<SEC-DOCUMENT>0000950123-11-035893.txt : 20110415
<SEC-HEADER>0000950123-11-035893.hdr.sgml : 20110415
<ACCEPTANCE-DATETIME>20110415094403
ACCESSION NUMBER:		0000950123-11-035893
CONFORMED SUBMISSION TYPE:	424B5
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20110415
DATE AS OF CHANGE:		20110415

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			RXI PHARMACEUTICALS CORP
		CENTRAL INDEX KEY:			0001390478
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		424B5
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-167025
		FILM NUMBER:		11761211

	BUSINESS ADDRESS:	
		STREET 1:		60 PRESCOTT  STREET
		CITY:			WORCESTER
		STATE:			MA
		ZIP:			01605
		BUSINESS PHONE:		508-767-3861

	MAIL ADDRESS:	
		STREET 1:		60 PRESCOTT  STREET
		CITY:			WORCESTER
		STATE:			MA
		ZIP:			01605
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>b86048fne424b5.htm
<DESCRIPTION>424(B)(5)
<TEXT>
<HTML>
<HEAD>
<TITLE>e424b5</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#B86048tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Filed pursuant to Rule&nbsp;424(b)(5)<BR>
Registration No.: 333-167025</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Prospectus Supplement</B><br>
(To Prospectus dated May&nbsp;21, 2010)
</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>RXI PHARMACEUTICALS CORPORATION</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="b86048fnb8604800.gif" alt="(RXI LOGO)">
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B><B>11,950,000</B> Shares of Common Stock<BR>
Warrants to Purchase up to <B>11,950,000</B> Shares of Common Stock</B>
</DIV>


<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are offering 11,950,000 shares of our common stock and warrants to
purchase up to 11,950,000 shares
of our common stock in this offering. We are not registering the shares of common stock issuable from time to time upon exercise of
the warrants offered hereby. The common stock and warrants will be sold in units, with each
unit consisting of one share of common stock and one warrant to purchase
a share of
common stock at an exercise price of $1.00. The shares of common stock and warrants will be issued
separately but can only be purchased together in this offering. Units will not be issued or
certificated. The warrants are exercisable beginning one year and one day from the date of issuance, but only if
our stockholders approve an increase in the number of our authorized shares of common stock, and expire on the
sixth anniversary of the date of issuance. For a more detailed description of the
securities offered by this prospectus, see the section entitled &#147;Description of the Securities&#148;
beginning on page S-29 of this prospectus supplement.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
common stock is traded on the Nasdaq Capital Market under the symbol
&#147;RXII.&#148; On April 14, 2011, the closing price of our common
stock was $1.16 per share. There is no established
public trading market for the warrants, and we do not expect a market to develop. In addition, we
do not intend to apply for listing of the warrants on any national securities exchange or other
nationally recognized trading system.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Investing in our securities involves a high degree of risk. Before buying any securities, you
should read the discussion of material risks of investing in our common stock under the heading
&#147;Risk Factors&#148; beginning on page S-10 of this prospectus supplement and the risk factors described
in the other documents incorporated by reference herein.</B>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus supplement or the accompanying prospectus. Any representation to the contrary is a
criminal offense.</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Per Unit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Public offering price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,950,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Underwriting discounts and commissions<SUP style="FONT-size: 85%; vertical-align: text-top">1 </SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">836,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proceeds, before expenses, to us</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,113,500</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 9pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>In addition, we have agreed to reimburse the
underwriter for certain of its expenses as described under &#147;Underwriting&#148; on
page S-31 of this prospectus supplement.</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We estimate the expenses of this offering, excluding underwriting discounts and commissions,
will be approximately $175,000.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delivery
of the securities is expected to be made on or about April 20, 2011, subject to the
satisfaction of certain conditions.
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>Roth Capital Partners</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The
date of this prospectus supplement is April 15, 2011.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="B86048tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Prospectus supplement</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048101">About this Prospectus Supplement</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-1</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048102">Summary</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-2</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048103">Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-10</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048104">Note Regarding Forward-Looking Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-27</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048105">Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-28</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048106">Dilution</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-28</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048107">Description of Securities</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-29</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048108">Underwriting</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-31</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048109">Legal Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-34</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048110">Experts</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-34</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048111">Where You Can Find More Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">S-34</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B86048112">Incorporation of Certain Documents by Reference</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" NOWRAP>S-34</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Prospectus</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">About this Prospectus
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">The Company
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Risk Factors
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Note Regarding Forward-Looking Statements
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Use of Proceeds
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Plan of Distribution
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Description of Common Stock
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Description of Preferred Stock
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Description of Warrants
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Description of Debt Securities
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Legal Matters
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Experts
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Where You Can Find More Information
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Incorporation of Documents by Reference
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#B86048tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="B86048101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ABOUT THIS PROSPECTUS SUPPLEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This document is part of the registration statement that we filed with the Securities and
Exchange Commission (the &#147;SEC&#148;) using a &#147;shelf&#148; registration process and consists of two parts.
The first part is this prospectus supplement, including the documents incorporated by reference,
which describes the specific terms of this offering. The second part, the accompanying prospectus,
including the documents incorporated by reference, gives more general information, some of which
may not apply to this offering. Generally, when we refer only to the &#147;prospectus,&#148; we are
referring to both parts combined. This prospectus supplement may add to, update or change
information in the accompanying prospectus and the documents incorporated by reference into this
prospectus supplement or the accompanying prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If information in this prospectus supplement is inconsistent with the accompanying prospectus
or with any document incorporated by reference that was filed with the SEC before the date of this
prospectus supplement, you should rely on this prospectus supplement. This prospectus supplement,
the accompanying prospectus and the documents incorporated into each by reference include important
information about us, the securities being offered and other information you should know before
investing in our securities. You should also read and consider information in the documents we
have referred you to in the section of this prospectus supplement and the accompanying prospectus
entitled &#147;Where You Can Find More Information.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on this prospectus supplement, the accompanying prospectus and the
information incorporated or deemed to be incorporated by reference in this prospectus supplement
and the accompanying prospectus. We have not authorized anyone to provide you with information
that is in addition to or different from that contained or incorporated by reference in this
prospectus supplement and the accompanying prospectus. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not offering to sell these securities
in any jurisdiction where the offer or sale is not permitted. You should not assume that the
information contained or incorporated by reference in this prospectus supplement or the
accompanying prospectus is accurate as of any date other than as of the date of this prospectus
supplement or the accompanying prospectus, as the case may be, or in the case of the documents
incorporated by reference, the date of such documents regardless of the time of delivery of this
prospectus supplement and the accompanying prospectus or any sale of our securities. Our business,
financial condition, liquidity, results of operations and prospects may have changed since those
dates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All references in this prospectus supplement or the accompanying prospectus to &#147;RXi,&#148; the
&#147;Company,&#148; &#147;we,&#148; &#147;us,&#148; or &#147;our&#148; mean RXi Pharmaceuticals Corporation and our subsidiaries, unless
we state otherwise or the context otherwise requires.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-1 <!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#B86048tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="B86048102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SUMMARY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>This summary highlights selected information appearing elsewhere in this prospectus supplement
or in the accompanying prospectus or incorporated by reference in this prospectus supplement and
the accompanying prospectus and does not contain all of the information that may be important to
you and does not contain all of the information that you should consider before investing in our
securities. This prospectus supplement and the accompanying prospectus include or incorporate by
reference information about the securities we are offering as well as information regarding our
business and detailed financial data. You should read this prospectus supplement and the
accompanying prospectus and the information incorporated by reference herein in their entirety,
including the risk factors beginning on page S-10, the financial statements and related notes and
the form of warrant.</I>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>The Company</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Overview</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were incorporated as Argonaut Pharmaceuticals, Inc. in Delaware on April&nbsp;3, 2006, changed
our name to RXi Pharmaceuticals Corporation on November&nbsp;28, 2006, and began operations in January
2007. Our principal executive offices are located at 60 Prescott Street, Worcester, MA 01605, and
our phone number is (508)&nbsp;767-3861. As described below under
&#147;Recent Developments,&#148; on April&nbsp;13,
2011, we acquired Apthera, Inc. (&#147;Apthera&#148;), a private biotechnology company. In connection with
the Apthera acquisition, we issued 4,974,090&nbsp;shares of our common stock to former stockholders of Apthera
and agreed to make certain contingent payments to such stockholders upon the achievement of certain
milestones. Unless otherwise specified, the information contained in this prospectus supplement
gives effect to the acquisition of Apthera.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RXi
is a biotechnology company focussed on discovering, developing and
commercializing innovative therapies addressing major unmet medical
needs using RNAi-targeted and immunotherapy technologies. We are
pursuing (1)&nbsp;cancer therapies utilizing
peptide-based immunotherapy products, including our main product candidate NeuVax<SUP style="FONT-size: 85%; vertical-align: text-top">TM</SUP>, for the
treatment of various cancers and (2)&nbsp;proprietary therapeutics based on RNA interference, or &#147;RNAi&#148;,
a naturally occurring cellular mechanism that has the potential to effectively and selectively
interfere with, or &#147;silence&#148;, expression of targeted disease-associated genes.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Immunotherapy Products</I>. Our main product candidate is NeuVax, which is a peptide-based
immunotherapy to reduce the recurrence of breast cancer in low-to-intermediate HER2-positive breast cancer patients not eligible for
Herceptin<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP>. We expect NeuVax to enter Phase III clinical trials in this breast
cancer patient population during the first half of 2012 if we are
able to satisfy certain United States
Food and Drug Administration (&#147;FDA&#148;) information
requirements to be released from a clinical hold to commence the trial. In
addition, based on our clinical trials, we believe that NeuVax has the potential to treat
other cancers, including prostate, bladder and ovarian cancers.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>RNAi Products</I>. We believe that certain human diseases can potentially be treated by
silencing targeted genes that lead to disease. While no therapeutic RNAi products have been
approved by the FDA to date, there has been significant interest and growth in the field of
RNAi therapeutic development. This growth is driven by the potential ability to use RNAi to
rapidly develop lead compounds that specifically and selectively inhibit a target gene,
many of which are thought to be undruggable by other modalities. RXI-109, our first RNAi
product candidate, is a dermal anti-scarring therapy that targets CTGF (connective tissue
growth factor). We are currently working towards filing an investigational new drug
application (&#147;IND&#148;) for RXI-109 in the second half of 2011 and commencing a Phase I
clinical trial in the first half of 2012. We intend to maintain our core RNAi discovery
and development capability to advance current collaborations, as well as enable alliances.
We believe that RXI-109 may be able to treat other indications, including pulmonary
fibrosis, liver fibrosis, acute spinal injury, ocular scarring and restinosis.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The chart below summarizes the current status of our drug development programs, with the
dark shading indicating completed stages of development and the
light shading indicating
development activities we intend to prioritize in the near-term.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="b86048fnb8604801.gif" alt="(BAR GRAPH)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our Therapeutic Programs</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Immunotherapy Program</I></B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are developing a pipeline of immunotherapy
product candidates for the treatment of various cancers based on the E75&nbsp;peptide,
the most advanced of which is NeuVax, which is targeted at preventing
the recurrence of breast
cancer. NeuVax has had positive Phase I/II clinical trial results for the prevention of breast
cancer recurrence in patients who have had breast cancer and received the standard of care
treatment (surgery, chemotherapy, radiotherapy and hormonal therapy). We intend to conduct a Phase
III clinical trial of NeuVax for the prevention of breast cancer recurrence in early-stage
(node-positive) HER2-positive breast cancer patients. We project that this Phase III clinical trial will begin in the first half
of 2012 subject to satisfying certain FDA information requirements to be released from a
clinical hold to commence the trial.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NeuVax is an immunotherapy that stimulates the immune system to actively seek out and
selectively kill cancer cells. NeuVax directs &#147;killer&#148; T-cells to target and destroy cancer cells
that express HER2/<I>neu</I>, a protein associated with epithelial tumors in breast, ovarian, pancreatic,
colon, bladder and prostate cancers. NeuVax is comprised of two components: a HER2/<I>neu</I>-derived
peptide called E75 and the immune adjuvant GM-CSF. E75 is a small 9-amino acid sequence that is
immunogenic (produces an immune response) and GM-CSF is a commercially available protein that acts to stimulate and
activate components of the immune system such as macrophages and dendritic cells.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NeuVax has been shown to be most effective in patients with low-to-intermediate HER2/<I>neu </I>expressors with HLA
type A2&#043; or A3&#043;. We believe that approximately 25,000 of
the approximately 200,000 women diagnosed with breast cancer in the U.S. each year meet these criteria. We believe that NeuVax&#146;s specificity provides for a highly targeted therapy to prevent breast cancer
recurrence for a selected subset of breast cancer patients and we believe it will increase the
chance of a successful treatment outcome for these patients.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the lead early-stage breast cancer indication for NeuVax, we are pursuing
additional therapeutic indications for NeuVax that are currently in Phase I/II clinical trials.
Under our IND, open protocols for the treatment of prostate cancer, ovarian cancer and bladder
cancer exist for patient populations with the same general criteria for eligibility as in breast
cancer (<I>i.e., </I>early-stage disease and adjuvant treatment setting after surgery with immunologic
competence). We may also explore whether NeuVax provides clinical benefits in other areas, such as
a prophylactic vaccine against breast cancer occurrence in healthy women with a high likelihood for
developing breast cancer based on genetic assays or biomarkers and a strong positive familial
history of breast cancer. Clinical trials conducted on NeuVax have provided proof-of-principle
data in early-stage node-negative breast cancer, although such data is preliminary and not
statistically significant as the trials were not designed to provide statistically significant
efficacy data. Both the early-stage node-negative breast cancer indication and the
</DIV>




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<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left" style="font-size: 10pt; margin-top: 6pt">high risk patient indication are longer-term areas of interest that we currently expect we will only explore
with support from corporate partners for these programs.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>RNAi Program</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By utilizing our expertise in RNAi and the comprehensive RNAi platform that we have
established, we believe we will be able to discover and develop lead compounds and progress them
into and through clinical development for potential commercialization. Our proprietary therapeutic
platform is comprised of two main components:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Novel RNAi Compounds, </I>referred to as rxRNA&#153; compounds, that are distinct from, and we
believe convey significant advantages over, classic siRNA (conventionally-designed &#147;small
interfering RNA&#148; compounds), and offer many of the properties that we believe are important
to the clinical development of RNAi-based
drugs. We have developed a number of unique forms of rxRNA compounds, all of which have been
shown to be highly potent both <I>in vitro </I>and in pre-clinical <I>in vivo </I>models. These RNAi
compounds include rxRNAori&#153;, rxRNAsolo&#153; and sd<I>-</I>rxRNA&#153;, or &#147;self delivering&#148; RNA. Based on our
research, we believe that these different, novel siRNA configurations have various potential
advantages for therapeutic use. These potential advantages include high potency, increased
resistance to nucleases and off-target effects, and, in the case of the sd-rxRNA compounds,
access to cells and tissues with no additional formulation required.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Advanced Delivery Technologies </I>that enable the delivery of our rxRNA compounds to
potentially treat a variety of acute and chronic diseases using both local and systemic
approaches, potentially providing a competitive advantage in the development of many RNAi
therapeutic compounds. RXi&#146;s suite of delivery technologies is comprised of delivery
vehicles, which can be combined with various rxRNA compounds, as well as sd-rxRNA
compounds, which are chemically modified and have the unique property of entering cells and
tissues to effect silencing without the need for any additional delivery vehicle. This
suite of delivery technologies has broad applications for multiple therapeutic areas
targeting both local and systemic applications.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are currently focusing our internal therapeutic development areas in fibrosis-dermal
anti-scarring. RXI-109, our first RNAi product candidate, is a dermal anti-scarring therapy that
targets CTGF (connective tissue growth factor). Approximately 42&nbsp;million surgical procedures are
performed annually, with many patients experiencing hypertrophic scarring and keloids. We believe
that RXI-109 will inhibit connective tissue formation in human fibrotic disease.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Data
obtained from pre-clinical studies of our sd-rxRNA compounds in preliminary pre-clinical models using local administration
to the skin have shown robust delivery and effective target gene silencing. We have selected a
dermal anti-scarring development candidate, RXI-109, and have targeted filing an IND for the
product candidate in the second half of 2011. If clinical studies of RXI-109 produce successful
results in anti-scarring, we may explore opportunities in other dermatology applications as well as
in other anti-fibrotic indications, including pulmonary fibrosis, liver fibrosis, acute spinal cord
injury, ocular scarring and restenosis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Recent Developments</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fourth quarter of 2010 and the first quarter of 2011, the Company announced several
important developments which are outlined below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;2, 2010, we announced that the United States Internal Revenue Service (IRS)
awarded us four Therapeutic Discovery Project (TDP)&nbsp;grants totaling $977,917 as part of the Patient
Protection and Affordable Care Act of 2010. The TDP grants were awarded in four equal amounts for
developing (1)&nbsp;self-delivering RNAi therapeutic for fibrotic disease, (2)&nbsp;self-delivering RNAi
therapeutic for age-related macular degeneration, (3)&nbsp;self-delivering RNAi for ALS (Lou Gehrig&#146;s
disease), and (4)&nbsp;oral delivery of glucose encapsulated siRNAs
for rheumatoid arthritis.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December&nbsp;17, 2010, we announced the selection of RXI-109 as our first RNAi therapeutic product
candidate to advance into development. We
have begun manufacturing activities and we are preparing a pre-IND package to submit to the FDA.
Pending FDA review, we intend to employ a clinical trial design to study safety and tolerability as
well as initial efficacy in a first clinical trial targeted for 2012. In this clinical trial, we
plan to evaluate RXI-109 for the reduction of dermal scarring in planned surgeries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January&nbsp;2011, we announced positive results from two successful collaborations with other
biotechnology companies using our proprietary sd-rxRNA technology. On January&nbsp;6, 2011, we announced
a successful
collaboration with Generex Biotechnology Corporation, and its wholly-owned subsidiary Antigen
Express, Inc., in developing proprietary vaccine formulations for active immunotherapy. Initial
results from the collaboration demonstrated success in using sd-rxRNA compounds to silence genes in
up to 80% in hemopoietic cells. The ability to reduce expression of certain genes in isolated
hemopoietic-derived cancer cells (<I>ex vivo</I>) has the potential to convert them into specific
immune-stimulants and opens the possibility for development of a new class of anticancer
therapeutic vaccines that could complement our Apthera product
candidate pipeline.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;27, 2011, we announced positive initial results as part of our collaboration with
miRagen Therapeutics, Inc., in creating microRNA mimics, or artificial copies of microRNAs, using
our sd-rxRNA technology. In particular, the collaboration demonstrated efficacy in down-regulating
a reporter gene (<I>in vitro</I>) whose expression is controlled by the microRNA in cell culture model
systems develop by miRagen. Increasing the level of particular microRNAs by using therapeutic
mimics may treat certain diseases, including cardiovascular, cancer, inflammatory, fibrotic and
metabolic disorders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;31, 2011, we announced that we had entered into an Agreement and Plan of Merger (the
&#147;Merger Agreement&#148;) with our wholly-owned subsidiary, Diamondback Acquisition Corp., a Delaware
corporation (&#147;Merger Sub&#148;), Apthera and Robert E. Kennedy, in his capacity as representative of
Apthera&#146;s stockholders. On April 13, 2011, pursuant to the terms of the Merger Agreement, Merger
Sub merged with and into Apthera, with Apthera surviving as a wholly-owned subsidiary of RXi (the
&#147;Merger&#148;). In connection with the Merger, we issued
4,974,090&nbsp;shares of our common stock to former
stockholders of Apthera and agreed to make certain contingent payments to such stockholders upon
the achievement of certain milestones.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the acquisition of Apthera, Mark J. Ahn, Ph.D., an existing member of our
Board of Directors, succeeded Noah D. Beerman as Chief Executive Officer of RXi and will lead the
combined company, which will operate out of our current headquarters in Worcester, MA. In
addition, Mark W. Schwartz, Ph.D., the Chief Executive Officer of
Apthera, became our Chief
Operating Officer and Robert E. Kennedy, the Chief Financial Officer
of Apthera, became our
Chief Financial Officer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Background on the Company and Recent Change in Strategic Focus</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
were formed in 2006 by CytRx Corporation (&#147;CytRx&#148;) (Nasdaq: CYTR) and four prominent RNAi
researchers, including Dr.&nbsp;Craig Mello, who was awarded the 2006 Nobel Prize in Medicine for his
co-discovery of RNAi. From 2003 through 2006, CytRx sponsored therapeutic RNAi research at the
University of Massachusetts Medical School, (&#147;UMMS&#148;) and Massachusetts General Hospital. We
commenced operations in January&nbsp;2007 after CytRx contributed to us its portfolio of RNAi
therapeutic assets in exchange for approximately 7.04&nbsp;million shares of our common stock. These
assets consisted primarily of RNAi licenses and related intellectual property and a nominal amount
of equipment.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the acquisition of Apthera, our principal activities consisted of conducting
discovery research and pre-clinical development activities utilizing our RNAi therapeutic platform,
acquiring RNAi technologies and patent rights through exclusive, co-exclusive and non-exclusive
licenses, recruiting an RNAi-focused management and scientific/clinical advisory team, capital
raising activities and conducting business development activities aimed at establishing research
and development partnerships with pharmaceutical and biotechnology companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors continually evaluates our strategic alternatives and recently
determined that it was in the best interests of our stockholders to diversify our development
programs with additional development candidates at various stages of development. Our acquisition
of Apthera followed from this determination to broaden our strategic
direction. We believe that acquiring Apthera will enhance our long term prospects by giving us
access to a late stage product candidate, NeuVax, which is expected to enter Phase III clinical
trials under an FDA-approved Special Protocol Assessment (&#147;SPA&#148;) for the treatment of breast cancer
in the first half of 2012 if we are able to satisfy certain FDA
information requirements to be released from a clinical hold to
commence the trial. Based on our clinical trials, we also believe that NeuVax has the potential to treat other cancers,
including prostate, bladder and ovarian cancers. In addition, we believe that reducing the scope
of our RNAi activities will enable us to commit more
resources to RXI-109, our lead RNAi-product, while maintaining our core RNAi discovery and
development capability to advance current collaborations, as well as enable alliances.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Management and Scientific Team</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Apthera acquisition, we reorganized our management and scientific
teams. Our Board of Directors believes that the following personnel possess the experience and
skills necessary to lead RXi into its next stage of development.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have a senior management team with experience in developing and commercializing
biopharmaceutical and healthcare products consisting of:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Mark J. Ahn, Ph.D., President and Chief Executive Officer. </B>Dr.&nbsp;Ahn served as a director
on RXi&#146;s board from 2007 until his appointment as President and Chief Executive Officer in
2011. He brings more than 20&nbsp;years of experience in the biopharmaceutical industry,
including as founder, President and Chief Executive Officer for Hana Biosciences, Inc. Prior to
joining Hana, he served as Vice President, Hematology and corporate officer at Genentech,
Inc., and held positions of increasing responsibility in strategy, general management, sales
and marketing, business development, and finance with Amgen Inc. and Bristol-Myers Squibb
Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Mark W. Schwartz, Ph.D., Executive Vice President and Chief Operating Officer. </B>Dr.
Schwartz joins RXi as part of our acquisition of Apthera, where he had been the President
and Chief Executive Officer. Prior to joining Apthera, Dr.&nbsp;Schwartz served for five years
as President and Chief Executive Officer of Bayhill Therapeutics Inc., a company developing an
innovative DNA vaccine platform for the treatment of autoimmune diseases, where he
completed a successful partnership with Genentech for the development of the company&#146;s type
1 diabetes vaccine. He had also served as President and Chief Executive Officer of Calyx
Therapeutics, Inc., which doubled its size, nurtured a successful working relationship with the
FDA, and completed key phase I and phase II international clinical trials of novel
anti-inflammatory compounds during his tenure.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Robert E. Kennedy, Treasurer and Chief Financial Officer. </B>Robert E. Kennedy co-founded
Apthera in 2005, where he served as Director, Secretary, Treasurer and Chief Financial
Officer. Previously, Mr.&nbsp;Kennedy served as Director and Chief Financial Officer and for
Blue Dot Services, Inc., a nationwide heating, ventilation, air-conditioning and plumbing
construction and services company. Prior to his work at Blue Dot Services, he was the
managing director for Koch Ventures, Inc., the venture capital arm of Koch Industries,
Inc., the second largest privately-held company in the United States. Mr.&nbsp;Kennedy has held
finance and accounting management roles at Sterling House Corporation, Thorn Americas, Inc.,
Raytheon Aircraft Corporation, and F.B. Kubik &#038; Company, CPAs; he serves on the board of
directors of Immunologix, Inc. and Arizona BioIndustry Association, and is a member of the
American Institute of Certified Public Accountants and the Arizona Society of CPAs.</TD>
</TR>

