Irvine-based eye drug developer Tarsus Pharmaceuticals Inc. saw its shares soar more than 40% to a valuation north of $400 million dollars following its initial public offering on Oct. 16.
“It’s incredibly exhilarating,” Chief Executive Bobak Azamian told the Business Journal last Tuesday.
“Taking an idea to a public company as a co-founder is incredibly rare. Building a public company in Orange County will be the highlight of my career.”
The clinical-stage firm went public on the Nasdaq Global Market under the ticker “TARS.”
Tarsus raised $101.2 million in net proceeds from the IPO, pricing its shares at $16, the middle of the previously announced $15 to $17 range. It sold some 6.3 million shares in the offering, up from an initial plan to sell 5 million shares.
Shares were trading around $23 as of late last week.
It’s the third OC-based company go public via a traditional IPO this year.
Medical device maker Inari Medical Inc. (Nasdaq: NARI) has watched its shares have more than triple since its IPO in May. The Irvine-based firm, with a $3.3 billion market cap, is planning a major expansion of its headquarters (see story, page 1).
Montrose Environmental Group Inc. of Irvine (NYSE: MEG) went public in July and now sports a nearly $700 million market cap.
Unlike Inari and Montrose, Tarsus has yet to unveil a product or service. The clinical-stage drug developer is focused on bringing a new drug that would treat patients with an inflammatory eye condition to market.
“It’s a great feeling to know that our company and product is now known to a much broader audience,” said Azamian. “The funds we’ve raised is rocket fuel for us, and it will allow us to take our journey even farther.”
Committed to OC
As the company accelerates its clinical work, it expects to hire about two employees per month and have about 50 employees by the end of next year.
The company, headquartered in about 11,000 square feet of space at Irvine Co.’s Discovery Park office campus, is committed to Orange County “for the long-haul” where industry talent is plentiful, said Azamian.
Tarsus has already tapped Allergan alumni Sesha Neervannan to lead operations and Aziz Mottiwala to head commercialization; both execs worked on dry eye therapeutic Restasis in prior roles.
Azamian moved to OC about nine years, where he took a position as an entrepreneur in residence at Versant Ventures, a leading healthcare venture firm where Newport Beach’s Bill Link is a managing partner.
Tarsus wouldn’t have made it this far without its original OC investors, Azamian said.
Backers include Horowitz Group and Link’s other venture firm Flying L Partners, both in Newport Beach, and Visionary Ventures. Link is on the company’s board of directors.
Visionary Ventures, an offshoot of Aliso Viejo-based business accelerator Octane, works with physicians and key opinion leaders in eyecare and played a pivotal role in helping Tarsus “hone our messaging” and “get our story to the highest-impact customers,” said Azamian.
Along with the IPO proceeds, Tarsus has raised about $100 million in private funds, including a nearly $40 million private placement in September. It has some $172 million of cash and cash equivalents after the IPO, according to regulatory documents.
Forward Momentum
After its IPO success, “I’m most excited about having an independent pathway to commercializing our lead product and developing our product pipeline,” said Azamian.
The company’s TP-03 candidate 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).Â
TP-03 will be used to treat Demodex blepharitis, an inflammation of the eyelids caused by Demodex mites that live among eyelashes.
The condition can lead to corneal damage, blurred vision and, on occasion, blindness.
Tarsus estimates it impacts about 20 to 25 million Americans, though it also believes it has an opportunity to increase the diagnosis rate of Demodex blepharitis and in turn grow the market.
Patients are currently being enrolled in a Phase 2b/3 for TP-03. Tarsus will also advance its entire product pipeline in 2021.
The company also aims to address “common, poorly-treated diseases” such as dry eye syndrome and a skin condition called Roscea, as well as “potentially save lives by preventing Lyme disease and malaria,” Azamian said.
Future Vision
Though Azamian is a three-time entrepreneur, Tarsus marks his first IPO as a CEO.
“We essentially had a one-week roadshow over Zoom, which gives you some level of personal connection to investors,” Azamian said.
While Tarsus took a day to celebrate its IPO as a team, now it’s getting back to business.
“We’re pioneering a new product in a new market,” Azamian said. “We’re not just thinking about where the market is today, but the potential of tomorrow.”
