Santa Rosa’s Ruthigen merges with Massachusetts startup

Santa Rosa-based biotech company Ruthigen is merging with Massachusetts-based Pulmatrix, Inc., a startup that is developing a new type of inhaled drug delivery method.

Under the merger announced Monday, Pulmatrix will become a wholly owned subsidiary of Ruthigen. The new company, named Pulmatrix, will be based in Lexington, Mass and be led by Pulmatrix’s current President/CEO Robert Clarke.

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 the outstanding common stock of Ruthigen,” the two companies said Monday in a press release.

The statement noted that “certain existing institutional investors in Pulmatrix” entered into stock purchase agreements to invest an additional $10 million upon the closing of the merger. Pulmatrix also raised about $4.5 million in February “in contemplation of entering into the merger agreement.”

“This merger has the potential to provide a significant business growth opportunity for our combined companies,” Ruthigen Chairman and CEO Hoji Alimi said in a statement. “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.”

Pulmatrix’s Clark said, “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.”

Ruthigen is working for regulatory approval of its lead drug candidate, RUT58-60, which the company says has shown promise for preventing and treating infections in surgery and trauma procedures.

Pulmatrix is developing what it calls “a novel dry powder delivery platform” for inhaled drugs. Among the products for which it hopes to win regulatory approval are PUR0200, “a once-daily inhaled bronchodilator for chronic obstructive pulmonary disease,” and PUR1900, an inhaled anti-infective for the treatment of cystic fibrosis.

Check back later for more details.