Tarsus Pharmaceuticals (TARS) Q2 2024 earnings summary

Executive summary

• XDEMVY net product sales reached $40.8 million in Q2 2024, up 65% from Q1, and $65.5 million year-to-date, driven by rapid commercial uptake and expanded payer coverage.

• Over 37,000 bottles of XDEMVY were dispensed in Q2, with strong adoption among 11,000 of 15,000 target ECPs and more than 60% prescribing to multiple patients.

• Gross-to-net discount improved to 44% in Q2 from 55% in Q1, reflecting enhanced payer coverage and commercial contracts.

• Expanded sales force and a direct-to-consumer TV campaign are planned to further accelerate growth, with full deployment expected by end of Q3 2024.

• Pipeline progress includes positive topline results for TP-03 (MGD), TP-04 (rosacea), and TP-05 (Lyme disease prevention), with regulatory discussions planned for late 2024.

Financial highlights

• Q2 2024 net product sales were $40.8 million, with year-to-date revenues of $68.4 million, including $65.5 million from product sales and $2.9 million from license/collaboration.

• Gross margin remained strong at approximately 93%, with Q2 cost of sales at $3.0 million.

• Operating expenses rose to $74.8 million in Q2, mainly due to increased sales, marketing, and sales force expansion.

• Q2 net loss was $33.3 million, with EPS of $(0.88); year-to-date net loss was $69.0 million, EPS $(1.89).

• Cash, cash equivalents, and marketable securities totaled $323.6 million as of June 30, 2024.

Outlook and guidance

• Expect Q3 bottle growth of about 10% over Q2, or approximately 41,000 bottles dispensed.

• Anticipate a stronger growth trajectory in Q4 as the expanded sales force is fully deployed and DTC campaign launches.

• Gross-to-net discount expected to remain in the low 40% range through 2025, with improvement as Medicare coverage expands.

• Retreatment volumes expected to become meaningful in 2025, with about 40% of patients recurring at month 12 based on phase 3 data.

• Regulatory discussions for pipeline assets are planned by year-end 2024.