Tarsus Pharmaceuticals, Inc. Q4 FY2025 earnings call

Bobby Azamian noted 2025 was a breakthrough year for Tarsus with XDEMVY. XDEMVY has brought about a fundamental shift in eye care, with expectations that it can reach blockbuster status with sales potential exceeding $2 billion. Tarsus aims to expand through identifying diseases and applying the XDEMVY playbook. Aziz Mottiwala discussed XDEMVY's growth drivers such as investing in the sales force, generating evidence, and the DTC campaign. Seshadri Neervannan provided updates on TP-04 and TP-05 programs, including TP-04's Phase II trial for Ocular Rosacea and TP-05's Phase II trial for Lyme disease prevention.

In 2025, XDEMVY, the first and only FDA-approved therapeutic for Demodex blepharitis, achieved over $450 million in full-year net sales. It has assisted over 0.5 million patients since its launch. XDEMVY is now profitable and growing. Additionally, pipeline programs like TP-04 for Ocular Rosacea and TP-05 for Lyme disease prevention are in the clinical stage.

For 2026, Tarsus anticipates strong net product sales ranging from $670 million to $700 million. Q1 is expected to be flat to slightly lower than Q4 2025 due to seasonality. Gross margins are projected to stay strong at around 93%. SG&A expenses are estimated to be between $545 million and $565 million, and R&D expenses between $115 million and $135 million. XDEMVY is profitable and growing, with expected operating leverage as revenue scales.

Q: Congrats on the progress. Can you give us a little bit more detail into what is going into your expectations beyond 1Q for that $370 million to $400 million guidance in terms of a little bit more about like the bottles and the refill and sort of what your expectations are around the cadence of that?

A: So yes, are you talking about Q1, Eddie, in particular?...

Q: Just on the operating expenses, which I think came in a little bit ahead of what people were modeling, and it makes sense given the R&D and the investments in sales and marketing. I was just curious, maybe looking beyond 2026, would you expect this, a similar level of step-up going forward? Or is there a point in time where maybe the increase in OpEx spend would kind of moderate a little bit?

A: Thanks, Jenna. This is Jeff. Great question. We don't expect a big step-up, absent a major change in the business....