Surface Pharmaceuticals has rung up about $20 million in a sale of series A preferred stock, completing its spinoff from Imprimis Pharmaceuticals into a separately financed and managed company. The money will support Surface’s push for FDA approval of three products in five ocular indications, including dry eye.
Imprimis will maintain an ownership stake of about 30% and retain royalty interests in certain products. Surface’s initial proceeds from venture capital firm Flying L Partners reached about $15 million, with a second closing of up to $5 million being expected in the next three months.
“There are an estimated 30 million Americans who suffer from some form of dry eye disease, but only approximately 4 million prescriptions were dispensed in 2017, leaving a large unmet need in the market,” said Flying L principal William Link in a release.
Flying L has backed many consequential ophthalmic companies over the past 30 years, said Imprimis CEO Mark Baum. “We could not have found a better partner to help develop Surface's ocular surface disease drug candidates," he added. Surface will be helmed by its own CEO, Kamran Hosseini, M.D., Ph.D.
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Imprimis has a history of identifying compounded drugs it believes can win their own FDA approval and enter the market—such as a cheaper version of toxoplasmosis drug Daraprim, its $750-per-pill price made infamous by Turing Pharmaceuticals and Martin Shkreli, as well as an alternative for kidney treatment Thiola.
After splitting off from Imprimis last October, Surface began the initial stages of drug development, chasing billion-dollar indications in dry eye and blepharitis fought over by big pharma companies. Surface is pursuing approvals through the FDA’s slightly obscure 505(b)(2) pathway, which allows companies to use data from previously submitted applications and skip the task of replicating certain studies. While more rigorous than the generic approval process, the pathway is mainly used for modifications of already-approved or patented products.
Surface’s pipeline includes eye drops SURF-100 and SURF-200, which combine the generic medications mycophenolic acid and betamethasone, respectively, with Imprimis’ patented delivery vehicle, Klarity, a topical ophthalmic gel or solution. The company’s third drug, SURF-300, combines the antibiotic doxycycline and omega-3 in an oral capsule.