RXi Pharmaceuticals Corp., a Worcester, Mass. subsidiary of Los Angeles' Cytrx Corp., said Friday that it had raised $8.3 million in a follow-on public offering of common stock.

RXi said it had agreements to purchase more than 2.38 million shares of its stock at $3.50 per share and warrants to purchase up to 954,286 shares at an exercise price of $4.50 per share. The warrants would be exercisable on February 4, 2010.

RXi expects a net gain of about $7.8 million from the sale, and plans to use the proceeds for working capital. The company is developing drugs based on RNAi technology, which seeks to treat diseases by interfering with the genes thought to be responsible for the diseases.

RXi shares were down 49 cents, or 11.5 percent, to $3.78 in midday trading on the Nasdaq.

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