[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This section details Tarsus Pharmaceuticals, Inc.'s Form 10-Q filing, including registrant identification and SEC filing status [Registrant Information](index=1&type=section&id=Registrant%20Information) This section provides the basic identification details for Tarsus Pharmaceuticals, Inc.'s Form 10-Q filing, including its incorporation state, address, telephone number, and SEC filing status as a large accelerated filer - Tarsus Pharmaceuticals, Inc. is a Delaware-incorporated company with its principal executive offices in Irvine, California[3](index=3&type=chunk) - As of July 31, 2025, the number of outstanding shares of common stock was **42,214,106**[5](index=5&type=chunk) Filer Status | Filer Status | Value | | :------------- | :---- | | Large accelerated filer | ☒ | | Accelerated filer | ☐ | | Non-accelerated filer | ☐ | | Smaller reporting company | ☐ | | Emerging growth company | ☐ | [Summary of Business Risks](index=3&type=section&id=SUMMARY%20OF%20RISKS%20ASSOCIATED%20WITH%20OUR%20BUSINESS) This section outlines the critical risks impacting Tarsus Pharmaceuticals, Inc.'s operations, financial condition, and future prospects [Key Business Risks](index=3&type=section&id=Key%20Business%20Risks) Tarsus Pharmaceuticals, Inc. faces significant risks as a commercial-stage biopharmaceutical company, including dependence on its single approved product XDEMVY, substantial capital requirements, challenges in market education and acceptance, reliance on third-party manufacturing and intellectual property licenses, and the inherent uncertainties of clinical drug development - The company is a commercial-stage biopharmaceutical company with a limited operating history and a single approved product, XDEMVY, which has generated revenue but also significant losses and negative cash flows[7](index=7&type=chunk) - Capital requirements are difficult to predict and may necessitate substantial additional funding, with failure to obtain it potentially leading to delays or elimination of product development and commercialization efforts[7](index=7&type=chunk) - Successful commercialization of XDEMVY and future product candidates depends on educating Eye Care Professionals (ECPs) and achieving market acceptance, adequate formulary coverage, pricing, and reimbursement[7](index=7&type=chunk) - The company relies on intellectual property licensed from Elanco Tiergesundheit AG for the development and commercialization of its products, including XDEMVY, TP-04, and TP-05[7](index=7&type=chunk) - Clinical drug development is a lengthy, expensive, and risky process with uncertain timelines and outcomes, and reliance on third parties for clinical trials and manufacturing, often single-source suppliers, poses risks to supply and development efforts[7](index=7&type=chunk)[8](index=8&type=chunk) [Part I - Financial Information](index=6&type=section&id=Part%20I%20-%20Financial%20Information) This section presents Tarsus Pharmaceuticals, Inc.'s unaudited condensed financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents Tarsus Pharmaceuticals, Inc.'s unaudited condensed financial statements, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's business, significant accounting policies, and specific account details for the periods ended June 30, 2025, and December 31, 2024 [Condensed Balance Sheets](index=7&type=section&id=Condensed%20Balance%20Sheets) This section provides a snapshot of Tarsus Pharmaceuticals, Inc.'s financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | $96,648 | $94,819 | | Marketable securities | $284,495 | $196,557 | | Total current assets | $474,429 | $356,705 | | Total assets | $494,994 | $376,991 | | **Liabilities & Equity** | | | | Total current liabilities | $90,253 | $80,612 | | Long-term debt, net | $72,129 | $71,845 | | Total liabilities | $162,382 | $152,457 | | Accumulated deficit | $(405,670) | $(360,210) | | Total stockholders' equity | $332,612 | $224,534 | - Total assets increased by **$118,003 thousand (31.3%)** from December 31, 2024, to June 30, 2025, primarily driven by increases in marketable securities and accounts receivable[14](index=14&type=chunk) - Accumulated deficit increased by **$45,460 thousand**, reflecting the net loss incurred during the six months ended June 30, 2025[14](index=14&type=chunk) [Condensed Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section presents Tarsus Pharmaceuticals, Inc.'s financial performance, including revenues, expenses, and net loss for the three and six months ended June 30, 2025, and 2024 Condensed Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product sales, net | $102,660 | $40,813 | $180,995 | $65,533 | | Total revenues | $102,660 | $40,813 | $180,995 | $68,427 | | Cost of sales | $6,237 | $3,004 | $11,448 | $4,658 | | Research and development | $15,594 | $12,319 | $30,003 | $24,385 | | Selling, general and administrative | $103,013 | $58,792 | $188,008 | $110,370 | | Total operating expenses | $124,844 | $74,115 | $229,459 | $139,413 | | Net loss | $(20,340) | $(33,290) | $(45,460) | $(69,021) | | Net loss per share, basic and diluted | $(0.48) | $(0.88) | $(1.11) | $(1.89) | - Product sales, net, increased by **151.5%** for the three months ended June 30, 2025, and by **176.2%** for the six months ended June 30, 2025, compared to the prior year periods, driven by increased XDEMVY bottle dispensations[15](index=15&type=chunk) - Net loss decreased by **38.9%** for the three months ended June 30, 2025, and by **34.1%** for the six months ended June 30, 2025, compared to the prior year periods, despite increased operating expenses[15](index=15&type=chunk) [Condensed Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Statements%20of%20Stockholders%27%20Equity) This section details changes in Tarsus Pharmaceuticals, Inc.'s stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit, for the six months ended June 30, 2025 Condensed Statements of Stockholders' Equity Highlights (in thousands) | Metric | December 31, 2024 | June 30, 2025 | | :----------------------------------- | :---------------- | :------------ | | Common Stock (shares) | 38,349,826 | 42,210,972 | | Additional Paid-In Capital | $584,559 | $738,237 | | Accumulated Deficit | $(360,210) | $(405,670) | | Total Stockholders' Equity | $224,534 | $332,612 | - Total stockholders' equity increased by **$108,078 thousand** from December 31, 2024, to June 30, 2025, primarily due to net proceeds from common stock issuance and stock-based compensation, partially offset by net loss[18](index=18&type=chunk) - Issuance of common stock, net of issuance costs, contributed **$134,771 thousand** to additional paid-in capital during the six months ended June 30, 2025[18](index=18&type=chunk) [Condensed Statements of Cash Flows](index=10&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section summarizes Tarsus Pharmaceuticals, Inc.'s cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(50,038) | $(52,193) | | Net cash used in investing activities | $(86,646) | $(142,749) | | Net cash provided by financing activities | $138,514 | $151,090 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $1,830 | $(43,852) | - Net cash used in operating activities decreased by **$2,155 thousand (4.1%)** for the six months ended June 30, 2025, compared to the prior year period[20](index=20&type=chunk) - Net cash used in investing activities decreased by **$56,103 thousand (39.3%)** for the six months ended June 30, 2025, primarily due to higher proceeds from maturities of marketable securities[20](index=20&type=chunk) - Net cash provided by financing activities decreased by **$12,576 thousand (8.3%)** for the six months ended June 30, 2025, compared to the prior year period, despite higher proceeds from common stock issuance[20](index=20&type=chunk) [Notes to the Condensed Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements) This section provides detailed explanations and disclosures supporting Tarsus Pharmaceuticals, Inc.'s condensed financial statements, covering business description, accounting policies, and specific account information [1. Description of Business and Presentation of Financial Statements](index=11&type=section&id=1.%20DESCRIPTION%20OF%20BUSINESS%20AND%20PRESENTATION%20OF%20FINANCIAL%20STATEMENTS) This note describes Tarsus Pharmaceuticals, Inc.'s business as a commercial-stage biopharmaceutical company and outlines the basis of presentation for its financial statements - Tarsus Pharmaceuticals, Inc. is a commercial-stage biopharmaceutical company focused on eye care, having launched XDEMVY for Demodex blepharitis in August 2023 after FDA approval in July 2023[22](index=22&type=chunk) - The company completed follow-on public offerings in March 2024 and March 2025, raising aggregate net proceeds of **$107.7 million** and **$134.8 million**, respectively, to fund operations[24](index=24&type=chunk)[25](index=25&type=chunk) - The company estimates its existing capital resources are sufficient for at least 12 months but anticipates continued operating losses and may need additional capital, which might involve delaying or reducing development programs[28](index=28&type=chunk)[29](index=29&type=chunk) [2. Summary of Significant Accounting Policies and Use of Estimates](index=12&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES%20AND%20USE%20OF%20ESTIMATES) This note details Tarsus Pharmaceuticals, Inc.'s key accounting policies and the significant management estimates and assumptions used in preparing the financial statements - Financial statements are prepared in accordance with GAAP for interim financial information and SEC rules, reflecting management's estimates and assumptions[30](index=30&type=chunk)[33](index=33&type=chunk) - The company holds **$2.6 million** in restricted cash as collateral for a new office space lease, classified as non-current assets[38](index=38&type=chunk) - Revenue from product sales is recognized upon delivery, net of various deductions like rebates and discounts, with estimates based on contractual terms and historical data[63](index=63&type=chunk)[65](index=65&type=chunk) - Research and development costs are expensed as incurred, including internal costs and third-party contractor services, with accruals based on work completed and service agreements[89](index=89&type=chunk) - Stock-based compensation expense is recognized for equity awards, with fair values estimated using the Black-Scholes model for options and closing market price for restricted stock units[92](index=92&type=chunk)[95](index=95&type=chunk) - The company anticipates expanding income tax footnote disclosures with the adoption of ASU 2023-09 in 2025 and is assessing the impact of ASU 2024-03 on expense disaggregation[110](index=110&type=chunk)[111](index=111&type=chunk) [3. Fair Value Measurements](index=24&type=section&id=3.