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 delivered in Q2, with approximately 11,000 ECPs prescribing and strong Medicare and commercial coverage.

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

• Pipeline programs for Meibomian gland disease, Lyme disease prevention, and rosacea are advancing, with FDA engagement expected by year-end 2024.

• Cash, cash equivalents, and marketable securities totaled $323.6 million as of June 30, 2024, supporting operations for at least the next 12 months.

Financial highlights

• Q2 2024 net product sales were $40.8 million, with H1 2024 sales at $65.5 million and year-to-date revenue at $68.4 million including $2.9 million from license/collaboration.

• Q2 net loss was $33.3 million, with EPS of $(0.88); H1 net loss was $69.0 million, EPS $(1.89).

• Operating expenses rose to $74.8 million in Q2, mainly due to higher sales, marketing, and corporate costs.

• Gross-to-net discount improved to 44% in Q2 from 55% in Q1, with gross margins around 93%.

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

Outlook and guidance

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

• Q3 2024 bottles dispensed projected to grow modestly by 10% over Q2, with stronger growth in Q4 as sales force and DTC campaign take effect.

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

• Continued quarter-over-quarter growth anticipated throughout 2025, driven by sales force expansion and DTC efforts.

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