</TABLE>
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<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Anastasia Khvorova, Ph.D., Chief Scientific Officer. </B>Dr.&nbsp;Khvorova has been our Chief
Scientific Officer since October&nbsp;2008. Dr.&nbsp;Khvorova has contributed significantly to the
RNAi field. While at Dharmacon (ThermoFisher Scientific, Inc.), she made major technology
advances in RNAi and microRNA. Dr.&nbsp;Khvorova was also responsible for establishing and
managing several drug discovery/development collaborations with major pharmaceutical
companies, including Abbott Laboratories and Alcon Inc. Her groundbreaking work has allowed her to author
more than 150 abstracts, 30 patents and patent applications, several book chapters and over
40 peer reviewed publications. Dr.&nbsp;Khvorova received her Ph.D. in Biochemistry from the
Russian Academia of Sciences in Moscow in 1994 and after 10&nbsp;years of working in academia
and industry she joined Dharmacon in 2002, where she served as the Chief Scientific Officer
for 6&nbsp;years.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Pamela Pavco, Ph.D., Vice President Pharmaceutical Development. </B>Dr.&nbsp;Pavco has been our
Vice President of Pharmaceutical Development since March&nbsp;2007. Dr.&nbsp;Pavco brings over 20
years of research and development experience in oligonucleotides to us. From 2002 to 2006,
Dr.&nbsp;Pavco was Senior Director, R&#038;D Project Management at Sirna Therapeutics, Inc., previously
known as Ribozyme Pharmaceuticals, Inc., where she was responsible for the discovery research and
development of Sirna-027, the first chemically modified siRNA to enter into clinical
trials. Dr.&nbsp;Pavco also managed the alliance with Allergan, Inc. that was initiated to continue
discovery research in the area of ophthalmology and take Sirna-027 forward into Phase 2
clinical studies. Dr.&nbsp;Pavco received a Ph.D. in Biochemistry from Virginia Commonwealth
University in 1983 and did her post-doctoral work at Duke University prior to joining Sirna
Therapeutics. She is a member of the American Association of Cancer Research and the
Association for Research and Vision in Ophthalmology.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Financial Condition</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not generated revenue to date and may not generate product revenue in the foreseeable
future, if ever. We expect to incur significant operating losses as we advance our product
candidates through the drug development and regulatory process. In addition to increasing research
and development expenses, we expect general and administrative costs to increase as we add
personnel and integrate Apthera. We will need to generate significant revenues to achieve
profitability and might never do so. In the absence of product revenues, our potential sources of
operational funding are expected to be the proceeds from the sale of equity, funded research and
development payments and payments received under partnership and collaborative agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
had cash and cash equivalents of approximately $6.9 million as of December&nbsp;31, 2010 and
approximately $11.0 million as of March&nbsp;31, 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a result of our acquisition of Apthera and the expenses expected to be incurred in connection with the Phase III  clinical trial for NeuVax, we expect
that our expenses will increase significantly from historic levels for the foreseeable future. We believe that
our existing cash and cash equivalents should be sufficient to fund our operations through at least
the first quarter of 2012. In the future, we will be dependent on obtaining funding from third
parties, such as proceeds from the sale of equity, funded research and development payments and
payments under partnership and collaborative agreements, in order to maintain our operations and
meet our obligations to licensors. There is no guarantee that debt, additional equity or other
funding will be available to us on acceptable terms, or at all. If we fail to obtain additional
funding when needed, we would be forced to scale back, or terminate, our operations or to seek to
merge with or to be acquired by another company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Recent Financing Activities</B>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->S-7 <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;4, 2011, we closed an underwritten public offering of 6,000,000 units at a price to
the public of $1.35 per unit for gross proceeds of $8.1&nbsp;million. The financing provided
approximately $7.3&nbsp;million to the Company after deducting the underwriting fee and offering
expenses. Each unit consisted of (i)&nbsp;one share of common stock, (ii)&nbsp;a thirteen-month warrant to
purchase 0.50 of a share of common stock at an exercise of $1.70 per share (subject to
anti-dilution adjustment) and (iii)&nbsp;a five-year warrant to purchase 0.50 of a share of common stock
at an exercise price of $1.87 per share (subject to anti-dilution
adjustment). As a result of this offering, the exercise price of
these warrants will be reduced to $1.00 per
share.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-8 <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>The Offering</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Issuer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">RXi Pharmaceuticals Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Common stock we are offering
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11,950,000  shares</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Common stock to be outstanding after this offering
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">36,945,428 shares</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Warrants we are offering
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">We are offering warrants to
purchase up to &#091;<B>&#149;</B>&#093; shares of
common stock, which will be
exercisable commencing one year and one day from the date of
issuance, but only if our stockholders approve an increase in
the number of authorized shares of common stock, until the sixth
anniversary of the date of issuance at an initial exercise price of
$1.00 per share. We do not have a sufficient number of authorized shares to permit exercise of the warrants. Thus,
we may be unable to issue shares upon exercise thereof unless we obtain stockholder approval to
effect an amendment to our certificate of incorporation to increase our authorized shares to an
amount sufficient to permit such exercise. In the event that we are unable to increase our
authorized shares by the date on which the warrants initially become
exercisable, we will be required to pay liquidated damages in an
aggregate amount of $2,500,000. See &#147;Description of the
Securities&#151;Warrants&#151;Stockholder Approval; Payment of Liquidated Damages; Registration of Warrant
Shares.&#148; We are not registering the
shares of common stock
issuable from time to time upon exercise of the
warrants offered hereby.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Risk Factors
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">See &#147;Risk Factors&#148; beginning
on page S-10 of this
prospectus supplement and page
5 of the accompanying
prospectus for a discussion of
factors you should consider
carefully when making an
investment decision.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Use of proceeds
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">We intend to use the net
proceeds of this offering for
general corporate purposes,
which may include working
capital, capital expenditures,
research and development
expenditures, pre-clinical and
clinical trial expenditures,
commercial expenditures,
acquisitions of new
technologies or businesses
that are complementary to our
current technologies or
business focus, and
investments. See &#147;Use of
Proceeds&#148; on page S-28 of
this prospectus supplement for
further information.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Nasdaq Capital Market symbol
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">RXII</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of shares of common stock shown above to be outstanding after this offering is
based on 24,995,428 shares outstanding as of April&nbsp;1, 2011 and excludes:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>4,974,090 shares of our common stock issued to former stockholders of Apthera in the
Merger;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>6,266,978 shares of our common stock subject to options outstanding as of April&nbsp;1,
2011 having a weighted average exercise price of $3.98 per share<SUP style="FONT-size: 85%; vertical-align: text-top">2</SUP>;</TD>
</TR>



<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>250,000 shares of our common stock that have been reserved
for issuance under our employee stock purchase plan;</TD>
</TR>




<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>8,250,642 shares of our common stock that have been reserved for issuance upon
exercise of outstanding warrants as of April&nbsp;1, 2011 having a weighted average exercise
price of $2.55 per
share<SUP style="FONT-size: 85%; vertical-align: text-top">3</SUP>; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>shares of our common stock issuable upon the exercise of warrants offered
hereby.</TD>
</TR>





</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><SUP style="FONT-size: 85%; vertical-align: text-top">2</SUP> On April&nbsp;14, 2011, all of our directors and certain of our executive officers executed
agreements with the Company under which they agreed that none of their outstanding stock options
will be exercisable unless and until our stockholders increase the number of authorized shares of
common stock to a number that is sufficient to permit the exercise or conversion in full of all
then outstanding options of the Company (including their stock options), warrants and other
securities of the Company that are convertible into shares of common stock, and at that point all
of their options shall thereafter be exercisable in accordance with the terms of their options
awards. An aggregate of 3,398,256 outstanding stock options are covered by these agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><SUP style="FONT-size: 85%; vertical-align: text-top">3</SUP>
On April&nbsp;15, 2011, the holders of outstanding warrants issued on
March 4, 2011 to purchase an aggregate of 3,450,000 shares of our common stock agreed to
exchange such warrants for warrants exercisable for the same number
of shares as those being exchanged, but otherwise on the same terms,
including the exercise price, as the warrants being offered hereby.
Consequently, such exchanged warrants will not be exercisable unless
our stockholders approve an increase in the number of authorized
shares of common stock.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->S-9 <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="left">
<A name="B86048103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Investing in our securities involves a high degree of risk. You should carefully consider the
risks described below and in the documents incorporated by reference into this prospectus
supplement and the accompanying prospectus before making a decision to invest in our securities.
Some of these factors relate principally to our business and the industry in which we operate.
Other factors relate principally to your investment in our securities. The risks and uncertainties
described below are not the only ones facing us. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also materially and adversely affect our
business and operations.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>If any of the matters included in the following risks were to occur, our business, financial
condition, results of operations, cash flows or prospects could be materially and adversely
affected. In such case, you may lose all or part of your original investment.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Risks Relating to RXi&#146;s Business and Industry</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>The anticipated benefits of our Apthera acquisition may not be realized.</I></B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our future success will depend on, among other things, the ability to combine the businesses
of RXi and Apthera in a manner that does not materially disrupt existing relationships or otherwise
result in decreased productivity and that allows us to capitalize on
the drug development activities and
capabilities of the combined company. If these objectives are not achieved, the anticipated
benefits of the Merger may not be realized fully or at all or may take longer to realize than
expected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to the  Merger, Apthera and RXi operated independently. It is possible
that the integration process could result in the disruption of RXi&#146;s or Apthera&#146;s ongoing
businesses or inconsistencies in standards, controls, procedures or policies that could adversely
affect the ability of the combined company to continue clinical
development of its product candidates, maintain relationships with third parties and
employees or to achieve the anticipated benefits of the Merger. Specifically, issues that must be
addressed in integrating the operations of RXi and Apthera in order to realize the anticipated
benefits of the Merger include, among other things, prioritizing
clinical development of product candidates, identifying and eliminating redundant
operations and assets across a geographically dispersed organization and integrating the research
and development operations and systems of RXi and Apthera. Integration efforts between the two
companies will also divert management&#146;s attention and resources. An inability to realize the full
extent of, or any of, the anticipated benefits of the Merger, as well as any delays encountered in
the integration process, could have an adverse effect on the combined company&#146;s business and
results of operations, which may affect the value of the shares of the combined company&#146;s common
stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, the actual integration may result in unanticipated adverse
effects and unforeseen expenses, and the
anticipated benefits of the integration plan may not be realized. Actual cost synergies, if
achieved at all, may be lower than expected and may take longer to achieve than anticipated. If
these challenges are not adequately addressed, RXi and Apthera may be unable to successfully
integrate their operations, or to realize the anticipated benefits of the integration of the two
companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We are largely dependent on the success of our two leading drug candidates neither
of which may receive regulatory approval or be successfully commercialized.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have identified and are developing two lead product candidates which use different
technologies and treat different medical conditions. Our business prospects depend
heavily on successfully developing and commercializing these
products. While we expect Phase III clinical trials of NeuVax to begin in
2012, the FDA requires certain Chemical, Manufacturing and Controls (&#147;CMC&#148;) information to be
submitted prior to the FDA granting its approval to proceed with a Phase III trial which we have
not yet produced. RXI-109 is our first RNAi-based product candidate, which targets CTGF
(connective tissue growth factor), which may be applied to a variety of medical conditions. We are
planning to file an investigational new drug (IND)&nbsp;application with the FDA in 2011 and begin Phase
I clinical trials in 2012 for RXI-109. The FDA may deny our application or require additional
information
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-10 <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">before approving our application, and such information may be costly to provide. We can provide no
assurance that we will be able to successfully develop NeuVax, RXI-109 or any other product
candidate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently generate no revenue from sales, and we may never be able to develop marketable
products. All of our products in development must be approved by the FDA or similar foreign
governmental agencies before they can be marketed. The process for obtaining FDA approval is both
time-consuming and costly, with no certainty of a successful outcome. Before obtaining regulatory
approval for the sale of any drug candidate, we must conduct, at our own expense, extensive
pre-clinical tests and clinical trials to demonstrate the safety and efficacy in humans of our
product candidates. Although NeuVax has demonstrated safety during Phase I and Phase II clinical
trials, further testing may undermine those determinations or unexpected side effects may arise.
We have not yet shown safety or efficacy in humans for any RNAi-based product candidates, including
RXI-109. A failure of any pre-clinical study or clinical trial can occur at any stage of testing.
The results of pre-clinical and initial clinical testing of these products may not necessarily
indicate the results that will be obtained from later or more extensive testing. Companies in the
pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical
trials, even after obtaining promising results in earlier trials.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>A number of different factors could prevent us from obtaining regulatory approval or
commercializing our product candidates on a timely basis, or at all.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We, the FDA or other applicable regulatory authorities, or an institutional review board
(&#147;IRB&#148;), which is an independent committee under the oversight of the United States Department of
Health and Human Services (&#147;HHS&#148;) that has been formally registered with HHS and functions to
approve, monitor and review biomedical and behavioral research involving humans, may suspend
clinical trials of a drug candidate at any time for various reasons, including if we or they
believe the subjects or patients participating in such trials are being exposed to unacceptable
health risks. Among other reasons, adverse side effects of a drug candidate on subjects or
patients in a clinical trial could result in the FDA or other regulatory authorities suspending or
terminating the trial and refusing to approve a particular drug candidate for any or all
indications of use.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Clinical trials of a new drug candidate require the enrollment of a sufficient number of
patients, including patients who are suffering from the disease the drug candidate is intended to
treat and who meet other eligibility criteria. Rates of patient enrollment are affected by many
factors, and delays in patient enrollment can result in increased costs and longer development
times.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Clinical trials also require the review and oversight of IRBs, which approve and continually
review clinical investigations and protect the rights and welfare of human subjects. An inability
or delay in obtaining IRB approval could prevent or delay the initiation and completion of clinical
trials, and the FDA may decide not to consider any data or information derived from a clinical
investigation not subject to initial and continuing IRB review and approval.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, cancer vaccines
are a relatively new form of therapeutic and a very limited number of such products have received regulatory approval.
Therefore, the FDA or other regulatory authority may apply standards for approval of a new cancer vaccine
that is different from past experience.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Numerous factors could affect the timing, cost or outcome of our drug development efforts,
including the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>delays in filing the initial drug application for RXI-109 or other product candidates,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>delays in providing the FDA with the CMC information required before the FDA approves
the commencement of Phase III clinical tests for NeuVax as described under &#147;The FDA has
placed the IND for NeuVax on a partial clinical hold which precludes us from entering into
a Phase III clinical trial of NeuVax&#148; below,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulty in securing centers to conduct trials,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>conditions imposed on us by the FDA or comparable foreign authorities regarding the
scope or design of our clinical trials,
</TD>
</TR>
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->S-11 <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>problems in engaging IRBs to oversee trials or problems in obtaining or maintaining IRB
approval of studies,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulty in enrolling patients in conformity with required protocols or projected
timelines,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>third party contractors failing to comply with regulatory requirements or meet their
contractual obligations to us in a timely manner,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our drug candidates having very different chemical and pharmacological properties in
humans than in laboratory testing and interacting with human biological systems in
unforeseen, ineffective or harmful ways,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the need to suspend or terminate our clinical trials if the participants are being
exposed to unacceptable health risks,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>insufficient or inadequate supply or quality of our drug candidates or other necessary
materials necessary to conduct our clinical trials,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>effects of our drug candidates not being the desired effects or including undesirable
side effects or the drug candidates having other unexpected characteristics,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the cost of our clinical trials may be greater than we anticipate,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>negative or inconclusive results from our clinical trials or the clinical trials of
others for drug candidates similar to our own or inability to generate statistically
significant data confirming the efficacy of the product being tested,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the FDA&#146;s requirements for our testing during the course of that testing,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>modification of the drug during testing,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reallocation of our limited financial and other resources to other clinical programs,
and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adverse results obtained by other companies developing similar drugs.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is possible that none of the product candidates that we develop will obtain the appropriate
regulatory approvals necessary for us to begin selling them or that any regulatory approval to
market a product may be subject to limitations on the indicated uses for which we may market the
product. The time required to obtain FDA and other approvals is unpredictable but often can take
years following the commencement of clinical trials, depending upon the complexity of the drug
candidate. Any analysis we perform of data from clinical activities is subject to confirmation and
interpretation by regulatory authorities, which could delay, limit or prevent regulatory approval.
Any delay or failure in obtaining required approvals could have a material adverse effect on our
ability to generate revenue from the particular drug candidate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are also subject to numerous foreign regulatory requirements governing the conduct of
clinical trials, manufacturing and marketing authorization, pricing and third-party reimbursement.
The foreign regulatory approval process includes all of the risks associated with the FDA approval
described above as well as risks attributable to the satisfaction of local regulations in foreign
jurisdictions. Approval by the FDA does not assure approval by regulatory authorities outside of
the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>The FDA has placed the IND for NeuVax on a partial clinical hold which precludes us from entering
into a Phase III clinical trial of NeuVax.</I></B>
</DIV>