%20FAIR%20VALUE%20MEASUREMENTS) This note provides information on Tarsus Pharmaceuticals, Inc.'s assets measured at fair value, categorizing them by valuation input levels as of June 30, 2025, and December 31, 2024 Assets Measured at Fair Value (in thousands) | Asset Type | June 30, 2025 (Total) | December 31, 2024 (Total) | | :-------------------------------- | :-------------------- | :-------------------- | | Money market funds | $96,648 | $89,822 | | U.S. Treasury securities | $147,750 | $103,314 | | Commercial paper | $63,942 | $21,795 | | Corporate debt securities | $51,373 | $46,644 | | Government-related debt securities | $21,430 | $29,801 | | **Total assets measured at fair value** | **$381,143** | **$291,376** | - Total assets measured at fair value increased by **$89,767 thousand (30.8%)** from December 31, 2024, to June 30, 2025[112](index=112&type=chunk) - Money market funds and U.S. Treasury securities are classified as Level 1, while commercial paper, corporate debt, and government-related debt securities are Level 2, reflecting their valuation inputs[113](index=113&type=chunk)[115](index=115&type=chunk) - As of June 30, 2025, substantially all available-for-sale debt securities had a maturity of 12 months or less, with six securities having maturities between one and two years valued at **$17.5 million**[116](index=116&type=chunk) [4. Balance Sheet Account Detail](index=27&type=section&id=4.%20BALANCE%20SHEET%20ACCOUNT%20DETAIL) This note provides detailed breakdowns of specific balance sheet accounts for Tarsus Pharmaceuticals, Inc., including inventory, property and equipment, and accrued liabilities Inventory Composition (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :-------------- | :---------------- | | Work in progress | $1,582 | $614 | | Finished goods | $2,291 | $2,006 | | Raw materials (non-current) | $2,532 | $2,533 | | **Total inventory** | **$6,405** | **$5,153** | - Total inventory increased by **$1,252 thousand (24.3%)** from December 31, 2024, to June 30, 2025, primarily due to an increase in work in progress and finished goods[119](index=119&type=chunk) Property and Equipment, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Property and equipment, at cost | $5,591 | $4,290 | | Accumulated depreciation | $(2,409) | $(1,976) | | **Property and equipment, net** | **$3,182** | **$2,314** | - Intangible assets, net, decreased to **$7,846 thousand** as of June 30, 2025, from **$8,326 thousand** as of December 31, 2024, due to amortization[122](index=122&type=chunk) Accounts Payable and Other Accrued Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Trade accounts payable and other | $28,075 | $27,739 | | Accrued product sales deductions | $45,117 | $33,122 | | Accrued royalty payable | $5,132 | $3,320 | | **Total accounts payable and other accrued liabilities** | **$78,641** | **$64,789** | [5. Stock-Based Compensation](index=28&type=section&id=5.%20STOCK-BASED%20COMPENSATION) This note details Tarsus Pharmaceuticals, Inc.'s stock-based compensation expense and unrecognized compensation for equity awards for the periods presented Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of sales | $170 | $190 | $305 | $325 | | Research and development | $1,920 | $1,866 | $3,425 | $3,331 | | Selling, general and administrative | $6,144 | $5,425 | $11,433 | $9,344 | | **Total stock-based compensation** | **$8,234** | **$7,481** | **$15,163** | **$13,000** | - Total stock-based compensation expense increased by **$753 thousand (10.1%)** for the three months ended June 30, 2025, and by **$2,163 thousand (16.6%)** for the six months ended June 30, 2025, compared to the prior year periods[127](index=127&type=chunk) - As of June 30, 2025, there was **$31.3 million** of unrecognized compensation expense for unvested stock options (expected over 2.5 years) and **$48.0 million** for unvested restricted stock units (expected over 3.0 years)[130](index=130&type=chunk)[131](index=131&type=chunk) - The company granted **692,623 performance stock units** during the six months ended June 30, 2025, with **$30.8 million** in unrecognized compensation expense, as no performance conditions were met or probable[132](index=132&type=chunk) [6. Net Loss per Share](index=31&type=section&id=6.%20NET%20LOSS%20PER%20SHARE) This note presents the calculation of Tarsus Pharmaceuticals, Inc.'s basic and diluted net loss per share for the three and six months ended June 30, 2025, and 2024 Net Loss Per Share (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(20,340) | $(33,290) | $(45,460) | $(69,021) | | Weighted-average shares outstanding | 42,360,452 | 37,823,233 | 40,869,364 | 36,530,756 | | **Net loss per share, basic and diluted** | **$(0.48)** | **$(0.88)** | **$(1.11)** | **$(1.89)** | - Net loss per share (basic and diluted) improved to **$(0.48)** for Q2 2025 from **$(0.88)** for Q2 2024, and to **$(1.11)** for H1 2025 from **$(1.89)** for H1 2024[135](index=135&type=chunk) - All potentially dilutive securities were excluded from diluted net loss per share calculation due to net losses in all periods presented, making them anti-dilutive[105](index=105&type=chunk)[135](index=135&type=chunk) [7. Segment Reporting](index=32&type=section&id=7.%20SEGMENT%20REPORTING) This note clarifies that Tarsus Pharmaceuticals, Inc. operates as a single reportable segment focused on therapeutics, with the CEO as the chief operating decision maker - The company operates in one reportable segment: therapeutics, deriving revenue primarily from XDEMVY sales in the U.S. and license fees[136](index=136&type=chunk) - The CEO, as CODM, uses net loss to assess segment performance and allocate resources, but does not review assets for this purpose[137](index=137&type=chunk)[139](index=139&type=chunk) Therapeutics Segment Operating Financial Results (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $102,660 | $40,813 | $180,995 | $68,427 | | Total operating expenses | $124,844 | $74,115 | $229,459 | $139,413 | | Loss from operations | $(22,184) | $(33,302) | $(48,464) | $(70,986) | | Net loss | $(20,340) | $(33,290) | $(45,460) | $(69,021) | [8. Commitments & Contingencies](index=33&type=section&id=8.%20COMMITMENTS%20%26%20CONTINGENCIES) This note outlines Tarsus Pharmaceuticals, Inc.'s contractual obligations, including lease agreements, in-license agreements, and potential milestone payments - The company entered a new 10-year lease for office space in Irvine, California, in December 2024, with payments expected to commence in late 2025 and an initial base rent of **$2.5 million**, subject to annual **3%** increases[146](index=146&type=chunk) - A **$2.6 million** letter of credit was provided as a security deposit for the new lease, which may be reduced to **$2.0 million** upon meeting certain financial milestones[147](index=147&type=chunk) - The company has in-license agreements with Elanco for lotilaner, incurring milestone payments upon commercial sale of XDEMVY (**$4.0 million** in August 2023) and achieving sales thresholds (**$5.0 million** in September 2024)[151](index=151&type=chunk) - Royalty expense for the three and six months ended June 30, 2025, was **$5.1 million** and **$9.0 million**, respectively, under the Elanco agreements[154](index=154&type=chunk) - An upfront payment of **$2.5 million** was made in October 2024 for a new in-license agreement for ophthalmic uses, with potential future milestone payments up to **$105.0 million**[157](index=157&type=chunk) [9. Out-License Agreements](index=36&type=section&id=9.%20OUT-LICENSE%20AGREEMENTS) This note details Tarsus Pharmaceuticals, Inc.'s out-license agreements, including the transition of commercial rights for TP-03 in China and associated payments - In March 2021, the company entered into the China Out-License with LianBio for TP-03 commercial rights in the China Territory, which was later transitioned to GrandPharma in March 2024[162](index=162&type=chunk)[168](index=168&type=chunk) - Aggregate payments received from LianBio through June 30, 2025, totaled **$86.1 million**, including initial consideration, milestone achievements, and termination payments[170](index=170&type=chunk) - The company is eligible for future consideration from GrandPharma, including up to **$20.0 million** in regulatory approval/patent issuance milestones, up to **$100.0 million** in sales threshold milestones, and tiered royalties[171](index=171&type=chunk) [10. Credit Facility Agreements](index=37&type=section&id=10.%20CREDIT%20FACILITY%20AGREEMENTS) This note describes Tarsus Pharmaceuticals, Inc.'s credit facility agreements, including the 2024 Credit Facility, its terms, and associated interest expenses - In April 2024, the company executed a **$75.0 million** initial term loan under the 2024 Credit Facility with Pharmakon, maturing in April 2029, with proceeds used to repay previous debt[172](index=172&type=chunk) - The 2024 Credit Facility accrues interest at a floating rate based on SOFR plus a **6.75%** margin, with a **3.75%** SOFR floor[174](index=174&type=chunk) - Interest expense for long-term debt was **$2.094 million** for Q2 2025 and **$4.168 million** for H1 2025, with an effective interest rate of **12.31%** as of June 30, 2025[176](index=176&type=chunk) - The company has one remaining **$50.0 million** tranche available under the 2024 Credit Facility, exercisable by December 31, 2025, subject to conditions[172](index=172&type=chunk) [11. Related Party Transactions](index=38&type=section&id=11.%20RELATED%20PARTY%20TRANSACTIONS) This note discloses Tarsus Pharmaceuticals, Inc.'s transactions with related parties, specifically an investment in an eye care company where its executives hold board positions - In April 2024, the company invested **$3.0 million** in preferred stock of a privately-held eye care company where its CEO and a board member also serve as board members[177](index=177&type=chunk) [12. Subsequent Event](index=38&type=section&id=12.