Tarsus Pharmaceuticals (TARS) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 results with $48.1M in XDEMVY net product sales, up 18% sequentially, and over 41,400 bottles dispensed, marking the most successful quarter since launch.

• Broadened payer coverage to over 80% of covered lives, including securing large Medicare contracts, accelerating access and reimbursement.

• Expanded sales force by 50 new representatives to 150 reps and launched the first direct-to-consumer TV campaign, driving increased engagement and expected to impact sales in 2025.

• Presented new clinical data showing XDEMVY's efficacy in Meibomian gland disease (MGD) and Demodex blepharitis (DB), expanding the addressable patient population.

• Strengthened leadership with appointments of Dr. Elizabeth Yeu as Chief Medical Officer and Dr. Kate Goodrich to the Board.

Financial highlights

• Q3 2024 net product sales reached $48.1M, up from $1.7M in Q3 2023, with a gross-to-net discount of ~40%.

• Q3 2024 net loss was $23.4M, improved from $39.1M in Q3 2023; operating expenses were $73.3M, mainly due to commercial expansion.

• Gross margin remained strong at approximately 93%.

• Cash, cash equivalents, and marketable securities totaled $317M as of September 30, 2024.

• Year-to-date 2024 product sales reached $113.7M, up from $1.7M year-over-year.

Outlook and guidance

• Expect continued growth in XDEMVY prescriptions in Q4 2024, with guidance of 50,000–55,000 bottles dispensed.

• Gross-to-net discount projected at 42%–46% for Q4, with a long-term target of 42%–43% by mid-2025.

• Anticipate increased OpEx in Q4 due to full impact of sales force and DTC campaign.

• No further sales force or DTC expansion needed for MGD opportunity; focus remains on current infrastructure.

• Plans to engage with FDA on TP-04 (rosacea) and TP-05 (Lyme disease prevention) by year-end 2024; no additional Phase 3 study required for XDEMVY approval in Europe, with potential EU approval in 2H 2027.