The Biotech Boom Adds Another Star, Rxi Pharmaceuticals Corporation (OTC:RXII)
The biotech boom among small cap stocks attracts new tickers which awaken from long-term valleys. The trend called forth Rxi Pharmaceuticals Corporation (OTC:RXII) and the stock managed to climb near its all-time peaks. The company, currently an OTC name after being delisted from NASDAQ years ago, attracted attention with upcoming presentations on its RNA-based therapies. 
The company is listed as a development-stage business, which means it may hold old debts and losses, still awaiting FDA approval for its therapies. The latest financial reports show that despite the promising area of research, the cost of entering the industry is high: 
- $6.2 million cash
- $6.7 million total assets
- $1.4 million current liabilities
- $57,000 revenue from grants
- $1.6 million operating loss
The company is handling the research phase well, although it is dependent on research grants. It is running several first-stage trials with healthy volunteers, which is an early phase in the drug development process. Still, lacking a major promotion, the stock went up on record buying volumes, after messages for upcoming conference presentations.
But this method the company undertook way back in 2010, along with a $10,000 for a monthly pump, while still a NASDAQ company. The pump caused a brief peak, but it seems RXII was in a similar stage of preliminary development back in 2010. The future was the only possible one, a downshift to the OTC markets and a permanent low price swinging between 20 cents and lows of 6 cents.
The proposed therapeutic model of so called RNA interference is promising enough to attract investors. However, in the mainstream such therapies are still few or yet to develop in some areas of medicine. While a breakthrough could come from a small business or small research center, the history of RXII shows that promises are a constant, while a viable therapy has not shown up in years.
A similar story in 2013 was drawn by the graph of Advanced Cell Technology, Inc. (OTC:ACTC). The company promised advances in its stem cell research, also a novel therapy with few proven therapeutic protocols. The best approach to biopharmaceutical developers is to estimate the risk you can take and the losses you can afford when the actual business of the company lags way behind the peaks in stock price.