%20SUBSEQUENT%20EVENT) This note describes a subsequent event, the enactment of the OBBB Act, and its expected non-material impact on Tarsus Pharmaceuticals, Inc.'s financial results - The One Big Beautiful Bill Act (OBBB Act) was enacted on July 4, 2025, introducing tax reform provisions, but the company does not expect a material impact on its effective tax rate or cash flows for the current fiscal year[178](index=178&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Tarsus Pharmaceuticals, Inc.'s financial condition and results of operations, highlighting the company's business overview, recent clinical and commercial achievements, and a detailed comparison of financial performance for the three and six months ended June 30, 2025 and 2024. It also discusses liquidity, capital resources, and critical accounting policies [Note Regarding Forward-Looking Statements](index=39&type=section&id=Note%20Regarding%20Forward-Looking%20Statements) This section advises readers that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements about future operations, financial position, revenue, product candidates, clinical trials, and regulatory approvals, which involve known and unknown risks and uncertainties[179](index=179&type=chunk) - Factors that may cause actual results to differ include the ability to commercialize XDEMVY, market acceptance, clinical trial outcomes, regulatory timelines, and global economic conditions[180](index=180&type=chunk)[181](index=181&type=chunk) [Overview](index=40&type=section&id=Overview) This section provides an overview of Tarsus Pharmaceuticals, Inc.'s business, its approved product XDEMVY, pipeline candidates, and financial highlights for the period - Tarsus Pharmaceuticals is a commercial-stage biopharmaceutical company focused on eye care, with XDEMVY (lotilaner ophthalmic solution) 0.25% approved by the FDA in July 2023 for Demodex blepharitis and launched in August 2023[185](index=185&type=chunk) - XDEMVY is the first and only FDA-approved therapeutic for Demodex blepharitis, targeting the root cause of the condition, Demodex mite infestation[187](index=187&type=chunk) - The company is advancing its pipeline with TP-04 for ocular rosacea (Phase 2 study planned H2 2025) and TP-05 for Lyme disease prophylaxis (Phase 2b clinical trial planned 2026)[189](index=189&type=chunk)[195](index=195&type=chunk)[198](index=198&type=chunk) - XDEMVY achieved **$102.7 million** in net product sales in Q2 2025 (**152% YoY increase**) and dispensed approximately **91,000 bottles**, with over **90%** commercial, Medicare, and Medicaid reimbursement[192](index=192&type=chunk) - The company has incurred significant net operating losses since inception (**$45.6 million** for H1 2025) and expects continued losses as it commercializes XDEMVY and advances other product candidates[203](index=203&type=chunk) - As of June 30, 2025, aggregate cash, cash equivalents, and marketable securities totaled **$381.1 million**[208](index=208&type=chunk) [Components of our Results of Operations](index=44&type=section&id=Components%20of%20our%20Results%20of%20Operations) This section analyzes the key components of Tarsus Pharmaceuticals, Inc.'s financial performance, including revenues and operating expenses, for the three months ended June 30, 2025, and 2024 Key Financials (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change | | :----------------------------------- | :----- | :----- | :----- | | Product sales, net | $102,660 | $40,813 | $61,847 | | Total revenues | $102,660 | $40,813 | $61,847 | | Cost of sales | $6,237 | $3,004 | $3,233 | | Research and development | $15,594 | $12,319 | $3,275 | | Selling, general and administrative | $103,013 | $58,792 | $44,221 | | Total operating expenses | $124,844 | $74,115 | $50,729 | | Net loss | $(20,340) | $(33,290) | $12,950 | - Product sales, net, increased by **$61.8 million (151.5%)** for Q2 2025 compared to Q2 2024, driven by approximately **91,000 bottles** of XDEMVY delivered to patients (vs. **37,000** in prior year)[211](index=211&type=chunk) - Research and development expenses increased by **$3.3 million (26.6%)** for Q2 2025, primarily due to increased TP-04 program expenses, payroll, and early-stage programs[214](index=214&type=chunk) - Selling, general and administrative expenses increased by **$44.2 million (75.2%)** for Q2 2025, mainly due to increased commercial and marketing costs (including DTC advertising) and payroll for business growth[215](index=215&type=chunk) - Net loss improved by **$12.95 million** for Q2 2025 compared to Q2 2024, primarily due to higher product sales and a **$1.9 million** loss on debt extinguishment in the prior year[210](index=210&type=chunk)[216](index=216&type=chunk) [Comparison of the Six Months Ended](index=46&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended) This section compares Tarsus Pharmaceuticals, Inc.'s financial results for the six months ended June 30, 2025, and 2024, detailing changes in revenues and expenses Key Financials (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change | | :----------------------------------- | :----- | :----- | :----- | | Product sales, net | $180,995 | $65,533 | $115,462 | | License fees and collaboration revenue | — | $2,894 | $(2,894) | | Total revenues | $180,995 | $68,427 | $112,568 | | Cost of sales | $11,448 | $4,658 | $6,790 | | Research and development | $30,003 | $24,385 | $5,618 | | Selling, general and administrative | $188,008 | $110,370 | $77,638 | | Total operating expenses | $229,459 | $139,413 | $90,046 | | Net loss | $(45,460) | $(69,021) | $23,561 | - Product sales, net, increased by **$115.5 million (176.2%)** for H1 2025 compared to H1 2024, driven by approximately **163,000 bottles** of XDEMVY delivered to patients (vs. **63,000** in prior year)[219](index=219&type=chunk) - License fees and collaboration revenue decreased by **$2.9 million** for H1 2025, as the prior year included termination payments from the China Out-License[220](index=220&type=chunk) - Selling, general and administrative expenses increased by **$77.6 million (70.3%)** for H1 2025, primarily due to increased commercial and marketing costs and payroll for business growth[223](index=223&type=chunk) - Net loss improved by **$23.6 million** for H1 2025 compared to H1 2024, mainly due to higher product sales and the absence of a **$1.9 million** loss on debt extinguishment recognized in the prior year[218](index=218&type=chunk)[224](index=224&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Tarsus Pharmaceuticals, Inc.'s financial liquidity, capital resources, and future funding needs, including cash, marketable securities, and credit facilities - As of June 30, 2025, the company had **$381.1 million** in cash, cash equivalents, and marketable securities, which is believed to be sufficient to fund operations for at least the next twelve months[226](index=226&type=chunk)[234](index=234&type=chunk) - The company has financed operations through public offerings (raising **$134.8 million** net in March 2025), proceeds from product sales, the China Out-License (**$86.1 million** total received), and draws from credit facilities (**$75.0 million** initial draw in April 2024)[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk)[231](index=231&type=chunk) - An additional **$50.0 million** tranche is available from the 2024 Credit Facility, contingent on sales milestones, which can be requested by December 31, 2025[231](index=231&type=chunk) - The company expects to incur significant operating losses and will require substantial additional capital to complete development and commercialization of product candidates, potentially through equity offerings, debt, or collaborations[233](index=233&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) Summary Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(50,038) | $(52,193) | | Net cash used in investing activities | $(86,646) | $(142,749) | | Net cash provided by financing activities | $138,514 | $151,090 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $1,830 | $(43,852) | [Critical Accounting Policies, Significant Judgments and Use of Estimates](index=52&type=section&id=Critical%20Accounting%20Policies%2C%20Significant%20Judgments%20and%20Use%20of%20Estimates) This section highlights Tarsus Pharmaceuticals, Inc.'s critical accounting policies, significant management judgments, and estimates used in financial reporting - The preparation of financial statements requires management to make estimates and assumptions, particularly for rebates, which are accrued based on contractual discounts, statutory rates, and historical data[249](index=249&type=chunk)[251](index=251&type=chunk) - The company evaluates the potential impact of new accounting pronouncements, such as ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation), on its financial statements[253](index=253&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Tarsus Pharmaceuticals, Inc.'s exposure to market risks, primarily related to interest rate fluctuations affecting its cash, cash equivalents, marketable securities, and floating-rate debt. The company does not anticipate a material impact from interest rate changes due to the short-term nature of its investments and the structure of its debt - The company's market risk primarily stems from interest rate fluctuations affecting its **$381.1 million** in cash, cash equivalents, and marketable securities as of June 30, 2025[256](index=256&type=chunk) - Due to the short-term maturities and low-risk profile of investments, an immediate **100 basis point** change in interest rates is not expected to materially affect the fair market value of these assets[256](index=256&type=chunk) - The **$75.0 million** outstanding debt under the 2024 Credit Facility accrues interest at a floating rate (SOFR + **6.75%** with a **3.75%** floor), but a hypothetical **100 basis point** change is not expected to significantly impact interest expense[257](index=257&type=chunk) - Inflation, interest rate changes, and foreign currency exchange rate fluctuations have not had a significant impact on results of operations for the periods presented, but future inflationary pressures could adversely affect operating costs[258](index=258&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details Tarsus