RXi Pharmaceuticals' (RXII) President and Chief Executive Officer Geert Cauwenbergh has just issued an open letter to the suffering shareholders of the company. This letter demonstrates the dedicated leadership of the company and shows that the company recognizes shareholders are confused by the latest moves the company has made and even more concerned about their investment in the company. The primary motivation for the letter was to respond to critics posting misleading and inaccurate information about the company and its latest news releases on social media. I encourage my readers to carefully read this letter.
The letter is in response to issues I just covered earlier this week in an earlier post entitled "RXi Pharmaceuticals: Stock Appears On Sale Following 2 Big Announcements." In this article, I discussed that the company had entered into an assignment and exclusive global license agreement with Hapten Pharmaceuticals, LLC to acquire its product called Samcyprone. I was quick to clearly admit that this acquisition was tough to interpret. Like many other shareholders I was confused. That said I stated that the long-term story remains intact and thus compared to my coverage initiation the stock is at more attractive levels. However, I in no way saw this executive level response coming.
I think this letter is a bullish sign. In my opinion, it is always better to have a management team that speaks up when it believes its stock is undervalued, or that there is misinformation being spread by the company. In the letter, Dr. Cauwenbergh elaborated on the motivation for the acquisition. The target diseases of Samcyprone complement the therapeutic areas in which RXI-109 would become commercially available, if approved. Further, there may be a combined effect between RXi's sd-rxRNA drugs and Samcyprone. This is because the way Samcyprone works is linked to DPCP's ability to alter the expression of multiple genes and miRNAs involved
