Seven months after Oyster Point Pharma bridged its way into a Phase III study with $93 million in venture cash, the biotech is stepping back up to see if public investors are in a mood to back their play to jump into a big league market with a minor league team.

The Princeton, NJ-based biotech teed up an IPO on Friday, outlining their case on going after dry-eye disease a blockbuster market that accounts for tens of millions of patients. On the drug side, thats a market that has been dominated by Allergans cash cow Restasis now being carved up by generics as AbbVie buys out the company and Xiidra, a therapy which Takeda sold off to Novartis in a $5.3 billion deal in the wake of the Shire acquisition. Most patients get eye drops for the condition.

Tiny Oyster Points plan involves taking a mostly positive Phase IIb study where their drug, varenicline, a formulation of Chantix, managed to get the tear ducts to flow in a statistically significant manner and proving it works in a second registrational, confirmatory story. The FDA, according to the S-1, has signed off on using the Phase IIb as their first or 2 required pivotals. And that study, they maintain, is the first ever to show statistical significance against signs and symptoms of dry eye disease.

If they do get an approval, they believe that they can hire a sales force of 150 to 200 to get it out on the market. The biotech currently has a staff of 18, putting it in the leanest and meanest category of late-stage companies.

Whether they mean that or plan to use it as a classic bluff in preparation for a possible buyout deal is the big question. Startups traditionally have faced a mountainous challenge selling the drugs they manage to get approved, and thats even true in specialty cancer markets. For major markets like dry eye disease, the climb against Big Pharma and generics is distinctly more challenging.

The biotech has burned through $53 million and had $84 million banked at the end of H1.

New Enterprise Associates and Versant are the 2 big investors, with 32% of equity each. Jeffrey Nau, the CEO, has 2.1% of the shares going in.

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Ophthalmology biotech upstart is asking investors to bet $85M-plus on their late-stage rival to Restasis and Xiidra - Endpoints News

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