IPO Report: Ruthigen (RTGN)

Francis Gaskins |

Ruthigen ($RTGN) is a pre-clinical trial company developing RUT58-60, the lead drug candidate, initially for the prevention of infection associated with abdominal surgery.

RTGN scheduled a $20 million IPO with a market capitalization of $46 million at a price range mid-point of $13, for  November 21, 2013.

Nine other operating companies scheduled IPOs for this week.. The full IPO calendar can be found at IPOpremium.

Manager, Joint Managers: Aegis Capital.  Co-Managers: Dawson James, Chardan Capital Markets.  S-1 filed Nov 7, 2013.

Overview

RTGN intends to start phase 1 and phase 2 clinical trials in the December 2013 quarter.

Valuation

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing sept 6 mos

Cap (mm)

Sls

Erngs

BkVlue

TanBV

in IPO

Ruthigen (RTGN)

$46

n/a

-15.2

2.8

2.8

43%

 

 

 

 

 

 

 

Glossary

Conclusion

The current market has turned unfavorable regarding pre-clincial stage biopharma companies.  The rating is avoid.

Business

There are approximately 30 million surgical and trauma procedures in the United States per year, approximately 7 million of which are abdominal surgeries.

RTGN’s initial goal is to obtain FDA approval for RUT58-60 for the prevention of infection associated with abdominal surgery and thereafter it plans to pursue FDA approval for RUT58-60 for use in other types of surgical procedures as well as additional clinical indications.

RTGN expects to commence its Phase 1/2 clinical trial in the fourth quarter of 2013. Pending the successful completion of that trial, RTGN plans to conduct the pivotal clinical trials necessary to obtain regulatory approval in the United States. The goal is to obtain regulatory approval from the FDA and begin marketing RUT58-60 for the prevention of infection associated with abdominal surgery as early as 2017.

If its is successful in receiving FDA approval for RUT58-60 for the prevention of infection in abdominal surgery, RTGN plans to pursue other types of surgeries, including cardiac, pulmonary and spinal, among others.

Based upon data from preclinical studies conducted by RTGN and data reported in third party publications, it believes that the safety and tolerability profile of RUT58-60, combined with its broad-range antimicrobial potency without specificity, offer a practical and unique approach to stem the high rate of hospital acquired infections and infections resulting from complications in surgeries and the increasing emergence of new antibiotic resistant bacteria that pose a significant risk to public health.

In addition to the United States, RTGN plans to seek regulatory approval to commercialize RUT58-60 in Canada, Europe and Japan. Under its license and supply agreement with Oculus, RTGN has exclusively licensed the hypochlorous acid technology relating to RUT58-60 for commercialization in the United States, Europe, Japan and Canada.

Products

RTGN is developing RUT58-60, its lead drug candidate, initially for the prevention of infection associated with abdominal surgery. Currently, it has no product candidates in its clinical development pipeline other than RUT58-60 and has no products approved for sale. It plans to file its IND for RUT58-60 with the FDA in the fourth quarter of 2013.

Competition

RTGN is aware of three companies in the United States and/or Europe that produce hypochlorous acid based products intended for medical applications, including Novabay, Oculus and Puricore, which RTGN considers its potential competitors in this regard.

In addition, many other companies have commercialized or are developing antibiotics that aim to address the increasingly growing concern of post-surgical infections, including Achaogen, Basilea, Cempra, Cubist Pharmaceuticals, Durata Therapeutics, Forest Laboratories & Astra Zeneca, GlaxoSmithKline, Merck, Paratek, Rempex, Rib-X, Tetraphase Pharmaceuticals, and Trius.

5% stockholders pre-IPO

Oculus Innovative Sciences, Inc., 100%

Use of proceeds

RTGN expects the net proceeds from this offering will allow it to fund its operations for up to two years following the closing of the offering, including the initiation and completion of its planned Phase 1/2 clinical trial and the costs associated with preparation for its first pivotal clinical trial. RTGN intends to use the net proceeds from this offering in more detail as follows:

$3-$5 million to fund its planned Phase 1/2 clinical trial of RUT58-60 and costs associated with the preparation of its first pivotal trial;

$2-$3 million to establish and validate an independent R&D and cGMP manufacturing facility;

$5 million to satisfy certain milestone payments under its license and supply agreement; and the remaining proceeds, if any, will be used for general corporate purposes, including working capital.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
RTGN RTGN n/a n/a n/a 0
CSTNL iShares VII PLC Core S&P 500 UCITS ETF 201.65 -10.10 -4.77 1,452

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