Tarsus Pharmaceuticals, Inc. Q4 FY2024 earnings call

• XDEMVY Performance: 2024 was a remarkable year for XDEMVY with over $180M in net sales, 163,000 bottles delivered. Sales force expanded to 150, over 15,000 ECPs prescribing, and 90% coverage. MGD data showed positive outcomes for DB patients.
• Ocular Rosacea: Plan to initiate Phase 2 trial of TP-04 for Ocular Rosacea in 2024, a disease caused by Demodex mites similar to DB.
• Pipeline: TP-05 has a clear regulatory path for Lyme disease prevention, with Phase 2 trial planned in 2026 and Phase 3 study to follow.
• DTC Campaign: Launched in Q4 2024, expanded to network TV, showing positive response with increased website engagement and patient activation.

In 2024, Tarsus generated over $180 million in net product sales from XDEMVY, with $66.4 million in Q4 net product sales. XDEMVY contributed the majority of revenue. More than 163,000 bottles of XDEMVY were delivered to patients in 2024, and commercial and Medicare coverage of XDEMVY extends to over 90% of potential patient lives.

• 2025 expects strong growth in XDEMVY prescriptions. Q1 bottles dispensed expected 62,000-67,000. Gross to net discount expected 46%-49% in Q1, improving to low 40s by year-end. Operating expenses to increase with DTC and marketing. Phase 2 Ocular Rosacea study cost $7M-$10M split over 2025-2026.

• Uncertainties in the impact timing and scale of the DTC campaign.
• Regulatory and clinical trial risks for pipeline programs like TP-05.
• Market dynamics and patient access challenges affecting prescription rates.

Q: Francois Brisebois asked about motivating prescribers to go from monthly to weekly to daily prescribing and NRx vs TRx.

A: Aziz Mottiwala and Bobby Azamian responded about sales force expansion, coverage, DTC, and MGD data driving depth of prescribing, expecting mid-single-digit rates in 2025 moving to 20% long term.

Q: Corey Jubinville asked about pipeline expansion impact on R&D spending and cash flow positivity.

A: Jeff Farrow discussed capital allocation focusing on XDEMVY's commercial ramp and pipeline development, noting TP-05 may be better suited for a partner.

Q: Jason Gerberry asked about FDA discussions on Phase 3 study size for Lyme disease and ECP prescriber mix.

A: Seshadri Neervannan and Aziz Mottiwala provided insights on Phase 3 study requirements and early prescriber dynamics being qualitative and early.

Q: Oren Livnat asked about TP-05 on-demand use and DTC campaign metrics.

A: Seshadri Neervannan explained TP-05's on-demand use and Jeff Farrow discussed DTC campaign metrics and retreatment rates being early and qualitative.

Q: Eddie Hickman asked about DTC campaign duration and guidance on full-year metrics.

A: Jeff Farrow and Aziz Mottiwala discussed the ongoing evaluation of DTC campaign impact and the need for time to see full-scale effects, with guidance based on quarterly evaluations.

Q: Andrea Newkirk asked about DTC campaign duration and annual expense projection.

A: Aziz Mottiwala and Jeff Farrow discussed the ongoing nature of the DTC campaign with a focus on ROI and annual modeling, expecting continued investment if positive returns are seen.

Q: Lachlan Hanbury-Brown asked about ECP interaction changes with prescribing progression and gross to net discount visibility.

A: Jeff Farrow and Aziz Mottiwala discussed the evolving interaction with ECPs as they progress in prescribing and the expected step-down in gross to net discount throughout 2025.