Tetraphase Pharmaceuticals, Inc. (TTPH)

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ARTICLE: Ruthigen IPO Set To Soar; Tetraphase To Find Lower Floor

ARTICLE: [Oculus'] Ruthigen IPO Set To Soar

Seeking Alpha
Ruthigen IPO Set To Soar; Tetraphase To Find Lower Floor
Wall Street Advisors • Today, 7:15 AM • 7 Comments

Now that the Ruthigen (RTGN) spinoff IPO from Oculus (OCLS) has officially been completed I see very strong upside potential in Ruthigen. Ruthigen's IPO pricing was on the low side, due most likely to investor concerns about Oculus' ability to raise the total amount needed for it. Now that they have pulled it off, however, at just a $30 million valuation (not including warrants) it looks very cheap next to several comps. Perhaps the closest of these comps is Tetraphase Pharmaceuticals (TTPH), which looks overvalued in contrast and presents the setup for a strong pair trade of long Ruthigen and short Tetraphase.

...The tight share structure in Ruthigen is an attractive scenario. This could help generate a momentum upswing in the stock on its own if there are not enough shares on the float to satisfy investor demand in the open market once it begins trading, as has been the case with several biotech IPOs recently. There are a total of 4.2 million common shares outstanding, with 2 million of these shares held by Oculus that have a one-year lock-up period. This leaves the 2.2 million shares on the float...


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