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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May&nbsp;8, 2009, we submitted a Special Protocol Assessment (&#147;SPA&#148;) for a Phase III clinical
trial for NeuVax. The FDA requires certain CMC information to be submitted prior to the FDA
granting its approval to proceed with a Phase III trial. We did not include such CMC information
in our SPA application. Although we received notification from the FDA of its acceptance of our
SPA in June&nbsp;2009, in July&nbsp;2009, the FDA informed us that our Investigational New Drug (&#147;IND&#148;)
application had been placed on &#147;partial clinical hold&#148; pending our submission and the FDA&#146;s acceptance
of the required CMC information. As a result, while we are allowed to continue semi-annual
treatments of patients enrolled active Phase I/II trials, we are prohibited from initiating a Phase
III clinical study until we have completed certain product manufacturing activities, submitted the
required CMC information to the FDA and the FDA has approved such information and removed the
partial clinical hold from the IND. Such actions will require us to expend additional funds to
meet the FDA&#146;s Phase III requirements, currently estimated by us to be approximately $2.5&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>The approach we are taking to discover and develop novel therapeutics using RNAi is unproven and
may never lead to marketable products.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RNA interference is a relatively new scientific discovery. The RNAi technologies that we have
licensed or have created internally and that we intend to develop have not yet been clinically
tested by us, nor are we aware of any clinical trials for efficacy having been completed by third
parties involving these technologies. To date, neither we nor any other company has received
regulatory approval to market therapeutics utilizing RNAi and a number of clinical trials of third
parties&#146; RNAi technology have been unsuccessful. The scientific evidence to support the
feasibility of developing drugs based on these discoveries is both preliminary and limited. To
successfully develop RNAi-based products we must solve a number of issues, such as providing
suitable methods of stabilizing the RNAi material and delivering it into target cells in the human
body. We may spend large amounts of money trying to solve these issues and never succeed in doing
so. In addition, any compounds that we develop may not demonstrate in patients the chemical and
pharmacological properties ascribed to them in laboratory studies, and they may interact with human
biological systems in unforeseen, ineffective or even harmful ways.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>The FDA could impose a unique regulatory regime for RNAi therapeutics.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The substances we are intending to develop may represent a new class of drug, and the FDA has
not yet established any definitive policies, practices or guidelines in relation to these drugs.
While we expect any product candidates that we develop will be regulated as a new drug under the
Federal Food, Drug, and Cosmetic Act, the FDA could decide to regulate them or other products we
may develop as biologics under the Public Health Service Act. The lack of policies, practices or
guidelines may hinder or slow review by the FDA of any regulatory filings that we may submit.
Moreover, the FDA may respond to these submissions by defining requirements that we may not have
anticipated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>The FDA approval process may be delayed for any drugs we develop that require the use of
specialized drug delivery devices or vehicles.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some drug candidates that we develop may need to be administered using specialized vehicles
that deliver RNAi therapeutics directly to diseased parts of the body. For example, we may use an
implantable pump to deliver certain potential drug candidates to the nervous system. The drug
delivery vehicles that we expect to deliver our drug candidates have not been approved by the FDA
or other regulatory agencies. In addition, the FDA may regulate the product as a combination
product of a drug and a device or require additional approvals or clearances for the modified
delivery.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further, to the extent the specialized delivery vehicle is owned by another company, we would
need that company&#146;s cooperation to implement the necessary changes to the vehicle, or its labeling,
and to obtain any additional approvals or clearances. Any delays in finding suitable drug delivery
vehicles to administer RNAi therapeutics directly to diseased parts of the body could negatively
affect our ability to successfully develop our RNAi therapeutics.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We will rely upon third parties for the manufacture of our clinical product candidates.</I></B>
</DIV>



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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not have the facilities or expertise to manufacture supplies of any of our
potential product candidates for clinical trials. Accordingly, we will be dependent upon contract
manufacturers for these supplies. We currently manufacture limited quantities of our RXi-based
product candidates for our research activities at our facility. There can be no assurance that we
will be able to secure needed supply arrangements on attractive terms, or at all. Our failure to
secure these arrangements as needed could have a materially adverse effect on our ability to
complete the development of our product candidates or, if we obtain regulatory approval for our
product candidates, to commercialize them.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our current plans call for the manufacture of our compounds and, as necessary, any delivery
vehicles that may be used to deliver our compounds by contract manufacturers offering research
grade, Good Laboratory grade and Good Manufacturing Practices grade materials for preclinical
studies (e.g. toxicology studies) and for clinical use. We anticipate the chemistry, manufacturing
and controls for each active pharmaceutical ingredient will be addressed by our clinical
development team in close collaboration with a contract manufacturer with extensive experience in
drug synthesis. Certain of our product candidates are complex molecules requiring many synthesis
steps, which may lead to challenges with purification and scale-up. These challenges could result
in increased costs and delays in manufacturing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production and utilization of products using our technologies may require the development of
new manufacturing technologies and expertise. We or our collaborators may be unable to successfully
meet any of these technological challenges, or others that may arise in the course of development.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may not be able to establish or maintain the third party relationships that are necessary to
develop or potentially commercialize some or all of our product candidates.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect to depend on collaborators, partners, licensees, clinical research organizations and
other third parties to support our discovery efforts, to formulate product candidates, to
manufacture our product candidates, and to conduct clinical trials for some or all of our product
candidates. We cannot guarantee that we will be able to successfully negotiate agreements for or
maintain relationships with collaborators, partners, licensees, clinical investigators and other
third parties on favorable terms, if at all. Our ability to successfully negotiate such agreements
will depend on, among other things, potential partners&#146; evaluation of the superiority of our
technology over competing technologies and the quality of the pre-clinical and clinical data that
we have generated, and the perceived risks specific to developing our
product candidates. In addition, we recently reduced the scale of our
RNAi operations, which could affect our ability to maintain or enter
into new alliances.  If we
are unable to obtain or maintain these agreements, we may not be able to clinically develop,
formulate, manufacture, obtain regulatory approvals for or commercialize our product candidates.
Under certain license agreements that we have already entered into, we have minimum dollar amounts
per year that we are obligated to spend on the development of the technology we have licensed from
our contract partners and other obligations to maintain certain licenses. If we fail to meet this
requirement under any of our licenses that contain such requirements or any other obligations under
these licenses, we may be in breach of our obligations under such agreement, which may result in
the loss of the technology licensed. We cannot necessarily control the amount or timing of
resources that our contract partners will devote to our research and development programs, product
candidates or potential product candidates, and we cannot guarantee that these parties will fulfill
their obligations to us under these arrangements in a timely fashion. We may not be able to
readily terminate any such agreements with contract partners even if such contract partners do not
fulfill their obligations to us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, we and other drug development companies receive notices from third parties from
time to time that our or such other companies&#146; technology or product candidates infringe or may
infringe the intellectual property rights of those third parties. The assertion by third parties
that our activities or product candidates infringe upon their intellectual property rights may
adversely affect our ability to secure strategic partners or licensees for our technology or
product candidates or our ability to secure or maintain manufacturers for our compounds.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Even if we obtain regulatory approvals, our marketed drugs will be subject to ongoing regulatory
review. If we fail to comply with continuing U.S. and foreign regulations, we could lose our
approvals to market drugs and our business would be materially adversely affected.</I></B>
</DIV>





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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following regulatory approval of any drugs we may develop, we will remain subject to
continuing regulatory review, including the review of adverse drug experiences and clinical results
that are reported after our drug products are made available to patients. This would include
results from any post marketing tests or vigilance required as a condition of approval. The
manufacturer and manufacturing facilities we use to make any of our drug products will also be
subject to periodic review and inspection by the FDA. The discovery of any new or previously
unknown problems with the product, manufacturer or facility may result in restrictions on the drug
or manufacturer or facility, including withdrawal of the drug from the market. We would continue
to be subject to the FDA requirements governing the labeling, packaging, storage, advertising,
promotion, recordkeeping, and submission of safety and other post-market information for all of our
product candidates, even those which the FDA had approved. If we fail to comply with applicable
continuing regulatory requirements, we may be subject to fines, suspension or withdrawal of
regulatory approval, product recalls and seizures, operating restrictions and other adverse
consequences.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Even if we receive regulatory approval to market our product candidates, our product candidates may
not be accepted commercially, which may prevent us from becoming profitable.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The RNAi product candidates that we are developing are based on new technologies and
therapeutic approaches. RNAi products may be more expensive to manufacture than traditional small
molecule drugs, which may make them more costly than competing small molecule drugs. Additionally,
for various applications, RNAi products are likely to require injection or implantation, and do not
readily cross the so-called blood brain barrier, which will make them less convenient to administer
than drugs administered orally. Key participants in the pharmaceutical marketplace, such as
physicians, medical professionals working in large reference laboratories, public health
laboratories and hospitals, third- party payors and consumers, may not accept products intended to
improve therapeutic results based on RNAi technology. As a result, it may be more difficult for us
to convince the medical community and third-party payors to accept and use our product, or to
provide favorable reimbursement. And if medical professionals working with large reference
laboratories, public health laboratories and hospitals choose not to adopt and use our RNAi
technology, our products may not achieve broader market acceptance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NeuVax
and our other cancer-targeted product candidates
will face many of the same commercial challenges facing our RNAi product candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other factors that we believe will materially affect market acceptance of our product
candidates include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the timing of our receipt of any marketing approvals, the terms of any approvals and
the countries in which approvals are obtained,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the safety, efficacy and ease of administration of our product candidates,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the advantages of our product candidates over those of our competitors,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the willingness of patients to accept relatively new therapies,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the success of our physician education programs,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the availability of government and third-party payor reimbursement,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the pricing of our products, particularly as compared to alternative treatments, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the availability of effective alternative treatments and the relative risks and/or
benefits of the treatments.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We will be subject to competition and may not be able to compete successfully.</I></B>
</DIV>






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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The biotechnology industry, including the cancer therapy vaccines market and RNAi research
sector, is intensely competitive and involves a high degree of risk. We compete with other
companies that have far greater experience and financial, research and technical resources than us.
Potential competitors in the United States and worldwide are numerous and include pharmaceutical
and biotechnology companies, educational institutions and research foundations, many of which have
substantially greater capital resources, marketing experience, research and development staffs and
facilities than us. Some of our competitors may develop and commercialize products that compete
directly with those incorporating our technology, introduce products to market earlier than such
products or on a more cost effective basis. We may be unable to effectively develop our technology
or any other applications on a cost effective basis or otherwise. In addition, our technology may
be subject to competition from other technology or methods developed using techniques other than
those developed by traditional biotechnology methods. Our competitors compete with us in recruiting
and retaining qualified scientific and management personnel as well as in acquiring technologies
complementary to our technology. Our collaborators or we will face competition with respect to
product efficacy and safety, ease of use and adaptability to various modes of administration,
acceptance by physicians, the timing and scope of regulatory approvals, availability of resources,
reimbursement coverage, price and patent position, including potentially dominant patent positions
of others. An inability to successfully complete our product development could lead to us having
limited prospects for establishing market share or generating revenues from our technology.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For patients with early stage breast cancer, adjuvant therapy is often given to prevent
recurrence and increase the chance of long-term disease free survival. Adjuvant therapy for breast
cancer can include chemotherapy, hormonal therapy, radiation therapy, or combinations thereof. In
addition, the HER2 targeted drug trastuzumab (Herceptin<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP>) may be given to patients with tumors with
high expression of HER2 (IHC 3&#043;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are a number of cancer vaccines in development for breast cancer, including but not
limited to Lapuleucel-T (Dendreon), AE-37 (Antigen Express) and Stimuvax (Merck KgA). While these
development candidates are aimed at a number of different targets, there is no guarantee that any
of the these compounds will not in the future be indicated for treatment of low to intermediate HER
2 breast cancer patients and become directly competitive with NeuVax.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Similarly, a number of companies are using RNAi technologies, including for at least some of
the disease indications we have been focusing our efforts on to date. Companies working in the
RNAi area include: Alnylam Pharmaceuticals, Inc., Marina Biotech,
Inc., Tacere Therapeutics, Inc., Benitec Limited, OPKO
Health, Inc., Silence Therapeutics plc, Quark Pharmaceuticals, Inc., Rosetta
Genomics Ltd., Lorus Therapeutics, Inc., Tekmira
Pharmaceuticals Corporation, Calando Pharmaceuticals, Inc., Regulus
Therapeutics Inc., and Santaris
Pharmaceuticals, as well as a number of the large pharmaceutical companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further, a number of companies are developing therapeutics for the same diseases we are
targeting, including anti-scarring for which we are developing our
first RNAi product candidate, using technologies other than RNA interference, and, for some of these diseases, there
are existing therapeutics currently on the market. Most of these competitors have substantially
greater research and development capabilities and financial, scientific, technical, manufacturing,
marketing, distribution, and other resources than us, and we may not be able to successfully
compete with them. In addition, even if we are successful in developing our product candidates, in
order to compete successfully we may need to be first to market or to demonstrate that our RNAi
based products are superior to therapies based on different technologies. A number of our
competitors have already commenced clinical testing of RNAi product candidates and may be more
advanced than are we in the process of developing products. If we are not first to market or are
unable to demonstrate such superiority, any products for which we are able to obtain approval may
not be successful.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We are dependent on technologies we license, and if we lose the right to license such technologies
or we fail to license new technologies in the future, our ability to develop new products would be
harmed.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently are dependent on licenses from third parties for technologies relating
to our product candidates. Our current licenses impose, and any future licenses we enter into are
likely to impose, various development, funding, royalty, diligence, sublicensing, insurance and other obligations on us.
If our license with
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">respect to any of these technologies is terminated for any reason, the
development of the products contemplated by the licenses would be delayed, or suspended altogether,
while we seek to license similar technology or develop new non-infringing technology. The costs of
obtaining new licenses are high, and many patents in the RNAi field have already been exclusively
licensed to third parties, including our competitors. If any of our existing licenses are
terminated, the development of the products contemplated by the licenses could be delayed or
terminated and we may not be able to negotiate additional licenses on acceptable terms, if at all,
which would have a material adverse effect on our business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may be unable to protect our intellectual property rights licensed from others parties, our
intellectual property rights may be inadequate to prevent third parties from using our technologies
or developing competing products, and we may need to license additional intellectual property from
others.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have a non-exclusive license to the Fire-Mello patent owned by UMMS and the Carnegie
Institution of Washington, which claims various aspects of RNAi or genetic inhibition by double
stranded RNA. This license continues to be available to third parties, and as such it does not
provide us with the ability to exclude others from its use or protect us from competition.
Therapeutic applications of gene silencing technologies, delivery methods, and other technologies
that we license from third parties are claimed in a number of pending patent applications, but
there can be no assurance that these applications will result in any issued patents or that those
patents would withstand possible legal challenges or protect our technologies from competition.
The United States Patent and Trademark Office and patent granting authorities in other countries
have upheld stringent standards for the RNAi patents that have been prosecuted so far.
Consequently, pending patents that we have licensed and those that we own may continue to
experience long and difficult prosecution challenges and may ultimately issue with much narrower
claims than those in the pending applications. Third parties may hold or seek to obtain additional
patents that could make it more difficult or impossible for us to develop products based on RNAi
technology without obtaining a license to such patents, which licenses may not be available on
attractive terms or at all.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, others may challenge the patents or patent applications that we currently license
or may license in the future or that we own and, as a result, these patents could be narrowed,
invalidated or rendered unenforceable, which would negatively affect our ability to exclude others
from using RNAi technologies described in these patents. There can be no assurance that these
patent or other pending applications or issued patents we license or that we own will withstand
possible legal challenges. Moreover, the laws of some foreign countries may not protect our
proprietary rights to the same extent as do the laws of the United States. Any patents issued to
us or our licensors may not provide us with any competitive advantages, and there can be no
assurance that the patents of others will not have an adverse effect on our ability to do business
or to continue to use our technologies freely. Our efforts to enforce and maintain our
intellectual property rights may not be successful and may result in substantial costs and
diversion of management time. Even if our rights are valid, enforceable and broad in scope,
competitors may develop products based on technology that is not covered by our licenses or patents
or patent application that we own.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have received a letter from a third party claiming that we require access to such third
party&#146;s patents and patent applications and demanding that we stop engaging in unspecified alleged
infringing activities unless we obtain a license from such third party. We understand that other
companies working in the RNAi area have received similar letters from this third party. Although
we do not believe, based on the advice of our patent counsel, that our current and planned
activities infringe any valid patent rights of such third party, there can be no assurance that we
will not need to alter our development candidates or products or obtain a license to such third
party rights to avoid any such infringement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no guarantee that future licenses will be available from third parties for either of
our product candidates on satisfactory terms, or at all. To the extent that we are required and
are able to obtain multiple licenses from third parties to develop or commercialize a product
candidate, the aggregate licensing fees and milestones and royalty payments made to these parties
may materially reduce our economic returns or even cause us to abandon development or
commercialization of a product candidate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is also a risk that the products incorporating our peptide-based immunotherapy
technology or otherwise marketed by us might infringe the patent, trademark or other intellectual
property rights of third parties.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have not received any notice of any claims or threats of
litigation based on any third party patent, trademark or other intellectual property rights;
however, the lack of such a notice to date does not guarantee that we will not receive such a
notice in the future, as frequently patent holders do not asset infringement until an alleged
infringer is commercializing a product.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to our licenses, we also rely on copyright and trademark protection, trade
secrets, know-how, continuing technological innovation and licensing opportunities. In an effort
to maintain the confidentiality and ownership of our trade secrets and proprietary information, we
require our employees, consultants, advisors and others to whom we disclose confidential
information to execute confidentiality and proprietary information agreements. However, it is
possible that these agreements may be breached, invalidated or rendered unenforceable, and if so,
there may not be an adequate corrective remedy available. Furthermore, like many companies in our
industry, we may from time to time hire scientific personnel formerly employed by other companies
involved in one or more areas similar to the activities we conduct. In some situations, our
confidentiality and proprietary information agreements may conflict with, or be subject to, the
rights of third parties with whom our employees, consultants or advisors have prior employment or
consulting relationships. Although we require our employees and consultants to maintain the
confidentiality of all confidential information of previous employers, we or these individuals may
be subject to allegations of trade secret misappropriation or other similar claims as a result of
their prior affiliations. Finally, others may independently develop substantially equivalent
proprietary information and techniques, or otherwise gain access to our trade secrets. Our failure
to protect our proprietary information and techniques may inhibit or limit our ability to exclude
certain competitors from the market and execute our business strategies.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our success depends upon our ability to obtain and maintain intellectual property protection for
our products and technologies.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our success will depend on our ability to obtain and maintain adequate protection of our
intellectual property covering our product candidates and technologies. The ultimate degree of
patent protection that will be afforded to biotechnology products and processes, including ours, in
the United States and in other important markets remains uncertain and is dependent upon the scope
of protection decided upon by the patent offices, courts and lawmakers in these countries. There
is no certainty that our existing patents, or patent applications if obtained, will afford us
substantial protection or commercial benefit. Similarly, there is no assurance that our pending
patent applications or patent applications licensed from third parties will ultimately be granted
as patents or that those patents that have been issued or are issued in the future will stand if
they are challenged in court. The applications based on RNAi technologies claim many different
methods, compositions and processes relating to the discovery, development, delivery and
commercialization of RNAi therapeutics. Because this field is so new, very few of these patent
applications have been fully processed by government patent offices around the world, and there is
a great deal of uncertainty about which patents will issue, when, to whom, and with what claims.
It is likely that there will be significant litigation and other proceedings, such as interference
and opposition proceedings in various patent offices, relating to patent rights in the RNAi field
and that we may be a party to such proceedings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There may be patent or other intellectual property rights belonging to others that require us
to alter our products, pay licensing fees or cease certain activities. If our products infringe
patent or other intellectual property rights of others, the owners of those rights could bring
legal actions against us claiming damages and seeking to enjoin manufacture, use, marketing and
sales of the affected products. If these legal actions are successful, in addition to any
potential liability for damages, we could be required to obtain a license in order to continue to
manufacture or market the affected products. We may not prevail in any action brought against us,
and any license required under any rights that we infringe may not be available on acceptable terms
or at all. Others may attempt to invalidate our intellectual property rights or those of our
licensors. Even if our rights, or those of our licensors, are not directly challenged, disputes
among third parties could lead to the weakening or invalidation of our intellectual property
rights. Any attempt by third parties to undermine or invalidate our intellectual property rights
could be costly to defend, require significant time and attention of our management and have a
material adverse effect on our business.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, we anticipate that the issued United States patent covering the composition of
matter of NeuVax that we have exclusively licensed will expire in 2015, and we have no equivalent
patent protection outside of the United States. We are currently negotiating for exclusive rights
to a patent application to which we already have non-exclusive rights that covers certain aspects
of the method of treatment using NeuVax that could provide additional patent protection in major
countries around the world through 2027, but there can be no assurance that we will successfully
negotiate such a license.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we are unable to obtain regulatory exclusivity for NeuVax,
our business would be adversely affected and such exclusivity may not
provide sufficient protection to prevent competitors from entering our markets.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because our intellectual
property rights to the composition of matter of NeuVax expire prior to commercialization,
we expect to rely substantially on orphan drug designation, if granted for NeuVax, and data
exclusivity provided under the Federal Food, Drug, and Cosmetic Act and similar laws in other countries. We are preparing to
apply for Orphan Drug status for NeuVax<U></U>which, if granted, could provide seven years or ten
years of data exclusivity in the US or EU, respectively. However, there is no assurance that our
Orphan Drug Application will be approved by either the FDA or EMEA. While we also anticipate that NeuVax
will qualify for 12&nbsp;years of data exclusivity, or the inability of another company to use our
clinical data to support their application for regulatory approval, under the Patient Protection
and Affordable Care Act; there can be no assurance that the 12&nbsp;years of exclusivity provided
for under the Patient Protection and Affordable Care Act will remain law, or that NeuVax will meet
the qualifications of a &#147;biological product&#148; to receive the
specified period of exclusivity.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">While the orphan drug designation for NeuVax, if granted, will provide seven years of market
exclusivity in the United States, we will not be able to exclude other companies from manufacturing
and/or selling E75 beyond that timeframe. Even if we have orphan drug designation for a particular
drug indication, we cannot guarantee that another company also holding orphan drug designation will
not receive FDA approval for the same indication before we do. If that were to happen, our
applications for that indication may not be approved until the competing company&#146;s seven-year
period of exclusivity expired. Even if we are the first to obtain FDA approval for an orphan drug
indication, there are circumstances under which a competing product may be approved for the
same indication during our seven-year period of marketing exclusivity, such as if the later product
is shown to be clinically superior to the orphan product. Further, the seven-year marketing
exclusivity would not prevent competitors from obtaining approval of the same compound for other
indications or the use of other types of drugs for the same use as the orphan drug. In addition,
data exclusivity does not prevent another company from completing its own clinical trials with
NeuVax and obtaining regulatory approval
for the same indication for which NeuVax may be approved. Consequently, we may not be able to
prevent competitors from entering the market prior to the end of any applicable data exclusivity
period. If we are not able to prevent competitors from entering the market with a similar product
to NeuVax, our ability to achieve profits from sales of NeuVax will be dramatically limited.
</DIV>




