Ophthalmic drugmaker Tarsus Pharmaceuticals Inc. has its eyes set on joining the roster of Orange County’s publicly traded companies.
The clinical-stage Irvine firm filed a preliminary prospectus on Sept. 25 with the Securities and Exchange Commission to raise about $86 million in an initial public offering.
Tarsus, which plans to trade on the Nasdaq Global Market under the ticker symbol “TARS,” could be the third OC-based company to go public via a traditional IPO this year.
It’d be the second healthcare firm, following in the footsteps of Irvine-based device maker Inari Medical Inc. (Nasdaq: NARI).
It’s not the only thing the two firms have in common: Bill Link, one of OC’s more prominent medtech venture capital execs, is an investor in both companies, and is a board member at Tarsus.
Inari raised some $156 million in its May IPO, and shares have more than tripled since then, vaulting its market cap past $3 billion.
While Inari had a history of sales prior to going public, Tarsus has yet to go to market with a product.
Tarsus has raised about $100 million in private funds since its inception, including a $40 million round in September, the prospectus said.
Proceeds from the offering would be used to finance drug candidates, beginning with an eye drop that is expected to treat an inflammatory condition that leads to corneal damage, blurred vision and, on occasion, blindness.
Tarsus and Link last week declined to a Business Journal request for comment, citing quiet period restrictions.
Fleas & Mites Drug
The TP-03 candidate from Tarsus uses the active ingredient Lotilaner. To date it’s been used as a veterinary drug used to control fleas and ticks, and has never been used in human therapeutics.
It’s licensed from Indiana’s pharmaceutical firm Elanco Animal Health Inc. (NYSE: ELAN).
TP-03 entered Phase III clinical trials this month for patients with Demodex blepharitis, an inflammation of the eyelids caused by Demodex mites that live among eyelashes.
Current treatments for Demodex blepharitis—such as tea tree oils, wipes and eye drops—lead to irritation and dissatisfaction for patients and do not eliminate the mites, which are the cause of the condition, the company says.
By contrast, TP-03 has been shown to paralyze and eradicate Demodex mites, according to the company’s research.
First-Ever Potential
Tarsus said it believes its candidate “has the potential to be the first FDA-approved therapeutic and become the standard of care for the treatment of Demodex blepharitis.”
The condition affects an estimated 20 to 25 million Americans, though Tarsus believes it is “significantly underdiagnosed,” the filings said.
“We believe there is a significant opportunity to increase the diagnosis rate of Demodex blepharitis and build a significant new market with the approval of a safe and effective therapeutic alternative that addresses the underlying cause of the condition,” it said.
The company also plans to initiate trials to treat dry eye syndrome, a skin condition called Rosacea, Lyme disease and malaria throughout 2021.
OC Built
Tarsus was formed in 2016 by Bobak “Bobby” Azamian, who received his doctor of medicine degree from Harvard Medical School.
His resumé includes positions with Versant Ventures, a San Francisco-based leading healthcare venture capital firm where Link is a managing director, as well as chief executive roles at device makers Metavention Inc. and Vibrato Medical Inc.
Azamian was a finalist for this year’s Business Journal Innovator of the Year Awards.
Tarsus, which had 12 full-time employees as of June 30, includes executive leadership from Allergan, Avanir Pharmaceuticals, and Spectrum Pharmaceuticals Inc.
More recently, the company relocated its headquarters and laboratory to a 10,879-square-foot facility at 15440 Laguna Canyon Road in Irvine, part of the Discovery Park office campus.
Experienced Backers
Tarsus said it had $53 million in cash and assets as of June 30, before it raised a $40 million Series C preferred stock round.
With some $93 million, the company believes it can sustain its business and continue development work for the next year. It counted an accumulated deficit of $11.2 million as of mid-2020.
Tarsus’ recent Series C round came from existing investors Palo Alto-based Vivo Capital, Newport Beach’s real estate investment firm Horowitz Group and Seattle-based Frazier Life Sciences.
New investors included New York-based RTW Investments and Boston-based Cormorant Asset Management.
In January, the firm raised its $60 million Series B round led by Vivo Capital, with participation from Flying L Partners, where Link serves as managing director.
Additional participants included Horowitz Group, Frazier, Visionary Ventures, an Aliso Viejo-based offshoot of business accelerator Octane, and New York-based Aperture Venture Partners.
San Diego’s Gunderson Dettmer Stough Villeneuve is the company’s law firm; underwriters for the IPO include BofA Securities, Jeffries and Raymond James.