Pharmaceuticals, Inc.'s disclosure controls and procedures, confirming their effectiveness as of June 30, 2025, based on evaluation by the CEO and CFO. It also notes no material changes in internal control over financial reporting during the period and acknowledges the inherent limitations of any control system - As of June 30, 2025, the company's disclosure controls and procedures were deemed effective by the CEO and CFO, providing reasonable assurance that required information is processed, recorded, summarized, and reported timely[259](index=259&type=chunk)[260](index=260&type=chunk) - There were no material changes in internal control over financial reporting during the period covered by the report[262](index=262&type=chunk) - Management acknowledges the inherent limitations of control systems, which can only provide reasonable, not absolute, assurance against errors and fraud[263](index=263&type=chunk) [Part II - Other Information](index=56&type=section&id=Part%20II%20-%20Other%20Information) [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) Tarsus Pharmaceuticals, Inc. is not currently involved in any material legal proceedings, though it may face litigation in the ordinary course of business, which could adversely impact operations due to costs, diversion of resources, and reputational harm - The company is not currently a party to any material legal proceedings[266](index=266&type=chunk) - Litigation, even if not material, can adversely impact the company through defense and settlement costs, diversion of management resources, and negative publicity[266](index=266&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) This section outlines the significant risks that could materially and adversely affect Tarsus Pharmaceuticals, Inc.'s business, financial condition, results of operations, and future growth prospects. These risks span various categories, including business and operational challenges, development and commercialization hurdles, financial position and capital needs, reliance on third parties, intellectual property protection, government regulation, and factors related to common stock ownership [Risks Related to our Business and Operations](index=56&type=section&id=Risks%20Related%20to%20our%20Business%20and%20Operations) - The company has a limited operating history and a single approved product (XDEMVY), incurring significant losses and negative cash flows, with expectations of continued high expenses for commercialization and pipeline development[268](index=268&type=chunk)[269](index=269&type=chunk) - Managing anticipated growth in development, regulatory, operational, sales, marketing, and distribution capabilities poses challenges that could disrupt operations if not effectively managed[271](index=271&type=chunk) - Heavy reliance on third-party contract organizations for clinical trials and manufacturing, including single-source suppliers, increases risks of delays, increased costs, or supply disruptions[274](index=274&type=chunk)[401](index=401&type=chunk)[402](index=402&type=chunk) - The company's success depends on retaining key employees and attracting qualified personnel in a competitive industry, with potential for loss if stock value appreciation or option exercise prices are favorable[276](index=276&type=chunk)[277](index=277&type=chunk)[279](index=279&type=chunk) - Information technology system failures, security breaches, or data loss could disrupt development programs, compromise sensitive information, and expose the company to liability and reputational damage[280](index=280&type=chunk)[282](index=282&type=chunk)[283](index=283&type=chunk) - Product liability lawsuits related to XDEMVY or product candidates could result in substantial liabilities, diversion of resources, and delays in commercialization, with insurance coverage potentially inadequate[285](index=285&type=chunk)[286](index=286&type=chunk) - Misconduct by employees or third-party partners, including non-compliance with regulatory standards, could lead to adverse effects on results of operations, regulatory sanctions, and reputational harm[287](index=287&type=chunk) - Unfavorable global and geopolitical economic conditions, including inflation and trade tensions, could adversely affect demand for products, increase operating expenses, and impact the value of investments[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk)[292](index=292&type=chunk) - Health epidemics could disrupt preclinical studies and clinical trials, regulatory activities, manufacturing, and supply chains, leading to delays, increased costs, and adverse impacts on business operations[293](index=293&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk) [Risks Related to Development and Commercialization](index=65&type=section&id=Risks%20Related%20to%20Development%20and%20Commercialization) - The commercial launch of XDEMVY may be unsuccessful, or future approved products may fail to achieve profitability due to challenges in developing commercial organizations, securing adequate reimbursement, and achieving market acceptance[300](index=300&type=chunk)[301](index=301&type=chunk) - The company is heavily dependent on the successful commercialization of XDEMVY and the development, regulatory approval, and commercialization of its pipeline, requiring significant efforts in clinical development, regulatory compliance, and market acceptance[302](index=302&type=chunk)[303](index=303&type=chunk) - Market opportunities for XDEMVY and other product candidates may be smaller than estimated, and efforts to educate ECPs and patients about Demodex blepharitis may not achieve sufficient market acceptance or adequate formulary coverage and reimbursement[304](index=304&type=chunk)[305](index=305&type=chunk)[314](index=314&type=chunk) - The company faces significant competition from major pharmaceutical and biotechnology companies, with competitors potentially developing safer, more effective, or less expensive products, or obtaining regulatory approval more rapidly[315](index=315&type=chunk)[316](index=316&type=chunk)[318](index=318&type=chunk) - Failure to obtain regulatory approval for XDEMVY or other product candidates in foreign jurisdictions would limit market potential, as approval in one country does not guarantee approval elsewhere[320](index=320&type=chunk) - Product candidates may cause significant adverse events or side effects, delaying or preventing marketing approval, or leading to regulatory actions and negative market perception for approved products[321](index=321&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - Non-compliance with government pricing programs (Medicaid, 340B, Medicare Part D) could result in additional reimbursement requirements, penalties, sanctions, and fines, materially impacting financial results[326](index=326&type=chunk)[334](index=334&type=chunk) - Clinical drug development is lengthy, expensive, and risky, with uncertain timelines and outcomes; results from early trials may not predict later success, and delays or failures could prevent commercialization[343](index=343&type=chunk)[344](index=344&type=chunk)[349](index=349&type=chunk) - Difficulties or delays in patient enrollment for clinical trials could increase costs, affect timing, and hinder the advancement of product candidates[354](index=354&type=chunk)[356](index=356&type=chunk) - Future growth depends on penetrating foreign markets, which involves additional regulatory burdens, risks from political/economic instability, trade restrictions, and varying pricing/reimbursement systems[360](index=360&type=chunk)[362](index=362&type=chunk)[365](index=365&type=chunk) - Managing obligations under in-license and out-license agreements, such as those with Elanco and GrandPharma, may divert management attention and could lead to delays or disruptions if not properly handled[368](index=368&type=chunk)[369](index=369&type=chunk) [Risks Related to our Financial Position and Need for Additional Capital](index=84&type=section&id=Risks%20Related%20to%20our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) - The company's limited operating history since 2016 makes it difficult to evaluate future viability and success, especially in transitioning from an R&D focus to commercial activities[372](index=372&type=chunk)[373](index=373&type=chunk) - Capital requirements are difficult to predict due to ongoing commercialization of XDEMVY and pipeline development, necessitating substantial additional funding through equity, debt, or collaborations[374](index=374&type=chunk)[375](index=375&type=chunk)[377](index=377&type=chunk) - Raising additional capital through equity or convertible debt will dilute existing stockholders, while debt financing may impose restrictive covenants on operations[381](index=381&type=chunk)[382](index=382&type=chunk) - Adverse developments in the financial services industry, such as bank failures, could impact liquidity and access to funds, especially for uninsured deposits exceeding FDIC limits[383](index=383&type=chunk)[384](index=384&type=chunk) - Existing indebtedness under the 2024 Credit Facility includes covenants that could limit operational flexibility, and default could significantly harm the business[388](index=388&type=chunk)[389](index=389&type=chunk) - Future acquisitions or strategic partnerships could disrupt business, dilute stockholders, reduce financial resources, or incur debt/contingent liabilities, and may not be successfully integrated[390](index=390&type=chunk)[391](index=391&type=chunk) - The ability to use net operating loss carryforwards and other tax attributes may be limited by ownership changes under tax laws, potentially increasing future tax liabilities[392](index=392&type=chunk)[393](index=393&type=chunk) - Adverse legislative or regulatory tax changes, such as the OBBB Act, could negatively impact financial condition, though the current impact on the effective tax rate or cash flows for the current fiscal year is not expected to be material[394](index=394&type=chunk) [Risks Related to Reliance on Third Parties](index=90&type=section&id=Risks%20Related%20to%20Reliance%20on%20Third%20Parties) - The company relies on third parties (CROs, medical institutions) to conduct clinical trials and preclinical studies; their failure to perform duties or meet deadlines could delay development programs and increase