Respiratory biotech Pulmatrix announced an agreement to merge with publicly traded, biopharmaceutical company Ruthigen.
The companies have entered into a definitive merger agreement, under which Pulmatrix will become a wholly-owned subsidiary of Ruthigen – which would take the Pulmatrix name and continue Pulmatrix’s work of advancing a new generation of inhaled therapies. Pulmatrix’s pipeline includes PUR1900, an inhaled anti-infective for the treatment of cystic fibrosis (CF), and Phase II-ready PUR0200, a once-daily inhaled bronchodilator for chronic obstructive pulmonary disease (COPD).
The drugs are delivered through Pulmatrix’s novel dry powder delivery platform, called iSPERSE (inhaled small particles easily respirable and emitted). The platform uses particle engineering to create dry powders containing unique properties including aerodynamically small, dense particles for efficient dispersibility and delivery to the airways. The iSPERSE powders can be used with an array of dry powder inhaler technologies and can be formulated with almost any drug substance.
“This merger has the potential to provide a significant business growth opportunity for our combined companies. We hope that the introduction of a new team of scientists and management with a proven track record, as well as Pulmatrix’s new drug development programs, will catalyze significant growth opportunities in the near future,” said Hojabr Alimi, Chairman and Chief Executive Officer of Ruthigen.
Under the deal, Pulmatrix will reverse-merge into Ruthigen becoming a wholly-owned subsidiary of the company, 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 outstanding common stock of Ruthigen. The combined company will use the Pulmatrix name, and, upon closing of the merger, some of Pulmatrix’s existing investors will invest $10 million in exchange for stock.
Upon completion of the merger, Pulmatrix’s President and Chief Executive Officer, Dr. Robert Clarke, will be appointed as the President and the Chief Executive Officer of the combined company, which will be headquartered in Lexington, MA.
“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,” Dr. Clarke said. “This transaction represents an excellent opportunity to advance our novel iSPERSE inhaled dry powder platform and lead CF candidate into clinical development and to meet our long-term growth objective of building a leading company around a robust pipeline for respiratory disease.”
Both companies’ boards of directors have approved the merger, which is subject to customary closing conditions.