdvantagesrxRNA: Potential Therapeutic Advantages

Classic Classic rxRNArxRNA

♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

siRNA siRNA 20012001

Properties rxRNA rxRNA 20072007

No High potency (cell culture) √ Yes

No Nuclease resistant √ Yes

No Reduced off-target effects √ Yes

Yes/No Reduced interferon induction √ Yes

Yes Relative ease of manufacturing √ Yes

37

rxRNA results demonstrated in RXi preclinical studies

rxRNA: High Potency in CellsrxRNA: High Potency in CellsKamens et al., RXi Pharmaceuticals, 2007

80

100Typical 21mer siRNAOptimized rxRNATM

RN

A

60

on P

PIB

mR

RNA Duplex EC50 (pM)

Optimized

20

40%

Red

uctioOptimized

rxRNA 30

Typical 21mer 1074

01 10 100 103 104

[RNA] pM

38

rxRNA: Nuclease ResistantrxRNA: Nuclease Resistant

rxRNA Modifications Reduce Degradation in Serum

Kamens et al., RXi Pharmaceuticals, 2007

rxRNA Modifications Reduce Degradation in Serum

0 2 4 6 24 0 2 4 6 24Time (hours)

No modifications rxRNA modifications

marker

• Duplexes incubated with 10% serum at 37oC

No modifications(21-mer)

rxRNA modifications(25-mer)

39

• Samples separated in 20% TBE PAAG and stained with SYBR green• Marker: dsRNA (17, 21, 25 bp)

rxRNA: Reduced Interferon Induction in CellsrxRNA: Reduced Interferon Induction in Cells

Woolf et al. 2003, Sequitur unpublished data

1601 1962 2792 2289 2164

ker

erfe

ron

Mar 12 h

24 h

72 h

Int 96 h

37 37 2121 27272727chemical modification++ +-- ---

duplex length (nt)

40

rxRNA chemistry appears more reliable than length at blocking immune side effects

rxRNA: Relative Ease of ManufacturerxRNA: Relative Ease of Manufacture

Cell culture scale (1000’s of rxRNAs per month)Cell culture scale (1000 s of rxRNAs per month)

Precursors manufactured in large scale

Non-clinical & clinical (GMP) development grade supply chain established

RXi believes rxRNA scalable using current methods

41

rxRNA: Potential Therapeutic AdvantagesrxRNA: Potential Therapeutic Advantagesgg

Properties rxRNA 2007

High potency (cell culture) √ Yes

Nuclease resistant √ Yes

Reduced off-target effects √ Yes

Reduced interferon induction √ Yes

√Relative ease of manufacturing √ Yes

42

rxRNA results demonstrated in RXi preclinical studies

RXi’s Comprehensive Approach to RNAi Delivery RXi’s Comprehensive Approach to RNAi Delivery yy

Local Administration

--CNS--

• Direct administration

• Minimal systemic exposure

• CNS, eye, lung, etc.

Systemic Delivery--Metabolic Disease--

• Nanotransporter

• Metabolic and Liver diseases

CNS, eye, lung, etc.

Metabolic Disease• Proprietary cationic lipids, self-delivering rxRNAs

Oral Delivery• Glucan-encapsulated siRNA Particles (GeRPs)

S ifi d li t h f i fl t diy

--Inflammation--• Specific delivery to macrophages for inflammatory disease

• Minimal systemic exposure

43

Local Delivery of SOD1 RNAi Compound Delays ALS Progression in MiceLocal Delivery of SOD1 RNAi Compound Delays ALS Progression in Mice

Rana et al (2008) J Biol Chem; exclusive therapeutic license to RXi

Sta

ge

ControlRNAi

rcen

t at E

nd

Per

• Intrathecal delivery via osmotic pump• 7-day administration (mRNA, protein endpoints)• 28 day administration in survival study (4 µg / day)

44

RNAi has potential to target disease genes in the central nervous system

• 28-day administration in survival study (4 µg / day)

Systemic Delivery with RXi NanotransportersSystemic Delivery with RXi Nanotransporterspp