<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We are subject to potential liabilities from clinical testing and future product liability claims.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of our future products are alleged to be defective, they may expose us to claims for
personal injury by patients in clinical trials of our products or by patients using our
commercially marketed products. Even if the marketing of one or more of our products is approved
by the FDA, users may claim that such products caused unintended adverse effects. We will seek to
obtain clinical trial insurance for clinical trials that we conduct, as well as liability insurance
for any products that we market. There can be no assurance that we will be able to obtain
insurance in the amounts we seek, or at all. We anticipate that licensees who develop our products
will carry liability insurance covering the clinical testing and marketing of those products.
There is no assurance, however, that any insurance maintained by us or our licensees will prove
adequate in the event of a claim against us. Even if claims asserted against us are unsuccessful,
they may divert management&#146;s attention from our operations and we may have to incur substantial
costs to defend such claims.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Any drugs we develop may become subject to unfavorable pricing regulations, third-party
reimbursement practices or healthcare reform initiatives, which could have a material adverse
effect on our business.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to sell our products primarily to hospitals which receive reimbursement for the
health care services they provide to their patients from third-party payors, such as Medicare,
Medicaid and other domestic and international government programs, private insurance plans and
managed care programs. Most third-party payors may deny reimbursement if they determine that a
medical product was not used in accordance with cost-effective treatment methods, as determined by
the third-party payor, or was used for an unapproved indication. Third-party payors also may
refuse to reimburse for experimental procedures and devices. Furthermore, because our programs are
in the early stages of development, we are unable at this time to determine their
cost-effectiveness and the level or method of reimbursement for them. Increasingly, the
third-party payors who reimburse patients are requiring that drug companies provide them with
predetermined discounts from list prices, and are challenging the prices charged for medical
products. If the price we are able to charge for any products we develop is inadequate in light of
our development and other costs, our profitability could be adversely effected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently expect that any drugs we develop may need to be administered under the
supervision of a physician. Under currently applicable law, drugs that are not usually
self-administered may be eligible for coverage by the Medicare program if:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>they are &#147;incidental&#148; to a physician&#146;s services,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>they are &#147;reasonable and necessary&#148; for the diagnosis or treatment of the illness or
injury for which they are administered according to accepted standard of medical
practice,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>they are not excluded as immunizations, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>they have been approved by the FDA.</TD>
</TR>


</TABLE>
</DIV>
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</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There may be significant delays in obtaining insurance coverage for newly-approved drugs, and
insurance coverage may be more limited than the purpose for which the drug is approved by the FDA.
Moreover, eligibility for insurance coverage does not imply that any drug will be reimbursed in all
cases or at a rate that covers our costs, including research, development, manufacture, sale and
distribution. Interim payments for new drugs, if applicable, may also not be sufficient to cover
our costs and may not be made permanent. Reimbursement may be based on payments for other services
and may reflect budgetary constraints or imperfections in Medicare data. Net prices for drugs may
be reduced by mandatory discounts or rebates required by government health care programs or private
payors and by any future relaxation of laws that presently restrict imports of drugs from countries
where they may be sold at lower prices than in the United States. Third-party payors often rely
upon Medicare coverage policy and payment limitations in setting their own reimbursement rates.
Our inability to promptly obtain coverage and profitable reimbursement rates from both
government-funded and private payors for new drugs that we develop could have a material adverse
effect on our operating results, our ability to raise capital needed to develop products, and our
overall financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, third-party payors are increasingly attempting to contain health care costs by
limiting both coverage and the level of reimbursement for medical products and services. Levels of
reimbursement may decrease in the future, and future legislation, regulation or reimbursement
policies of third-party payors may adversely affect the demand for and price levels of our
products. If our customers are not reimbursed for our products, they may reduce or discontinue
purchases of our products, which could have a material adverse effect on our business, financial
condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive health care reform legislation, which was recently adopted by Congress and was
subsequently signed into law, could adversely affect our business and financial condition. Among
other provisions, the legislation provides that a &#147;biosimilar&#148; product may be approved by the FDA
on the basis of analytical tests and certain clinical studies demonstrating that such product is
highly similar to an existing, approved product and that switching between an existing product and
the biosimilar product will not result in diminished safety or efficacy. This abbreviated
regulatory approval process may result in increased competition if we are able to bring a product
to market. The legislation also includes more stringent compliance programs for companies in
various sectors of the life sciences industry with which we may need to comply and enhanced
penalties for non-compliance with the new health care regulations. Complying with new regulations
may divert management resources, and inadvertent failure to comply with new regulations may result
in penalties being imposed on us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some states and localities have established drug importation programs for their citizens, and
federal drug import legislation has been introduced in Congress. The Medicare Prescription Drug
Plan legislation, which became law in December&nbsp;2003, required the Secretary of Health and Human
Services to promulgate regulations for drug reimportation from Canada into the United States under
some circumstances, including when the drugs are sold at a lower price than in the United States.
The Secretary, however, retained the discretion not to implement a drug reimportation plan if he
finds that the benefits do not outweigh the costs, and has so far declined to approve a
reimportation plan. Proponents of drug reimportation may attempt to pass legislation that would
directly allow reimportation under certain circumstances. Legislation or regulations allowing the
reimportation of drugs, if enacted, could decrease the price we receive for any products that we
may develop and adversely affect our future revenues and prospects for profitability.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If
our new management team is not effective or if we fail to attract, hire and retain qualified personnel, we may not be able to design, develop,
market or sell our products or successfully manage our business.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business prospects are dependent on our new management team and our Scientific Advisory Board (&#147;SAB&#148;)
members. The continued service of our executive officers and SAB members is critical to our
success. The loss of any of our executive
officers or SAB members, or our inability to identify, attract, retain and integrate additional
qualified key personnel, could make it difficult for us to manage our business successfully and
achieve our business objectives. In addition, following the Merger,
we have a new CEO, COO, and CFO. These executives will need to work
effectively with each other and the other members of our management
team to execute the Company&#146;s business strategy. If they fail to
do so, our business will be negatively impacted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Competition for skilled research, product development, regulatory and technical personnel also
is intense, and we may not be able to recruit and retain the personnel we need. The loss of the
services of any key research,
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">product development, regulatory, and technical personnel, or our
inability to hire new personnel with the requisite skills, could restrict our ability to develop
our product candidates.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We use biological and hazardous materials and if we do not comply with laws regulating the
protection of the environment and health and human safety, our business could be adversely
affected.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our research and development activities involve the controlled use of potentially harmful
biological materials as well as hazardous materials, chemicals and various radioactive compounds.
We cannot completely eliminate the risk of accidental contamination or injury; we could be held
liable for any damages that result, and any liability could exceed our resources. We are subject
to federal, state and local laws and regulations governing the use, storage, handling and disposal
of these materials and specific waste products. We are also subject to numerous environmental,
health and workplace safety laws and regulations, including those governing laboratory procedures,
exposure to blood-borne pathogens and the handling of biohazardous materials. The cost of
compliance with these laws and regulations could be significant and may adversely affect capital
expenditures to the extent we are required to procure expensive capital equipment to meet
regulatory requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are also subject to numerous environmental, health and workplace safety laws and
regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and
the handling of biohazardous materials. We maintain workers&#146; compensation insurance to cover us
for costs and expenses we may incur due to injuries to our employees resulting from the use of
these materials. The limits of our workers&#146; compensation insurance are mandated by state law, and
our workers&#146; compensation liability is capped at these state-mandated limits. We do not maintain
insurance for environmental liability or toxic tort claims that may be asserted against us in
connection with our storage or disposal of biological, hazardous or radioactive materials.
Additional federal, state and local laws and regulations affecting our operations may be adopted in
the future. We may incur substantial costs to comply with, and substantial fines or penalties if
we violate any of these laws or regulations.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Risks Relating Our Financial Position and Capital Requirements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may not be able to obtain sufficient financing, and may not be able to develop our product
candidates.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that our existing cash and cash equivalents and the proceeds from this offering
should be sufficient to fund our operations through at least the first half of 2012. In the
future, we will be dependent on obtaining further financing from third parties in order to maintain
our operations and to meet our financial obligations. We cannot assure that additional debt or
equity or other funding to maintain our operations and to meet our obligations to our licensors
will be available to us in the future on acceptable terms, or at all. If we fail to obtain
additional funding when needed, we would be forced to scale back, or terminate, our operations, or
to seek to merge with or to be acquired by another company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We anticipate that we will need to raise substantial amounts of money to fund a variety of
future activities integral to the development of our business, which may include but are not
limited to the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to gather and submit the CMC information to the FDA before initiating a Phase III
clinical trial for NeuVax,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to conduct a Phase III clinical trial for NeuVax,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to file the IND for RXI-109 and commence a Phase I clinical trial, </TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to conduct research and development to successfully develop our RNAi technologies,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to obtain regulatory approval for our product candidates,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to file and prosecute patent applications and to defend and assess patents to
protect our technologies,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to retain qualified employees, particularly in light of intense competition for
qualified scientists,</TD>
</TR>


</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to manufacture products ourselves or through third parties,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to market our products, either through building our own sales and distribution
capabilities or relying on third parties, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to acquire new technologies, licenses, products or companies.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot assure you that any financing needed for the development of our business will be
available to us on acceptable terms or at all. If we cannot obtain additional financing in the
future, our operations may be restricted and we may ultimately be unable to continue to develop and
potentially commercialize our product candidates.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We expect to continue to incur significant research and development expenses, which may make it
difficult for us to attain profitability, and may lead to uncertainty about or as to our ability to
continue as a going concern.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substantial funds were expended to develop our technologies and product candidates, and
additional substantial funds will be required for further research and development, including
pre-clinical testing and clinical trials of any product candidates, and to manufacture and market
any products that are approved for commercial sale. Because the successful development of our
products is uncertain, we are unable to precisely estimate the actual funds we will require to
develop and potentially commercialize them. In addition, we may not be able to generate enough
revenue, even if we are able to commercialize any of our product candidates, to become profitable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that we are unable to achieve or sustain profitability or to secure additional
financing, we may not be able to meet our obligations as they come due, raising substantial doubts
as to our ability to continue as a going concern. Any such inability to continue as a going
concern may result in our common stock holders losing their entire investment. There is no
guaranty that we will become profitable or secure additional financing. Our financial statements
contemplate that we will continue as a going concern and do not contain any adjustments that might
result if we were unable to continue as a going concern. Changes in our operating plans, our
existing and anticipated working capital needs, the acceleration or modification of our expansion
plans, increased expenses, potential acquisitions or other events will all affect our ability to
continue as a going concern. Future financing may be obtained through, and future development
efforts may be paid for by, the issuance of debt or equity, which may have an adverse effect on our
stockholders or may otherwise adversely affect our business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we raise funds through the issuance of debt or equity, any debt securities or preferred
stock issued will have rights, preferences and privileges senior to those of holders of our common
stock in the event of a liquidation. In such event, there is a possibility that once all senior
claims are settled, there may be no assets remaining to pay out to the holders of common stock. In
addition, if we raise funds through the issuance of additional equity, whether through private
placements or additional public offerings, such an issuance would dilute your ownership in us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The terms of debt securities may also impose restrictions on our operations, which may include
limiting our ability to incur additional indebtedness, to pay dividends on or repurchase our
capital stock, or to make certain acquisitions or investments. In addition, we may be subject to
covenants requiring us to satisfy certain financial tests and ratios, and our ability to satisfy
such covenants may be affected by events outside of our control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may have difficulty evaluating our business, because we have limited history and our
historical financial information may not be representative of our future results.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The historical financial information included in our annual report on Form 10-K for the year
ended December&nbsp;31, 2009 and subsequent quarterly reports on Form 10-Q do not necessarily reflect
the financial condition, results of operations or cash flows that we would have achieved as a
separate company during the periods presented or those that we will achieve in the future.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We have limited operating experience and may not be able to effectively operate.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are a development-stage company with limited operating history. We will focus on
developing and, if we obtain regulatory approval, commercializing our product candidates, and there is no assurance that we will be able
to successfully implement our business plan. While our management collectively possesses
substantial business and scientific experience, there is no assurance that we will be able to manage our business
effectively, or that we will be able to identify, hire and retain any needed additional management
or scientific personnel to develop and implement our product development plans, obtain third-party
contracts or any needed financing, or achieve the other components of our business plan. The
obligations associated with being an independent public company require significant resources and
management attention.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a publicly traded company, we are subject to the reporting requirements of the U.S.
Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), and the Sarbanes-Oxley Act of
2002. In addition, the Exchange Act requires that we file annual, quarterly and current reports.
Our failure to prepare and disclose this information in a timely manner could subject us to
penalties under federal securities laws, expose us to lawsuits and restrict our ability to access
financing. The Sarbanes-Oxley Act requires that we, among other things, establish and maintain
effective internal controls and procedures for financial reporting. From time to time we evaluate
our existing internal controls in light of the standards adopted by the Public Company Accounting
Oversight Board. It is possible that we or our independent registered public accounting firm may
identify significant deficiencies or material weaknesses in our internal control over financial
reporting in the future. Any failure or difficulties in implementing and maintaining these
controls could cause us to fail to meet the periodic reporting obligations or result in material
misstatements in our financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;404 of the Sarbanes-Oxley Act requires annual management assessments of the
effectiveness of our internal control over financial reporting. Our failure to satisfy the
requirements of Section&nbsp;404 on a timely basis could result in the loss of investor confidence in
the reliability of our financial statements, which in turn could have a material adverse effect on
our business and our common stock.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Risks Related to Ownership of Our Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>The market price and trading volume of our common stock may be volatile.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market price of our common stock could fluctuate significantly for many reasons, including
the following factors:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>announcements of regulatory developments or technological innovations by us or our
competitors,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in our relationship with our licensors and other strategic partners,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our quarterly operating results,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>developments in patent or other technology ownership rights,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>public concern regarding the safety of our products,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>additional funds may not be available on terms that are favorable to us and, in the
case of equity financings, may result in dilution to our stock holders,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>government regulation of drug pricing, and</TD>
</TR>

