TARS - Earnings call transcript Q1 2024 | Tarsus Pharmaceuticals, Inc.

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Operator

Good afternoon, and welcome to the Tarsus' First Quarter 2024 Financial Results Conference Call.

As a reminder, this call is being recorded. At this time, I would like to turn the call over to David Nakasone, Head of Investor Relations, to lead off the call. Please go ahead.

David Nakasone

Thank you.

be encourage Tarsus' go earnings website related we I section the release begin, materials the of to will we everyone to to Investors and Before today. discussing view the

Executive like Farrow, question-and-answer the and on Officer. I'd joining Strategy Chief draw our are our Aziz this Joining session, Financial attention our to Officer Officer; Officer Operating me Chairman; Jeff call and Commercial Officer; the Sesha Chief your Bobby Neervannan, us afternoon X, forward-looking to Azamian, for Chief our contains which Chief statements. Chief Mottiwala, and Slide our

During may this and for call are beliefs. to be will materially. to you differ and certain risk forward-looking expectations based are I turn statements the statements uncertainties, subject to I contained filings encourage call, that SEC we the in will our These risks additional consult current results on factors over that, actual our detail. With and making our Bobby.

Bobak Azamian

thank us. today. I'm you our you excited with Good and afternoon, progress for to Tarsus off everyone, XXXX to great for joining and share start a is

build XDEMVY, to only treatment commercial the and to short, for for at tremendous of just category Blepharitis continuing with a with sales. start it grow and and pace make not continue We strides a performance terms do pipeline. I'll our DB or advancement the again and first with new exceptional Demodex FDA-approved of which is in

seeing both of are can first-time just I and In patients are prescribers increasing we achieve full their DB well patients. market, only for what second the XDEMVY and as new a the demand we as know increased establishing existing are among quarter with surface scratching amongst We of and we adoption launch, doctors.

bottles in XDEMVY we result, $XX As XX,XXX patients. quarter this a nearly and to delivered approximately net product of million sales reported

clear These short for half week, remarkable finally, than we their prescribing educational XDEMVY. I've to commitment to the the understand, medication prescribe our how for finally, several prescriptions. sheer the they're share the our our firsthand early patients. sales of team provider to The XDEMVY eye of of XDEMVY, for have XDEMVY see visiting medicine and only all than facilitate Most patients. and ophthalmologists. first, more and and impact As initial And the the see time recently, multiple a I with approach, DB care are a teams in just which value our in testament in their patient was the professionals lot clinics ECP's to of and field last market; volume importance I on proposition efforts and and X,XXX their opportunity not and started and category-creating their excited eye compelling with new and to momentum then results of is the on saw to of build. with care are of new the or of beginning which been I ahead. disappoint spending stakeholders, more the takes patients illustrates building and our ACPs experiences, medical positive to continuing each optometrists patients are a experience commercial impact access variety journey first expertise efforts does a Georgia in the of centers

serve. patients more did XDEMVY, Whether hear examination. potential the a chief DB more complaint I and they they and diagnosed doctors further full champion and upon the more ECP gaining had was experience over or finding time, experience, presenting who patients, more felt not they As anyone of those initially, has realized gain looking initial could start of become the

blockbuster firsthand potential see the and to to know creative group become raise drivers quarter more to behavioral of Party, ACPs and off awareness proud know riders of engaging a promote is trajectory patients. prior to and third of disease, routine recent earlier more and also with launch the DB. and the traction in the field well our conditions ECP's which our Mite our to the upward the support more reach such targeted and consumer-focused start. ] so of deeper them up of of to efforts by first experienced in plan increase We're me visits to their fire are opportunity ECP And beginning driving who and creating clinics. In why These makes category diagnosis educational additional as my be engagement with we as initiatives million stay million it more and [ the These even campaign half most struggle with time ACPs changes utilization offices visit XDEMVY X.X Not myself greater and made patient continue strides the to to beyond we're this visiting among to to XDEMVY this reach and We will more with great the the efforts contact in can the patients a ECP the go aspiring contemplating patients key More action even believe, who I ultimately to patient DB more campaign early million field, of X.X it needed and prescriptions, of adopters, we quarter, launched help make we segments launched we into the eye XDEMVY. We segments engagement patient we the are take among demand mention ahead. to with amongst XX served than cataracts strong teams of like ECP in the patients the field in as have as educational visit XX,XXX of expansion additional far. Other eye also DB. next XDEMVY our target diagnosed of add to product such so already the to early their the sales our complementary force. our initiatives scale consumer remaining beginning awareness also strong knew we launch more see patients, But payers. focused lead include providers dry campaign. These who success lenses.

