Firebrick Pharma co-founder Dr Peter Molloy told AAP he's been working on the spray, called Nasodine, for almost a decade, as a treatment for the common cold.

"It appeared to me that if you could kill the viruses that are present in the nose, you could intervene in the course of the common cold and stop it spreading in the body and to other people," he said.

Colds can be caused by about 200 viruses from six major groups, and the delicate cells inside the nose meant developing an effective and sensitive formula has been a particular challenge.

The spray is based on povidone-iodine, the same active ingredient found in Betadine throat gargle, which Dr Molloy developed earlier in his career.

It should be next to impossible for germs to develop resistance, according to Dr Molloy, and has so far been shown to kill all viruses it has been tested against including SARS-COV-2, the virus responsible for for COVID 19.

If the Therapeutic Goods Administration approves the drug this year, it will be manufactured in Melbourne by the company Probiotech, and should by on pharmacy shelves in 2023.

But Dr Molloy cautioned Nasodine had yet to undergo a second round of phase three clinical trials and is not yet approved for sale, with no published evidence yet that it could be effective in the real world against COVID-19.

"Testing and demonstrating in a lab is far removed from establishing clinical efficacy," he said.

The $7 million IPO will fund Firebrick's expansion into international markets as well as new product development.

Firebrick is set to list on the ASX Friday.

Australian Associated Press