</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>general changes in the economy, the financial markets or the pharmaceutical or
biotechnology industries.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, factors beyond our control may also have an impact on the price of our stock.
For example, to the extent that other large companies within our industry experience declines in
their stock price, our stock price may decline as well. In addition, when the market price of a
company&#146;s common stock drops significantly, stockholders often institute securities class action
lawsuits against the company. A lawsuit against us could cause us to incur substantial costs and
could divert the time and attention of our management and other resources.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Anti-takeover provisions of our certificate of incorporation and by-laws and provisions of Delaware
law could delay or prevent a change of control that you may favor.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anti-takeover provisions of our certificate of incorporation and by-laws and provisions of
Delaware law may discourage, delay or prevent a merger or other change of control that stockholders
may consider favorable, or may impede the ability of the holders of our common stock to change our
management. These provisions of our certificate of incorporation and by-laws, among other things:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>divide our board of directors into three classes, with members of each class to be
elected for staggered three-year terms,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>limit the right of stockholders to remove directors,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>regulate how stockholders may present proposals or nominate directors for election
at annual meetings of stockholders, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>authorize our board of directors to issue preferred stock in one or more series,
without stockholder approval.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, Section&nbsp;203 of the Delaware General Corporation Law provides that, subject to
limited exceptions, persons that acquire, or are affiliated with a person that acquires, more than
15% of the outstanding voting stock of a Delaware corporation such as our company shall not engage
in any business combination with that corporation, including by merger, consolidation or
acquisitions of additional shares for a three-year period following the date on which that person
or its affiliate crosses the 15% stock ownership threshold. Section&nbsp;203 could operate to delay or
prevent a change of control of our company.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may acquire other businesses or form joint ventures that may be unsuccessful and could adversely
dilute your ownership of our company.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of our business strategy, we may pursue future acquisitions of other complementary
businesses and technology licensing arrangements. We also may pursue strategic alliances. We have
no experience with respect to acquiring other companies and limited experience with respect to the
formation of collaborations, strategic alliances and joint
ventures. Our acquisition of Apthera creates significant risks for the Company. See &#147;The anticipated
benefits of our Apthera acquisition may not be realized&#148; for
risks specific to the Apthera acquisition. We may not be able to
integrate Apthera or other acquisitions successfully into our existing
business and we could assume unknown or contingent liabilities. We also could experience adverse
effects on our reported results of operations from acquisition related charges, amortization of
acquired technology and other intangibles and impairment charges relating to write-offs of goodwill
and other intangible assets from time to time following the acquisition. Integration of an
acquired company requires management resources that otherwise would be available for
ongoing development of our existing business. We may not realize
the anticipated
benefits of any acquisition, technology license or strategic alliance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
finance future acquisitions, we may choose to issue shares of our common
stock as consideration,
which would dilute your ownership interest in us. Alternatively, it may be necessary for us to
raise additional funds through public or private financings. Additional funds may not be available
on terms that are favorable to us and, in the case of equity financings, may result in dilution to
our stockholders. Any future acquisitions by us also could
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">result in large and immediate write-offs, the incurrence of contingent liabilities or
amortization of expenses related to acquired intangible assets, any of which could harm our
operating results.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Risks Related to this Offering</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Management will have broad discretion as to the use of the proceeds of this offering.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not designated the amount of net proceeds we will receive from this offering for any
particular purpose. Accordingly, our management will have broad discretion as to the application
of these net proceeds and could use them for purposes other than those contemplated at the time of
this offering. Our stockholders may not agree with the manner in which our management chooses to
allocate and spend the net proceeds.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Investors in this offering will pay a much higher price than the book value of our common stock.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You will suffer substantial dilution in the net tangible book value of the common stock you
purchase in this offering because the price per share of our common stock being offered hereby is
substantially higher than the book value per share of our common stock. If you purchase shares of
common stock in this offering, you will suffer immediate and
substantial dilution of $0.53 per share
in the net tangible book value of the common stock. See
&#147;Dilution&#148; on page S-28 of this prospectus
supplement for a more detailed discussion of the dilution you will incur in this offering.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Future sales of substantial amounts of our common stock, or the perception that such sales could
occur, could affect the market price of our common stock.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future sales of substantial amounts of our common stock, or securities convertible or
exchangeable into shares of our common stock, into the public market, including shares of our
common stock issued upon exercise of options and warrants, or perceptions that those sales could
occur, could adversely affect the prevailing market price of our common stock and our ability to
raise capital in the future. For example, pursuant to the Merger, we
issued 4,974,090&nbsp;shares of common stock to
former stockholders of Apthera. Under the Merger Agreement, we are obligated to register those
shares for resale under the Securities Act. Upon the effectiveness of such registration, all of
those shares will be freely saleable. In addition, we have the option, subject to stockholder
approval, to issue shares of our common stock in payment of the contingent value rights received by
former stockholders of Apthera. Any additional shares we issue pursuant to the Merger Agreement
will likely be freely saleable upon issuance to any person who is not our affiliate.

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>There is no public market for the warrants to purchase common stock in this offering.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no established public trading market for the warrants being offered in this offering,
and we do not expect a market to develop. In addition, we do not intend to apply for listing the
warrants on any securities exchange, including the Nasdaq Capital Market, or any nationally
recognized trading system. Without an active market, the liquidity of the warrants will be
limited.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We are required to hold a stockholders&#146; meeting no later than July 31, 2011 to vote on a proposal
related to this offering, and if we fail to obtain such approval on a timely basis, we are required to pay
$2,500,000 in liquidated damages. The warrants will not be exercisable if we are unable to obtain such approval.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have agreed to hold a stockholders&#146; meeting no later than July 31, 2011 to seek stockholder approval for an
increase in the authorized shares of our common stock. If we are
unable to obtain the required stockholder approval by April 16, 2012, we will be required to pay liquidated damages of $2,500,000, which could have a negative effect on our
business and harm the market price of our common stock.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The warrants will not be exercisable if we are unable to obtain such approval. If we don&#146;t obtain such
approval the warrants will have no value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>The warrants may not have any value.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The warrants have an exercise price of $1.00 per share and can be exercised commencing one year and one day from the date of issuance, but only if our stockholders approve an increase in the number of authorized shares of common stock, until the sixth anniversary of the date of issuance at an initial exercise price of $1.00 per share. In the event our common stock price does not
exceed the exercise price of the warrants during the period when the warrants are exercisable, the
warrants may not have any value.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>You will be unable to exercise the warrants under certain circumstances.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The warrants will not be exercisable if we do not obtain stockholder approval
to increase the number of authorized shares of common stock. Even if we obtain such approval, the warrants may only be exercised if
such exercise is separately registered under the Securities Act or an exemption therefrom exists. If we are unable to register
the shares issuable upon exercise of the warrants or an exemption therefrom is not available, the warrants will not be
exercisable. In no event may the warrants be net cash settled.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Price adjustment provisions in certain of our warrants, including the warrants being sold in this
offering, make may make it more difficult and expensive for us to raise additional capital in the
future and may result in further dilution to investors in this offering.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of April 1, 2011, we had outstanding warrants that provide for a reduction in the exercise price per share if we issue or are deemed to
issue additional shares of our common stock at an effective per share price lower than the current
exercise price, subject to certain exceptions. Certain of our outstanding warrants and the warrants offered hereby provide that the exercise price will adjust to the
lowest price per share at which additional shares are issued or deemed to be issued (a
&#147;full-ratchet&#148; adjustment). Certain of our other outstanding warrants provide that the exercise price will adjust on a weighted average basis that takes
into account the relative size of the issuance resulting in the price adjustment. For example, the
exercise price of warrants to acquire an aggregate of 6,000,000 shares of our common stock that we
issued in our March&nbsp;2011 public offering, which contain &#147;full-ratchet&#148; price adjustment provisions,
will be decreased to $1.00 as a result of this offering. Because these price adjustment provisions
will have the effect of lowering the price at which shares of our common stock are issued upon
exercise of the warrants, if we are unable to raise additional capital at an effective price per
share that is higher than the exercise price of these warrants, these provisions may make it more
difficult and more expensive to raise capital in the future. In addition, a reduction in the
exercise price of our warrants may result in additional dilution in the per share net tangible book
value of the common stock you purchase in this offering to the extent that the adjusted exercise
price of the warrants is less than the public offering price per share of the common stock being
offered hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If this offering is deemed to violate the terms of the underwriting agreement for our March
2011 offering, we could be subject to claims.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriting agreement we entered into in connection with our March public offering contains a
provision under which we agreed, among other things, not to sell any securities for a period of 90
days, subject to a number of exceptions. Although we believe that this offering does not violate
that provision, we have not obtained a waiver for this offering. It is possible that the
representative of the underwriters for the March offering, or a purchaser of securities in the
March offering, could assert claims that this offering violates the terms of that underwriting
agreement. Although we do not believe that any such claim would have a material adverse effect on
our business, results of operations or financial condition, we are not able to quantify the risk of
such claims being made or the effect that any such claims would have on our business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We have never declared or paid dividends on our capital stock and we do not anticipate paying
dividends in the foreseeable future.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business requires significant funding, and we currently invest more in product development
than we earn from sales of our products. In addition, the agreements governing our debt restrict
our ability to pay dividends
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">on our common stock. Therefore, we do not anticipate paying any cash dividends on our common stock
in the foreseeable future. We currently plan to invest all available funds and future earnings in
the development and growth of our business. As a result, capital appreciation, if any, of our
common stock will be your sole source of potential gain for the foreseeable future.
</DIV>







<P align="center" style="font-size: 10pt"><!-- Folio -->S-26<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="B86048104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NOTE REGARDING FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus supplement, the accompanying prospectus, any free writing prospectus used in
connection with this offering and the other documents we have filed with the SEC that are
incorporated herein by reference contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, as well as
assumptions that, if they never materialize or prove incorrect, could cause our results to differ
materially from those expressed or implied by such forward-looking statements. All statements
other than statements of historical fact are statements that could be deemed forward-looking
statements, including any projections of financing needs, revenue, expenses, earnings or losses
from operations, or other financial items; any statements of the plans, strategies and objectives
of management for future operations; any statements concerning product research, development and
commercialization plans and timelines; any statements regarding safety and efficacy of product
candidates; any statements of expectation or belief; and any statements of assumptions underlying
any of the foregoing. All forward-looking statements attributable to us or to persons acting on
our behalf are expressly qualified in their entirety by the cautionary statements and risk factors
set forth in Risk factors and elsewhere in this prospectus supplement and set forth in our Form
10-K for the year ended December&nbsp;31, 2009 and our Form 10-Qs for the fiscal quarters ended March
30, 2010, June&nbsp;30, 2010 and September&nbsp;30, 2010. In addition, forward-looking statements may
contain the words &#147;believe,&#148; &#147;anticipate,&#148; &#147;expect,&#148; &#147;estimate,&#148; &#147;intend,&#148; &#147;plan,&#148; &#147;project,&#148; &#147;will
be,&#148; &#147;will continue,&#148; &#147;will result,&#148; &#147;seek,&#148; &#147;could,&#148; &#147;may,&#148; &#147;might,&#148; or any variations of such
words or other words with similar meanings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Given these uncertainties, you should not place undue reliance on these forward-looking
statements. You should read this prospectus supplement, the accompanying prospectus and the
documents that we reference in this prospectus with the understanding that our actual future
results may be materially different from what we expect. Except as required by law, we do not
undertake any obligation to update or revise any forward-looking statements contained in this
prospectus and any supplements to this prospectus, whether as a result of new information, future
events or otherwise.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-27<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="B86048105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We estimate that the net proceeds from the sale of the units offered by this prospectus,
excluding the proceeds, if any, from the exercise of the warrants issued in this offering and after
deducting underwriting discounts and commissions and estimated offering expenses payable by us,
will be approximately $10.9 million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently intend to use the net proceeds of this offering for general corporate purposes,
which may include working capital, capital expenditures, research and development expenditures,
clinical and pre-clinical trial expenditures, commercial expenditures, acquisitions of new
technologies or businesses that are complementary to our current technologies or business focus,
and investments. As of the date of this prospectus supplement, we cannot specify with certainty
all of the particular uses of the proceeds from this offering. As a result, our management will
retain broad discretion in the allocation and use of the net proceeds from this offering.
</DIV>
<DIV align="left">
<A name="B86048106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DILUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you invest in our common stock, you will experience dilution to the extent of the
difference between the price per unit you pay in this offering (attributing no value to the
warrants) and the net tangible book value per share of our common stock immediately after this
offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
net tangible book value as of September&nbsp;30, 2010 was
approximately $3.3&nbsp;million, or $0.18 per share
of common stock. Net tangible book value per share is equal to our total tangible assets minus
total liabilities, divided by the number of shares of common stock outstanding as of September&nbsp;30,
2010. After giving effect to the sale of
11,950,000 units by us at a public offering
price of $1.00 per unit (attributing no value to the warrants), and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our
as-adjusted net tangible book value would have been approximately
$14.1 million or approximately $0.47 per
share of common stock, as of September&nbsp;30, 2010. This represents an immediate increase in net
tangible book value of approximately $0.29 per share to existing stockholders and an immediate
dilution of approximately $0.53 per share to investors participating in this offering. The
following table illustrates this calculation on a per share basis:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Public offering price per unit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net tangible book value per share as of September&nbsp;30, 2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase per share attributable to the offering</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">As adjusted net tangible book value per share after this offering</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dilution per share to investors participating in this offering</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.53</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of shares of common stock shown above to be outstanding after this offering is
based on 18,372,759 shares outstanding as of September&nbsp;30, 2010 and excludes:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>4,974,090 shares of our common stock issued to former stockholders of Apthera in the
Merger;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>6,266,978 shares of our common stock subject to options outstanding as of April&nbsp;1,
2011 having a weighted average exercise price of $3.98 per share;</TD>
</TR>


<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>250,000 shares of our common stock that have been reserved
for issuance under our employee stock purchase plan;</TD>
</TR>



<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>8,250,642 shares of our common stock that have been reserved for issuance upon
exercise of outstanding warrants as of April&nbsp;1, 2011 having a weighted average exercise
price of $2.55 per share;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>6,000,000 shares of our common stock sold on March&nbsp;4,
2011 at a price of $1.35 per share; and</TD>
</TR>