I and achieve we progress. in keeping further capacity because see we XDEMVY. investing forward are greater With you even able be positive to we our growth updated We faster, of capabilities on now potential investment, will to and the feedback this demand, further goals our and look payer believe

Before Aziz our with progress realize becoming from the positive also Thanks execution highlight track disease, for other data potential the launch foundation reported. pipeline plans the quarter want Rosacea data Tarsus, to to the I strength FDA boosting over I to team, we for world-class Officer, of reporting a for this positive studies, of data of care begun to our to full Commercial additional Phase Chief you. us have therapies. Aziz, II potential with product already this turn the of We and advance made Gland while Motiwala, with path of put to category-creating over with just down at here proud our look X clinical only so these the by disease. along end the call of the built pipeline we to bring one well another Meibomian treatment of to Phase resources continuing prevention the We remain of the Lyme with the this II the eye our forward our on I'm year, we to of of XDEMVY. also relentless have commercial leader. an the launch first has we

Unknown Executive

debilitating daily of are XDEMVY motivating we more represents a we field this shared the as is broadly deeply impact disease. eyelid you pervasive millions No of hearing in experience work can The make XDEMVY. from to the Bobby. patients with living bring positive who of are about Thanks, patients the to one difference lives and

$XX Bobby XDEMVY sales we in generated almost of nearly this quarter. As increase an last quarter. XX% That's noted, over million

as anticipated, in to half of to which the bar XDEMVY. launch, quarter of And on laid now is approximately consistent differentiated we metrics than maintained robust and first the ECPs product to face of diagnosed the of launches. XX%, discount disruptive noted, we're out are reaching which weeks traditional a well year force the writing the DB. of more Additionally, target our as raise the are success new we encouraging already commitment was launch continuing highlight best-in-class patients our Bobby And just of early as started. In as sales XX,XXX net headwinds. These gross last approach predominantly we getting with

significant progress conditions presenting other surgery. the to already who into ECP reach complementary we're addition are adoption. cataract for treatment with the dry patient in segments. are in eye diagnosed to Likewise, we particular, making patients for also those beginning seeking Now Those eye or with patients,

efforts physician well of wave launch. of to the success next of our riders commitment seeing These existing patients, the and prescribing exchanges peer-to-peer we the we're The signs in Our of that beyond moving visually awareness course, adopters compelling we early more attributable facilitating are increasingly and highly our educational are homework, disease patient the and before initiated have become initial are to into campaigns team. the successes and, ECPs.

us new blockbuster disease as But efforts. great said, confidence category full time a we sizable All this gives and requires the a of XDEMVY. creating potential in of building takes education market

educational in efforts. the sales size the up turning the consumer and we're scope So [indiscernible] and our investment of in force

the and take into more time launch. ECPs is of become more to business. to next getting We more phase writers that Moving know going prolific

secure to As onboard end recruit, leaders base increase current new ECPs sales of the and and representatives to XX we by phase next the hire part writers, quarter. the within third of to recurring of of demand and plan our approximately effort prescribing the

and from excited established markets. leadership apply a disrupting success positively ] of talent, of with and high [ greater we've the to volume their has generated folks experience XDEMVY small we're feat, the no to that's interest While launch culture at significant Tarsus the sales

impactful to visit per We people multichannel consumer elevate awareness the can grow strain. we also advertising dynamic market through encourage designed of This campaign. is our marketing recent directly DB like efforts Party campaign and Mite believe to ECP and

of market which on DB, us that launching potential symptoms diagnosis, about recent would a more than they their XX% most for more campaign later this ECPs proper year. they impact TV, broad the in an said giving streaming patients that and confidence our thinking seek we're even of experience of fulsome research Additionally, if consumer indicates out

front, patient high report have have need earnings of our of commercial couple that and XDEMVY. Payers plans contracts the XDEMVY placed on XX secured I'm multiple to X major including ago, to year-end a value a pleased months continue efficacy just million that unmet product we approximately status. since lives payer preferred payer covered strong call On with

in coverage the need lag the start quarter acknowledging like of should there's As by before to contracts, helping patients Tarsus of we solution. their with XXXX. I'd see second and close entire and this more in reach previous a the begins, team benefits us the in to for a efforts coverage more of

this quarter financial Our of I our results of speak the power tremendous invest pipeline. XDEMVY an will team, creativity expertise, Jeff? not over clinical call the update that, and we're to only also results tenacity proposition to compelling to in to and on the the continuing Jeff both. With to and category our and creation, our but provide turn value discuss

