Oculus Innovative Sciences plan to spin off biotechnology business

USA-based health care company Oculus Innovative Sciences (Nasdaq: OCLS) last week 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. The company 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.

On completion of the spinoff, Hoji Alimi, founder and current chief executive of Oculus, will remain on the board of directors at Oculus and serve as chairman and chief executive of Ruthigen. Jim Schutz, the current chief operating officer and director of Oculus, will assume the role of CEO of Oculus, with a new board chairman 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.