Tarsus at 45th Annual William Blair: Xtendi’s Blockbuster Potential

On Tuesday, 03 June 2025, Tarsus Pharmaceuticals (NASDAQ:TARS) presented at the 45th Annual William Blair Growth Stock Conference, offering a strategic overview of its recent successes and future plans. The company highlighted the impressive launch of Xtendi, its treatment for Demodex blepharitis, while also addressing the challenges and opportunities within its pipeline and market expansion strategies.

Key Takeaways

• Tarsus Pharmaceuticals reported tripling its 2024 revenue expectations, initially set at $55 million.
• The Xtendi launch is considered one of the best in eye care in the last decade, with significant quarter-over-quarter growth.
• Tarsus is focusing on expanding its reach to 15,000 eye care professionals and increasing prescription frequency.
• Future developments include TP-04 for ocular rosacea and potential out-licensing of a Lyme disease prophylactic.

Financial Results

• Tarsus ended Q1 with $408 million in cash, providing a strong financial foundation.
• The company is re-evaluating its revenue guidance, with direct-to-consumer (DTC) campaigns expected to significantly impact revenue.
• Gross to net discounts are projected to decline, aiming for a target of 42-43% by the fourth quarter due to Medicare impacts.

Operational Updates

• The Xtendi launch exceeded expectations, with a strategic expansion of the sales force completed by Q1.
• Tarsus initiated a DTC campaign, initially focusing on streaming before expanding to network TV ads, showing positive early engagement metrics.
• Approximately 40% of targeted eye care professionals are now prescribing Xtendi beyond Demodex blepharitis patients.

Future Outlook

• Tarsus plans to expand into European and Japanese markets, with proof-of-concept data for ocular rosacea expected in the second half of next year.
• A Phase 2 study for TP-04 is planned, with endpoints such as reduction in redness and vessel growth confirmed as approvable.
• The company is exploring partnerships for its Lyme disease prophylactic, which demonstrated a 98% tick kill rate in Phase 2 data.

Q&A Highlights

• Market dynamics reveal a shift in prescription behavior, with optometrists accounting for 60% of Xtendi prescriptions.
• Tarsus is targeting eye care professionals treating MGD, dry eye, and contact lens intolerance, beyond the initial Demodex blepharitis diagnosis.
• The company emphasizes the importance of continuous education for eye care professionals to broaden Xtendi’s usage.

For more detailed insights, readers are invited to refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Lachlan Henry Brown, Research Analyst, William Blair: Of the forty fifth William Blair Growth Stock Conference. My name is Lachlan Henry Brown. I am the research analyst here covering Tarsus Pharmaceuticals. Before we get started, I do want to, direct everybody to please visit WilliamBlair.com to see any and all relevant disclosures. We have Jeff Farrow here today, the CFO and chief strategy officer of Tarsus.

He’s gonna run through a few slides, and then we’ll jump into q and a. So I will lead q and a, but by all means, yeah, if you have a question, raise your hand, and we’ll we’ll try to get to you.

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Great. Thank you, Lachlan. It’s, great to be here, thank you for everybody joining us so early in the morning. Much like Lachlan did, I do refer to our forward looking statement here and encourage you to take a look at our SEC filings, including the risk factors there. I will be making some forward looking statements today.

So Tarsus is a commercial stage company focused on eye care. Our first medicine, Xtendvi, was approved in September actually, it was launched in September of twenty twenty three, and the launch is going quite well. We think it has a a blockbuster status, potentially over a billion dollars, and we have seen continued growth quarter over quarter as well as underlying demand. We also have an exciting pipeline. Really, it’s a pipeline and a product, somewhat cliche, but in this case, it’s true.

It’s the same active ingredient that’s in Xtampi, and we’re purposing it for a disease called ocular rosacea. Again, another category creating area there where there’s no FDA approved therapeutics for it. So we’re really excited about it. It’s synergistic with our sales call point, and could have a big potential impact for the patients that are impacted by this. And then we also have something for Lyme disease.

It’s an oral prophylactic for the treatment of Lyme disease. That is something fundamentally that we think probably is better suited in in partners’ hands, so we look to outlicense that at a certain stage. So Demodex blepharitis is a highly prevalent disease. There’s about twenty five million patients that are impacted by hit in The United States. It’s caused by Demodex mites.

And so we all have these mites, on us, almost from the day that we’re born. And these mites sometimes over proliferate in some of our patients. And they go and migrate into the eyelashes. They like an oily, sebaceous environment. It is very easy to diagnose.

Everybody that’s been to an eye doctor has probably been in a slit lamp. You basically put your chin on the slit lamp, and the doctor asks you to look down. And if you have these cholerates, which you can see here on the left hand side of the slide, this waxy sort of, buildup that goes around the eyelashes, that’s the hallmark of the disease. And so it’s pathognomonic for the disease. Our treatment is a eye drop, and the treatment course is a six week course of treatment.

