Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tarsus Pharmaceuticals Inc (TARS, Financial) reported a significant 65% increase in sales from Q1 to Q2 2024, generating over $40 million in sales.
- The company has achieved exceptional high-quality payer coverage, with contracts secured with major commercial and Medicare payers.
- Approximately 11,000 eye care providers (ECPs) are prescribing XDEMVY, with more than 60% prescribing it to multiple patients.
- Tarsus Pharmaceuticals Inc (TARS) is expanding its sales force and planning a consumer television campaign to further accelerate growth.
- The company is advancing a robust pipeline with plans to bring three programs to the FDA by the end of the year, focusing on meibomian gland disease, Lyme disease prevention, and rosacea.
Negative Points
- The gross to net discount remains relatively high at approximately 44%, which could impact profitability.
- There is an anticipated increase in the gross to net discount due to the Medicare donut hole, potentially affecting financial performance in the second half of the year.
- Operating expenses increased by approximately $9.5 million in Q2 2024, driven by sales and marketing costs and the expanded sales force.
- The company expects a modest growth rate of approximately 10% in bottles dispensed in Q3, partly due to the summer slowdown in ECP offices.
- There is a potential challenge in maintaining momentum as the company expands its sales force, which may temporarily disrupt operations.
Q & A Highlights
Q: Given the strong performance in the quarter, what are your thoughts around the consensus for Q3 and Q4?
A: Bobak Azamian, CEO, mentioned that while they can't provide explicit guidance, the math suggests a positive outlook. Aziz Mottiwala, Chief Commercial Officer, added that Medicare coverage will start to impact later this year, with more expected in 2025, leading to a stable gross-to-net discount.
Q: What are your expectations for long-term gross-to-net discounts as payer mix changes and coverage expands?
A: Bobak Azamian, CEO, anticipates a slight increase in gross-to-net discount due to the Medicare donut hole issue, with improvements expected in 2025 to stabilize around 42%.
Q: Regarding retreatment dynamics, which patient profiles are more likely to experience reinfestation?
A: Bobak Azamian, CEO, noted it's early to determine retreatment volumes, but about 40% of patients recur at month 12 based on Phase 3 studies. Retreatment is expected to become more meaningful in 2025 as physicians gain experience.
Q: Can you elaborate on the quarterly growth in ECPs and feedback on disease education efforts?
A: Aziz Mottiwala, Chief Commercial Officer, highlighted the broad appeal of XDEMVY, with over 11,000 doctors prescribing it. The focus is on deepening prescribing habits and expanding utilization through increased sales force interactions and disease education.
Q: How do you expect bottle growth to look in 2025 with a fully deployed sales force and DTC efforts?
A: Jeffrey Farrow, CFO, expects continued quarter-over-quarter growth throughout 2025, driven by the full deployment of the sales force and the impact of direct-to-consumer campaigns.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