Jeffrey S. Farrow

Aziz. Thanks,

revenue in example for Among first million million revenues eye new $XX.X product key Pharma comprised license with in the continuing of collaboration of launches. another approximately XDEMVY generated license was the total Grand and to of $X.X of million for product fees the quarter a The we and bar are China how raise $XX.X sales highlights, approximately in agreement TPOX. XXXX from net we care signing

made million $X.X As a agreement, onetime part payment warrant payment equity approximately this previous cancellation and of Leanne of partner, Bio, of $XXX,XXX. an our

a of We from strengthened science position $XXX nearly commitment investor. an life million a also million our Advisors, non-dilutive equity completed leading raise with $XXX financing financial and Pharmakon

We increasing of eye by and XDEMVY. encouraged [indiscernible] are care patients the number from professionals

the the also year-end mentioned are major payer we're today, numbers new to the benefit not we to as gross earnings second evidenced we're we these And commercial and our contracts beyond. are of Aziz net progress quarter the first We with call quarter the plans be making pleased since are expected by earlier. benefits reflected additional secured with secured clear, as in to but payers, reporting

and dynamics, net despite reset quarter approximately out-of-pocket costs steady we coverage impact saw deductibles gap. typical due the gross the a of patient to first to discount expected, of XX% including Medicare higher plans in As

Looking broad coverage of XXXX. ahead, we the end Medicare by coverage year, remain commercial the on track beginning and for in

and additional that commercial While progress. we work dynamics with quarters, implement which what expect dynamics, a payers continue out-of-office requirements XDEMVY's decide there's quarter near-term other Further, including chance short-term as see scripts, sales. similar over of X time all as always the medical last to patient the to the impact to second and/or holidays we hurdles to because well we've seen conferences payers consistent on impacting with of establish could coverage, net could vacations, potentially

As ship the warehouse strong we a patients. the due quarter, initial In distributors, not the XDEMVY when off first reminder, we from recognize to to revenue demand our the bottles dispensed to on launch. coming the

Our incremental line distributors the quarter first further dispensed expect We see bottles dispensed the quarter, increased end X in the and in extended increase quarter quarter We remain the approximately hand of saw on-hand on increase to second inventory this of the of in to purchases, in an versus expect fourth to week their bottles patients the do additional to at quarter. we of first XXXX. in of the first not resulting the the stocking with the days quarter. be for second with patients in to number number inventory consistent days

also $XXX ended of the securities, to cash quarter-over-quarter improve discounts on million net incrementally marketable our with XX% the million a sheet raise. improve gross XXXX. We We to in state of the equity in steady quarter and to of strong quarter in and second inclusive continue expected balance approximately $XXX expect

more our $XX the million providing approximately initiatives on close, the seeing in after and facility. a that us to April, as terms we previous progress to we're health leaders, Advisors, facility the and TV, providers. leader Additionally, credit expand million net care. Based elected pipeline sum further the draw our in Pharmakon We the previous at This will our a with us repayment of our plan term highlighted of our the enable of with refinanced efforts facility this in in see new of eye their our we begin patients the to the to borrow compared as of towards eye becoming full. enables launch loan from representatives XX of million the a portion support launch, ongoing existing larger Hiring goal with days on a $XXX engage increase depth to which $XX credit flexible next breadth we direct-to-consumer to ECPs sales including of following to increasing streaming to business adoption and ensuring deploy investment early an the the care success of continuing we potentially wave more advertising, and a in target to encourage are capital key Aziz incremental we earlier. to

Turning P&L. to our

administrative of expenses from million. approximately in in of was increase primarily in increases The launch general increases XDEMVY by total Our and operating expenses operating driven $XX.X selling, cost due sales were and expenses pay royalty quarter-over-quarter margins Elanco. to to of includes addition efforts XX%, for Gross launch education commercial the support sales marketing the the we which quarter to the XDEMVY. approximately of were infrastructure, and force and first the the

line second the of expect expenses XXXX. total quarter the we in first at to be operating with quarter, Looking

the on of the As operating deployed to and second DTC quarter. of based in our half third force which plan, we the by expansion, quarter the end potential into due expenses fourth total we to be the expect expect and sales we XXXX to current fully efforts increase move

We next based data advancing full in II end programs providing each engaging disease. top programs high Phase of steps positive the for X III to XDEMVY. line of they completing in TPO Lyme studies programs for TPO-X of cause of Turning on Gland and disease, the for the underlying same of found prevention reported Phase lotilaner by are include our ingredient target Meibomian rosacea; all active and X the year. II all the forward needs the FDA as and our programs. recently the popular data review We with analysis progress. now All unmet And X of pustular TPOX quick to disease; on pipeline. updates a address sets these of in the look the

new plan medicines. With for is of I the XDEMVY pipeline create to that investing call categories back other will final designed we that, and to to remarks. Finally, continue in Bobby strategically our turn

