Ruthigen and Pulmatrix enter into merger agreement
Upon the closing of the deal, Pulmatrix will become a wholly owned subsidiary of Ruthigen
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SANTA ROSA, Calif.—Ruthigen Inc., a biopharmaceutical company, and Pulmatrix Inc., a Lexington, Mass.-based clinical-stage biotechnology company, announced that on March 13, 2015, they had entered into a definitive merger agreement. Upon the closing of the transactions contemplated by the merger agreement, Pulmatrix will become a wholly owned subsidiary of Ruthigen and all of Pulmatrix’s debt and equity securities outstanding prior to the consummation of the merger will be exchanged for shares of Ruthigen common stock that will represent approximately 81 percent of the outstanding common stock of Ruthigen.
In connection with Pulmatrix’s entry into the merger agreement, certain of its existing institutional investors entered into stock purchase agreements with Pulmatrix to invest an additional $10 million in the company upon the closing of the merger. Pulmatrix also raised approximately $4.5 million in February 2015, in contemplation of entering into the merger agreement.
Upon completion of the merger, Ruthigen will be renamed Pulmatrix, and, pending NASDAQ approval of the merger, the surviving company’s common stock will continue to trade on the NASDAQ Capital Market after the merger. It is anticipated that the combined company will focus its resources and efforts on the development of Pulmatrix’s next-generation inhaled therapeutic products.
Upon completion of the merger, Dr. Robert Clarke, president and CEO of Pulmatrix, will be appointed as the president and CEO of the combined company, which will be headquartered in Lexington. Prior to joining Pulmatrix in 2004, Clarke was director of life sciences at Alkermes Inc.
“We believe that a merger with Ruthigen provides a strong financial foundation with enhanced access to capital to further Pulmatrix’s mission of innovative inhaled product development for patients with significant unmet needs in respiratory disease,” Clarke said. “This transaction represents an excellent opportunity to advance our novel iSPERSE inhaled dry powder platform and lead CF [cystic fibrosis] candidate into clinical development and to meet our long-term growth objective of building a leading company around a robust pipeline for respiratory disease.”
Terry McGuire, senior Pulmatrix board member and founding partner at Polaris Partners, Pulmatrix’s largest shareholder, noted, “This transaction provides significant momentum for Pulmatrix to achieve its goals in the next stage of its development.”
