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Rosetta Green Closes Israeli IPO, Raising $6M to Advance microRNA Programs


By Doug Macron

Rosetta Genomics announced this week that its plant biotech subsidiary Rosetta Green has gone public in Israel, raising a little more than $6 million.

The money raised in the initial public offering on the Tel Aviv Stock Exchange will allow Rosetta Green to advance its development of microRNAs for agricultural, industrial, and clean technology applications, Rosetta President and CEO Kenneth Berlin said in a statement.

At the same time, the establishment of Rosetta Green as “a separate, publicly-traded entity provides access to the capital markets to fund important developments and allows Rosetta Green to benefit from its accomplishments going forward,” he added.

Securing additional financing wasn't a necessity for Rosetta Green, Berlin told Gene Silencing News. Having previously raised $1.5 million from outside investors and secured an undisclosed amount of funding from the Israeli Office of the Chief Scientist within the Ministry of Industry, Trade and Labor, the company had enough cash for a good 18 months.” But by going public, it has the money to “ramp up more quickly and accelerate the work they are doing.”

Part of that ramp up, Berlin noted, includes the addition of new staffers.

Rosetta Green was established in late 2008 as a unit of Rosetta Genomics as part of a bid to realize additional value from the company's miRNA technologies and know-how in areas outside of human health (GSN 10/30/2008).

By mid-2010, Rosetta had changed gears slightly, making Rosetta Green a majority-owned subsidiary and passing along licenses to intellectual property related to the use of miRNAs in agricultural and clean technology applications (GSN 6/3/2010). The companies also established a service agreement under which Rosetta Genomics provides “certain research-related and additional services” to the subsidiary.

Rosetta Green inked its first industry deal just weeks later, announcing that it would work with marine microalgae producer Seambiotic to develop new algae strains for use in biofuel production (GSN 7/29/2010).

“Biofuel from algae is currently the most promising potential alternative to fossil fuels," Rosetta Green CEO Amir Avniel said in a statement at the time. "Most of the large oil companies in the world have already invested millions of dollars in the field due to its numerous advantages, especially as yields can be 300 to 500 fold higher than those of land plants."

But Berlin pointed out that Rosetta Green also has a second focus in agriculture, where the company aims to use miRNA technologies for applications such as the development of drought-resistant crops. He added that the firm has undisclosed arrangements in place where it is trying to demonstrate proof of concept in areas of interest to potential collaborators.

Israeli IPO

In its IPO, Rosetta Green floated 135,200 units at a price of $44.51 apiece. Each unit includes 25 shares of ordinary stock, and warrants to buy additional shares at a predetermined exercise price.

Rosetta Genomics holds a roughly 50 percent stake in Rosetta Green following the offering, but agreed not to sell any of its shares for 12 months. After two years, the company will be able to sell up to 1 percent of its equity in Rosetta Green per month.

While Rosetta Genomics is publicly traded in the US following its 2007 IPO (GSN 3/1/2007), the company made the decision to sell Rosetta Green's shares in Israel in part based on the success drug and diagnostics firm Compugen had establishing Evogene to carry its technologies forward into the ag-bio space, Berlin noted. Both Compugen and Evogene are based in Israel, but while Compugen shares began trading on the Nasdaq in 2002, Evogene trades on the Tel Aviv Stock Exchange.

This is “a scenario that had played out well” for Compugen and Evogen, he said. Rosetta Green's IPO “was somewhat modeled after that,” he added.

Another company that sees value in the Israeli public market is Quark Pharmaceuticals. The company is currently making its second attempt to sell its shares on the Nasdaq after pulling the plug on a planned IPO in 2007 (GSN 10/7/2010). Quark CEO Daniel Zurr told Gene Silencing News this summer that the firm is planning to go public on the Tel Aviv Stock Exchange first as a prelude to an eventual dual listing in the US and Israel.

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