Bobak Azamian

much you, Jeff. a year come. start to to so the more tremendous What Thank and there's

elements open forward we XDEMVY unlock the beginning full to foundational look Tarsus, potential strong, in pipeline. further to we are of the more to investing line forward Xepi Our just believe of candidates and your only with potential. X We are engagement and please our even and today you time advancing launch and questions. with soon. Operator, creating and look to category for We appreciate the speaking

Operator

Instructions]. [Operator

from comes Securities. Eddie question first with Hickman Guggenheim The

Eddie Hickman

Just a for me. few

writing or prescribers comment prescribers. from I'm wondering is second quoted volume increased XX% you X,XXX why going penetration your sort if group starting but small patients. of written outside the the have the more. see And those previously. from just wondering that of claims X,XXX of you that on other those the And Aziz, that XX% you're could -- much data script. then noted you concentrated aren't commented I'm a You on in initially if to only to how sort diagnosed of

Bobak Azamian

you, Eddie. Thank

to I comments. I a Before of Aziz, pass make is couple want this Bobby, to just

ultimately to prescribing dynamics and sales address patient force, patients DTC and And education efforts. medicine asked taking I'll seeing we now your category more building are to the hold. to why potentially this really, And ask other in involving is So down that's the it's look all double you've to doctors and the and Aziz the question, time creating that market we and payers our serving forward to patients, the on taking dynamics education, about.

Unknown Executive

And Yes. question. that. Thanks Bobby. Eddie, great Thanks, for

the is about new X,XXX quarter. progress by on adoption. We've things we're per that continued the prescribers we're prescriber seeing added delighted think I X consistently momentum really and

more course written so continuing contemporary, first I endured launch most prescribers XX% of a have. couple haven't the that couple weeks extrapolate script, all, that So of not them data right? One build the things new that. a we of of So for the number ago, haven't is at that That's far, week a them of recent of through the coming can lot in, slowed we're Well, of right? from started think there's is metric of and why to second quarter. as is just So you the just a right? That's we question

write we haven't to well. just of with So physicians as that's last quarter saw that chance what the a large consistent proportion and yet, second these script had

In of is, I more once continues it think driven as we earlier as this really of to benefits they concentrated about the terms that comments concentration that's about XX the They the scripts, look for how X more is think sort I product. they in in add you more of by broaden. that XDEMVY. with prescribers, really, get what seen to to start And start patient doctors think talked they it routine about to routinely. They've to the get types. to start And happens

the beyond about, X. to a here's dry or patient. "oh, think traditional that So eye starting a therapy failed patient Demodex They're Blepharitis

take evaluation, presurgical my the let at works, patients lips later, can a me holistic If to they and and outcome. good about then, patients lids. scan their think a me have pre-op [indiscernible], ] these that look let [ me all sure let make I my in beat and resolve me weeks X Let I Sure that can have enough them problem." treat if

core new think seeing the as prescribers of continues to we I to base prescribers well. is add what So continue expand as you're that

new right? thinking really the And that and of prescribing maintain prescribers with talked really we're utilization So is goal expands. X the our about expanding sales of pleased we momentum. So prescribing, course, across about, reasons the force, to is short, increasing of adding depth in then this we're of base momentum which the as

I think of great at we've that health it's continued a sign that clip.

product. slowing work well any of as value adoption new seen think haven't yet. I of And doing speaks to the as prescriber We the the that we're

Operator

comes next with Balaji from question Barclays. Our

Balaji Prasad

from questions me. of couple A

bottles back? ECPs, detailing dynamics are who sales them with data looking about what is to we work think not force to if sales writing And warehouse prescribed, That's looking you additional you're fact to your XX,XXX out I for there? those the I substantially mean, provider we How as data? $XX the $XX to have track, primary clearly, But and sales. see it this listening do I regard that's million Are reporting million not have all to it looked they what prescription, an to As still have that did holding the to due I primary between the and metrics ECP quarters, million. higher previous a a around would ship report your of around seen $XX had dynamics at one. Two, that this sales? extrapolate is number, and the you of

