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Oculus Innovative
Sciences, Inc.
today announced that its board of directors has
unanimously approved a spin-off of its novel biotechnology business, Ruthigen,
Inc.
Oculus management is currently working with securities counsel and bankers on
a plan to provide equity in Ruthigen to Oculus shareholders. Oculus expects
the spinoff to be a tax-free stock distribution and ultimately anticipates
Ruthigen to become an independent NASDAQ-traded company. Oculus has retained
bankers and financial advisors for the spinoff, and expects the spinoff to
be completed in 2013. Execution of the transaction requires further work
relative to structure, governance and other significant matters and risks.
Upon completion of the spinoff, Hoji Alimi, founder and current chief
executive officer of Oculus, will remain on the board of directors at Oculus
and serve as chairman and chief executive officer of Ruthigen, Inc. Jim
Schutz, the current chief operating officer and director of Oculus,
will assume the role of chief executive officer of Oculus, with a new board
chair to be elected shortly. Each company will operate with independent
management teams and boards of directors to establish separate governance
and financials as required by accounting rules. Additional details
regarding structure will be determined and disclosed at a later time.
Oculus will retain all Microcyn drug and device indications while Ruthigen
will focus on RUT58-60, a drug candidate intended for the prevention of
infection in trauma and surgical procedures. RUT58-60 is a new unique
chemical formulation containing twice the concentration of hypochlorous acid,
along with magnesium and no sodium hypochlorite.
Alimi said: "By separating these unique businesses into two companies, we
believe each company will benefit from greater strategic and managerial focus
and be better positioned to capitalize on future market opportunities. Under
the plan currently under consideration, Oculus shareholders will receive
shares of Ruthigen. Ultimately, we are seeking to create additional value for
current and future shareholders of both Oculus and Ruthigen.
"Our Microcyn business will continue as it has over the past seven years
providing life saving products for patients without the additional burden of
drug development costs. Oculus has a foundation of strong fundamentals,
including sustainable revenues from several key markets and a solid plan for
new sources of revenue growth over the next several years."
Oculus' intent is to secure additional FDA and CE regulatory approvals and to
expand medical device offerings over the next 12 months. This will provide
current partners with new products and a growing platform of products for new
partners. While Oculus will continue promoting Microcyn-based products for
topical use, Ruthigen intends to focus on use of its uniquely differentiated
drug for internal use targeting organ exposure. Ruthigen intends to identify a
partner for its European drug indication as well as file an S-1 registration
statement to fund its pivotal drug program in the United States.
Upon completion of a public offering, the entities will operate as independent
entities.
"The spin-off of Ruthigen should be attractive to shareholders who are
interested in companies that are addressing the critical issue of surgical
infection," said Alimi. "Initially, we intend to leverage our previous phase
two drug data for use in regulatory approvals relative to the prevention of
infection in surgeries."
The completion of the proposed spinoff is subject to certain customary
conditions, including final approval by Oculus' board of directors, the filing
and effectiveness of appropriate filings with the U.S. Securities and Exchange
Commission including a registration statement on form S-1, and any necessary
third-party consents, as well as certain other matters relating to the
spinoff, receipt of legal opinions, execution of intercompany agreements, and
final approval of the transactions contemplated by the spinoff, as may be
required under Delaware law. Oculus notes that there can be no assurance that
any separation transaction will ultimately occur, or, if one does occur,
its terms or timing.
Management Conference Call
Oculus management will hold a conference call today to discuss the spin-off
and to answer questions, beginning at 4:30 p.m. ET. Individuals interested in
participating in the conference call may do so by dialing (877) 303-7607 for
domestic callers or (973) 638-3203 for international callers. Those interested
in listening to the conference call live via the Internet may do so at
http://ir.oculusis.com/events.cfm. Log on approximately 30 minutes prior to
the presentation in order to register and download the appropriate
software. Please note that those listening via the web do not have the ability
to pose questions.
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