Santa Rosa biotech company Ruthigen has conducted an initial public offering of stock valued at $19.2 million, even as it prepares for the first clinical trials this summer of a drug to fight infections in surgery patients.
Ruthigen shares began trading Friday on the NASDAQ stock market, ending the day at $7.25 a share, up 25 cents. The stock symbol is RTGN.
"It was a huge milestone for the company," CEO Hoji Alimi said.
The offering's proceeds will fund the company for the next two years, he said. Ruthigen plans soon to start hiring staff for new research and development positions.
Ruthigen was incorporated in January 2013 as a wholly owned subsidiary of Oculus Innovative Sciences, a Petaluma biotech company. Alimi previously was the CEO of Oculus.
This week's public offering involves 2.6 million units, each consisting of a share of common stock and a Series A warrant that can be exercised during the next two years for an additional share. If that warrant is exercised, the holder receives not only the share but also a Series B warrant, which can be used to purchase still another share.
In its prospectus filed Friday, Ruthigen estimated that the initial offering price would raise $19.2 million. The company projected that its net proceeds would amount to $15.4 million, or approximately $18 million if its underwriters exercise all their stock and warrant options.
"Upon completion of this offering, we estimate Oculus will own 43 percent of our outstanding shares of common stock," the prospectus stated.
Last August, Ruthigen filed for the offering, stating then that it hoped to raise up to $26.7million to finance the development of its flagship drug, RUT58-60. The company says the drug has shown promise for preventing and treating infections in surgery and trauma procedures.
The drug involves "a novel formulation of hypochlorous acid," according to the company prospectus.