Rana et al. (2007) ACS Chemical Biol

Novel systemExclusive therapeutic plicense from UMASS

~80 nm complex size

Relatively easily formulatedRelatively easily formulated

Toxicity and immune stimulation not observed

Charge and ligands can be variedCharge and ligands can be varied

Demonstrated in vivo activity in mice

Potential delivery to multiple organs

45

Using Nanotransporter Delivery to Target a Cholesterol Gene in vivoUsing Nanotransporter Delivery to Target a Cholesterol Gene in vivo

Rana et al. (2007) ACS Chemical Biol

gg

80

100

120

Apo B-100

Apo B-48

20

40

60Apo BProtein

0

20

Control Apo B MM Apo B siRNA

Intravenous; daily for 3 days; N = 3-4 mice

5 mg/kg siRNA:nanoparticle

Stabilized siRNA (MM=mismatch)

B th i f d i li ( t d) A B 48 i f d i i t tiBoth isoforms expressed in liver (secreted), ApoB-48 isoform expressed in intestine

Plasma sampled at 24 hr post last dose

46

Nanotransporters Deliver RNAi to TissuesNanotransporters Deliver RNAi to TissuesRana et al. (2007)

siRNANT1tRNA

NT1

NT2 siRNA

tRNA

NT3siRNA

tRNA

Mice were treated with 1 mg/kg siRNA:nanotransporter containing stabilized siRNA

Tissues were sampled 48 hr post dose

47

Northern blot analyses were conducted using a DNA probe to detect the antisense strand of siRNA

10 µg of total RNA were loaded with tRNA shown as a loading control

Oral Delivery of RNAi Compounds to Macrophages Oral Delivery of RNAi Compounds to Macrophages p gp g

Rieux, et al., J of Cont Release, 2006

•Particles•Bacteria

Glucan-encapsulated siRNA Particles

•Yeast •GeRPs Intestinal Lumen

48

Intestinal tissue

Gut Macrophages Migrate to Other TissuesGut Macrophages Migrate to Other Tissues

Small intestinal mucosa:

M ll

This is the anticipated mechanism of this technology

M cell β− Glucan

M Cell transcytosis

Intestinal macrophagesDectin-1 mediated

Phagocytosis

Macrophage Migration

49

SpleenBone Lung Liver

Oral Delivery of β-Glucan-encapsulated RNAi May Reduce Systemic InflammationOral Delivery of β-Glucan-encapsulated RNAi May Reduce Systemic Inflammation

Package RNAi compound into GeRPs

Orally deliver GeRPs to small intestinal mucosa

Intestinal macrophages engulf GeRPs by phagocytosis

GeRPs transcytose through M cells

GeRPs by phagocytosis(Dectin-1 receptor mediated)

GeRPs release RNAi compound and inflammation target is silenced within the macrophage

Macrophages migrate to various sites in body (bone, spleen liver, lung, joints, etc.)

target is silenced within the macrophage

50

Reduced systemic inflammatory response

GeRP Delivery of rxRNA to Macrophages ex vivoGeRP Delivery of rxRNA to Macrophages ex vivop gp g

Macrophages purified from Cynomolgus macaque whole blood

Phase contrast image at 20x magnification Dy547 fluorescent image at 20x magnification Phase contrast and fluorescent images merged

Macrophages purified from Cynomolgus macaque whole blood

Transfected ex vivo with GeRPs:rxRNA

rxRNA is fluorescently labeled with Dy547 (red)

Photographed 48 hrs post transfection

51

Therapeutic Potential of Oral Delivery using GeRP TechnologyTherapeutic Potential of Oral Delivery using GeRP Technologyg gyg gy

Represents potential breakthrough in RNAi deliveryRepresents potential breakthrough in RNAi deliveryDelivers RNAi compound directly to macrophage

Target in macrophage is silenced, less inflammation at site

Limited systemic exposure in animal models

Proof of principle demonstrated in animal models

Targeting macrophages may allow treatment of a large number of inflammatory diseases with significant marketsmarkets

Arthritis, Asthma, Crohn’s Disease, Atherosclerosis, Psoriasis, Type II diabetes, etc.

