AAA Novartis-backed Pulmatrix merges with Ruthigen

Novartis-backed Pulmatrix merges with Ruthigen

Pulmatrix, a US-based biotechnology company backed by pharmaceutical firm Novartis, agreed yesterday to merge with publicly-listed biopharmaceutical company Ruthigen in an all-stock deal.

Formed in 2003, Pulmatrix is developing a range of products based on iSperse, a dry powder delivery platform for inhaled medicines.

Ruthigen, which floated on Nasdaq in March 2014, is working on an anti-infective drug for surgical and trauma procedures but the merged enterprise plans to concentrate on Pulmatrix’s technology.

Pulmatrix had raised about $65m in equity funding and $20m in debt from investors including Novartis Venture Fund, which acts as Novartis’ corporate venturing unit, Polaris Partners, Arch Venture Partners and 5AM Ventures.

The companies will merge in an agreement that will involve Pulmatrix transferring its equity and debt to Ruthigen in return for 81% of Ruthigen’s shares. Undisclosed investors in Pulmatrix, which secured $4.5m in funding last month, will invest a further $10m in the new company, which will be known as Pulmatrix, Inc.

Robert Clarke, the president and CEO of Pulmatrix, will take up the same position at the newly formed company.

Clarke said: “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.

“This transaction represents an excellent opportunity to advance our novel iSperse inhaled dry powder platform and lead [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.”

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