Tarsus Pharmaceuticals(TARS) - 2025 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported net revenues of $102.7 million for the last quarter, indicating strong growth since the launch of XDEMVY [2][3] - Guidance for Q3 suggests distribution of 95,000 to 100,000 bottles, reflecting a steady cadence of growth despite seasonal dynamics [1][5] - Gross-to-net is expected to decrease to 43% to 45% for Q3, with a target of low 40% by year-end, driven by reduced discounts as patients progress through deductibles [8][9] Business Line Data and Key Metrics Changes - Over 20,000 eye doctors have prescribed XDEMVY, exceeding the initial target of 15,000, showcasing effective market education and engagement [14][15] - The company has achieved over 90% insurance coverage for XDEMVY, which is significantly above the industry average [11][12] Market Data and Key Metrics Changes - The total addressable market (TAM) for Demodex blepharitis is approximately 25 million Americans, with 9 million actively seeking treatment, indicating substantial growth potential [21][22] - The company anticipates that the TAM could expand as more patients become aware of the treatment options available [21][22] Company Strategy and Development Direction - The company is focused on deepening prescriber engagement and expanding the utilization of XDEMVY across various patient types, including those with dry eye disease and meibomian gland disease [16][17] - Plans for international expansion include market entry strategies for Europe and Japan, with a focus on physician education and market development [27][29] Management's Comments on Operating Environment and Future Outlook - Management noted that Q3 typically experiences slower growth due to seasonal factors, but expects Q4 to be robust as patient visits increase post-summer [5][6] - The company is optimistic about maintaining high insurance coverage levels and continuing to grow prescriber engagement [11][12] Other Important Information - The company is preparing for the initiation of a phase 2 trial for TP-04 in ocular rosacea, with a focus on specific clinical endpoints [30][31] - The company is also exploring opportunities in Lyme disease prevention with TP-05, which is seen as a complementary program to its eye care focus [35][36] Q&A Session Summary Question: How should we think about seasonal trends on a go-forward basis? - Management explained that seasonal dynamics affect patient flow, with Q3 typically slower due to vacations, but expects robust growth in Q4 [5][6] Question: Can you discuss the guidance on gross-to-net? - Management detailed that gross-to-net discounts are expected to decrease as patients move through their deductibles, with a steady state anticipated in the low 40% range [8][9] Question: What is the potential for expanding the prescriber base? - Management indicated that while the prescriber base has reached 20,000, the focus will now be on increasing the depth of prescribing among existing prescribers [14][15] Question: What are the expectations for the DTC campaign? - Management expressed confidence in the DTC campaign's effectiveness, anticipating continued growth in patient awareness and engagement [18][19] Question: What is the market potential for ocular rosacea? - Management noted that ocular rosacea affects 15 to 18 million individuals, with significant opportunities for treatment as awareness grows [33][34]