52

RXi’s Discovery PipelineRXi’s Discovery Pipeline

Demonstrated in vivo efficacy with RNAi compounds using three y p gdelivery modalities

Local Administration NeurologyDirect intrathecal infusion to CNS with mini-osmotic pumpPublished efficacy in ALS animal model

Systemic Delivery Metabolic Disease Nanoparticles--for liver (and other) delivery Published efficacy for cholesterol lowering in mice

Oral Delivery Inflammatory DiseaseGeRPs Direct targeting of macrophages

Several excellent opportunities for therapeutic developmentInitial development program will be data driven

53

Initial development program will be data driven






Discovery Pipeline



54

General RNAi Patent ConsiderationsGeneral RNAi Patent Considerations

“Fire and Mello” licensed non-exclusively to manyFire and Mello licensed non exclusively to many organizations

No single company “owns” the field of RNA interferenceAdditi l i t i ti f th tiAdditional improvement inventions necessary for therapeuticsA limited number of companies and universities own or control specific therapeutic RNAi technology improvements

US Patent and Trademark Office has generally become conservative with RNAi patent applicationsIssued patents in the field tend to be very specific andIssued patents in the field tend to be very specific and narrowly directed to discrete improvements

55

IP SummaryIP Summary

RXi’s owned and licensed IP may be used toRXi s owned and licensed IP may be used to impede unlicensed parties from employing rxRNA and our proprietary delivery technologies.

Our proprietary rxRNA compounds provide multiple parallel paths to achieving RNAi which are not covered by our competitors patents.

56

Example of rxRNA Configuration Example of rxRNA Configuration

♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

rxRNA Ver. 1

25-27 units long

“Blunt ends” (no overhangs)

Advanced pattern of chemical modifications

57

Fire-MelloFire-Mello

Filed in 1997 Non-Exclusively licensedDouble-stranded RNA to inhibit gene expressionWith or without chemical modificationsSpecifically cites 25-400 unit lengthsHuman therapeutic usesu a t e apeut c uses

Foundational patent “prior art” has lead to the rejection of many claims of more recently filed patent applicationsy p pp

58

25-400 units

STEALTH I: 25-27 Blunt ConfigurationSTEALTH I: 25-27 Blunt Configuration

Filed in 2002Filed in 2002

Exclusively

25-30 units

Blunt ended (without overhangs)

25-30 units without overhangs59

STEALTH II: Modified ChemistrySTEALTH II: Modified Chemistry

Filed in 2003Filed in 2003

Exclusive

STEALTH chemical modificationsReduced immune side effects

Enhanced specificity

Nuclease resistantNuclease resistant

25-30 units without overhangs

♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

25 30 units without overhangs+ STEALTH chemistry in sense strand

60

rxRNArxRNA

Owned exclusively by RXiOwned exclusively by RXi2007 Priority Date25-30 unitsBl t d d ( ith t h )Blunt ended (without overhangs)Advanced rxRNA chemical modification pattern

Further reduced immune side effectsEnhanced specificityFurther nuclease resistance

♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦


♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

25 30 units without overhangs+ rxRNA chemistry in sense strand

61

Multiple Layers of IP Protection for rxRNAMultiple Layers of IP Protection for rxRNA

1997 non disclosed1997 non-disclosed

2002 Sequitur2002 Subsequences

2001 Hannon1998 Mello

Actual Sequence2007 RXi

2003 Sequitur

Actual Chemistry

rxRNATM

62

+ undisclosed FTO on subsequence strategy+ undisclosed optional feature

Broad, Early Intellectual Property Estate with Multiple Layers of ProtectionBroad, Early Intellectual Property Estate with Multiple Layers of Protection

RNAi–Mello

Delivery

Targetsg

rxRNA Chemistry and Configuration

63


RXi’s owned and licensed IP protect RXiRXi s owned and licensed IP protect RXi from unlicensed parties from employing rxRNA and our proprietary deliveryrxRNA and our proprietary delivery technologies.

Our proprietary rxRNA compoundsOur proprietary rxRNA compounds provides multiple parallel paths to achieving RNAi which are not covered byachieving RNAi which are not covered by our competitors patents.