</TABLE>
</DIV>




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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>11,950,000 shares of our common stock issuable upon the exercise of warrants offered
hereby.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a result of this offering, the exercise price of the warrants issued
in our March 2011 offering will be reduced to
$1.00 per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that outstanding warrants are exercised, you may experience further dilution.
The above illustration of dilution per share to investors participating in this offering assumes no
exercise of outstanding options to purchase our common stock or outstanding warrants to purchase
shares of our common stock. The exercise of outstanding options and warrants having an exercise
price less than the offering price will increase dilution to new investors.
</DIV>
<DIV align="left">
<A name="B86048107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DESCRIPTION OF SECURITIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In this offering, we are offering 11,950,000 units, consisting of 11,950,000 shares of common
stock and warrants to purchase up to 11,950,000 shares of common stock. Each unit consists of one share
of common stock and one warrant to purchase a share of common stock at an exercise price of
$1.00 per share. Units will not be issued or certificated. The shares of common stock and warrants
are immediately separable and will be issued separately. We are not registering the shares of common stock issuable from time to time upon exercise of the warrants offered hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Common Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The material terms and provisions of our common stock are described under the caption
&#147;Description of Common Stock&#148; starting on page 9 of the accompanying prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Warrants</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The following summary of certain terms and provisions of the warrants offered hereby is not
complete and is subject to, and qualified in its entirety by reference to, the terms and provisions
set forth in the form of warrant to be filed by us on Form&nbsp;8-K. Prospective investors should carefully
review the terms and provisions set forth in the form of warrant.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Duration and Exercise Price. </I>The warrants will be exercisable on the later of one year and one
day from the date of issuance, and the date that we effect an increase in the number of authorized
shares of common stock, and will expire on the sixth anniversary of the date of issuance at an initial
exercise price of $1.00 per share of common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stockholder Approval; Payment of Liquidated Damages; Registration Warrant Shares. </I>We have
agreed to hold a stockholders meeting no later than July 31, 2011 in order to seek stockholder
approval for an amendment to our certificate of incorporation to increase the authorized number
of shares of our common stock from 50,000,000 to 100,000,000 shares. In the event that we do not
increase the authorized number of shares of our common stock on or
prior to April 16, 2012, we will be required to pay liquidated damages in
the aggregate amount of $2,500,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the increase in the authorized number of shares of common stock, we have agreed to
register under the Securities Act the shares of our common stock issuable upon exercise of the
warrants and to list those shares on the Nasdaq Capital Market. We will not be required to register
the shares of our common stock issuable upon exercise of the warrants if we deliver an opinion of
counsel reasonably satisfactory to the underwriter that registration is not required because of
either the cashless exercise rights described below or because an exemption from registration is
available. If we deliver the opinion of counsel, we will publicly announce that no registration
statement will be filed and explain how holders may exercise their warrants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Anti-Dilution Protection. </I>The warrants contain full-ratchet anti-dilution protection upon the
issuance of any common stock, securities convertible into common stock or certain other issuances
at a price below the then-existing exercise price of the warrants, with certain exceptions. The
terms of the warrants, including these anti-dilution protections, may make it difficult for us to
raise additional capital at prevailing market terms in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exercisability. </I>The warrants will be exercisable, at the
option of each holder, in whole or in part, by delivering to us a duly executed exercise notice
accompanied by payment in full for the number of shares of our common stock purchased upon such
exercise (except in the case of a cashless exercise as discussed below). A holder (together with
its affiliates) may not exercise any portion of the warrant to the extent that the holder would own
more than 4.9% of the outstanding common stock after exercise, except that upon at least 61&nbsp;days&#146;
prior notice from the holder to us, the holder may increase the amount of ownership of outstanding
stock after exercising the holder&#146;s warrants up to 9.9% of the number of shares of our common stock
outstanding immediately after giving effect to the exercise, as such percentage ownership is
determined in accordance with the terms of the warrants.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-29<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cashless Exercise</I>. If, at the time a holder exercises its warrant, there is no effective
registration statement registering, or the prospectus contained therein is not available for an
issuance of the shares underlying the warrant to the holder, then in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in payment of the
aggregate exercise price, the holder may elect instead to receive upon such exercise (either in
whole or in part) the net number of shares of common stock determined according to a formula set
forth in the warrant. If we deliver the opinion of counsel referred to above, the warrants will only be exercisable through a cashless exercise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Transferability</I>. Subject to applicable laws and the restriction on transfer set forth in the
warrant, the warrant may be transferred at the option of the holder upon surrender of the warrant
to us together with the appropriate instruments of transfer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exchange Listing. </I>We do not plan on making an application to list the warrants on the Nasdaq
Capital Market, any national securities exchange or other nationally recognized trading system.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Fundamental Transactions</I>. In the event of any fundamental transaction, as described in the
warrants and generally including any merger with or into another entity, sale of all or
substantially all of our assets, tender offer or exchange offer, or reclassification of our common
stock, then upon any subsequent exercise of a warrant, the holder shall have the right to receive
as alternative consideration, for each share of our common stock that would have been issuable upon
such exercise immediately prior to the occurrence of such fundamental transaction, the number of
shares of common stock of the successor or acquiring corporation or of RXi Pharmaceuticals
Corporation, if it is the surviving corporation, and any additional consideration receivable upon
or as a result of such transaction by a holder of the number of shares of our common stock for
which the warrant is exercisable immediately prior to such event. In addition, in the event of a
fundamental transaction in which the amount of the alternate consideration is less than the
exercise price of the warrant, then we or any successor entity shall pay at the holder&#146;s option,
exercisable at any time concurrently with or within ninety (90)&nbsp;days after the consummation of the
fundamental transaction, an amount of cash equal to the value of the warrant as determined in
accordance with the Black Scholes option pricing model.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Right as a Stockholder</I>. Except as otherwise provided in the warrants or by virtue of such
holder&#146;s ownership of shares of our common stock, the holders of the warrants do not have the
rights or privileges of holders of our common stock, including any voting rights, until they
exercise their warrants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Waivers and Amendments</I>. Any term of the warrants issued in the offering may be amended or
waived with our written consent and the written consent of the holder of the warrant and, in certain instances, with the prior written consent of the underwriter.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-30<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="B86048108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>UNDERWRITING</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms and subject to the conditions in an underwriting agreement dated the date of
this prospectus supplement, the underwriter named below has agreed to purchase, and we have agreed
to sell to such underwriter, the number of units (each unit consisting of one share of common stock
and one warrant to purchase a share of common stock) at the public offering price, less the
underwriting discounts and commissions, as set forth on the cover page of this prospectus
supplement, as indicated below:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Underwriter</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of Units</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Roth Capital Partners, LLC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,950,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B><B></B>11,950,000</B></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriter is offering the units subject to its acceptance of the securities included in
the units from us and subject to prior sale. The underwriting agreement provides that the
obligations of the underwriter to pay for and accept delivery of the units offered by this
prospectus are subject to the approval of certain legal matters by their counsel and to other
conditions. The underwriter is obligated to take and pay for all of the units offered by this
prospectus if any such units are taken.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriter initially proposes to offer the units directly to the public at the public
offering price listed on the cover page of this prospectus supplement and to certain dealers at
that price less a concession not in excess of $0.035 per unit. After the initial offering of the
units, the offering price and other selling terms may from time to time be varied by the
underwriter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriting agreement provides that the obligations of the underwriter are subject to
certain conditions precedent, including the absence of any material adverse change in our business
and the receipt of customary legal opinions, letters and certificates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Discount and Expenses</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table summarizes the public offering price, underwriting
discounts and commissions and proceeds
before expenses to us:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Per</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Unit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Public offering price</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,950,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Underwriting discounts and commissions</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">836,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Proceeds to us (before expenses)</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,113,500</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The expenses of the offering,
not including the underwriting discounts and commissions, payable by us are
estimated to be $175,000. We have also agreed to reimburse the underwriter for its legal fees incurred
in connection with this offering up to approximately $100,000. The aggregate value of all
compensation received or to be received by the participating FINRA members does not exceed 8% of
the offering proceeds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Listing on the Nasdaq Capital Market</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our shares of common stock included in the units are listed on the Nasdaq Capital Market under
the symbol &#147;RXII.&#148; Our registrar and transfer agent for all shares of common stock is
Computershare Trust Company,
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-31<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">N.A. We do not plan on making an application to list the warrants on the Nasdaq Capital
Market, any national securities exchange or other nationally recognized trading system. We will
act as the registrar and transfer agent for the warrants.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>No Sales of Similar Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We and each of our executive officers and directors, subject to certain customary exceptions,
have agreed with the underwriter not to dispose of or hedge any of our shares of common stock or
securities convertible into or exercisable or exchangeable for common stock for thirty (30)&nbsp;days
after the date of this prospectus without first obtaining the written consent of Roth Capital
Partners, LLC; provided, however that we may issue securities with an effective offering price per
share of common stock not less than the public offering price set forth on the cover of this
prospectus supplement. In addition, we may issue securities (i)&nbsp;pursuant to our employee benefit and
compensation plans and (ii)&nbsp;in connection with strategic alliances involving us and in other cases
as specified in the underwriting agreement. The 30-day &#147;lock-up&#148; period is subject to extension
such that, in the event that either (i)&nbsp;during the last 17&nbsp;days of the &#147;lock-up&#148; period, we issue
an earnings or financial results release or material news or a material event relating to us
occurs, or (ii)&nbsp;prior to the expiration of the &#147;lock-up&#148; period, we announce that we will release
earnings or financial results during the 16-day period beginning on the last day of the &#147;lock-up&#148;
period, then in either case the expiration of the &#147;lock-up&#148; period will be extended until the
expiration of the 18-day period beginning on the issuance of the earnings or financial results
release or the occurrence of the material news or material event, as applicable, unless Roth
Capital Partners, LLC waives, in writing, such an extension.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Price Stabilization, Short Positions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriter has advised us that it does not intend to conduct any stabilization or
over-allotment activities in connection with this offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Indemnification</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have agreed to indemnify the underwriter against certain liabilities, including liabilities
under the Securities Act of 1933, as amended, and liabilities arising from breaches of
representations and warranties contained in the underwriting agreement. We have also agreed to
contribute to payments the underwriter may be required to make in respect of such liabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Electronic Distribution</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus supplement and the accompanying prospectus in electronic format may be made
available on websites or through other online services maintained by the underwriter, or by its
affiliates. Other than this prospectus supplement and the accompanying prospectus in electronic
format, the information on the underwriter&#146;s website and any information contained in any other
website maintained by the underwriter is not part of this prospectus supplement, the accompanying
prospectus or the registration statement of which this prospectus supplement and the accompanying
prospectus form a part, has not been approved and/or endorsed by us or the underwriter in its
capacity as underwriter, and should not be relied upon by investors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>United Kingdom</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This document is only being distributed to and is only directed at (i)&nbsp;persons who are outside
the United Kingdom or (ii)&nbsp;to investment professionals falling within Article&nbsp;19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the &#147;Order&#148;) or (iii)
high net worth entities, and other persons to whom it may lawfully be communicated, falling within
Article&nbsp;49(2)(a) to (e)&nbsp;of the Order (all such persons together being referred to as &#147;relevant
persons&#148;). The units are only available to, and any invitation, offer or agreement to subscribe,
purchase or otherwise acquire such units will be engaged in only with, relevant persons. Any
person who is not a relevant person should not act or rely on this document or any of its contents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriter has represented and agreed that:
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-32<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;it has only communicated or caused to be communicated and will only communicate or cause
to be communicated an invitation or inducement to engage in investment activity (within the meaning
of Section&nbsp;21 of the Financial Services and Markets Act 2000 or FSMA) received by it in connection
with the issue or sale of the units in circumstances in which Section&nbsp;21(1) of the FSMA does not
apply to us, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;it has complied with, and will comply with all applicable provisions of FSMA with respect
to anything done by it in relation to the units in, from or otherwise involving the United Kingdom.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>European Economic Area</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that the offer of the units is made in any Member State of the European Economic
Area (&#147;EEA&#148;) that has implemented the Prospectus Directive before the date of publication of a
prospectus in relation to the units which has been approved by the competent authority in the
Member State in accordance with the Prospectus Directive (or, where appropriate, published in
accordance with the Prospectus Directive and notified to the competent authority in the Member
State in accordance with the Prospectus Directive), the offer (including any offer pursuant to this
document) is only addressed to qualified investors in that Member State within the meaning of the
Prospectus Directive or has been or will be made otherwise in circumstances that do not require us
to publish a prospectus pursuant to the Prospectus Directive.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In relation to each Member State of the EEA which has implemented the Prospectus Directive
(each, a &#147;Relevant Member State&#148;), the underwriter has represented and agreed that with effect from
and including the date on which the Prospectus Directive is implemented in that Relevant Member
State (the &#147;Relevant Implementation Date&#148;) it has not made and will not make an offer of shares to
the public in that Relevant Member State prior to the publication of a prospectus in relation to
the shares which has been approved by the competent authority in that Relevant Member State or,
where appropriate, approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the Prospectus Directive, except
that it may, with effect from and including the Relevant Implementation Date, make an offer of
units to the public in that Relevant Member State at any time:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;to legal entities which are authorized or regulated to operate in the financial markets
or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;to any legal entity which has two or more of (1)&nbsp;an average of at least 250 employees
during the last financial year; (2)&nbsp;a total balance sheet of more than &#128;43,000,000 and (3)&nbsp;an
annual net turnover of more than &#128;50,000,000, as shown in its last annual or consolidated accounts,
or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;in any other circumstances which do not require the publication by us of a prospectus
pursuant to Article&nbsp;3 of the Prospectus Directive. For the purposes of this provision, the
expression an &#147;offer of units to the public&#148; in relation to any shares in any Relevant Member State
means the communication in any form and by any means of sufficient information on the terms of the
offer and the units to be offered so as to enable an investor to decide to purchase or subscribe
the units, as the same may be varied in that Relevant Member State by any measure implementing the
Prospectus Directive in that Relevant Member State and the expression &#147;Prospectus Directive&#148; means
Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The EEA selling restriction is in addition to any other selling restrictions set out below.
In relation to each Relevant Member State, each purchaser of units (other than the underwriter)
will be deemed to have represented, acknowledged and agreed that it will not make an offer of units
to the public in any Relevant Member State, except that it may, with effect from and including the
date on which the Prospectus Directive is implemented in the Relevant Member State, make an offer
of units to the public in that Relevant Member State at any time in any circumstances which do not
require the publication by us of a prospectus pursuant to Article&nbsp;3 of the Prospectus Directive,
provided that such purchaser agrees that it has not and will not make an offer of any units in
reliance or purported reliance on Article&nbsp;3(2)(b) of the Prospectus Directive. For the purposes of
this provision, the expression an &#147;offer of units to the public&#148; in relation to any units in any
Relevant Member State has the same meaning as in the preceding paragraph.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-33<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="B86048109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the issuance of the securities offered hereby will be passed upon for us by
Ropes &#038; Gray LLP, Boston, Massachusetts. Lowenstein Sandler PC, Roseland, New Jersey is acting as
counsel for the underwriter in connection with certain legal matters related to this offering.
</DIV>
<DIV align="left">
<A name="B86048110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial
statements of RXi Pharmaceuticals Corporation as of December&nbsp;31, 2009 and 2008
and for the years then ended and for the cumulative period from inception (January&nbsp;1, 2003) through
December&nbsp;31, 2009, incorporated by reference in this prospectus supplement, have been so
incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting
firm, upon the authority of said firm as experts in auditing and accounting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements of Apthera, Inc. as of December&nbsp;31, 2010 and 2009 and for the years
then ended and for the period from inception
(July&nbsp;20, 2005) to
December&nbsp;31, 2010, incorporated by reference in this prospectus supplement, have been so incorporated in
reliance on the report of Lohman Company PLLC, independent certified public accountants, upon the authority of
said firm as experts in auditing and accounting.
</DIV>
<DIV align="left">
<A name="B86048111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file annual, quarterly and current reports, proxy statements and other information with the
SEC. Our SEC filings are available to the public over the Internet at the SEC&#146;s website at
<I>http://www.sec.gov</I>. The SEC&#146;s website contains reports, proxy and information statements and other
information regarding issuers, such as us, that file electronically with the SEC. You may also
read and copy any document we file with the SEC at the SEC&#146;s Public Reference Room at 100 F Street,
N.E., Room&nbsp;1580, Washington, D.C., 20549. You may also obtain copies of these documents at
prescribed rates by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of its Public Reference Room.
</DIV>
<DIV align="left">
<A name="B86048112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC allows us to &#147;incorporate by reference&#148; into this prospectus supplement the
information we have filed with the SEC. The information we incorporate by reference into this
prospectus supplement is an important part of this prospectus. Any statement in a document we
incorporate by reference into this prospectus supplement or the accompanying prospectus will be
considered to be modified or superseded to the extent a statement contained in this prospectus
supplement or any other subsequently filed document that is incorporated by reference into this
prospectus supplement modifies or supersedes that statement. The modified or superseded statement
will not be considered to be a part of this prospectus supplement or the accompanying prospectus,
as applicable, except as modified or superseded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We incorporate by reference into this prospectus supplement the information contained in the
documents listed below, which is considered to be a part of this prospectus supplement:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Annual Report on Form 10-K for the year ended December&nbsp;31, 2009;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Quarterly Report on Form 10-Q for the quarterly periods ending March&nbsp;31,
2010, June&nbsp;30, 2010 and September&nbsp;30, 2010;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Reports on Form 8-K filed with the SEC on March&nbsp;23, 2010, June&nbsp;10,
2010, April&nbsp;5, 2011 and April 14, 2011 (as amended by the Form 8-K/A
filed with the SEC on April&nbsp;14, 2011);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Proxy Statement of Schedule&nbsp;14A filed with the SEC on April&nbsp;23, 2010; and</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->S-34<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the description of our common stock and related rights contained in our
registration statements on Form 8-A (file no. 001-33958) filed under the Exchange Act,
including any amendment or report filed for the purpose of updating such description.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also incorporate by reference all documents filed pursuant to Sections&nbsp;13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus supplement and prior to the termination
of this offering; provided, however, that we are not incorporating any information furnished under
Item&nbsp;2.02 or Item&nbsp;7.01 of any current report on Form 8-K we may subsequently file.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statements made in this prospectus supplement or the accompanying prospectus or in any
document incorporated by reference in this prospectus supplement or the accompanying prospectus as
to the contents of any contract or other document referred to herein or therein are not necessarily
complete, and in each instance reference is made to the copy of such contract or other document
filed as an exhibit to the documents incorporated by reference, each such statement being qualified
in all material respects by such reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may request a copy of these filings, at no cost, by writing or telephoning us at the
following address:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">RXi Pharmaceuticals Corporation<BR>
60 Prescott Street<BR>
Worcester, MA 01650<BR>
Attention: Investor Relations<BR>
Phone: (508)&nbsp;767-3861
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copies of these filings are also available, without charge, through the &#147;Investor Relations&#148;
section of our website (www.rxipharma.com) as soon as reasonably practicable after they are filed
electronically with the SEC. The information contained on our website is not a part of this
prospectus.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-35<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">PROSPECTUS
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>RXI PHARMACEUTICALS CORPORATION</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="b86048fnb8102401.gif" alt="(RXI LOGO)">
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">$75,000,000<BR>
Common Stock<BR>
Preferred Stock<BR>
Warrants<BR>
Debt Securities
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may offer to the public from time to time in one or more series or issuances:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>shares of our common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>shares of preferred stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>warrants to purchase shares of our common stock, preferred stock and/or debt securities; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>debt securities consisting of debentures, notes or other evidences of indebtedness.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus provides a general description of the securities we may offer. Each time
we sell securities, we will provide specific terms of the securities offered in a supplement to
this prospectus. Such a prospectus supplement may also add, update or change information contained
in this prospectus. This prospectus may not be used to consummate a sale of securities unless
accompanied by the applicable prospectus supplement. You should read both this prospectus and the
applicable prospectus supplement together with additional information described under the heading
&#147;Where You Can Find More Information&#148; before you make your investment decision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will sell the securities directly to our stockholders or to purchasers or through
agents on our behalf or through underwriters or dealers as designated from time to time. If any
agents or underwriters are involved in the sale of any of the securities, the applicable prospectus
supplement will provide the names of the agents or underwriters and any applicable fees,
commissions or discounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General Information</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is traded on the Nasdaq Capital Market under the symbol &#147;RXII.&#148; On May 19, 2010, the closing price of our common stock was $4.17.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March&nbsp;22, 2010, the aggregate market value of our outstanding common stock held by
non-affiliates was approximately $84,447,354 based on 16,241,125 shares of outstanding common stock, of
which approximately 10,412,744 shares are held by non-affiliates, and a per share price of $8.11 based on the closing sale price of our
common stock on March&nbsp;22, 2010.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Investing in our securities involves risks. Please see &#147;Risk Factors&#148; on page 5 and
other information included and incorporated by reference in this prospectus, and in any applicable
prospectus supplement, for a discussion of the factors you should consider carefully before
deciding to purchase our securities</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">The date
of this prospectus is May 21, 2010
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="B81024tocpage"></A>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024101">About this Prospectus
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024102">The Company
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024103">Risk Factors
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024104">Forward-Looking Statements
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024105">Use of Proceeds
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024106">Plan of Distribution
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024107">Description of Common Stock
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024108">Description of Preferred Stock
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024109">Description of Warrants
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024110">Description of Debt Securities
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024111">Legal Matters
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024112">Experts
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024113">Where You Can Find More Information
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#B81024114">Incorporation of Certain Documents by Reference
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
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</TABLE>
</DIV>

<DIV align="left">
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</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="B81024101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ABOUT THIS PROSPECTUS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The securities described in this prospectus are part of a registration statement that we filed
with the Securities and Exchange Commission (the &#147;SEC&#148;) using a &#147;shelf&#148; registration process. Under
this shelf registration process, we may offer to sell any combination of the securities described
in this prospectus in one or more offerings up to a total dollar amount of $75,000,000. This
prospectus provides you with a general description of the securities we may offer. Each time we
sell securities under this shelf registration, we will provide a prospectus supplement that will
contain specific information about the terms of such offering. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read both this
prospectus and any applicable prospectus supplement, including all documents incorporated herein by
reference, together with additional information described under &#147;Where You Can Find More
Information&#148; below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not authorized any dealer, agent or other person to give any information or to
make any representation other than those contained or incorporated by reference in this prospectus
and any accompanying prospectus supplement. You must not rely upon any information or
representation not contained or incorporated by reference in this prospectus or an accompanying
prospectus supplement. This prospectus and the accompanying prospectus supplement, if any, do not
constitute an offer to sell or the solicitation of an offer to buy any securities other than the
registered securities to which they relate, nor do this prospectus and any accompanying prospectus
supplement constitute an offer to sell or the solicitation of an offer to buy securities in any
jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such
jurisdiction. You should not assume that the information contained in this prospectus and any
accompanying prospectus supplement is accurate on any date subsequent to the date set forth on the
front of the document or that any information we have incorporated by reference is correct on any
date subsequent to the date of the document incorporated by reference, even though this prospectus
and any accompanying prospectus supplement is delivered or securities are sold on a later date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless the context otherwise requires, &#147;RXi,&#148; the &#147;Company,&#148; &#147;we,&#148; &#147;us,&#148; &#147;our&#148; and
similar names refer to RXi Pharmaceuticals Corporation.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="B81024102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE COMPANY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our Business</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were incorporated as Argonaut Pharmaceuticals, Inc. in Delaware on April&nbsp;3, 2006, changed
our name to RXi Pharmaceuticals Corporation on November&nbsp;28, 2006, and began operations in January
2007. We are a discovery-stage biopharmaceutical company pursuing proprietary therapeutics based on
RNA interference, or &#147;RNAi&#148;, a naturally occurring cellular mechanism that has the potential to
effectively and selectively interfere with, or &#147;silence&#148;, expression of targeted disease-associated
genes. It is believed that this specific silencing can be used
to potentially treat human diseases by &#147;turning off&#148; genes that lead to disease. While no
therapeutic RNAi products have yet been approved, there has been significant growth in the field of
RNAi development and potential therapeutic applications in this field. This growth is driven by the
potential ability to use RNAi to rapidly develop lead compounds that specifically and selectively
inhibit a target gene, many of which are undruggable by other modalities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By utilizing our expertise in RNAi and the comprehensive RNAi therapeutic platform that we
have established, we believe we will be able to discover and develop lead compounds and progress
them into and through clinical development for potential commercialization more efficiently than
traditional drug development approaches.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our proprietary therapeutic platform is comprised of two main components:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Novel RNAi Compounds</B>, referred to as rxRNA&#153; compounds, that are distinct from, and we
believe convey significant advantages over classic siRNA (conventionally-designed &#147;small
interfering RNA&#148; compounds), and offer many of the properties that we believe are important
to the clinical development of RNAi-based drugs. We have developed a number of unique forms
of rxRNA compounds, all of which have been shown to be highly potent both <I>in vitro </I>and <I>in
vivo. </I>These RNAi compounds include rxRNA<I>ori</I><SUP style="FONT-size: 85%; vertical-align: text-top">TM</SUP>,
rxRNA<I>solo</I><SUP style="FONT-size: 85%; vertical-align: text-top">TM</SUP> and <I>sd-</I>rxRNA<SUP style="FONT-size: 85%; vertical-align: text-top">TM</SUP>, or &#147;self delivering&#148;
RNA. Based on our research we believe that these different, novel siRNA configurations have
various advantages for therapeutic use. These advantages include high potency, increased
resistance to nucleases and off-target effects, and, in the case of the <I>sd</I>-rxRNA compounds,
access to cells and tissues with no additional formulation required.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Advanced Delivery Technologies</B>, may enable the delivery of our rxRNA compounds to treat
a variety of acute and chronic diseases using both local and systemic approaches,
potentially providing a competitive advantage in the development of many RNAi therapeutic
compounds. RXi&#146;s suite of delivery technologies is comprised of delivery vehicles, which
can be combined with various rxRNA compounds, as well as <I>sd</I>-rxRNA compounds, which are
chemically modified and have the unique property of entering cells and tissues to effect
silencing without the need for any additional delivery vehicle. This suite of delivery
technologies has broad applications for multiple therapeutic areas targeting both local and
systemic applications.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Local Applications. </I>An area of application of the RXi therapeutic platform
which uses rxRNA compounds to target genes expressed in tissues that can be silenced
by direct, local delivery. The numerous diseases common to tissues accessible by local
delivery represent significant unmet medical needs and large market opportunities.
Most of our initial targets are validated gene targets relevant in important
biological pathways and are implicated in multiple diseases enabling us to leverage
these targets and associated compounds across a broad array of therapeutic areas.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Systemic Applications. </I>RXi has active internal efforts to advance the
therapeutic platform to optimize robust systemic delivery to various tissues and
organs of the body. In some cases, such as in targeting a treatment to the liver, the
optimal route of administration is by systemic delivery. Efforts to improve the
systemic delivery of RNAi compounds are currently ongoing, and these efforts are
supported by internal activities targeting an undisclosed gene thought to be
responsible for elevated cholesterol. We have also in-licensed intellectual property
developed by Dr.&nbsp;Michael Czech (one of our scientific co-founders and scientific
advisory board members) on genes that
appear to be important regulators of metabolism, and continue to develop and validate
this approach with these other potential target genes.</TD>
</TR>

