Inari Medical (Nasdaq: NARI) has been a breakout success story for Orange County public companies in 2020, quickly becoming one of the area’s ten largest public firms by market capitalization just five months after its initial public offering.
That expansion is now also physical, with a new headquarter lease in Irvine that more than triples the company’s current base, reinforcing its status as a burgeoning local device maker.
Inari said this month that it inked a new lease for nearly 121,000 square feet in the Spectrum area of the city, at Irvine Co.’s Oak Canyon Business Center.
It’ll be taking up most of the largest building at the complex, at 6001 Oak Canyon.
The four-building business park is near the intersection of Sand Canyon Avenue and the Santa Ana (I-5) Freeway, close to the Oak Creek Golf Club.
It’s also next to Irvine Co.’s under-construction Innovation Park office development, a 73-acre project that the landlord looks to be positioning as a potential new med-tech hub for the city (see story, this page).
The new HQ space will replace the company’s existing 38,200 square foot base at another Irvine Co.-owned office campus elsewhere in the Spectrum area, the Bake Technology Park.
“We’re excited about the opportunity to expand locally and we appreciate the support of the Irvine Company and the City of Irvine,” Paul Koehn, vice president of operations, said in a statement to the Business Journal.
Inari currently employs about 240 people; its local base appears poised to increase significantly with the expanded HQ base.
“Our new home will help us build the foundation for Inari’s future growth as we pursue our mission to help more patients who are suffering from venous thromboembolism,” said Koehn.
Inari, which makes products to treat patients suffering from blood clots and venous diseases, said in a filing with the Securities Exchange Commission that it was given a $4.1 million allowance from the landlord to invest in tenant improvements for its new HQ.
In addition to office space, the new facility will also be used for research and development, production, assembly, manufacturing, distribution, training and other related activities.
The building totals about 161,000 square feet. It previously served as the headquarters for Incipio Group, a maker of protective cases for iPhones and other consumer electronics devices.
The 10-year lease has a base rent of $1.5 million in the first year, which works out to a monthly rent in the $1.04 per square foot range. Annual increases up the rent to $2.8 million for the deal’s final year, or $1.93 per square foot on a monthly basis.
The deal is among the tops for an area office lease during the pandemic, and also comes as another fast-growing local innovator, electric truck maker Rivian, ramps up its OC presence with a new 96,000-square-foot deal (see story, page 3).
Inari, which was founded in 2011, currently counts a market cap of $3.2 billion.
The company went public May 22, the first Orange County company to do so via a traditional IPO in over a year, raising about $163 million in proceeds. It has since seen its stock rise from an initial price of $16 to nearly $70 at press time.
In August, Inari reported net sales of $25.4 million in its inaugural quarterly earnings report as a public company, which was well above analyst consensus estimates of $13.5 million and up 152% from the same period a year ago.
“At our current average selling prices, the combined market represents $3.6 billion in total addressable market,” Chief Executive Bill Hoffman told analysts during the company’s latest earnings call. “Despite our strong growth in the first eight quarters of commercialization, we have penetrated less than 2% of this market. We have a great deal of opportunity in front of us.”
Despite disruptions to hospitals across the country due to the pandemic, treated patients increased from 2,400 in the first quarter to 2,500 in the second quarter.
Inari said its key advantage is that since 2000, more than 170 thrombectomy devices cleared by the FDA were nearly all designed for the arterial system and then “repurposed” for the veins.
By contrast, the company’s devices are designed from the start to remove clots from the veins.
Analysts on average expect $109.8 million in sales this year; Inari reported $51 million of revenue in 2019.
Medical Science Focus at Innovation Park
Irvine Co.’s first phase of development at its Innovation Park office campus runs 15 buildings and 550,000 square feet; along with the nearby Spectrum Terrace project it’s the largest new office project currently under construction in Orange County, and could open by Spring 2021.
Ultimately, Irvine Co. plans Innovation Park to run 28 buildings running two stories each, with the project running nearly 1 million.
Inari Medical’s just-disclosed new headquarters site, at 6001 Oak Canyon, sits next to the Innovation Park development site.
Plans filed with the city this month suggest Inari won’t be the only medical device to call the area home.
The developer’s looking to re-zone the area into a “medical science” area, although traditional office would be a permitted and intended use for tenants there.
A range of building sizes at the park would allow “smaller, emerging companies to establish identity and their place in the Irvine marketplace,” according to a presentation on the proposed changes—which involves re-allocation of commercial entitlements in other nearby areas—from Irvine Co. earlier this month.
Would Inari consider expansion into the new park? Regulatory filings for the device maker’s forthcoming HQ indicate the new lease’s start date is potentially tied to the city of Irvine’s final approval of the proposed zone changes.