64

rxRNA Provides Multiple Parallel Paths to RNA Interference* rxRNA Provides Multiple Parallel Paths to RNA Interference*

Alnylam IPClassic siRNA rxRNA (Ia) rxRNA (Ib) rxRNA (II)

(structure not disclosed)

Tuschl I 19-24 bp Y N N N

Tuschl II Overhangs Y N N N

Kreutzer-Limmer Y * N N

ISIS Antisense Chemistries(1980-1990)

N N N N

65

*Kreutzer Limmer is under opposition by multiple groups in Europe and has not issued in the US

Tuschl ITuschl I

Projected to issue for 19-23 units lengthsProjected to issue for 19 23 units lengths

Does not cover rxRNA

rxRNA♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦


♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

66

25 27 units without overhangs+ chemistry in sense strand

Tuschl IITuschl II

All claims require “overhangs”All claims require overhangs

Does not cover rxRNA

rxRNA


♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

67

25 27 units without overhangs+ chemistry in sense strand

Early Antisense Chemistries (1980-1990)Early Antisense Chemistries (1980-1990)

Common modified RNA chemistries (i e 2’-O-Common modified RNA chemistries (i.e., 2 -O-methyl RNA and phosphorothioates) have been known since 1980-1990

Expired or will expire prior to the expected sale of RXi’s therapeutics

Key to RNAi chemistry IP lies in the placement (configuration) of chemical modifications and not the chemistry per se

68


RXi’s owned and licensed IP may be used toRXi s owned and licensed IP may be used to impede unlicensed parties from employing rxRNA and our proprietary delivery technologies.

Our proprietary rxRNA compounds provide multiple parallel paths to achieving RNAi which are not covered by our competitors patents.

69






Discovery Pipeline



70

RXi Commercial Strategy RXi Commercial Strategy

RXi’s broad technology platform supports multiple product gy p pp p popportunities

Potential of rxRNA to silence virtually any geneMultiple/expanding delivery approaches to a variety of tissuesp p g y pp y

Enables a two-pronged strategyInternal product development programsPartnering to fund a larger number of product development programsPartnering to fund a larger number of product development programs

Efforts focused on building partner awareness of RXi as: As a major force in RNAi therapeuticsProviding FTO in RNAi chemistryOffering deep expertise to enable discovery and preclinical development

71

RXi Partnering ProgramRXi Partnering Program

The nature, scope and value of deals is expected toThe nature, scope and value of deals is expected to expand over time

Early deals are expected to focus on discovery of rxRNAs against gene targets of interest to the partnerg g g p

ExpandableOption to employ existing delivery technologies (e.g. nanotransporter)

In the future, RXi partnerships may include:Broader scope, encompassing more targets or entire therapeutic indicationsMore delivery options, such as recently announced oral deliverySpecific products with clinical dataPotential retention of certain commercialize rights (e.g. co-Potential retention of certain commercialize rights (e.g. comarketing) by RXi

72

RXi Financial OverviewRXi Financial Overview

Company historyp y yFounded in 2006Operations began in January 2007Initial funding of $15 million in April 2007Initial funding of $15 million in April 2007

Public trading initiated March 12, 2008Completed PIPE June 25, 2008; gross proceeds approx. $8.7 millionmillionCapitalization - outstanding

13.7mm common shares2mm options/warrants

Cash of $15.1 million as of June 30, 2008

73

RXi’s 2008-2009 Corporate GoalsRXi’s 2008-2009 Corporate Goals

Commence Public Trading

Consummate First Development Partnership in 2008p p

Consummate Second Development Partnership in 2009

File First IND with the FDA in 2009

Identify Lead rxRNA compound for Second Clinical y pProgram in 2009

Continue to Expand RXi’s Technology Lead p gy

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RNAi

Management TeamSeasoned &

Potential New Class of Drugs High Value

Therapeutic PipelineNeurology

RNAi Focused Metabolic DiseaseInflammation

RXi Pharmaceuticals

Intellectual Property

Alternative path

RXi’s Therapeutic Platform

rxRNA™

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Alternative pathMultiple LayersOral, systemic and local

delivery

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