</TABLE>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to use our RNAi therapeutic platform and our expertise in RNAi to identify lead
compounds against multiple target genes, and advance them towards pre-clinical and clinical
development in therapeutic areas that address broad unmet medical needs, in both acute and chronic
settings. There are many well-studied genes that have been associated with numerous diseases but
have been difficult to target with conventional medicinal chemistry or traditional modalities
involving both large and small molecules. We believe RNAi technology may play an important role in
targeting these genes and potentially treating the related diseases and disorders. We plan on
pursuing disease areas with the goal of creating multiple clinical development program
opportunities, either through independent internal efforts at the company or in conjunction with
partners through various collaborations and partnerships with pharmaceutical or biotechnology
companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that we have created and established a strong intellectual property portfolio. We
have secured exclusive and nonexclusive licenses from both academic institutions and commercial
entities to certain issued and pending patents and patent applications covering RNAi technologies
in the following three categories: (i)&nbsp;therapeutic targets, (ii)&nbsp;chemistry and configurations of
RNAi compounds and (iii)&nbsp;formulation and delivery of RNAi compounds within the body. We have also
filed patents based on our internal discoveries in the each of the areas mentioned above, which
enables us to further strengthen our broad intellectual property portfolio.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our founding scientists recognized that the key to therapeutic success with RNAi lies in
delivering intact RNAi compounds to the target tissue and the interior of the target cells. To
accomplish this, we are developing a comprehensive platform that includes local, systemic and oral
delivery approaches that give rise to target silencing after RNAi compound administration. We work
with chemically synthesized RNAi compounds that we believe are optimized for stability and
efficacy. We endow these compounds with favorable delivery profiles and properties either by
covalent chemical modification or combination with appropriate formulations to achieve optimal
delivery to specific target tissues.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Local Delivery</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The local delivery method may avoid some hurdles associated with systemic approaches such as
rapid clearance from the bloodstream and inefficient extravasation (e.g. crossing the endothelial
barrier from the blood stream). The <I>sd</I>-rxRNA molecules have unique properties which improve tissue
uptake in local delivery models. We have studied <I>sd</I>-rxRNA molecules in a rat model of dermal
delivery. Direct application of <I>sd</I>-rxRNA with no additional delivery vehicle to compromised skin
(incision introduced) demonstrates that target gene silencing can be measured after topical
delivery. We have also injected <I>sd</I>-rxRNA to the skin layers and observed efficient uptake and
target gene silencing. The dose levels required for these direct injection methods are small and
suitable for clinical development suggesting that local delivery indications will be very
accessible with the <I>sd</I>-rxRNA technology platform. Target tissues that are potentially accessible
for local delivery using rxRNA compounds include lung, eye, skin, CNS, mucosal tissues, sites of
inflammation, and tumors (locally).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Systemic Delivery</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Systemic delivery occurs when a drug accesses the tissue of interest through the circulatory
system. In some cases, such as in targeting a treatment to the liver, the optimal route of delivery
may be by a systemic route. We have a portfolio of systemic delivery solutions utilizing our RNAi
therapeutic platforms. One novel approach involves the use of <I>sd</I>-rxRNA compounds. The
self-delivering technology introduces properties required for <I>in vivo </I>efficacy such as cell and
tissue penetration and improved blood clearance and distribution properties. Systemic delivery of
these compounds to mice has resulted in gene specific inhibition at 50 mg/kg doses with no
additional delivery vehicle required. In addition, we have developed novel nanotransporter
formulations to aid in transport of RNAi compounds to both liver and various other target tissues
in the body. These nanotransporters are chemically synthesized molecules that form nanometer-sized
particles when mixed with RNAi compounds and alter the clearance, distribution and tissue
penetration properties of the RNAi compounds. Delivery of RNAi compounds to the
liver might be critical for the treatment of many diseases and using rxRNA in conjunction with such
delivery vehicles has enabled us to demonstrate gene specific inhibition at low doses (1 mg/kg) in
a mouse model after intravenous, systemic delivery. Target tissues that are potentially accessible
using rxRNA compounds by systemic
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">delivery approach include liver, lung, adipocytes, cardiomyocytes, bone marrow, sites of
inflammation, tumors, vascular endothelium, and kidney.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Oral Delivery</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most RNAi therapeutic products being developed today require recurring intravenous injections
or other forms of administration which are not patient friendly. To address the desire for RNAi
therapeutics with improved modes of administration, we are testing a novel formulation technology,
Glucan Encapsulated RNAi Particles (GeRPs) that may allow our rxRNA compounds to be incorporated
into orally administered pills. In research to date, the GeRP delivery system appears to be 5 to
250 times more potent than previous methods used for systemic delivery of RNAi therapeutics by
intravenous injection. The GeRP system is very flexible and can either be used to administer a
single RNAi compound, multiple RNAi compounds, or could potentially allow co-delivery of RNAi, DNA,
protein and small molecule combinations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Therapeutic Programs and Markets</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By utilizing our expertise in RNAi compound design and delivery, we intend to identify lead
compounds to both tractable and intractable targets implicated in diseases that address broad unmet
medical needs in both acute and chronic settings. The broad applicability of our RNAi therapeutic
platform has the potential to enable delivery to various tissues in both a local setting as well as
in a systemic setting. Target tissues that are potentially accessible using our rxRNA compounds in
the context of a local delivery approach include lung, eye, skin, CNS, mucosal,
sites of inflammation, and tumors (locally). Similarly, target tissues that are potentially
accessible using our rxRNA compounds in the context of a systemic delivery approach include liver,
lung, adipocytes, cardiomyocytes, bone marrow, sites of inflammation, tumors, vascular endothelium,
and kidney. We will continue to focus our efforts selecting targets to prosecute internally, and as
we identify relevant compounds, we intend to begin preclinical development in specific areas as
appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Corporate Information</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal executive offices are located at 60 Prescott Street, Worcester, MA 01605, and
our phone number is (508)&nbsp;767-3861.
</DIV>

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</DIV>

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<DIV align="left">
<A name="B81024103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investing in our securities involves risk. You should consider the risks, uncertainties and
assumptions discussed under the heading &#147;Risk Factors&#148; in our Annual Report on Form 10-K for the
fiscal year ended December&nbsp;31, 2009 filed on March&nbsp;31, 2010 with the SEC, which is incorporated
herein by reference, and may be amended, supplemented or superseded from time to time by other
reports we file with the SEC in the future. The risks and uncertainties we have described are not
the only ones we face. Additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also affect our operations. If any of these risks were to occur, our
business, financial condition, and results of operations could be severely harmed. This could cause
the trading price of our common stock to decline, and you could lose all or part of your
investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, any prospectus supplement applicable to each offering of our securities will
contain a discussion of the risks applicable to such an investment in us. Prior to making a
decision about investing in our securities, you should carefully consider the specific factors
discussed under the heading &#147;Risk Factors&#148; in the applicable prospectus supplement, together with
all of the other information contained or incorporated by reference in such prospectus supplement
or appearing or incorporated by reference in this prospectus.
</DIV>
<DIV align="left">
<A name="B81024104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus, any prospectus supplement and the other documents we have filed with the SEC
that are incorporated herein by reference contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, as well
as assumptions that, if they never materialize or prove incorrect, could cause the results of RXi
to differ materially from those expressed or implied by such forward-looking statements. All
statements other than statements of historical fact are statements that could be deemed
forward-looking statements, including any projections of financing needs, revenue, expenses,
earnings or losses from operations, or other financial items; any statements of the plans,
strategies and objectives of management for future operations; any statements concerning product
research, development and commercialization plans and timelines; any statements regarding safety
and efficacy of product candidates; any statements of expectation or belief; and any statements of
assumptions underlying any of the foregoing. In addition, forward-looking statements may contain
the words &#147;believe,&#148; &#147;anticipate,&#148; &#147;expect,&#148; &#147;estimate,&#148; &#147;intend,&#148; &#147;plan,&#148; &#147;project,&#148; &#147;will be,&#148;
&#147;will continue,&#148; &#147;will result,&#148; &#147;seek,&#148; &#147;could,&#148; &#147;may,&#148; &#147;might,&#148; or any variations of such words or
other words with similar meanings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Given these uncertainties, you should not place undue reliance on these forward-looking
statements. You should read this prospectus, any supplements to this prospectus and the documents
that we reference in this prospectus with the understanding that our actual future results may be
materially different from what we expect. Except as required by law, we do not undertake any
obligation to update or revise any forward-looking statements contained in this prospectus and any
supplements to this prospectus, whether as a result of new information, future events or otherwise.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="B81024105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise provided in the applicable prospectus supplement, we intend to use
the net proceeds from the sale of the securities covered by this prospectus for general corporate
purposes, which may include working capital, capital expenditures, research and development
expenditures, clinical trial expenditures, commercial expenditures, acquisitions of new
technologies or businesses, and investments. Additional information on the use of net proceeds from
the sale of securities covered by this prospectus may be set forth in any prospectus supplement
relating to a specific offering.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="B81024106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may sell the securities in any of the ways described below or in any combination:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to or through underwriters or dealers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>through one or more agents; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>directly to purchasers or to a single purchaser.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The distribution of the securities may be effected from time to time in one or more
transactions:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at a fixed price, or prices, which may be changed from time to time;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at market prices prevailing at the time of sale;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at prices related to such prevailing market prices; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at negotiated prices.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each prospectus supplement will describe the method of distribution of the securities and
any applicable restrictions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any prospectus supplement with respect to the securities of a particular series will
describe the terms of the offering of the securities, including the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the name or names of any underwriters, dealers or agents and
the amounts of securities underwritten or purchased by each of
them;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the public offering price of the securities and the proceeds
to us and any discounts, commissions or concessions allowed or
reallowed or paid to dealers; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any securities exchanges on which the securities may be listed.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time. Under no circumstances will any fees, discounts,
commissions or concessions received by any FINRA member or independent broker-dealer exceed eight
percent of the gross proceeds to us in any offering in the United States of the securities covered
by the prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only the agents or underwriters named in each prospectus supplement are agents or
underwriters in connection with the securities being offered thereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may authorize underwriters, dealers or other persons acting as our agents to solicit
offers by certain institutions to purchase securities from us pursuant to delayed delivery
contracts providing for payment and delivery on the date stated in each applicable prospectus
supplement. Each contract will be for an amount not less than, and the aggregate amount of
securities sold pursuant to such contracts shall not be less nor more than, the respective amounts
stated in each applicable prospectus supplement. Institutions with whom the contracts, when
authorized, may be made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other institutions, but shall in
all cases be subject to our approval. Delayed delivery contracts will be subject only to those
conditions set forth in each applicable prospectus supplement, and each prospectus supplement will
set forth any commissions we pay for solicitation of these contracts.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agents, underwriters and other third parties described above may be entitled to
indemnification by us against certain civil liabilities, including liabilities under the Securities
Act of 1933, or to contribution from us with respect to payments which the agents, underwriters or
other third parties may be required to make in respect thereof. Agents, underwriters and such other
third parties may be customers of, engage in transactions with, or perform services for us in the
ordinary course of business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;One or more firms, referred to as &#147;remarketing firms,&#148; may also offer or sell the securities,
if a prospectus supplement so indicates, in connection with a remarketing arrangement upon their
purchase. Remarketing firms will act as principals for their own accounts or as our agents. These
remarketing firms will offer or sell the securities in accordance with the terms of the securities.
Each prospectus supplement will identify and describe any remarketing firm and the terms of its
agreement, if any, with us and will describe the remarketing firm&#146;s compensation. Remarketing firms
may be deemed to be underwriters in connection with the securities they remarket. Remarketing firms
may be entitled under agreements that may be entered into with us to indemnification by us against
certain civil liabilities, including liabilities under the Securities Act of 1933, and may be
customers of, engage in transactions with or perform services for us in the ordinary course of
business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain underwriters may use this prospectus and any accompanying prospectus supplement
for offers and sales related to market-making transactions in the securities. These underwriters
may act as principal or agent in these transactions, and the sales will be made at prices related
to prevailing market prices at the time of sale.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The securities may be new issues of securities and may have no established trading
market. The securities may or may not be listed on a securities exchange. Underwriters may make a
market in these securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. We can make no assurance as to the liquidity of, or the
existence of trading markets for, any of the securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain persons participating in an offering may engage in overallotment, stabilizing
transactions, short covering transactions and penalty bids in accordance with rules and regulations
under the Securities Exchange Act of 1934. Overallotment involves sales in excess of the offering
size, which create a short position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a specified maximum. Short
covering transactions involve purchases of the securities in the open market after the distribution
is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling
concession from a dealer when the securities originally sold by the dealer are purchased in a short
covering transaction to cover short positions. Those activities may cause the price of the
securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue
any of the activities at any time.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="B81024107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DESCRIPTION OF COMMON STOCK</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following summary of the terms of our common stock is subject to and qualified in its
entirety by reference to our charter and by-laws, copies of which are on file with the SEC as
exhibits to previous SEC filings. Please refer to &#147;Where You Can Find More Information&#148; below for
directions on obtaining these documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of May 21, 2010, we are authorized to issue 50,000,000 shares of common stock. As of May
21, 2010, we had 18,372,759 shares of common stock outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of our common stock are entitled to one vote for each share on all matters voted
on by stockholders, including elections of directors, and, except as otherwise required by law or
provided in any resolution adopted by our board with respect to any series of preferred stock, the
holders of such shares possess all voting power. Our certificate of incorporation does not provide
for cumulative voting in the election of directors. Subject to any preferential rights of any
outstanding series of our preferred stock created by our board from time to time, the holders of
common stock are entitled to such dividends as may be declared from time to time by our board from
funds available therefore and upon liquidation are entitled to receive pro rata all assets
available for distribution to such holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of our common stock, other than CytRx Corporation (&#147;CytRx&#148;), have no preemptive
rights. The rights, preferences and privileges of holders of common stock are subject to, and may
be adversely affected by, the rights of the holders of shares of any series of preferred stock
which we may designate and issue in the future. Under our agreement with CytRx, with some
exceptions, CytRx has preemptive rights to acquire a portion of any new securities sold or issued
by us so as to maintain their percentage beneficial ownership of us at the time of such sale or
issuance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of our
 common stock, other than CytRx, have no redemption rights.
 Pursuant to a stock redemption agreement dated March 22, 2010 between us and CytRx, we are
 required to use 25% of the proceeds from the exercise of certain warrants that we issued in
 a March 2010 registered direct offering to repurchase from CytRx a number of shares of common
stock held by CytRx equal to 25% of shares issued upon the exercise of such warrants.  We issued
warrants to purchase an aggregate of 540,000 shares of our common stock in the March 2010 registered
 direct offering.  We estimate that we will be required to redeem 135,000 shares of common stock
from CytRx for an aggregate price of $810,000 if all of the warrants issued in the March 2010
registered direct offering are exercised.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Transfer Agent and Registrar</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Nasdaq Capital Market</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is listed for quotation on the Nasdaq Capital Market under the symbol &#147;RXII.&#148;
</DIV>
<DIV align="left">
<A name="B81024108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DESCRIPTION OF PREFERRED STOCK</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are authorized to issue up to 5,000,000 shares of preferred stock, par value $0.0001 per
share. Our board of directors, without further action by the holders of our common stock, may issue
shares of our preferred stock. Our board is vested with the authority to fix by resolution the
designations, preferences and relative, participating, optional or other special rights, and such
qualifications, limitations or restrictions thereof, including, without limitation, redemption
rights, dividend rights, liquidation preferences and conversion or exchange rights of any class or
series of preferred stock, and to fix the number of classes or series of preferred stock, the
number of shares constituting any such class or series and the voting powers for each class or
series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The authority possessed by our board to issue preferred stock could potentially be used to
discourage attempts by third parties to obtain control of RXi through a merger, tender offer, proxy
contest or otherwise by making such attempts more difficult or more costly. Our board may issue
preferred stock with voting rights or conversion rights that, if exercised, could adversely affect
the voting power of the holders of common stock. There are no current agreements or understandings
with respect to the issuance of preferred stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we offer a specific class or series of preferred stock under this prospectus, we will
describe the terms of the preferred stock in the prospectus supplement for such offering and will
file a copy of the certificate establishing the terms of the preferred stock with the SEC. To the
extent required, this description will include:
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the title and stated value;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the number of shares offered, the liquidation preference per share and the
purchase price;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the dividend rate(s), period(s) and/or payment date(s), or method(s) of
calculation for such dividends;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether dividends will be cumulative or non-cumulative and, if cumulative, the
date from which dividends will accumulate;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the procedures for any auction and remarketing, if any;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the provisions for a sinking fund, if any;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the provisions for redemption, if applicable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any listing of the preferred stock on any securities exchange or market;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether the preferred stock will be convertible into our common stock, and, if
applicable, the conversion price (or how it will be calculated) and conversion
period;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether the preferred stock will be exchangeable into debt securities, and, if
applicable, the exchange price (or how it will be calculated) and exchange period;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>voting rights, if any, of the preferred stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a discussion of any material U.S. federal income tax considerations applicable
to the preferred stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the relative ranking and preferences of the preferred stock as to dividend
rights and rights upon liquidation, dissolution or winding up of the affairs of the
Company; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any material limitations on issuance of any class or series of preferred stock
ranking senior to or on a parity with the series of preferred stock as to dividend
rights and rights upon liquidation, dissolution or winding up of the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preferred stock offered by this prospectus, when issued, will not have, or be subject to,
any preemptive or similar rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Transfer Agent and Registrar</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transfer agent and registrar for any series or class of preferred stock will be set forth
in each applicable prospectus supplement.
</DIV>
<DIV align="left">
<A name="B81024109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DESCRIPTION OF WARRANTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of May 21, 2010, we had 2,100,642 warrants outstanding to purchase shares of our common
stock. We may issue warrants to purchase shares of our common stock, preferred stock and/or debt
securities in one or more series together with other securities or separately, as described in each
applicable prospectus supplement. Below is a description of certain general terms and provisions of
the warrants that we may offer. Particular terms of the warrants will be described in the
applicable warrant agreements and the applicable prospectus supplement for the warrants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The applicable prospectus supplement will contain, where applicable, the following terms of
and other information relating to the warrants:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the specific designation and aggregate number of, and the price at which we will
issue, the warrants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the currency or currency units in which the offering price, if any, and the
exercise price are payable;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#B81024tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the designation, amount and terms of the securities purchasable upon exercise of
the warrants;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if applicable, the exercise price for shares of our common stock and the number
of shares of common stock to be received upon exercise of the warrants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if applicable, the exercise price for shares of our preferred stock, the number
of shares of preferred stock to be received upon exercise, and a description of
that class or series of our preferred stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if applicable, the exercise price for our debt securities, the amount of our
debt securities to be received upon exercise, and a description of that series of
debt securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the date on which the right to exercise the warrants will begin and the date on
which that right will expire or, if the warrants may not be continuously exercised
throughout that period, the specific date or dates on which the warrants may be
exercised;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether the warrants will be issued in fully registered form or bearer form, in
definitive or global form or in any combination of these forms, although, in any
case, the form of a warrant included in a unit will correspond to the form of the
unit and of any security included in that unit;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any applicable material U.S. federal income tax consequences;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the identity of the warrant agent for the warrants and of any other
depositaries, execution or paying agents, transfer agents, registrars or other
agents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the proposed listing, if any, of the warrants or any securities purchasable upon
exercise of the warrants on any securities exchange;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if applicable, the date from and after which the warrants and the common stock,
preferred stock and/or debt securities will be separately transferable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if applicable, the minimum or maximum amount of the warrants that may be
exercised at any one time;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>information with respect to book-entry procedures, if any;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the anti-dilution provisions of the warrants, if any;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any redemption or call provisions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether the warrants are to be sold separately or with other securities as parts
of units; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any additional terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Transfer Agent and Registrar</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transfer agent and registrar for any warrants will be set forth in the applicable
prospectus supplement.
</DIV>
<DIV align="left">
<A name="B81024110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DESCRIPTION OF DEBT SECURITIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will issue the debt securities offered by this prospectus and any accompanying prospectus
supplement under an indenture to be entered into between us and the trustee identified in the
applicable prospectus supplement. The terms of the debt securities will include those stated in the
indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as
in effect on the date of the indenture. We have previously filed a copy of the form of indenture as
an exhibit to a previous SEC filing. Please refer to &#147;Where You Can Find More Information&#148; below
for directions on obtaining this document. The indenture will be subject to and governed by the
terms of the Trust Indenture Act of 1939.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#B81024tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may offer under this
prospectus up to an aggregate principal amount of $75,000,000 in
debt securities, or if debt securities are issued at a discount, or in a foreign currency, foreign
currency units or composite currency, the principal amount as may be sold for an initial public
offering price of up to $75,000,000. Unless otherwise specified in the applicable prospectus
supplement, the debt securities will represent direct, unsecured obligations of RXi and will rank
equally with all of our other unsecured indebtedness.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following statements relating to the debt securities and the indenture are summaries,
qualified in their entirety by reference to the detailed provisions of the indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may issue the debt securities in one or more series with the same or various maturities, at
par, at a premium, or at a discount. We will describe the particular terms of each series of debt
securities in a prospectus supplement relating to that series, which we will file with the SEC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The prospectus supplement will set forth, to the extent required, the following terms of the
debt securities in respect of which the prospectus supplement is delivered:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the title of the series;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the aggregate principal amount;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the issue price or prices, expressed as a percentage of the aggregate principal
amount of the debt securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any limit on the aggregate principal amount;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the date or dates on which principal is payable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the interest rate or rates (which may be fixed or variable) or, if applicable,
the method used to determine such rate or rates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the date or dates from which interest, if any, will be payable and any regular
record date for the interest payable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the place or places where principal and, if applicable, premium and interest, is
payable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the terms and conditions upon which we may, or the holders may require us to,
redeem or repurchase the debt securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the denominations in which such debt securities may be issuable, if other than
denominations of $1,000 or any integral multiple of that number;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether the debt securities are to be issuable in the form of certificated
securities (as described below) or global securities (as described below);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the portion of principal amount that will be payable upon declaration of
acceleration of the maturity date if other than the principal amount of the debt
securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the currency of denomination;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the designation of the currency, currencies or currency units in which payment
of principal and, if applicable, premium and interest, will be made;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if payments of principal and, if applicable, premium or interest, on the debt
securities are to be made in one or more currencies or currency units other than
the currency of denomination, the manner in which the exchange rate with respect to
such payments will be determined;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#B81024tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if amounts of principal and, if applicable, premium and interest may be
determined by reference to an index based on a currency or currencies or by
reference to a commodity, commodity index, stock exchange index or financial index,
then the manner in which such amounts will be determined;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the provisions, if any, relating to any collateral provided for such debt
securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any addition to or change in the covenants and/or the acceleration provisions
described in this prospectus or in the indenture;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any events of default, if not otherwise described below under &#147;Events of
Default&#148;;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the terms and conditions, if any, for conversion into or exchange for shares of
our common stock or preferred stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any depositaries, interest rate calculation agents, exchange rate calculation
agents or other agents; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the terms and conditions, if any, upon which the debt securities shall be
subordinated in right of payment to other indebtedness of the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may issue discount debt securities that provide for an amount less than the stated
principal amount to be due and payable upon acceleration of the maturity of such debt securities in
accordance with the terms of the indenture. We may also issue debt securities in bearer form, with
or without coupons. If we issue discount debt securities or debt securities in bearer form, we will
describe material U.S. federal income tax considerations and other material special considerations
which apply to these debt securities in the applicable prospectus supplement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may issue debt securities denominated in or payable in a foreign currency or currencies or
a foreign currency unit or units. If we do, we will describe the restrictions, elections, and
general tax considerations relating to the debt securities and the foreign currency or currencies
or foreign currency unit or units in the applicable prospectus supplement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Exchange and/or Conversion Rights</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may issue debt securities which can be exchanged for or converted into shares of our common
stock or preferred stock. If we do, we will describe the terms of exchange or conversion in the
prospectus supplement relating to these debt securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Transfer and Exchange</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may issue debt securities that will be represented by either:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;book-entry securities,&#148; which means that there will be one or more global
securities registered in the name of a depositary or a nominee of a depositary; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;certificated securities,&#148; which means that they will be represented by a
certificate issued in definitive registered form.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will specify in the prospectus supplement applicable to a particular offering whether the
debt securities offered will be book-entry or certificated securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Certificated Debt Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you hold certificated debt securities, you may transfer or exchange such debt securities at
the trustee&#146;s office or at the paying agent&#146;s office or agency in accordance with the terms of the
indenture. You will not be charged a service charge for any transfer or exchange of certificated
debt securities but may be required to pay an amount sufficient to cover any tax or other
governmental charge payable in connection with such transfer or exchange.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may effect the transfer of certificated debt securities and of the right to receive the
principal of, premium, and/or interest, if any, on the certificated debt securities only by
surrendering the certificate representing the certificated debt securities and having us or the
trustee issue a new certificate to the new holder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Global Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we decide to issue debt securities in the form of one or more global securities, then we
will register the global securities in the name of the depositary for the global securities or the
nominee of the depositary, and the global securities will be delivered by the trustee to the
depositary for credit to the accounts of the holders of beneficial interests in the debt
securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The prospectus supplement will describe the specific terms of the depositary arrangement for
debt securities of a series that are issued in global form. None of RXi, the trustee, any payment
agent or the security registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership interests in a global debt
security or for maintaining, supervising or reviewing any records relating to these beneficial
ownership interests.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>No Protection in the Event of Change of Control</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The indenture does not have any covenants or other provisions providing for a put or increased
interest or otherwise that would afford holders of our debt securities additional protection in the
event of a recapitalization transaction, a change of control of RXi, or a highly leveraged
transaction. If we offer any covenants or provisions of this type with respect to any debt
securities covered by this prospectus, we will describe them in the applicable prospectus
supplement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Covenants</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise indicated in this prospectus or the applicable prospectus supplement, our
debt securities will not have the benefit of any covenants that limit or restrict our business or
operations, the pledging of our assets or the incurrence by us of indebtedness. We will describe in
the applicable prospectus supplement any material covenants in respect of a series of debt
securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Consolidation, Merger and Sale of Assets</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have agreed in the indenture that we will not consolidate with or merge into any other
person or convey, transfer, sell or lease our properties and assets substantially as an entirety to
any person, unless:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the person formed by the consolidation or into or with which we are merged or
the person to which our properties and assets are conveyed, transferred, sold or
leased, is a corporation organized and existing under the laws of the U.S., any
state or the District of Columbia or a corporation or comparable legal entity
organized under the laws of a foreign jurisdiction and, if we are not the surviving
person, the surviving person has expressly assumed all of our obligations,
including the payment of the principal of and, premium, if any, and interest on the
debt securities and the performance of the other covenants under the indenture; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>immediately before and immediately after giving effect to the transaction, no
event of default, and no event which, after notice or lapse of time or both, would
become an event of default, has occurred and is continuing under the indenture.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Events of Default</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise specified in the applicable prospectus supplement, the following events will
be events of default under the indenture with respect to debt securities of any series:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we fail to pay any principal or premium, if any, when it becomes due;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we fail to pay any interest within 30&nbsp;days after it becomes due;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we fail to observe or perform any other covenant in the debt securities or the
indenture for 60&nbsp;days after written notice specifying the failure from the trustee
or the holders of not less than 25% in aggregate principal amount of the
outstanding debt securities of that series; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>certain events involving bankruptcy, insolvency or reorganization of RXi or any
of our significant subsidiaries.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The trustee may withhold notice to the holders of the debt securities of any series of any
default, except in payment of principal of or premium, if any, or interest on the debt securities
of a series, if the trustee considers it to be in the best interest of the holders of the debt
securities of that series to do so.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an event of default (other than an event of default resulting from certain events of
bankruptcy, insolvency or reorganization) occurs, and is continuing, then the trustee or the
holders of not less than 25% in aggregate principal amount of the outstanding debt securities of
any series may accelerate the maturity of the debt securities. If this happens, the entire
principal amount, plus the premium, if any, of all the outstanding debt securities of the affected
series plus accrued interest to the date of acceleration will be immediately due and payable. At
any time after the acceleration, but before a judgment or decree based on such acceleration is
obtained by the trustee, the holders of a majority in aggregate principal amount of outstanding
debt securities of such series may rescind and annul such acceleration if:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all events of default (other than nonpayment of accelerated principal, premium
or interest) have been cured or waived;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all lawful interest on overdue interest and overdue principal has been paid; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the rescission would not conflict with any judgment or decree.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, if the acceleration occurs at any time when we have outstanding indebtedness
which is senior to the debt securities, the payment of the principal amount of outstanding debt
securities may be subordinated in right of payment to the prior payment of any amounts due under
the senior indebtedness, in which case the holders of debt securities will be entitled to payment
under the terms prescribed in the instruments evidencing the senior indebtedness and the indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an event of default resulting from certain events of bankruptcy, insolvency or
reorganization occurs, the principal, premium and interest amount with respect to all of the debt
securities of any series will be due and payable immediately without any declaration or other act
on the part of the trustee or the holders of the debt securities of that series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of a majority in principal amount of the outstanding debt securities of a series
will have the right to waive any existing default or compliance with any provision of the indenture
or the debt securities of that series and to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee, subject to certain limitations specified in the
indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No holder of any debt security of a series will have any right to institute any proceeding
with respect to the indenture or for any remedy under the indenture, unless:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the holder gives to the trustee written notice of a continuing event of default;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the holders of at least 25% in aggregate principal amount of the outstanding
debt securities of the affected series make a written request and offer reasonable
indemnity to the trustee to institute a proceeding as trustee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the trustee fails to institute a proceeding within 60&nbsp;days after such request;
and</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the holders of a majority in aggregate principal amount of the outstanding debt
securities of the affected series do not give the trustee a direction inconsistent
with such request during such 60-day period.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These limitations do not, however, apply to a suit instituted for payment on debt securities
of any series on or after the due dates expressed in the debt securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will periodically deliver certificates to the trustee regarding our compliance with our
obligations under the indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Modification and Waiver</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time, we and the trustee may, without the consent of holders of the debt
securities of one or more series, amend the indenture or the debt securities of one or more series,
or supplement the indenture, for certain specified purposes, including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to provide that the surviving entity following a change of control of RXi
permitted under the indenture will assume all of our obligations under the
indenture and debt securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to provide for certificated debt securities in addition to uncertificated debt
securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to comply with any requirements of the SEC under the Trust Indenture Act of
1939;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to provide for the issuance of and establish the form and terms and conditions
of debt securities of any series as permitted by the indenture;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to cure any ambiguity, defect or inconsistency, or make any other change that
does not materially and adversely affect the rights of any holder; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to appoint a successor trustee under the indenture with respect to one or more
series.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time we and the trustee may, with the consent of holders of at least a majority
in principal amount of an outstanding series of debt securities, amend or supplement the indenture
or the debt securities series, or waive compliance in a particular instance by us with any
provision of the indenture or the debt securities. We may not, however, without the consent of each
holder affected by such action, modify or supplement the indenture or the debt securities or waive
compliance with any provision of the indenture or the debt securities in order to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reduce the amount of debt securities whose holders must consent to an amendment,
supplement, or waiver to the indenture or such debt security;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reduce the rate of or change the time for payment of interest or reduce the
amount of or postpone the date for payment of sinking fund or analogous
obligations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reduce the principal of or change the stated maturity of the debt securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>make any debt security payable in money other than that stated in the debt
security;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>change the amount or time of any payment required or reduce the premium payable
upon any redemption, or change the time before which no such redemption may be
made;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>waive a default in the payment of the principal of, premium, if any, or interest
on the debt securities or a redemption payment;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>waive a redemption payment with respect to any debt securities or change any
provision with respect to redemption of debt securities; or</TD>
</TR>