Unknown Executive

Jeff it speak first So the to I'll then revenue take part, and pass I'll to bookings. to the

doctors some want to the They of function thing other And are we've performs. do. to of that They experience terms see the seeing doctors In XX,XXX critical X,XXX audience holding the just might to And product see we how late so the hear in remaining what that data. pushback of written and we're adoption that's our doctors. don't be want far. how other other question They your back comprise a a have the doctors a of want seen. adopters. lot X,XXX see It's they of if

category. takes a And time. It's building. repeat some sales a force, We're the of this right? from new habit. also visits takes It's new It

with job the X hesitant when is visits a of is cetera. process, done in that access, it's little our a good. little from And process and new We've to really repetition bit resolved So repeat bit get the required through a to market a right? we that's more do then some actually are sometimes PA working force. And because our course, doctors lastly, pharmacies. averse sales again, products et They're great

than products. that the reps the of process. in done continues educate a able job have lot It's most there a actually to improve. and coverage payer being great to new Our to holistically how manage easier And practice get on

I with why short, takes and And multiple that's peer-to-peer love thinking And getting force. that's the And we're as to take doctors Two, experience expanding now that doctors. the office in again they see to really it potentially new are more potentiate prescribers. And visits, then about the to in we're we component. think of And right? is sales why think lastly, longer impact starting continuing in empowering you hear experience I think educating just the hold. other I So we office consumer and And the the can whole that the product. is that the and Right? that's going even to certainly write it's asking ramp into term, getting mentioned comments, as consumer. imagine position to reconsider more

think I a a of matter it's category. It's So time. new

over You last to continue habits, in We've to the plans have to quarters, piece? show place you got comment on the and to doing build consistently that revenue do momentum. Jeff, these success. we've of have that some been want couple you new the great

Jeffrey S. Farrow

Balaji. Sure.

You're right. recognize or our from In pharmacy. essence, warehouse we do, our as revenue do to most they manufacturers distributor shift when

built well. one. this delta an was -- a week of that as be had we was extra to going It inventory there's So

to The that you're potentially revenue that versus gross being here could other in as what recorded thing delta is well. maybe in difference we modeling actually the the side a net a

Balaji Prasad

the That's it. could force sales follow-up a have And just question expansion. Got I helpful. on

from confidence You the sales think that How this fireside, should actioned force the conference. about revenue upon being year? contribution in end the your I the see of towards the did signals Good comment incremental that the part. costs and recent and this our the on to

Jeffrey S. Farrow

be We the again. in expect to that guided Jeff them hitting field we sometime QX. had it's Balaji, late

model will about And fully would it cost neutral XX from per times we essentially. sales I be XXX,XXX net So burdened reps. perspective, a sales think out revenue it reps,

net So perspective, neutral. a P&L from

but an upside in incremental more of obviously same in revenue much will So be XXXX, probably XXXX. generated seeing

Operator

question comes Oppenheimer. Next with François from Brisebois

FranÃ§ois Brisebois

had just you So was I DTC. wondering, talked about

see I was maybe population. Medicare, obviously which this patient think impact with it is the important waiting of to

just to if So bit was earlier, and of there's maybe maybe you little any? the that, like Medicare a strategic minuses pluses and the about do talk can it move maybe DTC pre campaign the

Unknown Executive

Sure. earlier. Frank, to way doing, accelerate things right? a base yes, are to this that's the here, with potentially And to core expansion. continued the think great it's I a X sales about starting we're depth we've as We the what's prescribers really real really about is Aziz. of see And think think And We force little think we we this some to can right? really do. want of prescribing just establish to momentum

So if that piece the The look is two the making secondly, And got they've things consumer put QX, terms we're in plan there is saw QX. likewise, for opportunities, ground, in we why step market delivering Clearly, we to if market reason, right? the any right, launch hit that, with how that first potentially out that do pleased line But the access is which and incremental we're to that's contemplation certainly, that's we're XXXX. The something QX. and spot want going have our in we're sales and weren't confident, goals for we it momentum. sure in force going, a feel back. we clear on, accelerating then the And really good solidify of contemplating in launch. is in D sight make we Part this conditions on to really to sure you're could we're in that to communicating of

those are hitting why we and And that's patient DTC, plan. [indiscernible]. So but sooner empower consistent we watching go wouldn't out there sooner, still I to our start the volumes trajectory if with in very very been we We're very of feel the and confident launch and then clear and sales here. terms the build of in access market the things drive think have incremental we're force progress,

FranÃ§ois Brisebois

me learned looking learnings there symptomatic last patients? maybe I look sorry, the from any didn't one little a actually goodness, can right can then patient reception optometrist seems product? they to And that. I it And these. us there's maybe it and to product of or you're it take realize, maybe doc were And in you versus on launch guess, very color is like surprised the looking anything a It side. say, help then side, in my just us terms of looking, some maybe to way, looking the But a give versus that obvious? that And wasn't fair a second didn't have DUCs the -- from is way. thought for the you you're the right from the slit [indiscernible] you asymptomatic if Understood. I on out say that the And a doctors that's you "Oh lamp. ophthalmologists lot I through Or now

