SANTA ROSA -- Having raised a net $15.4 million after its initial public offering and related expenses, Santa Rosa-based Ruthigen (Nasdaq: RTGN) will now be able to fully fund the first two phases of clinical trials for a preventative antibiotic treatment designed for use in surgery and wound care, said chief executive Hojabr "Hoji" Alimi.
[caption id="attachment_90397" align="alignleft" width="214"] Hoji Alimi[/caption]
If successful, those trials will pave the way for further tests and potential approval of the company's so-called "RUT58-60" treatment for widespread use in the United States in 2018, he said. The product would be applied directly to a surgical area or wound, and has shown promise in preventing infection from treatment-resistant bacteria and a broad spectrum of other strains.
"Now we have sufficient funding to complete our phase one and two clinical trials," Mr. Alimi said.
Ruthigen became an independent company through its March IPO, which raised a total of $19.2 million, he said. The company was announced in January 2013 as a wholly owned subsidiary of Petaluma's Oculus Innovative Sciences, Inc. (Nasdaq: OCLS), which first developed RUT58-60.
The former subsidiary operates with an exclusive license for RUT58-60, a hypochlorous acid-basic compound, from Oculus. Oculus continues to own approximately 48 percent of the company's shares following the IPO.
Phase 1/2 clinical trials are expected to begin in July of this year, with results announced in the first quarter of 2015, Mr. Alimi said.
Ruthigen, which had six employees as of March 1, plans to first seek FDA approval for abdominal surgery applications of the RUT58-60 compound. Those uses could expand to cardiac, spinal and other applications in the future, according to filings with the U.S. Securities and Exchange Commission.
The company originally planned to raise up to $26.7 million in its public offering, but ultimately revised that target to $19.2 million. Ruthigen sold 2.65 million shares, up from approximately 1.5 million planned in late 2013.
Approximately $7 million to $8 million in proceeds from the sale are expected to fund the phase 1/2 clinical trial and eventually establish an independent research facility, according to filings with the SEC. The company currently has offices at 2455 Bennett Valley Road in Santa Rosa.
Shareholders also received warrants for the purchase of additional stock classes in Ruthigen that, if exercised, could raise roughly $19 million in additional funds to support the final two phases of FDA trials, Mr. Alimi said. Other options for funding those later trials include financial partnerships with pharmaceutical companies in the potential markets of Europe and Japan, as well as new capital partners.
"The general market for biotech and pharmaceutical companies is very good right now," he said.
Oculus, which went public in 2007, sells a number of topical antibiotic and scar treatment products for human and veterinary use. Those treatments hinge largely on an antimicrobial compound marketed as Microcyn, with sales in the United States, Mexico, India, China, Europe and the Middle East and manufacturing in the United States and Latin America.
The company has 42 employees in the United States and the Netherlands, as well as 39 contract employees in Mexico. Oculus had $15.4 million in revenue in its most recently reported fiscal year ended March 31, 2013.
Mr. Alimi continues to serve as chairman of the board for Oculus, a position he has held since 1999. He served as CEO and president of Oculus from 1999 to February 2013.