costs[395](index=395&type=chunk)[398](index=398&type=chunk) - Reliance on third-party contract manufacturers for XDEMVY and product candidates, including single-source suppliers for materials, increases the risk of insufficient supply, delays, or impaired commercialization efforts[401](index=401&type=chunk)[402](index=402&type=chunk) - Inability to successfully scale-up manufacturing of XDEMVY or product candidates in sufficient quality and quantity could delay or prevent commercialization and clinical trials[408](index=408&type=chunk)[410](index=410&type=chunk) - Changes in manufacturing methods or formulation during development could lead to additional costs, delays, or require bridging clinical trials, impacting product commercialization[411](index=411&type=chunk) [Risks Related to Intellectual Property](index=94&type=section&id=Risks%20Related%20to%20Intellectual%20Property) - Changes in patent law in the U.S. and other jurisdictions, including the Leahy-Smith Act and the new European unitary patent system, could diminish patent value and impair the ability to protect XDEMVY or product candidates[412](index=412&type=chunk)[415](index=415&type=chunk)[455](index=455&type=chunk) - The development and commercialization of products are dependent on intellectual property licensed from Elanco; breach or termination of these agreements could result in loss of license rights[416](index=416&type=chunk)[417](index=417&type=chunk) - Failure to obtain and maintain sufficient intellectual property protection, or if the scope is not broad enough, could allow competitors to commercialize similar products, adversely affecting the company's ability to commercialize its own[418](index=418&type=chunk)[422](index=422&type=chunk)[424](index=424&type=chunk) - Compliance with various procedural and fee payment requirements of governmental patent agencies is critical; non-compliance could lead to abandonment or lapse of patent rights[426](index=426&type=chunk) - Failure to identify relevant third-party patents or incorrect interpretation of their scope/expiration could negatively impact the ability to develop and market products, potentially leading to infringement claims[427](index=427&type=chunk)[428](index=428&type=chunk) - Inability to acquire rights to future assets through in-licensing or form collaborations on acceptable terms could alter or delay commercialization or development plans[429](index=429&type=chunk)[430](index=430&type=chunk) - Collaborations may not be successful, heavily depending on collaborators' efforts, and could lead to delays, termination, or disputes over intellectual property[432](index=432&type=chunk)[433](index=433&type=chunk) - Uncertainty regarding patent issuance, validity, and enforceability means that pending patent applications may not lead to issued patents, or issued patents may be challenged and narrowed[443](index=443&type=chunk)[445](index=445&type=chunk) - Lawsuits for infringing third-party intellectual property rights could be costly, time-consuming, and prevent or delay development/commercialization, potentially leading to injunctions or monetary damages[446](index=446&type=chunk)[449](index=449&type=chunk)[450](index=450&type=chunk) - Failure to obtain patent term extension for product candidates could shorten the period of exclusive market rights, leading to earlier generic competition and reduced revenue[451](index=451&type=chunk)[466](index=466&type=chunk) - Enforcing intellectual property rights against third parties can be expensive and uncertain, potentially leading to decisions not to pursue claims or to accept non-litigious solutions[452](index=452&type=chunk)[453](index=453&type=chunk)[454](index=454&type=chunk) - Inability to protect intellectual property rights globally, due to varying national laws and costs, could prevent the company from stopping infringement or marketing of competing products in foreign countries[458](index=458&type=chunk)[459](index=459&type=chunk) - Reliance on trade secrets and proprietary know-how, which are difficult to trace and enforce, could harm competitive position if confidentiality is breached or information is misappropriated[460](index=460&type=chunk)[461](index=461&type=chunk) [Risks Related to Government Regulation](index=107&type=section&id=Risks%20Related%20to%20Government%20Regulation) - The biopharmaceutical industry is highly regulated; compliance with extensive requirements is necessary to develop, obtain, and maintain marketing approval for XDEMVY and product candidates, with potential for delays or rejections[467](index=467&type=chunk)[468](index=468&type=chunk)[469](index=469&type=chunk) - Changes in healthcare law and policy, such as the ACA and IRA, can impact pricing, reimbursement, and post-approval activities, potentially leading to reduced demand and affordability for products[470](index=470&type=chunk)[471](index=471&type=chunk)[474](index=474&type=chunk)[476](index=476&type=chunk)[479](index=479&type=chunk) - Misconduct by employees, contractors, or partners, including non-compliance with regulatory standards and fraud and abuse laws, could lead to significant penalties, sanctions, and reputational harm[483](index=483&type=chunk) - Failure to comply with environmental, health, and safety laws and regulations could result in fines, penalties, or substantial costs, and disrupt research, development, and manufacturing[484](index=484&type=chunk)[487](index=487&type=chunk)[488](index=488&type=chunk) - The company is subject to federal, state, and foreign healthcare fraud and abuse laws, false claims laws, and information privacy/security laws (e.g., HIPAA, CCPA, GDPR); non-compliance could lead to substantial penalties, criminal sanctions, and reputational damage[490](index=490&type=chunk)[494](index=494&type=chunk)[504](index=504&type=chunk)[507](index=507&type=chunk)[509](index=509&type=chunk)[510](index=510&type=chunk)[513](index=513&type=chunk) - Inadequate funding for the FDA and other government agencies could hinder their ability to review and approve new products, impacting development timelines and business operations[495](index=495&type=chunk)[496](index=496&type=chunk) - Ongoing regulatory obligations and review for approved products, including XDEMVY, may result in significant additional expense and potential restrictions or withdrawal from the market if compliance is not maintained[498](index=498&type=chunk) [Risks Related to Ownership of our Common Stock](index=118&type=section&id=Risks%20Related%20to%20Ownership%20of%20our%20Common%20Stock) - The market price of the common stock may be volatile and decline regardless of operating performance, influenced by factors such as product development goals, clinical trial results, regulatory actions, and overall market conditions[515](index=515&type=chunk) - Lack of research or inaccurate/unfavorable research from securities or industry analysts could negatively affect stock price and trading volume[517](index=517&type=chunk) - Loss of 'emerging growth company' and 'smaller reporting company' status as of December 31, 2024, will increase operating costs due to heightened compliance and reporting requirements[518](index=518&type=chunk)[519](index=519&type=chunk) - Sales of a substantial number of common stock shares in the public market, including future equity offerings, could cause the stock price to fall and dilute existing stockholders[520](index=520&type=chunk)[521](index=521&type=chunk)[522](index=522&type=chunk) - Concentration of stock ownership by officers, directors, and major holders limits other stockholders' ability to influence corporate matters, including director elections and significant transactions[523](index=523&type=chunk) - Requirements of being a public company significantly increase costs and divert management attention, and failure to maintain proper internal controls could impair financial reporting and lead to sanctions[524](index=524&type=chunk)[526](index=526&type=chunk)[528](index=528&type=chunk) - The company does not intend to pay dividends for the foreseeable future, requiring stockholders to rely on stock price appreciation for gains[529](index=529&type=chunk)[530](index=530&type=chunk) - Operating results may fluctuate significantly due to various factors, making future predictions difficult and potentially causing results to fall below expectations, leading to stock price decline[532](index=532&type=chunk)[533](index=533&type=chunk)[534](index=534&type=chunk) - Delaware law and provisions in the company's charter documents could make mergers, tender offers, or proxy contests difficult, potentially depressing the stock's trading price[535](index=535&type=chunk)[537](index=537&type=chunk) - Exclusive forum provisions in the certificate of incorporation for certain disputes could limit stockholders' ability to choose a favorable judicial forum, potentially increasing litigation costs[538](index=538&type=chunk)[541](index=541&type=chunk)[542](index=542&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=125&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered sales of equity securities or use of proceeds were reported for the period - No unregistered sales of equity securities or use of proceeds were reported for the period[543](index=543&type=chunk) [Item 3. Defaults Upon Senior Securities](index=125&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults upon senior securities were reported during the period - No defaults upon senior securities were reported for the period[544](index=544&type=chunk) [Item 4. Mine Safety Disclosures](index=125&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that there are no mine safety disclosures to report - No mine safety disclosures were reported for the period[545](index=545&type=chunk) [Item 5. Other Information](index=125&type=section&id=Item%205.