We saw very impactful clinical data that showed eighty five percent of the patients saw clinically meaningful improvement in a very benign safety profile. So I talked about the twenty five million patients that are impacted. We’re actually initially going after nine million patients. These are patients that are actively going into their to see their eye care professional for one of these particular diseases, be it DB itself or perhaps MGD, dry eye cataract or contact lens. So that’s our initial effort, and that’s where our sales force is really focused.

We’re focused on 15,000 eye care professionals that treat these patients. And as you can see here, we have seen quarter over quarter growth, as well as underlying demand here. So, you know, arguably, this is one of the best eye care launches in perhaps the last decade. And it’s important to remind everybody that this is essentially, you know, an NRx product. It’s, basically, one treatment course can, you know, prevent this disease for a period of time.

Although we did start to see the mites migrate back up into the eyelashes somewhere, you know, post treatment, somewhere in the area of six to twelve months. And so we do expect refills to occur over time. But initially, this is all new patients. And the launch, you know, beyond that has gone really well. We’ve seen broad ECP adoption.

We’re targeting 15,000. At a highlight, we have 90% coverage across all payers, and we continue to see metrics that show increased growth across the the, the dynamics of the prescribing. From a milestone perspective, you can see here we’ve got some milestones ahead of us. You know, we continue to look at Europe as an opportunity for demidex blepharitis as well as Japan. And we were initiating the ocular rosacea study here in the, second half of this year with proof of concept, probably in the second half of next year.

And then we could initiate a, phase two study in Lyme disease as well. And with that, that’s the prepared section, Lachlan.

Lachlan Henry Brown, Research Analyst, William Blair: Alrighty. Thank you. So I guess the first question for those in the room that maybe haven’t been following the story for the past year year and a half, two years or so. The launch has obviously gone very well, I think better than most expected. Mhmm.

I I often tell people that I think starting 2024 or at the start of 2024, consensus called for about 55,000,000 in revenues, and you guys tripled it. So can you maybe walk through why that is? I think people obviously were initially a little hesitant. You know, you’re building a new market. That typically takes time, perhaps not as much time as we expected here.

You just talk through some of the factors that have allowed you to sort of exceed those initial expectations?

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Sure. Yeah. No. It’s most people haven’t heard edematous blepharitis nor had I before coming across the company. And so and with twenty five million patients, you you know, it it did create a head scratcher for some folks.

And I think a lot of people were sort of analogizing us to dry eye launches, which have been generally unsuccessful primarily because of the competition, and the gross to net discounts can be particularly onerous. So this is really a category creating effort that we did as you highlighted, and it really goes back to probably a year before the launch, maybe eighteen months before the launch. The team did a really great job of getting out there and educating the eye care professionals on disease education. What is demodex blepharitis? What does it do to the patients?

So they were educating the eye care professionals, but also educating the payers as well and showing why, you know, it should be, you know, covered essentially. You know, this they showed pharmacoeconomic benefit. They showed them the clinical data, and that really resonated, with the payers. And I think that was one of the reasons for our early success. We got, commercial coverage and, ultimately, Medicare coverage much more quickly than we anticipated.

So with those sort of wheels moving, it was really just getting out there, starting our Salesforce. We started with a hundred sales reps because of the success of the launch. We had always anticipated increasing the number of sales reps, but we brought them on a little bit earlier than we anticipated, probably about six months earlier, just to sort of reduce the size of the territory, still focusing on the 15,000 eye care professionals that I referenced earlier. And it’s really about driving depth in those different categories that we hide highlighted there. So the, it’s really been sort of an an evolution, going back to the, know, early days.

And then we initiated a direct to consumer campaign in the fourth quarter focused initially on streaming. And then in the first part of this year, in q one, we initiated network TV ads as well. And so that is really driving consumer disease education and patients coming into their office asking if they’ve got, you know, Demedex mites.

Lachlan Henry Brown, Research Analyst, William Blair: Okay. Great. So so let’s talk about those 15,000 eye care professionals. I think you’ve you’ve talked several times about you now have all of them have written a script for Xtampi, and the goal is now to move them sort of along that continuum of frequency of prescribing. How do you do that?

Because every doctor that we’ve spoken to says it’s a great experience. Like, their patients love it. It’s hugely effective. In some senses, why do they not do that on their own Yeah. If they have a great experience with it?

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Yep. I think it’s a continuum. You know? Initially, there’s, you know, I think, a group of physicians that were very aware of the disease and the impact of the disease. And, you know, the low hanging fruit initially was patients that had edematous blepharitis.

We had about one point five million there that were diagnosed, you know, with that disease. But it’s really educating the eye care professionals that there is no such thing as an asymptomatic patient that has demodex arthritis. And so while they might not be initially complaining about it, there’s still some underlying disease that they’re that they’re probably So so it’s really continue to educate. Look at your patients that have MGD.

