Oculus Innovative Sciences, a Petaluma biotech company, plans this year to spin off a subsidiary that would seek federal approval for a new drug to prevent infections in surgery patients.
The spinoff would allow Oculus to continue selling products without the burden of drug development costs, which should help the company more quickly reach its goal of profitability.
"We see this being an opportunity to accelerate that process," Oculus spokesman Dan McFadden said Monday.
The company, with 37 employees in Petaluma, makes a number of products based on Microcyn, a solution for dermatology, oral care, wound care, animal health care and other markets.
The new company, Ruthigen Inc., would seek approval for a new drug candidate, RUT58-60. Its formulation is similar to Microcyn, McFadden said, though the new solution differs in having magnesium and not containing sodium hypochlorite.
Ruthigen would incur the expense of conducting clinical trials. It might be able to benefit by using some of the drug trials that previously were conducted for Microcyn, he said. Oculus halted further trials nearly four years ago during the recession.
The new company would be publicly traded with its own board of directors. Oculus founder and CEO Hoji Alimi would serve as CEO and chairman of Ruthigen, though he also would remain on the Oculus board of directors.
Jim Schutz, now chief operating officer for Oculus, would advance to become that company's CEO.
Oculus plans to complete the spinoff by the end of 2013.
The 10-year-old company has 74 employees globally. It went public in 2007.
For the quarter ending Sept. 30, Oculus had revenues of $4.5 million, compared to $3.7 million a year earlier. The company reported a net loss of $1.5 million, compared to a loss of $840,000 a year earlier.