Shares of Genoptix Inc. made a strong debut on Tuesday. The Carlsbad, Calif.-based company priced its initial public offering at $17 per share, above its previously projected range of $14 to $16 per share. The stock (NASDAQ:GXDX) then traded up a whopping $9.59, or 56.4 percent, to close at $26.59.

The IPO generated gross proceeds of about $73.1 million for Genoptix, which sold 4.3 million shares. An additional 714,286 shares were sold by certain shareholders. Genoptix will make another 750,000 shares available to underwriters Lehman Brothers, Banc of America Securities LLC and Cowen and Company to cover any overallotments.

While many life science IPOs this year have priced below their projected ranges, Genoptix has one thing most biotechs don't: revenues. The company's services to help hematologists and oncologists diagnose, treat and monitor cancer patients brought in $24 million in revenues in 2006 and $10.7 million just in the first quarter of 2007. And Genoptix believes there's plenty of room for more growth, considering that it currently holds just 4 percent of the billion-dollar-plus bone marrow testing market. (See BioWorld Today, Aug. 2, 2007.)

Proceeds from the IPO will be used to hire additional personnel, establish a second laboratory facility, expand backup systems, repay debt and pursue collaborations or acquisitions. Any remaining funds will go to working capital and general corporate purposes.

RXi To Be Majority-Owned No More

As part of its continuing transformation from a majority-owned subsidiary of CytRx Corp. to an independent pure-play RNAi company, RXi Pharmaceuticals Corp. filed a registration statement on Form S-1 with the Securities and Exchange Commission.

The filing covers approximately 10.8 million shares of RXi common stock to be distributed by CytRx. Of those shares, about 4.5 million will become a dividend to CytRx's shareholders and 83,714 will go to CytRx's directors, officers and employees. The remaining 6.2 million shares will be sold by CytRx on the public markets, once RXi becomes publicly listed.

RXi applied to list its shares on the NASDAQ Capital Market under the symbol "RXIP." The listing will provide liquidity to shareholders and allow RXi to raise money publicly in the future, but it won't be immediately accompanied by a financing.

For now, RXi is running on $15 million that CytRx invested into its operations in May. CytRx also previously contributed intellectual property and a pipeline of preclinical RNAi programs for familial amyotrophic lateral sclerosis, obesity, diabetes, oncology and CMV retinitis. In exchange, CytRx took an 85 percent stake in the newly formed company. (See BioWorld Today, Jan. 11, 2007, and April 19, 2007.)

RXi also licensed intellectual property and product candidates from the University of Massachusetts Medical School (UMMS). As part of the deal, UMMS required Los Angeles-based CytRx to reduce its stake in Worcester, Mass.-based RXi to a minority position. The distribution of 4.5 million shares to CytRx's shareholders will accomplish that, while the planned public sale of 6.2 million shares will give CytRx proceeds with which to advance its own programs, including lead compound arimoclomol for amyotrophic lateral sclerosis.

Shares of CytRx (NASDAQ:CYTR) fell 56 cents, to close at $3.94 on Tuesday.