Scarring is an inevitable consequence of dermal wounds - such as those incurred during routine surgeries - that has a profound impact on physical appearance and psychological well-being. Despite high demand for therapies that prevent or reduce dermal scarring, there are few treatment options approved by the U.S. Food & Drug Administration (“FDA”), which has led to significant investor appetite for companies targeting the space. For instance, Oculus Innovative Sciences, Inc. (NASDAQ: OCLS) recently doubled in price after receiving FDA 510(k) approval for its Microcyn Scar Management HydroGel on December 4, 2013.
There are more than 42 million procedures each year in the U.S. that could benefit from dermal scarring treatments, according to the Mattson Jack Group
. While not all of these scars are treatable or severe enough to warrant the expense of surgery, there were approximately 171,000 scar revision surgeries conducted in the U.S. in 2012 alone, according to the American Society of Plastic Surgeons
Some physicians use over-the-counter dermal scarring treatments, such as Merz’s Mederma, Avocet’s Avogel, or other silicon-based options, but these treatments are not FDA approved and are generally unsupported by the medical and scientific community. Some have also been the subject of regulatory scrutiny. In May of 2012, the FDA and Marshals seized Crescendo Therapeutics’ HybriSil treatments after several warnings for inappropriate marketing.
Companies that have tried to obtain legitimate FDA approvals for scar prevention or reduction therapies have been largely unsuccessful. For example, Capstone Therapeutics Corp. (OTCQB: CAPS
) ceased its Phase II clinical trials of AZX-100
during the first quarter of 2012 after failing to reach its desired clinical endpoints and Renovo Group plc (LON: RNVO) discontinued its clinical trials of Prevascar
in April of 2012 to focus on M&A plans.
One of the few companies still pursuing the dermal scarring market is RXi Pharmaceuticals Corp. (OTCQX: RXII). Founded by a Nobel prize winner for RNAi therapeutics, the company treats dermal scarring by silencing the expression of one of the associated genes. Early clinical trials showed that its RXI-109 was safe, well tolerated and silenced the CTGF gene in a dose-dependent manner.
Pfizer Inc. (NYSE: PFE) is a second company attempting to gain approval for a dermal scarring treatment after acquiring Excaliard’s EXC-001 after its spin-off from ISIS Pharmaceuticals (NASDAQ: ISIS). Comparing early clinical studies, RXI-109 reported a higher knockdown of 43% at a low dose compared to EXC-001’s reported 40% knockdown at a higher dose. In early December, RXi Pharmaceuticals released additional Phase I results further supporting dose-dependent efficacy.
With over $15 million on its balance sheet, RXi Pharmaceuticals has enough cash to last until mid-2015 while EMA Specials approval in Europe could enhance this cash flow over the near-term. Successful approval by the FDA and EMA could equate to blockbuster potential given the large addressable market and lack of treatment options. Before that time, the company could also start to see some acquisition interest, particularly given Pfizer’s interest in EXC-001.
For more information, see RXi Pharmaceuticals’ website at www.rxipharma.com
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Except for the historical information presented herein, matters discussed in this release contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. For full disclosure please visit: http://secfilings.com/Disclaimer.aspx
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