MicroRNA company Rosetta Green Ltd. has filed a draft prospectus to raise NIS 28 million in an IPO on the Tel Aviv Stock Exchange (TASE). Rosetta Green is a subsidiary of microRNA-based molecular diagnostics developer Rosetta Genomics Ltd. (Nasdaq:ROSG).
Rosetta Green develops superior plants and algae with improved traits. The company has two main focus areas: developing feedstocks for biofuel production, and developing food crops with improved traits, such as better drought tolerance, improved fertilizer use efficiency, increased yield, and enhanced disease resistance. The company has already used its platform technologies to successfully produce plants with improved drought tolerance and algae with increased oil content.
Rosetta Green operates in the same field as Evogene Ltd. (TASE:EVGN), a spin off of Compugen Ltd. (Nasdaq: CGEN; TASE: CGEN). Evogene's market cap now exceeds that of its parent company - NIS 547 million to NIS 479 million - thanks to success in genetically engineering seeds for improved food crop. Evogene provides the genes to seed companies, which conduct field tests of the crops in order to bring the products to market.
Rosetta Green is not as far advanced as Evogene, but it could become just as successful, depending on a number of factors, the most of which is the potential value of the genes it develops to large seed companies and the cooperation agreements it can reach with them.
Rosetta Green has eight cooperation agreements for the joint development of agricultural and biofuel products, but these agreements do not yet generate revenue, and the company disclosed no revenue information in its prospectus.
Rosetta Green plans to invest NIS 2.4 million from the IPO proceeds in each of two food crop fields: improved fertilizer efficiency, and improved severe climate tolerances. The company also plans to invest NIS 4.2 million in algae and plants for biofuel.
Rosetta Green has had no revenue in the past three years, and its net loss widened to NIS 4 million in the first half of 2010 from NIS 1.3 million in the second half of 2009 and NIS 871,000 in the first half. The company has been financed by Rosetta Genomics, including a NIS 2.4 million loan in August, but Rosetta Genomics has itself faced financial difficulties. Hence the plan to float Rosetta Green.
Rosetta Genomics owns 62% of Rosetta Green, Boston-based cleantech venture capital fund Plan B Ventures owns 18.5%, and Rosetta Green CEO Amir Avniel owns 16.8%.
In an unrelated development, Rosetta Genomics plans to raise a gross $2.5 million in a private placement. Rosetta's share price opened at $1.24 on Nasdaq today, giving a market cap of $20.8 million
Published by Globes [online], Israel business news - www.globes-online.com - on November 30, 2010
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