Biopharmaceutical company CytRx Corp. said Tuesday its RXi Pharmaceuticals Corp. subsidiary will buy back some of its shares from CytRx.
RXi plans to buy 675,000 of its own shares from CytRx at a price of $5.70 per share, a discount of 30 percent from Monday's closing price. CytRx expects about $3.8 million in proceeds from the sale, and said RXi will have an option to buy another 135,000 shares at $6 per share.
RXi also announced a registered direct offering of stock and warrants that will be worth $16.2 million. After the buyback and the offering are complete, CytRx will own around 5.1 million shares of RXi, or about 28 percent of the company's shares.
CytRx will use proceeds to fund cancer drug development.
CytRx shares fell 10 cents, or 7.4 percent, to $1.26. RXi stock plunged $2.15, or 27 percent, to close at $5.96.