Tarsus Pharmaceuticals, Inc. Q3 FY2024 earnings call

• Successful launch of XDEMVY with strong net product sales and growing number of eye care professionals (ECPs) prescribing it.
• Expanded sales force from approximately 100 to 150 by the end of Q3, leading to increased ECP engagement.
• Presented groundbreaking positive data in DB patients with meibomian gland disease (MGD) at the American Academy of Optometry.
• Activated first direct-to-consumer campaign on streaming television to support patient education.
• Secured additional commercial coverage and two remaining large Medicare contracts, bringing total covered lives to more than 80%.
• Welcomed new clinical leaders, including Dr. Elizabeth Yeu as Chief Medical Officer and Dr. Kate Goodrich to the Board of Directors.

In the third quarter of 2024, Tarsus generated more than $48 million in XDEMVY net product sales, with over 41,000 bottles delivered to patients impacted by demodex blepharitis (DB). XDEMVY's revenue contribution is the primary focus here as it drives the segment performance.

• Expect continued growth in XDEMVY prescriptions in Q4, with an expected 50,000 to 55,000 bottles delivered.
• Reiterate gross to net discount range of approximately 42% to 46% exiting 2025, with potential for a one to two point increase in Q4 2024 due to donut hole impact.
• Anticipate an increase in total operating expenses in Q4 due to full quarter impact of expanded salesforce, new DTC campaign, and other XDEMVY-related marketing costs.

Q: Will the MGD expansion require another salesforce expansion or targeted DTC? And when might retreatment impacts be seen?

A: Aziz Mottiwala stated no plans for salesforce or DTC expansion for MGD, and retreatment rates are early with an expected increase to around 20% over time.

Q: How to measure sales rep effectiveness?

A: Jeff Farrow mentioned metrics like call productivity, prescriber base growth, and weekly writing doctors as indicators.

Q: Thoughts on seasonality and R&D evidence generation?

A: Bobby Azamian noted summer and first quarter seasonality impacts, and Sesha Neervannan discussed leveraging MGD data for evidence generation to impact salesforce.

Q: On Europe and R&D, thoughts on pricing and evidence?

A: Aziz Mottiwala discussed ongoing work in Europe, noting similar prevalence and desire for the product, and focus on education and reimbursement.

Q: On M&A and ophthalmology focus?

A: Aziz Mottiwala mentioned focus on development stage opportunities and commercialization to broaden patient reach in ophthalmology.