UPDATED: Tarsus to raise $75.6M for repurposed dog drug that's headed to FDA after eye drop's PhIII win
Tarsus Pharmaceuticals will ship its eye drop off to the FDA before year’s end in the hopes of securing the first regulatory nod for a treatment for Demodex blepharitis, or eyelid mange, after a Phase III data drop Monday and said it will seek $50 million in a public offering to fuel it.
The biotech upsized the public offering to $75.6 million on Tuesday. The company lost 23.5% of its stock $TARS value by the closing bell on Monday, slipping to $14 per share.
“This is a trial that really hasn’t been conducted by anyone before, a Demodex blepharitis pivotal,” CEO Bobak Azamian told Endpoints News.
With Phase III results in hand, the Irvine, CA biotech will seek an FDA green light, advance the drug into a Phase III with partner LianBio in China and form similar partnerships in Europe, Japan and elsewhere across Asia, the CEO said.
The biotech’s eye drop was able to completely cure the number of infestation-induced lesions, defined as 0 to 2 per lid, in 56% of patients at day 43, compared to 13% on placebo. The drug, dubbed TP-03, led to a “significant, clinically meaningful collarette cure,” defined as grade 0 or 1, in 89% of patients versus 33% of those on placebo at day 43.
Collarettes “are basically composed of decomposing mites. They’re a result of the mites that bubble up and form this waxy plaque at the base of the eyelashes,” Azamian said.
Mite eradication, or 0 per lash, was achieved in 52% of patients, compared to 14% on placebo. That Phase III result comes in below the Phase IIb study in which 68% of patients saw mites eradicated entirely. Both studies enrolled more than 400 patients, with the Saturn-2 trial being conducted at 21 sites across the US and commenced before the Phase IIb results even came in because of the biotech’s confidence in the eye drop.
The treatment was delivered for six weeks because that’s what the FDA wanted to see based on other eye drops and anti-infective experience, Azamian said.
“It works well for the biology because a mite life cycle is about two weeks. There’s different forms of mites — eggs, nymphs, adult mites, so you want to treat about two or three life cycles, so we knew that we’d want to treat for at least a month,” he said.
The drug also led to complete redness cure, a secondary endpoint, in 31% of patients compared to 9% in the placebo group.
“Think about lid redness as something patients notice, not just an objective sign, but also something beyond mites and collarettes. So inflammation improving and being cured, and that’s very rarely seen with any eye drops, even power anti-inflammatories. So that really provides, I think, a broader clinical validation of our treatment to patients, doctors and ultimately to payers, as well,” Azamian said.
TP-03 is a repurposed, eye drop formulation of lotilaner, a common tick and flea drug, usually in tablet form, for dogs. Tarsus has tested the new formulation in about half a dozen human studies since sub-licensing it from pet health giant Elanco in 2019.
In terms of TP-03’s safety profile, the eye drop led to instillation site pain/burning/stinging in 7.9% of patients. “If you compare to something like Restasis, those rates are 20% plus,” the CEO said, referring to AbbVie’s Allergan eye drop for chronic dry eye.
And Restasis is a drug that Tarsus knows well. The biotech’s chief commercial officer, Aziz Mottiwala, was a VP of marketing at Allergan and oversaw the ramp up of Restasis. At Tarsus, he has the potential to lead the launch of a drug that Azamian has said could impact 25 million Americans.
“He came here because he saw the opportunity to do it again and do it even better because of the visual aspects of this disease,” Azamian said of Mottiwala, who’s built out a sales team with VP leadership and others to secure market presence, pending approval.
Asked about the bear market that Tarsus could be launching its drug in, Azamian referred to the biotech’s $175 million credit facility that the company secured earlier this year, giving it runway into the second half of 2024, or “well into our launch.”
“While of course, we’re not happy with our share price, we don’t really worry too much about it because we have the runway we need to make TP-03 a success,” the CEO said.
After raising $88 million in its October 2020 Wall Street debut, Tarsus $TARS has largely stayed above its $16 IPO pricing but has steadily fallen from its $49.62 peak in December 2020.
Tarsus also snagged a partner last year to expand the scope of TP-03, in a $15 million upfront deal with Shanghai’s LianBio.
“We have a confident path there to approval that will involve one more Phase III, which they will conduct, starting later this year,” Azamian said of LianBio’s study in China. “And obviously with this Phase III under our belts, it gives everyone a lot more confidence in that. We’re hearing a lot of interest from other geographies.”
Japan, other parts of Asia and Europe are “regions we’re considering next,” the CEO said.
Tarsus is also advancing a cream for rosacea and a pill for Lyme disease and malaria.