- Net Product Sales: $180.1 million for the full year 2024.
- Q4 Product Sales: $66.4 million.
- Bottles Dispensed: 163,000 bottles for the full year 2024.
- Gross Margin: Approximately 93%.
- Operating Expenses: Approximately $303.5 million for 2024.
- Cash and Cash Equivalents: $291.4 million at the end of 2024.
- Gross to Net Discount: Approximately 45% for 2024.
- Sales Force Expansion: Increased from 100 to 150 sales representatives.
- Commercial and Medicare Coverage: Extends to more than 90% of potential patient lives.
- Warning! GuruFocus has detected 4 Warning Signs with TARS.
Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tarsus Pharmaceuticals Inc (NASDAQ:TARS) reported over $180 million in net product sales for 2024, exceeding expectations.
- The company expanded its sales force from 100 to 150 representatives, increasing its reach to over 15,000 eye care physicians.
- XDEMVY, Tarsus Pharmaceuticals Inc (NASDAQ:TARS)'s product, now has commercial and Medicare coverage extending to more than 90% of potential patient lives.
- The company launched a successful direct-to-consumer advertising campaign, expanding into major network TV events, which has increased patient engagement.
- Tarsus Pharmaceuticals Inc (NASDAQ:TARS) is advancing its pipeline with a phase 2 trial for ocular rosacea and a Lyme disease prevention program, indicating strong future growth potential.
Negative Points
- Operating expenses for 2024 were high at approximately $303.5 million, primarily due to commercial and marketing costs.
- The gross-to-net discount is expected to be slightly higher in the first quarter of 2025, impacting revenue.
- The company anticipates typical sector dynamics and external factors like winter storms and natural disasters to affect first-quarter sales.
- There is uncertainty regarding the long-term impact and ROI of the direct-to-consumer campaign, which requires ongoing evaluation.
- The Lyme disease prevention program may require a larger partner for phase 3 trials due to the expected size and cost of the study.
Q & A Highlights
Q: How do you motivate prescribers to go from monthly to weekly to daily, and what are the biggest challenges in doing so? A: Aziz Mottiwala, Chief Commercial Officer, explained that the trajectory seen in 2024 was positive, driven by the product's effectiveness. Key strategies include Salesforce expansion and increased coverage, with 90% of lives covered. These factors are crucial for driving prescribing depth. In the mid to long term, direct-to-consumer (DTC) advertising and compelling MGD data will further motivate prescribers. Bobak Azamian, CEO, added that the product's effectiveness and evidence generation will support this progression.
Q: What has been the initial receptivity to MGD data in the field, and how should we think about its impact on revenues? A: Aziz Mottiwala noted that the MGD data shows objective benefits and improved patient outcomes, such as fluctuating vision. Physicians are receptive, seeing it as an opportunity to expand patient treatment. Education is key, with data presented at conferences and through sales teams. Bobak Azamian added that physicians are increasingly looking for Demodex in patients due to the data.
Q: Can you provide context on the impact of TP-04 and TP-05 programs on R&D spending and strategy? A: Jeffrey Farrow, CFO, stated that capital allocation focuses on the success of XDEMVY's launch and the opportunity in ocular rosacea. The TP-04 phase 2 study is expected to cost $7-10 million over 2025-2026. TP-05 for Lyme disease prevention is seen as a potential partnership opportunity due to its GP call point, with no 2025 costs expected.
Q: How do you view the overlap between ocular rosacea and DB, and what are the commercial implications of a gel versus an eye drop? A: Seshadri Neervannan, COO, explained that while both conditions are caused by mites, they are distinct diseases with different treatments. Ocular rosacea is treated with a gel applied to the eyelid and surrounding area, while XDEMVY is an eye drop for DB. The commercial strategy will reflect these differences.
Q: What is the anticipated duration of the DTC campaign, and should the $60-70 million annual expense be expected annually? A: Aziz Mottiwala indicated that the DTC campaign aims to educate and drive patients to physicians, with the duration dependent on positive ROI. Jeffrey Farrow suggested modeling the expense annually, with adjustments based on campaign effectiveness.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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