Tarsus Pharmaceuticals, Inc. ((TARS)) has held its Q4 earnings call. Read on for the main highlights of the call.
Tarsus Pharmaceuticals recently held its earnings call, revealing a year marked by robust financial performance and strategic pipeline advancements. The company celebrated the success of its flagship product, XDEMVY, while also acknowledging challenges such as rising operational costs and anticipated headwinds in early 2025.
Record-Breaking Financial Performance
In 2024, Tarsus Pharmaceuticals reported a record-breaking financial year with over $180 million in net product sales for XDEMVY. The company successfully delivered more than 163,000 bottles to patients, marking a significant milestone in its sales achievements.
Expanded Sales Force and Coverage
Tarsus expanded its sales force from 100 to 150 representatives, which has been instrumental in increasing the number of eye care physicians prescribing XDEMVY to over 15,000. This expansion has resulted in coverage extending to more than 90% of potential patient lives, enhancing the product’s market reach.
Positive Pipeline Developments
The company made significant strides in its pipeline, including plans for a Phase 2 trial of TP-04 for Ocular Rosacea and establishing a clear regulatory path for TP-05 in Lyme disease prevention. These developments highlight Tarsus’ commitment to advancing its product offerings.
Successful Direct-to-Consumer Campaign
Tarsus launched a successful direct-to-consumer advertising campaign, featuring network TV placements that have increased patient engagement and visits to eye care professionals. This campaign has been a key driver in raising awareness and demand for XDEMVY.
High Gross Margins
The company reported impressive gross margins of approximately 93%, reflecting effective cost management alongside strong sales performance. This high margin underscores Tarsus’ operational efficiency and profitability.
Increased Operating Expenses
Operating expenses rose to approximately $303.5 million, primarily due to commercial and marketing costs associated with XDEMVY. While these expenses are significant, they are viewed as necessary investments to support the product’s growth.
Challenges in Early 2025
Tarsus anticipates challenges in early 2025, including higher patient out-of-pocket costs, holiday impacts, and natural disasters affecting prescriptions. These factors are expected to pose headwinds in the first quarter.
High Gross-to-Net Discount
The company expects a higher gross-to-net discount in Q1 2025, ranging from 46% to 49%. However, Tarsus aims to achieve a steady-state discount in the low 40s by the end of the year, indicating a strategic focus on improving financial metrics.
Forward-Looking Guidance
Looking ahead, Tarsus plans to continue investing in its direct-to-consumer advertising campaign, with an annual budget of $60 to $70 million. The company is also advancing its pipeline with a Phase 2 trial for TP-04 in Ocular Rosacea and potential studies for TP-05 in Lyme disease prevention by 2026. These initiatives are expected to drive future growth and maintain a steady gross-to-net discount.
In summary, Tarsus Pharmaceuticals’ earnings call reflected a year of strong performance and strategic advancements, particularly with XDEMVY. Despite challenges such as increased operational costs and anticipated headwinds in early 2025, the company remains optimistic about its future prospects, driven by pipeline developments and effective market strategies.