Tarsus Pharmaceuticals, Inc. Q1 FY2025 earnings call

• Product Sales: XDEMVY achieved over $78 million in Q1 2025 sales, up 217% y-o-y with 72,000 bottles dispensed. The sales force expansion has led to a shift from monthly to weekly/daily prescribing among physicians.
• Commercial Achievements: Broad commercial and Medicare coverage (over 90% covered) has eliminated a major barrier to adoption. The DTC campaign expanded to network TV, resulting in a 140% increase in average weekly website visits in March 2025 vs December 2024.
• Global and Pipeline: Explored global potential of XDEMVY, with data from ASCRS showing Demodex blepharitis prevalence in Japan similar to the US. Progress in Europe with EMA stating no Phase 3 needed for potential 2027 approval. TP-04, a molecule for Ocular Rosacea, is on track for a Phase 2 trial later in 2025.
• Financing: Secured ~$135 million in equity financing, strengthening the financial position to drive XDEMVY growth and pipeline advancement.

In the first quarter, XDEMVY generated more than $78 million in net product sales, driven by approximately 72,000 bottles dispensed to patients, representing a year-over-year increase of 217%. XDEMVY's revenue contribution is the primary focus here, with these sales being the key segment performance metric.

• Q2 Expectations: Anticipates bottles dispensed to be in the range of 85,000 to 90,000, with a gross to net discount expected in the range of 45% to 47%.
• DTC Spending: SG&A XDEMVY-related marketing costs are expected to increase by $5 million to $10 million compared to Q1 2025 due to expanded DTC efforts. Full-year 2025 DTC costs are projected to be between $70 million and $80 million.
• R&D: The Phase 2 trial for TP-04 in Ocular Rosacea is expected to start in the second half of 2025, with costs estimated between $7 million and $10 million.

• Regulatory Uncertainties: Potential delays or issues in meeting with regulatory authorities for pipeline products could impact timelines.
• Tariffs Impact: Uncertainty around tariffs, though management believes any impact on gross margins would be insignificant.
• Adherence and Refills: While retreatment is a positive sign, adherence rates for chronic medications remain a potential factor affecting long-term growth.

Q: Have you seen disruptions in meeting with the FDA for pipeline products, and what's the volume split between Medicare and commercial prescriptions?

A: We have not had any delays in our meeting schedule. The volume of prescriptions is relatively equally split between Medicare and commercial, with Medicare coverage being a significant growth driver as it eliminated a key barrier for physicians.

Q: Can you discuss repeat prescribing and retreatments?

A: Doctors are increasingly reporting retreatments. The sales force discusses data on recurrence, and refill rates indicate a positive trend with near-term drivers including the sales force and coverage, and long-term drivers including DTC and evidence generation.

Q: What's the feedback on the Orion registry data and details on the Phase 2 trial for TP-04?

A: Orion registry data prompts doctors to diagnose more, with Ersa and Rhea data showing XDEMVY's impact on symptoms and oil secretions. Details of the Phase 2 trial for TP-04 in Ocular Rosacea will be shared later in 2025.

Q: What factors affect guidance and what's the patient profile from DTC campaigns?

A: Factors like the impact of the expanded DTC network campaign prevent long-range guidance. Insights from DTC campaigns show patient demographics mirroring coverage evolution, with mid-40s patients and those 60+ being responsive, informed by streaming insights on viewing habits and activity leading to prescriptions