%20Other%20Information) This section provides information on Rule 10b5-1 trading plans adopted by the company's directors and executive officers, specifically detailing Rule 10b5-1 trading plans for the CEO and Chief Commercial Officer - CEO Bobak Azamian adopted a Rule 10b5-1 trading plan in December 2024 to sell up to **24,000 shares** between March 24, 2025, and March 23, 2026, with no sales made in Q2 2025[546](index=546&type=chunk) - Chief Commercial Officer Aziz Mottiwala adopted a Rule 10b5-1 trading plan in March 2025 to sell up to **17,500 shares** between June 9, 2025, and June 9, 2026, completing all trades under the plan in Q2 2025[547](index=547&type=chunk) [Item 6. Exhibits](index=126&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with Tarsus Pharmaceuticals, Inc.'s Form 10-Q, including an amendment to a license agreement, certifications from executive officers, and Inline XBRL documents - Exhibit 10.1 is an Amendment to the Amended and Restated License Agreement with Elanco Tiergesundheit AG, dated May 1, 2025[549](index=549&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) are included, with 32.1 and 32.2 not deemed filed with the SEC[549](index=549&type=chunk) - Inline XBRL Instance Document, Taxonomy Extension Schema, and Cover Page Interactive Data File are also filed as exhibits[549](index=549&type=chunk) [Signatures](index=127&type=section&id=SIGNATURES) This section contains the duly authorized signatures of Tarsus Pharmaceuticals, Inc.'s President, Chief Executive Officer, and Chairman (Principal Executive Officer), and Chief Financial Officer and Chief Strategy Officer (Principal Financial Officer and Principal Accounting Officer), certifying the report on August 6, 2025 - The report is signed by Bobak Azamian, M.D., Ph.D., President, Chief Executive Officer and Chairman (Principal Executive Officer), and Jeffrey Farrow, Chief Financial Officer and Chief Strategy Officer (Principal Financial Officer and Principal Accounting Officer)[554](index=554&type=chunk) - The signatures certify the report on behalf of Tarsus Pharmaceuticals, Inc. on August 6, 2025[552](index=552&type=chunk)[554](index=554&type=chunk)

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) Tarsus Pharmaceuticals achieved record Q2 2025 net product sales for XDEMVY, driven by a successful DTC campaign, while advancing its clinical pipeline and global expansion efforts [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Tarsus Pharmaceuticals achieved record quarterly net product sales of **$102.7 million** for XDEMVY in Q2 2025, marking a **152% year-over-year increase** within two years of its launch - Record quarterly net product sales of **$102.7 million** achieved within two years of XDEMVY launch, an increase of **152% year over year**[1](index=1&type=chunk) - XDEMVY has been established as the standard of care for Demodex blepharitis[2](index=2&type=chunk) - The peak potential of XDEMVY is now believed to be even greater than initially expected at launch[2](index=2&type=chunk) [Recent Business and Clinical Achievements](index=1&type=section&id=Recent%20Business%20and%20Clinical%20Achievements) The company's direct-to-consumer (DTC) campaign significantly boosted prescription growth for XDEMVY, leading to increased patient activation and prescriber engagement, while clinical development and global expansion progress [XDEMVY Commercial Performance](index=1&type=section&id=XDEMVY%20Commercial%20Performance) XDEMVY demonstrated strong commercial growth in Q2 2025, with **$102.7 million** in net product sales and approximately **91,000 bottles distributed**, driven by a successful DTC campaign XDEMVY Q2 2025 Commercial Metrics | Metric | Q2 2025 | | :----- | :------ | | Net Product Sales ($) | $102.7 million | | Bottles Distributed | ~91,000 | | Commercial, Medicare, Medicaid Coverage (%) | >90% | | Gross-to-Net Discount (%) | ~45% | - The Company's action-oriented direct-to-consumer (DTC) advertising campaign meaningfully contributed to prescription growth[3](index=3&type=chunk) DTC Campaign Impact | DTC Metric | Change since early 2025 | | :--------- | :---------------------- | | XDEMVY.com Active Consumer Engagement | Up nearly 400% | | Consumer Unaided Awareness | More than tripled | | ECPs Prescribing XDEMVY | >20,000 (30%+ increase) | [Clinical Pipeline Advancements](index=1&type=section&id=Clinical%20Pipeline%20Advancements) Tarsus' robust pipeline remains on track, with Phase 2 studies for TP-04 (ocular rosacea) planned for H2 2025 and TP-05 (Lyme disease prevention) for 2026 - The Company's robust pipeline remains on track[3](index=3&type=chunk) - A Phase 2 study of TP-04 for the potential treatment of ocular rosacea is planned to initiate in H2 2025[3](index=3&type=chunk) - A Phase 2 study of TP-05 for the potential prevention of Lyme disease is planned to initiate in 2026[6](index=6&type=chunk) [Global Expansion Efforts](index=2&type=section&id=Global%20Expansion%20Efforts) Global expansion efforts are progressing, with regulatory meetings in Japan on track for H2 2025 and potential European approval for a preservative-free XDEMVY formulation expected in 2027 - Meetings with regulatory authorities in Japan remain on track for H2 2025[6](index=6&type=chunk) - Potential European regulatory approval for a preservative-free formulation of XDEMVY is expected in 2027[6](index=6&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) Tarsus Pharmaceuticals demonstrated strong financial performance in Q2 and YTD 2025, driven by significant product sales growth, leading to a reduced net loss and improved balance sheet [Second Quarter 2025 Financial Performance](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Tarsus reported significant growth in Q2 2025, with net product sales reaching **$102.7 million**, a **152% increase year-over-year**, and a reduced net loss of **$20.3 million** Q2 2025 vs Q2 2024 Financial Performance | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Product sales, net ($) | $102.7 million | $40.8 million | +152% | | Bottles of XDEMVY delivered | ~91,000 | ~37,000 | +146% | | Cost of sales ($) | $6.2 million | $3.0 million | +107% | | R&D expenses ($) | $15.6 million | $12.3 million | +27% | | SG&A expenses ($) | $103.0 million | $58.8 million | +75% | | Net loss ($) | $(20.3) million | $(33.3) million | -39% | | Basic & Diluted Net Loss per Share ($) | $(0.48) | $(0.88) | -45% | - Cash, cash equivalents and marketable securities were **$381.1 million** as of June 30, 2025[6](index=6&type=chunk) [Year-to-Date 2025 Financial Performance](index=2&type=section&id=Year-to-Date%202025%20Financial%20Performance) For the six months ended June 30, 2025, net product sales grew to **$181.0 million**, up **176%** from the prior year, with a significantly narrowed net loss of **$45.5 million** YTD 2025 vs YTD 2024 Financial Performance | Metric | YTD 2025 | YTD 2024 | YoY Change | | :----- | :------- | :------- | :--------- | | Product sales, net ($) | $181.0 million | $65.5 million | +176% | | Bottles of XDEMVY delivered | ~163,000 | ~63,000 | +159% | | Cost of sales ($) | $11.4 million | $4.7 million | +143% | | R&D expenses ($) | $30.0 million | $24.4 million | +23% | | SG&A expenses ($) | $188.0 million | $110.4 million | +70% | | Net loss ($) | $(45.5) million | $(69.0) million | -34% | | Basic & Diluted Net Loss per Share ($) | $(1.11) | $(1.89) | -41% | [Condensed Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The condensed statements of operations show significant increases in product sales and operating expenses for both the three and six months ended June 30, 2025, with a decreased net loss due to substantial revenue growth Condensed Statements of Operations and Comprehensive Loss | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product sales, net (in thousands) | $102,660 | $40,813 | $180,995 | $65,533 | | Total revenues (in thousands) | $102,660 | $40,813 | $180,995 | $68,427 | | Cost of sales (in thousands) | $6,237 | $3,004 | $11,448 | $4,658 | | Research and development (in thousands) | $15,594 | $12,319 | $30,003 | $24,385 | | Selling, general and administrative (in thousands) | $103,013 | $58,792 | $188,008 | $110,370 | | Total operating expenses (in thousands) | $124,844 | $74,115 | $229,459 | $139,413 | | Loss from operations (in thousands) | $(22,184) | $(33,302) | $(48,464) | $(70,986) | | Net loss (in thousands) | $(20,340) | $(33,290) | $(45,460) | $(69,021) | | Net loss per share, basic and diluted ($) | $(0.48) | $(0.88) | $(1.11) | $(1.89) | | Weighted-average shares outstanding | 42,360,452 | 37,823,233 | 40,869,364 | 36,530,756 | [Condensed Balance Sheets](index=7&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, Tarsus' total assets increased to **$494.99 million** from **$376.99 million** at December 31, 2024, driven by growth in marketable securities and receivables, alongside increased liabilities and stockholders' equity Condensed Balance Sheets | (In thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | **ASSETS** | | | | Cash and cash equivalents (in thousands) | $96,648 | $94,819 | | Marketable securities (in thousands) | $284,495 | $196,557 | | Accounts receivable, net (in thousands) | $58,334 | $46,760 | | Total current assets (in thousands) | $474,429 | $356,705 | | Total assets (in thousands) | $494,994 | $376,991 | | **LIABILITIES** | | | | Total current liabilities (in thousands) | $90,253 | $80,612 | | Long-term debt, net (in thousands) | $72,129 | $71,845 | | Total liabilities (in thousands) | $162,382 | $152,457 | | **STOCKHOLDERS' EQUITY** | | | | Total stockholders' equity (in thousands) | $332,612 | $224,534 | [Product and Pipeline Information](index=3&type=section&id=Product%20and%20Pipeline%20Information) This section details XDEMVY, an FDA-approved treatment for Demodex blepharitis, and the investigational pipeline including TP-04 for ocular rosacea and TP-05 for Lyme disease prevention [XDEMVY (Lotilaner Ophthalmic Solution)](index=3&type=section&id=XDEMVY%20(Lotilaner%20Ophthalmic%20Solution)) XDEMVY (lotilaner ophthalmic solution) 0.25% is an FDA-approved prescription eye drop for Demodex blepharitis, demonstrating statistical significance in clinical trials with common side effects of instillation site stinging and burning - XDEMVY is indicated for the treatment of Demodex blepharitis[10](index=10&type=chunk) - Evaluated in two pivotal trials collectively involving more than **800 patients**, both trials met the primary endpoint and all secondary endpoints with statistical significance[9](index=9&type=chunk) - The most common ocular adverse reactions observed in studies were instillation site stinging and burning, reported in **10% of patients**[9](index=9&type=chunk)[10](index=10&type=chunk) [Investigational Pipeline](index=3&type=section&id=Investigational%20Pipeline) Tarsus is advancing its pipeline with two investigational products: TP-04 for ocular rosacea and TP-05 for Lyme disease prevention, both currently in