Unknown Executive

Yes.

of X/X right? few I across X/X there's From Boston an receptivity a conference is So ophthalmology were back. see and in at there, We ophthalmology. about think standpoint, ophthalmology and ASCRS utilization We really things great. weeks segments. right, deep very consistent, a about optometry, both the optometry couple

in you're say, to starting refractive cataract real more and surgeons, this ophthalmology. is habit top right there's I fact, That's some starting the speaks routine to out though of presurgical as from to some leaders surgeons, In "Hey, opportunity critical volume organically their think a of little here that as bit right? coming and cataract and even to podium that evaluations. the And they're implement the study are a more hear optometry [indiscernible] starting American thought of

nicely. So we're segments really progress that across both seeing

a asked the about You patients. little bit

results, doctors that's seeing One got a typically think clear really They the well. those then looking [indiscernible]. positive start closely, happen. I a treat that probably worked patient little and more patients. a is do feedback, "Hey, with really the with chief what great It's they bit X complaint is initially things right? They're happens start

Let me take look. closer a

Your this solve." for I'm they're then trouble that you How less waiting the in eliciting is the at problem feeling? you asking sure are wearing They're secondly, not can and or have any make actually from dialogue. me Let still the and a I initiate less patient. Do patients. tired the patient to feedback because actively contact this lenses? morning eyes And they're the night, missing

to to and talk that's confidence, should patient So happens, we gain as question a is X the doctor what closely, doctors XX%, starts start I say, that elements about The the little more really closely, a that the right? look little bit they to more. bit X%

Most physicians symptomatic patient It's and matter this really as experience, factor. and that taking extra asymptomatic symptomatic. to that. not the just patients the get XX% symptomatic, we're seeing they're a are idea a feet So these ask, doctor are a is plus doing that of of just look of versus

Bobak Azamian

personal I'll just anecdote. add And one

have So I'm And as see it chief the in a physician. prior history you are And the examined field, don't necessarily diagnosis. a in struck or with being a they're coming either complaint asked in colored on in being patients physical. that's me or DB really those being when that patients

prior big with I field to the of options our that so complaint. to think more. this KOL the get to some of one and morning. has been effective. chief lot talking and he I reaffirmed KOL presenting with XX about the weren't of symptomatic, and more patient this a experience patients when seeing you the more more me was for talk what's he's that B And the prescribers it's and And asymptomatic who's and in treating that as doctors, looking years more a over

that really education crystallizes described. it physician the market and journey Aziz to me has So that

Operator

comes The from with question America. Bank of next Jason Gerberry

Jason Gerberry

on actually. a Just couple Medicare

operating or think patients, that. exceptions to net. something any the take like around of D getting your D patients And like do Part to floodgates redesign covered market? does addition you open Part Or feel then of of impact they're how Does getting like the gross maybe should next already it year? but medical through who are So sort you're about half steady assumptions we Medicare some the

if potentially XXXX an from perspective, how sort frame up impacts of half insurance the year market how that curious can of opening next you to impact volumes? the you Just

Unknown Executive

Yes.

so couple factors a So getting D. is things, in right? XX% all with of starting of gross-to-net, think I So steady-state all the our accounts for that gross-to-net to Part

Medicare And come taken our through -- in terms already of PA. we've through, in right? when As goals to that So through XXXX seeing you -- exception get or scripts our tell I account would that in there. that you we're mentioned, you point,

of a volume come are seeing that. we amount So decent through

there's the Of So you the get but one should get time. formularies, the keep is year, coverage. QX we first at right? course, have mind typical then period thing that get grow to continue that you to volume on of in as of some beginning headwinds, course, the to of more time The through

coverage pull to not state. switch, to over time. It's though but steady a that to The a it light like build would it switch, that months few able light So is right? a be does get take really to

biggest bridge. be of and that ability is that in of anymore target giving we'll away that So build getting away. factor then not optimize going to And you that to be go think gross the coverage XX% hit coverage. it's our will get product net to as terms steady just because free That the I

it I think way trigger over in all get the obviously So terms a debt get the it's we on opportunity, the then but gross in to modeling, about will state steady And as is accounts factored XX% getting steady we think that of build time. that increase to volumes to is the Medicare.

