Ruthigen, Inc. RTGN and Pulmatrix, Inc. announced that they have entered into a definitive merger agreement on Mar 13, 2015.
Upon closing of the transaction, Pulmatrix will become a wholly-owned subsidiary of Ruthigen, which will be renamed as Pulmatrix. Following NASDAQ’s approval, the surviving company’s common stock will continue to trade on The NASDAQ Capital Market. It will be headquartered in Lexington, MA.
Pulmatrix’s debt and equity securities outstanding before the closing of the agreement will be exchanged for shares of Ruthigen common stock representing nearly 81% of the latter’s outstanding common stock. In Feb 2015, Pulmatrix raised approximately $4.5 million in consideration of the upcoming merger with Ruthigen.
Additionally, some existing institutional investors in Pulmatrix entered into stock purchase agreements with the company to invest an additional amount of $10 million upon the closing of the merger. Ruthigen’s shares surged 10.7% following the company’s announcement.
Ruthigen stated that the combined company is expected to focus its resources on the development of Pulmatrix’s next-generation inhaled therapeutic products. The merger will create a strong financial foundation and offer enhanced access to capital for the development of innovative inhaled products designed to meet significant unmet needs in the field of respiratory diseases. Moreover, it will provide the opportunity to advance Pulmatrix’s iSPERSE inhaled dry powder platform and the lead cystic fibrosis candidate into clinical development.
Ruthigen carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Lannett Company, Inc. LCI, Salix Pharmaceuticals Ltd. SLXP and Cytokinetics, Inc. CYTK. All these stocks carry a Zacks Rank #1 (Strong Buy).
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