Phase 2 development [TP-04 (Ocular Rosacea)](index=3&type=section&id=TP-04%20(Ocular%20Rosacea)) TP-04 is an investigational sterile aqueous gel formulation of lotilaner being studied for the potential treatment of ocular rosacea, a prevalent and underserved eye disease without FDA-approved therapy, with a Phase 2 study planned for H2 2025 - TP-04 is an investigational sterile aqueous gel formulation of lotilaner[13](index=13&type=chunk) - Tarsus is studying TP-04 for the potential treatment of ocular rosacea, a highly prevalent and underserved eye disease with no FDA-approved therapy[3](index=3&type=chunk)[13](index=13&type=chunk) - A Phase 2 study of TP-04 is planned to initiate in H2 2025[3](index=3&type=chunk) [TP-05 (Lyme Disease Prevention)](index=4&type=section&id=TP-05%20(Lyme%20Disease%20Prevention)) TP-05 is an investigational oral systemic formulation of lotilaner, believed to be the only non-vaccine, drug-based preventative therapeutic in development for Lyme disease prevention, with a Phase 2 study planned for 2026 - TP-05 is an investigational oral systemic formulation of lotilaner[15](index=15&type=chunk) - TP-05 is believed to be the only non-vaccine, drug-based, preventative therapeutic in development designed to kill ticks to potentially prevent Lyme disease transmission[15](index=15&type=chunk) - A Phase 2 study of TP-05 for the potential prevention of Lyme disease is planned to initiate in 2026[6](index=6&type=chunk) [Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides details on the Q2 2025 conference call, an overview of Tarsus Pharmaceuticals, forward-looking statement disclaimers, and contact information [Conference Call and Webcast](index=3&type=section&id=Conference%20Call%20and%20Webcast) Tarsus hosted a conference call and webcast on August 6, 2025, to discuss its second quarter 2025 financial results and business highlights, with a recorded version available online - Tarsus hosted a conference call and webcast on August 6, 2025, at 1:30 p.m. PT / 4:30 p.m. ET to discuss Q2 2025 financial results and business highlights[1](index=1&type=chunk)[8](index=8&type=chunk) - A recorded version of the call will be available on the Tarsus website shortly after completion and archived for at least 90 days[8](index=8&type=chunk) [About Tarsus Pharmaceuticals, Inc.](index=4&type=section&id=About%20Tarsus%20Pharmaceuticals%2C%20Inc.) Tarsus Pharmaceuticals focuses on revolutionizing patient treatment, starting with eye care, by applying proven science and new technology, advancing a pipeline across eye care, dermatology, and infectious disease prevention - Tarsus Pharmaceuticals applies proven science and new technology to revolutionize treatment for patients, starting with eye care[16](index=16&type=chunk) - The company is advancing its pipeline to address several diseases with high unmet need across eye care, dermatology, and infectious disease prevention[16](index=16&type=chunk) - XDEMVY is FDA approved for Demodex blepharitis, and TP-04 (ocular rosacea) and TP-05 (Lyme disease prevention) are in Phase 2 development[16](index=16&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding future expectations, plans, and prospects, which are subject to various important factors and risks detailed in SEC filings that could cause actual results to differ materially - Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute 'forward-looking statements'[17](index=17&type=chunk) - Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors and risks detailed in SEC filings[17](index=17&type=chunk)[18](index=18&type=chunk) - Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on current expectations and speak only as of the date of the release[18](index=18&type=chunk) [Media and Investor Contacts](index=5&type=section&id=Media%20and%20Investor%20Contacts) Contact information for media inquiries (Adrienne Kemp) and investor relations (David Nakasone) is provided - Media Contact: Adrienne Kemp, Sr. Director, Corporate Communications, (949) 922-0801, akemp@tarsusrx.com[19](index=19&type=chunk) - Investor Contact: David Nakasone, Head of Investor Relations, (949) 620-3223, DNakasone@tarsusrx.com[19](index=19&type=chunk)

Core Insights - Tarsus Pharmaceuticals reported record quarterly net product sales of $102.7 million for Q2 2025, marking a 152% increase year over year, driven by the successful launch of XDEMVY [1][5] - The Direct-To-Consumer campaign has significantly increased patient engagement and prescriptions, with active consumer engagement on the XDEMVY website up nearly 400% since the start of 2025 [5] - The company is on track with its pipeline advancements and global expansion efforts, including plans for regulatory meetings in Japan and potential European approval for a preservative-free formulation of XDEMVY [5][10] Recent Business and Clinical Highlights - XDEMVY has established itself as the standard of care for Demodex blepharitis, with over 91,000 bottles distributed in Q2 2025 [2][5] - More than 20,000 Eye Care Professionals (ECPs) are now prescribing XDEMVY, a 30% increase since the beginning of 2025 [5] - The company plans to initiate a Phase 2 study of TP-04 for ocular rosacea in H2 2025 and a Phase 2 study of TP-05 for Lyme disease prevention in 2026 [5] Financial Results - For Q2 2025, product sales were $102.7 million compared to $40.8 million in Q2 2024, with a total of approximately 91,000 bottles delivered [5][10] - Cost of sales increased to $6.2 million from $3.0 million in the same period last year, primarily due to manufacturing costs related to XDEMVY [10] - Research and development expenses rose to $15.6 million from $12.3 million in Q2 2024, driven by increased program expenses and personnel-related costs [6][10] Year-to-Date Financial Performance - Year-to-date product sales reached $181.0 million, up from $65.5 million in the same period in 2024 [10] - Selling, general and administrative expenses increased to $188.0 million from $110.4 million, largely due to higher commercial and marketing costs associated with the XDEMVY launch [10] - The net loss for the year-to-date period was $45.5 million, an improvement from a net loss of $69.0 million in the same period in 2024 [10]

Company Overview - Tarsus Pharmaceuticals, Inc. focuses on revolutionizing treatment for patients, particularly in eye care, by applying proven science and new technology [2] - The company is advancing its pipeline to address diseases with high unmet needs across various therapeutic categories, including eye care and infectious disease prevention [2] Product Development - Tarsus has FDA approval for XDEMVY® (lotilaner ophthalmic solution) 0.25% for the treatment of Demodex blepharitis [2] - The company is developing TP-04 for the potential treatment of Ocular Rosacea and TP-05 as an oral tablet for the potential prevention of Lyme disease [2] Upcoming Events - Tarsus Pharmaceuticals will host a live webcast on August 6, 2025, at 1:30 p.m. PT / 4:30 p.m. ET to report its second quarter 2025 financial results and provide a corporate update [1]

Tarsus Pharmaceuticals (TARS) FY Conference Summary Company Overview - Tarsus Pharmaceuticals is a commercial stage biotech company focused on the eye care space, specifically targeting Demodex Blepharitis with its drug Xtampi, launched in September 2023 [4][5]. Industry Insights - The eye care market is significant, with approximately 25 million patients in the U.S. affected by Demodex Blepharitis, and Tarsus is targeting 9 million patients actively seeking treatment [5]. Key Launch Insights - The launch of Xtampi has been successful, with sequential increases in demand and revenue [5]. - Commercial coverage was achieved earlier than expected, with Medicare coverage starting in early 2025 [6]. Sales Force Expansion - Tarsus expanded its sales force by hiring 50 additional sales representatives, which has positively impacted the frequency of doctor visits and prescription rates [6][7]. - It takes an average of 5 to 10 visits for sales reps to convert doctors to regularly prescribe Xtampi [8][9]. Prescribing Patterns - Tarsus targets about 15,000 eye care professionals (ECPs) who write 85% of scripts in the dry eye space [10]. - As of December, 40% of ECPs were prescribing Xtampi beyond the Demodex Blepharitis category [11]. - The company has dispensed approximately 225,000 scripts, indicating significant room for growth given the target of 9 million patients [15]. Future Growth and Guidance - Tarsus expects to see continued growth in bottle dispensed, although percentage growth may slow as the base grows larger [22]. - The company anticipates a guidance of 85,000 to 90,000 new prescriptions for the second quarter, factoring in seasonal impacts [20]. Refill Dynamics - Currently, 8-9% of prescriptions are refills, with a target of reaching a 20% refill rate based on clinical history [24][25]. - The company is focused on acquiring new patients as the primary growth driver, rather than relying heavily on refills [26]. Direct-to-Consumer (DTC) Campaign - Tarsus has budgeted $70 million to $80 million for DTC advertising, including streaming and network TV campaigns [42]. - The DTC campaign aims to increase patient engagement and script dispensation, with expected impacts to be seen in the latter half of the year [44][46]. International Development Plans - Tarsus has partnered with Grand Pharma for its drug approval in China, which typically takes 18-24 months [49][50]. - European approval is anticipated in the second half of 2027, contingent on regulatory requirements for a preservative-free formulation [51][52]. Pipeline Developments - Tarsus is preparing to initiate a Phase 2 study for ocular rosacea, targeting a significant unmet need in the market [58][60]. - The company is also exploring a potential Lyme disease treatment, with plans for a Phase 2b study in 2026 [70][73]. Intellectual Property Strategy - Tarsus holds strong intellectual property protections, with patents extending through 2038 and beyond for various uses of its products [75][76]. Conclusion - Tarsus Pharmaceuticals is positioned for growth in the eye care market with a successful product launch, an expanding sales force, and a robust pipeline of future treatments. The company is actively engaging in DTC marketing and exploring international opportunities while maintaining a strong focus on intellectual property.

