Stockholders Agreement

Exhibit 10.11

RXi PHARMACEUTICALS CORPORATION
One Innovation Drive
Worcester, Massachusetts 01605

February 23, 2007

      Re: Stockholders Agreement

Gentlemen:

     RXi Pharmaceuticals Corporation (“RXi”), CytRx Corporation (“CytRx”), and the other current stockholders and Scientific Advisory Board members of RXi (“SAB Members”) believe it is in their mutual best interests to enter into this letter agreement (this “Agreement”) in order to set forth their understanding and agreement regarding their ownership and voting of shares of common stock of RXi (“RXi Shares”), which for this purpose includes any and all additional shares of common stock and other voting securities of RXi that they may acquire or own at any time. The parties also believe it is mutually beneficial that, in consideration of CytRx’s willingness to enter into this Agreement, RXi grant CytRx certain rights to purchase any “New Securities” (as defined in Annex 1) which RXi proposes to sell or issue.

     In consideration of the mutual promises set forth herein, and other good and valuable consideration, the parties hereby agree as follows:

     1. From the period beginning upon the closing of an equity financing of RXi in an aggregate amount of not less than $15 million dollars from investors (including CytRx acting as an Investor) (the “Initial Financing”), CytRx agrees that it will not vote its RXi Shares or otherwise take steps to elect or have elected individuals who are (i) employees, officers or directors of CytRx, (ii) employees, officers or directors of any entity that has a contractual business relationship with CytRx, or (iii) employees, officers, directors of any entity that has a contractual business relationship with any officer or director of CytRx (collectively, (i), (ii), and

CytRx Corporation
February 23, 2007
Page 2

(iii) are “Affiliates”) to constitute a majority of RXi’s Board of Directors, and, in the event that Affiliates are elected to hold a majority of the seats of RXi’s Board of Directors, CytRx shall use reasonable efforts to cause a sufficient number of its Affiliates to resign from their position as directors of RXi or to cause a sufficient number of independent directors to be added to RXi’s Board of Directors, so that Affiliates do not constitute a majority of RXi’s Board of Directors. If at any time following the Initial Financing, CytRx, together with its subsidiaries and any other entities controlled by, or under common control with, CytRx (collectively, “CytRx Affiliates”) hold in the aggregate a majority of the outstanding voting power of RXi, CytRx will use reasonable efforts without delay to transfer or otherwise dispose of a sufficient number of shares of RXi’s voting stock to bring the aggregate ownership by CytRx and CytRx Affiliates of the total outstanding shares of RXi’s voting stock below fifty percent (50%), subject to the rules and regulations of the Securities and Exchange Commission and applicable state securities laws.

     2. CytRx agrees that, from the period beginning at the closing of the Initial Financing it shall vote, or provide its written consent with respect to, all RXi Shares then owned or controlled by it and CytRx Affiliates in such manner as shall be recommended by the Board of Directors of RXi with respect to any or all of the following matters that may be submitted by RXi for action by the stockholders of RXi:

          (a) any proposal to amend the certificate of incorporation of RXi to increase the authorized RXi Shares in order to facilitate obtaining additional financing needed by RXi at any time and from time to time to fund its ongoing working capital requirements;

          (b) the sale and issuance of RXi Shares or other securities in any such working capital financing; and

          (c) any other matter submitted for action by the RXi stockholders generally with respect to any such financing;

provided , however , that CytRx shall have no obligation hereunder with respect to any of the foregoing matters in which CytRx or the RXi Shares owned by it or CytRx Affiliates would receive different treatment than the treatment afforded the other RXi stockholders generally; and provided further , that CytRx’s obligations above shall not extend to any financing for purposes of acquiring the business, technologies, assets, or operations of any other company.

     3. RXi hereby grants CytRx the rights set forth on Annex 1 hereto, which is incorporated herein by reference. Such rights granted to CytRx shall become effective as of the first date as of which the issued and outstanding RXi Shares owned in the aggregate by CytRx and CytRx Affiliates shall constitute less than 50% of the total issued and outstanding RXi Shares, and shall terminate upon the earlier of (a) January 8, 2012 or (b) the first date as of which CytRx and CytRx Affiliates own in the aggregate less than ten percent (10%) of the outstanding RXi Shares. Notwithstanding the provisions of Annex 1, the rights granted thereunder to CytRx

CytRx Corporation
February 23, 2007
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shall be suspended if, and for so long as, CytRx shall be in breach of any of its obligations under this Agreement.

     4. Except for the provisions of paragraph 3, above, the provisions of this Agreement may be terminated at any time by the written consent or agreement of CytRx, RXi, and a majority of the SAB Members then serving as such. Unless sooner terminated, the provisions of this Agreement shall terminate as to an SAB Member, at such time as he is no longer serving as a member of RXi’s Scientific Advisory Board.

     5. This Agreement is governed by and construed in accordance with the laws of the State of Delaware irrespective of any conflicts of law principles.

     6. This Agreement shall be binding upon CytRx, RXi, and the SAB Members and their respective heirs and successors in interest. The obligations of each of CytRx and the SAB Members hereunder shall terminate as to any RXi Shares sold, transferred or assigned by it or him upon such sale, transfer or assignment, and this Agreement shall not bind or inure to the benefit of any transferee of RXi Shares sold, assigned or transferred by any party (other than transfers to CytRx Affiliates and other than transfers to a successor in interest of all or any substantial part of the business or assets of a party by way of sale, exchange, merger or otherwise).

     7. This Agreement may not be modified or amended, except in a writing signed by CytRx, RXi, and at least a majority of the SAB Members who are then serving as members of RXi’s Scientific Advisory Board.

     8. Without limiting the rights of each party hereto to pursue any and all other legal and equitable remedies available to such party, each party acknowledges and agrees that the remedy at law in the event of a breach by any party of it obligations under this Agreement would be inadequate and, therefore, that the parties shall be entitled to specific performance, injunctive relief and other equitable remedies in such event.

     9. This Agreement, including Annex 1 hereto, contain the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings with respect thereto.

     10. The parties hereto shall at all times act in good faith and shall not take any actions, or fail to take actions, to circumvent or frustrate the provisions of this Agreement.

CytRx Corporation
February 23, 2007
Page 4

     11. This Agreement may be executed in counterparts, each of which when executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same instruction.

ANNEX 1

Preemptive Rights

SECTION 1. General