Operator

comes Andrea question from next The Tan Goldman Sachs. with

Andrea Tan

the that those one early to the you're you maybe X spoken about, of to here. the previously? need anything specifically are you've DB? else to that for newer many into that adopters quantify outside And that reach talked prescribers there of Maybe the buckets the are could think you those sales is planning you X,XXX those about do prescribers fall that how balance of additional you've you force Of here? versus then Aziz, proportion X,XXX

Unknown Executive

Yes.

specific at our I is breakdown. into base. of clearly prescribing we're get you beyond what the don't we can X,XXX, XX% So tell that But

force So expansion, in eager of but really sales all as So in reach clearly, to the to We're DB. think reach confident force bring it's them. we've the of be majority play. when go much an a early eager all really current have this deeper, opportunity right? The and the now. frequency able They've are in their practice. that to adopters and tenth that to and prescription eventually deep getting adopted to all increase about really get them, higher really and we're it's right treaters early prescribing a they're on to of new treaters, fifth, become just prescribing ability routine. just We're We've DB, the getting starting or sales you in [indiscernible] a very those a to calling our They're to looking the our that second, gotten they're And to early vast not third, adopters these been new segments. starting threshold pattern right?

help I of and really when the the potentiate great wasn't success. it -- patients conferences, leg me had the my patient sales complain DB contact and we and that starting let [ believe wait, don't to third the and the actively get with I podium I've adopters. consumer addition off at to this I'm me adopters the to That's success can I breaking would this. is think We've progress do this So for things let you majority have those If in. now our doctor, implemented really okay, the going in look about, or at looking does hear lenses treaters I in great something doctor DB. what it's even to of looking your is to to whether that resonate And people force beyond I'm consumer, the the early new one the doctors And right, across vast treaters. been we we personal in be that the peer-to-peer things most think practice, empowering be the in understand unlock ], you That lid that the made [indiscernible] are force. And look I early eager now are eye. go let asking that DB, if right? missing new that take dry the about is say, can't is your compelling or cataract into optometrist this an was really new while the can second you experience to share down, there's a compelling then that history when having with before, where particularly for early obviously in ones the the I we've other symptomatology. got coming of is tell doctor, quantitatively doctors coming think sales look me the education understand started

waves deepen the made I about. across going early way from and effort are those the sharing prescribing far of expansion, progress the continued think we consumer allow is all a the think sales this I adopters is really and great force the so to stores that So eventually to these we've And us what's see then segments.

Andrea Tan

if quick may. And question, it. maybe X I Got

be yet may if a it early, but recognize you're retreatments. hearing on Just bit curious anything

Unknown Executive

early. pretty still it's Yes,

early been any launch, to you're right? in say this. starting We've massive are the see to here. We too would this, months to starting see I it's conclusion several draw And

perhaps and going complete second coming I But second be just think those and hearing do we start in to great [indiscernible] treatment now, that really in able XXXX. you're rare doctors to a patients meaningfully perfection. clearance. to a the shooting one-off really to they anecdotal cases response one-offs. treatment saw maybe get that are They just for in see But right really back more for some some

here, when think in to really we it's start probably insights see meaningful going any be that I to 'XX get to early volume.

Operator

there? from The [ you comes are Usman ] Tolani Sachs. Tolani next with question Goldman

Unknown Executive

Tolani think Operator, works I with Andreas.

Unknown Analyst

yes. with work I Andrea,

Thank been have you. answered. questions So

Operator

Our next William Lugo question Tim Blair. from will with come

Unknown Analyst

on is This for [indiscernible] Tim.

get So some I improvement already mid-XXs wondering end this talking end on the year. previously you've the I obviously gross-to-net, was and to said year. you're about the to of about there think by over you expect incremental of but

gross-to-net? So there. at -- or related is give you many on update are volume on or to into the your moment, we about Can of maybe just yet can formulary you of how scripts payers. color through covered that be those any not how the are the around what proportion quarters the on year that much end comments next us And some of should sort the how on thinking few versus

Jeffrey S. Farrow

we go ahead just Ultimately, the on earlier, incremental what great more we -- question. Aziz on. commercial of the realigning and I'll Sure. payers question. And growth start get sort net of expect gross as said to

patients Medicare with small the XX% So of it and alluded the get threshold but of won't 'XX broad has 'XX. but be that improvement sometime to see in XXXX. yields then early the coverage to start will X% more closer in to getting light switch, we the once a in gross cross in upwards, increases net Aziz And to per part to, much middle as X% it quarter we'll

Unknown Executive

get we Yes. say And that detail last got some Obviously, this would quarter quarter plans announced. into covered I then scripts, the don't we've in and but commercial the terms there, big we've gory of that really

The obviously vast have majority covered. of are been So those those preferred.