Summary of Tarsus Pharmaceuticals Conference Call Company Overview - Tarsus Pharmaceuticals is a commercial stage company focused on the eye care space, having launched its product Xtembi in August 2023 [2][3] - Xtembi is an eye drop treatment for demodex blepharitis, showing significant efficacy with 85% of patients experiencing clinically meaningful improvement [4][3] Market Opportunity - Demodex blepharitis affects approximately 25 million Americans, with a specific target market of about 9 million patients currently in clinics [10][12] - The company has only treated a couple hundred thousand patients since launch, indicating substantial growth potential [12] Product Efficacy and Safety - Xtembi is easy to diagnose and has a simple treatment paradigm, contributing to its success [5][4] - The treatment is a six-week course, administered twice daily [33] Pipeline Developments - Tarsus plans to initiate a Phase II study for ocular rosacea, a condition affecting 15-18 million patients, with a significant unmet need [6][58] - The company is also exploring the use of the same active ingredient in Xtembi for Lyme disease, with promising Phase II data showing a 97% tick kill rate within 24 hours [7][64] Sales and Marketing Strategy - Tarsus has one of the largest eye care sales forces, with 150 representatives targeting both ophthalmologists and optometrists [44][45] - The company is focusing on physician education to increase awareness of demodex blepharitis and the importance of diagnosing it during eye exams [15][16] Financial Performance - Tarsus reported $78 million in revenue for Q1, with guidance for Q2 indicating 85,000 to 90,000 bottles dispensed [25][26] - The gross to net discount was approximately 47% in Q1, expected to decrease to 42-43% by Q4 [25][27] Direct-to-Consumer (DTC) Campaign - The company plans to spend $70-80 million on DTC marketing, focusing on various media channels [38] - The effectiveness of the DTC campaign will be closely monitored to ensure a positive return on investment [39][41] Future Guidance - Tarsus is not providing annual revenue guidance yet but is optimistic about continued growth driven by its sales force and DTC efforts [50][51] - The company anticipates a 20% annualized retreatment rate for patients, indicating potential for recurring revenue [30][32] International Expansion - Tarsus is exploring opportunities in Europe and Japan, with potential NDA filings expected by 2027 [53][54] - The company is assessing pricing dynamics and regulatory requirements in these markets [54][55] Cash Position - As of Q1, Tarsus had approximately $48 million in cash, providing a healthy balance sheet to support ongoing operations and clinical studies [68]

Summary of Tarsus Pharmaceuticals (TARS) FY Conference Call Company Overview - Tarsus Pharmaceuticals is a commercial stage company focused on eye care, with its first medicine, Xtendvi, launched in September 2023, showing potential blockbuster status with projected revenues over a billion dollars [4][15][74]. Key Products and Pipeline - **Xtendvi**: Launched successfully with quarter-over-quarter growth and strong underlying demand. The product targets Demodex blepharitis, a prevalent condition affecting approximately 25 million patients in the U.S. [4][9][10]. - **Ocular Rosacea Treatment**: A new product in development using the same active ingredient as Xtendvi, aimed at a market with no FDA-approved therapeutics [5][58]. - **Lyme Disease Treatment**: An oral prophylactic treatment that Tarsus plans to outlicense, with a phase two study anticipated next year [6][68]. Market Dynamics and Growth Factors - The company has targeted 15,000 eye care professionals, achieving 90% coverage across all payers, which has facilitated the growth of Xtendvi [12][10]. - The sales force has expanded, with a focus on educating eye care professionals and patients about Demodex blepharitis, leading to increased prescriptions [18][19][20]. - Direct-to-consumer (DTC) campaigns initiated in Q4 2023 have driven consumer awareness and demand, although the impact on prescription volume is expected to materialize over one to two quarters [39][44]. Financial Performance and Projections - Initial revenue projections for 2024 were around $55 million, which the company has tripled due to strong market adoption and effective sales strategies [15][17]. - Gross-to-net discounts are expected to decline to a target range of 42-43% by the end of the year, influenced by the introduction of Medicare Part D coverage [54][56]. Clinical Data and Efficacy - Clinical data for Xtendvi showed that 85% of patients experienced clinically meaningful improvement with a benign safety profile [9]. - The company is focused on demonstrating the efficacy of its products through ongoing studies and market research, particularly for ocular rosacea and Lyme disease [60][71]. Challenges and Considerations - The company faces challenges in educating physicians about the prevalence of Demodex blepharitis and the need for treatment, as many patients may be asymptomatic [22][26]. - The need for a reproducible scale for clinical endpoints in the ocular rosacea study is critical for regulatory approval [63][65]. Cash Position - As of Q1 2025, Tarsus reported a cash balance of approximately $408 million, with future guidance on cash flow positive status pending revenue evaluations [74]. Conclusion - Tarsus Pharmaceuticals is positioned for growth with a strong product pipeline and effective market strategies, but it must continue to navigate educational challenges and regulatory requirements to maximize its potential in the eye care market.

Summary of Tarsus Conference Call Company Overview - **Company**: Tarsus - **Product**: XtendV, launched in September 2023 - **Market Focus**: Demodex blepharitis, ocular rosacea, Lyme disease Key Points Product Launch and Market Penetration - XtendV has experienced strong demand and revenue growth since its launch, with over 90% payer coverage including Medicare and commercial plans [2][3] - The company targets an initial segment of 9 million patients out of an estimated 25 million in the U.S. suffering from Demodex blepharitis [9][10] - The initial target includes patients with endemic blepharitis and meibomian gland dysfunction (MGD) [10] Clinical Efficacy and Safety - Over 85% of patients in Phase III studies reported clinically meaningful results, with a favorable safety profile [6] - The treatment is a six-week regimen, with a noted recurrence rate of about 40% between months six and twelve post-treatment [28][29] Sales and Marketing Strategy - The company has expanded its sales force by hiring an additional 50 sales representatives to enhance market penetration and reduce territory sizes for better efficiency [17][19] - Education campaigns for eye care professionals (ECPs) have been crucial in increasing awareness and adoption of the treatment [12][22] Payer Dynamics and Reimbursement - Rapid payer uptake is attributed to the pharmacoeconomic benefits of XtendV compared to previous treatments like tea tree oil, which were less effective [31][34] - The company reports a gross-to-net discount of approximately 47%, with expectations to decrease to the low 40s by Q4 [41][42] Pipeline and Future Studies - Tarsus is exploring additional indications, including ocular rosacea and Lyme disease, with plans for Phase IV studies in MGD and other conditions [46][51] - The company is developing a scale for assessing ocular rosacea severity, aiming for a Phase II study later this year [52] Financial Outlook - As of Q1, Tarsus reported approximately $48 million in cash, sufficient to support ongoing growth and upcoming studies [56] - The company has not yet provided revenue guidance due to the uncertainty surrounding direct-to-consumer (DTC) impacts [57] Additional Insights - The treatment addresses a significant unmet need in the market, with no FDA-approved alternatives for Demodex blepharitis prior to XtendV [34][35] - The company is focused on operational excellence and evidence generation to support ongoing market expansion [12][46]

Financial Data and Key Metrics Changes - The company reported $180 million in net sales for the full year 2024 and $70.8 million in the first quarter of 2025, indicating strong revenue generation for a new product [8][10] - The company has generated over $250 million in revenues for Xtendvi, showcasing significant commercial success [8] Business Line Data and Key Metrics Changes - Xtendvi has seen a rapid increase in prescriptions, with over 200,000 scripts issued, indicating a strong market demand [19] - The company is targeting approximately 9 million patients actively seeking treatment for Demodex blepharitis and related conditions, suggesting a substantial growth opportunity [18][19] Market Data and Key Metrics Changes - The company achieved 90% payer coverage, with 45% of patients covered by commercial insurance and 45% by Medicare, which has positively impacted the launch [10] - The company is focusing on educating eye care professionals and patients about Demodex blepharitis, which is a relatively unknown condition, to drive further growth [21][22] Company Strategy and Development Direction - The company plans to expand its product offerings to include treatments for ocular rosacea and Lyme disease, indicating a strategic focus on unmet medical needs [29][36] - The company is considering partnerships for international expansion, particularly in Europe and Japan, while addressing regulatory and manufacturing challenges [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth, stating that the initial commercial success is not just a one-time event but part of a longer-term opportunity [18][19] - The company is optimistic about the impact of its direct-to-consumer campaign and expects to see further acceleration in growth in the latter half of the year [44] Other Important Information - The company has a healthy balance sheet with approximately $48 million on hand as of March 31, which is expected to support its near-term strategies [40][41] - The company is developing a gel formulation for ocular rosacea, which addresses a significant patient population with unmet needs [31][32] Q&A Session Summary Question: How has the initial commercial success been affected by pent-up demand? - Management believes the growth will continue and is not solely due to pent-up demand, as they are just beginning to tap into the market [18] Question: Is there more educational work needed on the prescriber or patient side? - Management indicated that both sides require further education, with a focus on increasing awareness among patients about the condition [21][22] Question: Are there repeat patients, or do they typically get cured with one prescription? - Clinical studies showed about 40% of patients experienced a recurrence of symptoms within six to twelve months, indicating the potential for repeat prescriptions [23][24] Question: What are the timelines for the cash runway and future studies? - Management has not provided specific guidance on cash flow breakeven but indicated that the current balance sheet is sufficient to support ongoing initiatives [40][41] Question: What are the key near-term catalysts for the company? - Management highlighted quarterly script numbers and the impact of the direct-to-consumer campaign as key indicators to watch for growth [43][44]

Core Viewpoint - Tarsus Pharmaceuticals, Inc. (TARS) has experienced significant selling pressure, resulting in a 15.6% decline in stock price over the past four weeks, but analysts anticipate improved earnings reports in the near future [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to identify oversold stocks, with a reading below 30 indicating oversold conditions [2] - TARS has an RSI reading of 29.83, suggesting that the heavy selling may be exhausting, potentially leading to a price rebound [5] Group 2: Fundamental Indicators - Analysts have raised earnings estimates for TARS by 19.5% over the last 30 days, indicating a positive trend that typically correlates with price appreciation [6] - TARS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, further supporting the potential for a turnaround [7]