Tarsus Pharmaceuticals, Inc. has announced a significant financial move to strengthen its position by securing a $200 million non-dilutive financing commitment from funds associated with Pharmakon Advisors, LP. The company has decided to draw $75 million on the closing date, with the remaining $125 million available in three tranches through specified time windows, the last ending in December 2025. After the repayment of the existing credit facility and associated fees and expenses, the net proceeds to the company at closing will be approximately $40 million.
The new five-year interest-only credit facility with Pharmakon also provides for three potential additional loan tranches, to be drawn at the company’s option, in principal amounts up to $25 million, $50 million, and $50 million, respectively. These tranches will be available upon the achievement of certain revenue thresholds.
The credit facility bears interest at a floating rate based upon the secured overnight financing rate (SOFR), plus a margin of 6.75% per annum, with SOFR subject to a 3.75% floor. Interest on the funded loan is paid quarterly in arrears until April 19, 2029, the maturity date, with the unpaid principal amount of the outstanding loan due and payable on that date. Notably, there is no warrant coverage to the lenders and no financial covenants associated with the financing.
Pharmakon Advisors, LP, the investor in non-dilutive debt for the life sciences industry and the investment manager of the biopharma credit funds, has committed $7.8 billion across 51 investments since its establishment in 2009.
Armentum Partners served as Tarsus’ financial advisor on this transaction. The company has also filed additional details on the agreement in a Form 8-K with the Securities and Exchange Commission.
Tarsus Pharmaceuticals, Inc. focuses on applying proven science and new technology to revolutionize treatment for patients, starting with eye care. The company is advancing its pipeline to address several diseases with high unmet needs across a range of therapeutic categories, including eye care, dermatology, and infectious disease prevention. Notably, XENDEMVY® (lotilaner ophthalmic solution) 0.25% is FDA-approved in the United States for the treatment of demodex blepharitis, while Tarsus is also developing TP-03 as an investigational therapy for the treatment of meibomian gland disease, TP-04 for the treatment of rosacea, and TP-05 as an oral tablet for the prevention of Lyme disease, all of which are in phase 2. Following these announcements, the company's shares moved 4.6%, and are now trading at a price of $33.77. Check out the company's full 8-K submission here.