utilization optimize drive So in great really gross-to-net. to our our terms ability and of that's

D One that of the prior or medical necessity through go questions we scripts Part we seeing mentioned exception. are

then the end as build really well. So we -- think to critical reaching start the as mass year, away see D bridging commercial go sort I those covered then that getting the at of a the and And coverage, to in, Part very to of continue remainder you'd then obviously kicking in XXXX, product minimal level. the are of

what Jeff that should discount allow way improve, think those is think talking reduce and So gross optimize XX% the state. going to to the Every gross-to-net ties to in net coverage and to steady incremental as right? us that comes that that's to quarter, back at improvements about it, I quarter-over-quarter that's to really about is

Unknown Analyst

Got I the sales add quickly guess, on and you any should we reps expect as it. force, territories. disruption sort And of more realign

Unknown Executive

here job really of mapping out. a done good this we've So

insights the I great from great some things our launch is We've a few data. some we've the from of We've learnings think the launch. great got into great force. quarters got expanding about sales X got

a things that on there's gotten well think favor. out. gone the word I has So launch and working few has are the One,

a lot talent to team. gotten the join that So we've great wants of

desk to terms the to that's folks team. join really the and So see nice across in wanting it's our coming of paper quality volume

into to by. delighted talent the going be Tarsus I'm high-quality which able we're So get really organization, some to

to got we've a right? the inform We've Secondly, return incremental best to of in the done data get where going lot to put effort that's exactly this analytics.

and I'm ability be to targeted terms time to going offset frame. in So by going cetera. in then you there's but And effort of the to in a disruption place lastly, little a anytime what the of always reasonable doctors allow that's sure a optimize messaging, be learnings see I that's incremental fashion terms great with think to really us change to going et the resonates got in ramp-up we've territories,

more a to bit they're even effectively our current experience reps are first to to the going to be going trained able actually than of efficiently and these because you learn team. the little So if class, be able will, be from

I'm them really expect and And speed. said, up running pleased the we to the able get impact to hit people ground So looking to be to that like at. make I quality with we're of

the strengthen disruption this you'd and manage of any is think our So team really to going see. any offset doing plan disruption, I but we place think I in all can that temporary will to

Operator

One moment queue LifeSci with while we from up Capital. final our Cory comes question Jubinville question. This

Cory Jubinville

in there holidays, to You incidence seasonality be that you vacations, Curious there the similar might be how potential seasonality to might if seasonality any also due in and dictate rosacea that might practices, mentioned indication or severity of allergies? have et sales DB cetera. ECP

Unknown Executive

Yes.

good question, a it's So Cory.

holidays, when can doctors are at What going still also those I that out when that right? this swings mind doctors the seasonality, keeping vast think is people majority out of to early So sort on an from product volume look other are to it's office NRx of be NRxs, even we the product, The the market right? think vacation. comes tell we more the it's sensitive to or impact see the I of proxies and being right? is of in

as we've a any belt indicate X we'll to the I done disease, that's work bit across we prior. visiting be is under QX historically, are see that's think would or the is often. a And if literature only deductible things we impacts we've when know a to that specific are typically, the Blepharitis. the to board. before and in I launch resets But haven't other and of headwinds anything quarter. bit our of probably get something the always seen in Demodex something in the and see and people QX, come into a much That's There's there's additional in then more their doctor that not more always to got little it, few a we people we better year on terms see pretty right? The little try challenging seasonality in tend quarters that seasonality QX the know

Cory Jubinville

on so think taking of forward are curious Rosacea either if have we I should around regulator III that thinking or spend a we're you discussions Phase IIb feedback, R&D how and potential Phase complete? you Lyme opportunities the awaiting And partnership Phase these studies? could moving how And but for programs far. into now speak about are II studies about progressed know

Jeffrey S. Farrow

it's Yes. Jeff. Cory,

throughout the I be R&D, expect the to flat for to this compared year quarter. think we it relatively

down closing interrogating sites the still and are We data.

I'll there's over turn the forward. So further Sesha some work to there. definite And going discussion plans it still on for that's on

Seshadri Neervannan

Jeff. Thanks question, Great Corey.

In tracking we really terms are of pipeline well. progress, the

on Phase our And this As we of is year. agency end analysis really it's are mentioned the progressing once all previously, by well. those we do II plan continuing additional our have to to go to of trials analysis, and we

to We report are move pleased collecting any forward. all of we'll data progress as and we the be

Operator

time. questions program. you am in at Thank this your the no conference, showing does participation today's and for conclude further this I

disconnect. may now You

Tarsus Pharmaceuticals (TARS) 8 May 242024 Q1 Earnings call transcript