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>take any other action otherwise prohibited by the indenture to be taken without
the consent of each holder affected by the action.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Defeasance of Debt Securities and Certain Covenants in Certain Circumstances</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The indenture permits us, at any time, to elect to discharge our obligations with respect to
one or more series of debt securities by following certain procedures described in the indenture.
These procedures will allow us either:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to defease and be discharged from any and all of our obligations with respect to
any debt securities except for the following obligations (which discharge is
referred to as &#147;legal defeasance&#148;):</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to register the transfer or exchange of such debt securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to replace temporary or mutilated, destroyed, lost or stolen debt securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to compensate and indemnify the trustee; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to maintain an office or agency in respect of the debt securities and to hold monies for
payment in trust; or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to be released from our obligations with respect to the debt securities under
certain covenants contained in the indenture, as well as any additional covenants
which may be contained in the applicable supplemental indenture (which release is
referred to as &#147;covenant defeasance&#148;).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to exercise either defeasance option, we must deposit with the trustee or other
qualifying trustee, in trust for that purpose:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>money;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>U.S. Government Obligations (as described below) or Foreign Government
Obligations (as described below) which through the scheduled payment of principal
and interest in accordance with their terms will provide money; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a combination of money and/or U.S. Government Obligations and/or Foreign
Government Obligations sufficient in the written opinion of a nationally-recognized
firm of independent accountants to provide money;</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">which in each case specified above, provides a sufficient amount to pay the principal of, premium,
if any, and interest, if any, on the debt securities of the series, on the scheduled due dates or
on a selected date of redemption in accordance with the terms of the indenture.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, defeasance may be effected only if, among other things:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the case of either legal or covenant defeasance, we deliver to the trustee an
opinion of counsel, as specified in the indenture, stating that as a result of the
defeasance neither the trust nor the trustee will be required to register as an
investment company under the Investment Company Act of 1940;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the case of legal defeasance, we deliver to the trustee an opinion of counsel
stating that we have received from, or there has been published by, the Internal
Revenue Service a ruling to the effect that, or there has been a change in any
applicable federal income tax law with the effect that (and the
opinion shall confirm that), the holders of outstanding debt securities will not
recognize income, gain or loss for U.S. federal income tax purposes solely as a
result of such legal defeasance and will be subject to U.S. federal income tax on
the same amounts, in the same manner, including as a result of prepayment, and at
the same times as would have been the case if legal defeasance had not occurred;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the case of covenant defeasance, we deliver to the trustee an opinion of
counsel to the effect that the holders of the outstanding debt securities will not
recognize income, gain or loss for U.S. federal income tax purposes as a result of
covenant defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
covenant defeasance had not occurred; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>certain other conditions described in the indenture are satisfied.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we fail to comply with our remaining obligations under the indenture and applicable
supplemental indenture after a covenant defeasance of the indenture and applicable supplemental
indenture, and the debt securities are declared due and payable because of the occurrence of any
undefeased event of default, the amount of money and/or U.S. Government Obligations and/or Foreign
Government Obligations on deposit with the trustee could be insufficient to pay amounts due under
the debt securities of the affected series at the time of acceleration. We will, however, remain
liable in respect of these payments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The term &#147;U.S. Government Obligations&#148; as used in the above discussion means securities which
are direct obligations of or non-callable obligations guaranteed by the United States of America
for the payment of which obligation or guarantee the full faith and credit of the United States of
America is pledged.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The term &#147;Foreign Government Obligations&#148; as used in the above discussion means, with respect
to debt securities of any series that are denominated in a currency other than U.S. dollars (1)
direct obligations of the government that issued or caused to be issued such currency for the
payment of which obligations its full faith and credit is pledged or (2)&nbsp;obligations of a person
controlled or supervised by or acting as an agent or instrumentality of such government the timely
payment of which is unconditionally guaranteed as a full faith and credit obligation by that
government, which in either case under clauses (1)&nbsp;or (2), are not callable or redeemable at the
option of the issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Regarding the Trustee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will identify the trustee with respect to any series of debt securities in the prospectus
supplement relating to the applicable debt securities. You should note that if the trustee becomes
a creditor of RXi, the indenture and the Trust Indenture Act of 1939 limit the rights of the
trustee to obtain payment of claims in certain cases, or to realize on certain property received in
respect of any such claim, as security or otherwise. The trustee and its affiliates may engage in,
and will be permitted to continue to engage in, other transactions with us and our affiliates. If,
however, the trustee acquires any &#147;conflicting interest&#148; within the meaning of the Trust Indenture
Act of 1939, it must eliminate such conflict or resign.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of a majority in principal amount of the then outstanding debt securities of any
series may direct the time, method and place of conducting any proceeding for exercising any remedy
available to the trustee. If an event of default occurs and is continuing, the trustee, in the
exercise of its rights and powers, must use the degree of care and skill of a prudent person in the
conduct of his or her own affairs. Subject to that provision, the trustee will be under no
obligation to exercise any of its rights or powers under the indenture at the request of any of the
holders of the debt securities, unless they have offered to the trustee reasonable indemnity or
security.
</DIV>






<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="B81024111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the issuance of the securities offered hereby will be passed upon for us by
Ropes &#038; Gray LLP, Boston, Massachusetts. The validity of any securities will be passed upon for any
underwriters or agents by counsel that we will name in the applicable prospectus supplement.
</DIV>
<DIV align="left">
<A name="B81024112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements as of December&nbsp;31, 2009 and 2008 and for the years then ended and for
the cumulative period from inception (January&nbsp;1, 2003) through December&nbsp;31, 2009 incorporated by
reference in this Prospectus have been so incorporated in reliance on the report of BDO Seidman,
LLP, an independent registered public accounting firm, incorporated herein by reference, given on
the authority of said firm as experts in auditing and accounting.
</DIV>
<DIV align="left">
<A name="B81024113"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed a registration statement on Form S-3 with the SEC for the securities we are
offering by this prospectus. This prospectus does not include all of the information contained in
the registration statement. You should refer to the registration statement and its exhibits for
additional information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are required to file annual and quarterly reports, special reports, proxy statements,
and other information with the SEC. We make these documents publicly available, free of charge, on
our website at www.rxipharma.com as soon as reasonably practicable after filing such documents with
the SEC. You can read our SEC filings, including the registration statement, on the SEC&#146;s website
at http://www.sec.gov. You also may read and copy any document we file with the SEC at its public
reference facility at:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Public Reference Room<BR>
100 F Street N.E.<BR>
Washington, DC 20549.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please call the SEC at 1-800-732-0330 for further information on the operation of the
public reference facilities.
</DIV>
<DIV align="left">
<A name="B81024114"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC allows us to &#147;incorporate by reference&#148; into this prospectus the information we file
with it, which means that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be part of this prospectus,
and information in documents that we file later with the SEC will automatically update and
supersede information in this prospectus. We incorporate by reference into this prospectus the
documents listed below and any future filings made by us with the SEC under Section&nbsp;13(a), 13(c),
14 or 15(d) of the Exchange Act until we close this offering, including all filings made after the
date of the initial registration statement and prior to the effectiveness of the registration
statement; provided, however, that we are not incorporating any information furnished under Item
2.02 or Item&nbsp;7.01 of any current report on Form 8-K we may subsequently file. We hereby incorporate
by reference the following documents:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Annual Report on Form 10-K for the year ended December&nbsp;31, 2009 filed with
the SEC on March&nbsp;31, 2009, including any amendment filed for the purpose of
updating such Annual Report;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Quarterly Report on Form 10-Q for the quarterly period ending March&nbsp;31, 2010
filed with the SEC on May&nbsp;17, 2010;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K filed with the SEC on March&nbsp;23, 2010;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Proxy Statement on Schedule&nbsp;14A filed with the SEC on April&nbsp;23, 2010; and</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the description of our common stock contained in our registration statement on
Form 8-A filed February&nbsp;8, 2008, under the Securities Act, including any amendment
or report filed for the purpose of updating such description.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may request a copy of these filings, at no cost, by writing or telephoning us at the
following address:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">RXi Pharmaceuticals Corporation<BR>
60 Prescott Street<BR>
Worcester, MA 01650<BR>
Attention: Investor Relations<BR>
Phone: (508)&nbsp;767-3861
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copies of these filings are also available, without charge, through the &#147;Investor Relations&#148;
section of our website (www.rxipharma.com) as soon as reasonably practicable after they are filed
electronically with the SEC. The information contained on our website is not a part of this
prospectus.
</DIV>






<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>11,950,000 Shares of Common Stock<BR>
Warrants to Purchase up to 11,950,000 Shares of Common Stock</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="b86048fnb8604800.gif" alt="(RXI LOGO)">
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROSPECTUS SUPPLEMENT</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="Center" style="font-size: 14pt; margin-top: 6pt"><B>Roth Capital Partners</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">April 15, 2011
</DIV>


</DIV>




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