Tarsus Pharmaceuticals(TARS) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q3 2025, Tarsus Pharmaceuticals reported approximately $119 million in net revenue, reflecting a significant increase from the previous quarter, with over 103,000 bottles of XDEMVY delivered to patients [3][10][15] - The company achieved a gross to net discount of 44.7%, consistent with previous guidance, driven by adjustments related to the Medicare Manufacturers Discount Program and an increase in Medicare patients entering the catastrophic coverage category [16][17] - For Q4, Tarsus expects net product sales for XDEMVY to be in the range of $140 million to $145 million, contributing to an annual revenue forecast of $440 million to $445 million [17][19] Business Line Data and Key Metrics Changes - XDEMVY has become one of the best-selling prescription eye drops, with over 20,000 doctors prescribing it, and a 20% increase in weekly prescribers noted [4][10][11] - The refill rate for prescriptions is showing positive trends, with over 10% of weekly prescriptions being refills, and expectations for this to stabilize around 20% over time [13][35] Market Data and Key Metrics Changes - The company is experiencing a positive trend in direct-to-consumer (DTC) engagement, with a 90% increase in website visits and a 42% growth in unaided awareness since the last quarter [12][60] - Tarsus is seeing strong adoption across multiple patient segments, particularly in the treatment of Demodex blepharitis, which is now recognized as a mainstream condition [13][14] Company Strategy and Development Direction - Tarsus aims to broaden its pipeline and expand globally, with plans to initiate a phase two trial for ocular rosacea by the end of the year and to advance its Lyme disease prevention program [8][18] - The company is focused on creating a market and shifting physician behavior to establish XDEMVY as a standard treatment in eye care [9][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing growth trajectory of XDEMVY, anticipating continued momentum into 2026 and beyond, with a clear path to achieving Blockbuster Plus potential [19][20] - The management team highlighted the importance of physician education and patient engagement in driving the adoption of XDEMVY [35][56] Other Important Information - Tarsus is evaluating strategic options for its pipeline programs, including potential partnerships to advance its Lyme disease program efficiently [18] - The company is also considering flexible commercial strategies for international markets, particularly in Europe and Japan [18][19] Q&A Session Summary Question: Changes in doctors' practice patterns regarding XDEMVY - Management noted a significant increase in the depth of prescribing, with a 20% rise in weekly prescribers and a 30% increase in those prescribing multiple times a week, driven by new data on meibomian gland disease [25][27][29] Question: Refill rates and patient return behavior - The company reported a positive trend in refill rates, with over 10% of weekly prescriptions being refills, and emphasized the importance of physician education on the chronic nature of the disease to encourage patient follow-ups [33][35] Question: Update on peak sales estimates for XDEMVY - Management indicated that while they are thrilled with current performance, they are not ready to quantify peak sales estimates but continue to believe in the Blockbuster Plus potential of XDEMVY [33][39] Question: Status of TP-04 study for ocular rosacea - The company confirmed that no further FDA meeting is needed before starting the TP-04 trial, which is on track to begin later this year [43][44] Question: Insights on operational spending for 2026 - Management expects operational expenses to align with 2025 levels, with a focus on DTC spending and potential costs associated with the ocular rosacea and Lyme disease programs [45][46] Question: Traction between optometrists and ophthalmologists - Tarsus sees a balanced mix of prescriptions from both optometrists and ophthalmologists, with approximately 65% of volume coming from optometry, and both groups are showing strong engagement with XDEMVY [75][78]