Look at your patients that maybe are not able to wear their contacts for the full day or contact lens intolerant. They can’t wear them at And so just really going through those different sort of segments. And, you know, that is really an effort that the Salesforce is doing right now to drive that sort of depth of prescribing, and it seems to be working. You know, we saw in in December through a, ATU, or a a survey with the physicians that forty percent of the docs that are prescribing, so forty percent of those 15,000 have already started to move into those categories, those other categories. And to your point, Lachlan, it’s it’s really moving some of those doctors that are maybe prescribing monthly, you know, once a month or twice a month to weekly to daily.

And so really just sort of educating the docs that all patients could be benefiting from Xtampi.

Lachlan Henry Brown, Research Analyst, William Blair: Okay. And is there a sort of typical timeline that that takes for someone to from the first time they try it, try it in a few patients, see how it goes? Yeah. Is like, a few months before they’re writing it every week, or is it a few quarters? Or

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: It it so it depends. So, you know, typically, what we find is, you know, they wanna treat you know, if they’re a, you know, naive doc, haven’t treated a patient before, takes six to eight patients before they start to maybe prescribe monthly. And then it’s just, one of those things where they do see, you know, the efficacy and, you know, the patient feedback has been phenomenal that that starts to resonate. But it is a detail specific. You know, it really does it behooves us to go in and really remind the doctors about this disease.

It hasn’t become standard practice yet just given it’s only a year in launch. So reminding them to continue to look for the cholera, you know, ask their patients to to look down. And so it’s a process, and it’ll probably take some time before it becomes regular course for those 15,000. But some of them are prescribing daily. The the nice thing is none of the doctors, even our highest prescribers, have not said they’ve come up against a glass wall where, you know, they don’t have any more patients.

They continue to see more patients come in with these colorants. K.

Lachlan Henry Brown, Research Analyst, William Blair: Okay. So I guess that sort of leads into that the the discussion of the different patient populations. You know, you said forty percent of prescribers had written in one of those populations beyond those patients with a diagnosis of DB. Is it fair for us to assume that at this point, most of the prescriptions that have been written are probably for those patients with an existing diagnosis?

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: I think early on in the launch, that was the low hanging fruit. Right? Because these patients had previously been diagnosed with demodex blepharitis, and, you know, they were using nonefficacious therapeutics, sort of homeopathic, lid wipes or key tree oil, which don’t get to the root cause. They don’t kill one mite. And so I think that was, you know, probably the initial, you know, couple quarters of the patient population.

But as time has gone on, you know, we have seen them, you know, sort of anecdotally, we’ve heard that they were going through all of those different categories. It’s not something we can get real time data on, so it’s something we really have to go through surveys or chart reviews at this point. And we’ll plan on updating that that metric as time goes on as well. But, you know, I think what we’re seeing is there’s more and more depth in those different segments as time goes on.

Lachlan Henry Brown, Research Analyst, William Blair: Yeah. So I was gonna ask you, is there a sort of claims analysis that you can do at some point to see if because presumably these patients that are in those other categories Yeah. Are getting diagnosed and getting coded for that. So is there at some point an analysis of claim Yeah.

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: It’s it’s hard at this point because they’re all being coded with the ICD 10 code for for Demenex’s blepharitis. And so the only way we can really do it is through doc surveys or going in and and taking a look at some charts and to see, yes, they have MGD and demodex blepharitis. And they got an Xtendi script for that.

Lachlan Henry Brown, Research Analyst, William Blair: Okay. But then so a claims analysis, I guess, would show that the diagnosis of demodex blepharitis is probably increasing. That’s right. Yeah. Exactly.

Okay. Awesome. And so the ECP population that you’re targeting is a mix of optometrists and ophthalmologists. That’s right. Can you talk about the different dynamics there in terms of, I guess, what you would expect, but also what you’re seeing in terms of the prescribing behaviors and how they differ.

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Yeah. They’re they’re a little bit different. So we talked about the 15,000, half of which are ophthalmologists, half of which are optometrists. And it’s really a subset of the optometrists. It’s not your, you know, sort of optometrists that work at LensCrafters or Warby Parker’s.

These are doctors that are, you know, essentially writing 85% of the scripts for anything that’s in the anterior segment, sort of dry eye glaucoma, those type of things. And so it’s about 7,500 of that 40,000, though, the ODs. Right now, we’re seeing about 60% of the scripts coming from the ODs and the other portion coming from the ophthalmologists. We do think over time, they’ll probably get more fifty fifty, but right now, it’s about sixty forty. There is a little bit of a different dynamics.

A lot of these physicians, ODs have migrated to this sort of front of the eye eye drop type of practice because of the dynamics of Warby Parker’s and online type things. This is a an opportunity for them to build a practice, a specialized practice. And so there is some, you know, benefit to them for treating these things. And so, if you go in for a eye exam, use your vision insurance, and it’s reimbursed at about $50. If you go in and they see that you have demetic arthritis or dry eye, they’re gonna ask for your medical insurance, which reimburses, you know, say, at a hundred 25 to a hundred and 50.

And so you get a much better, you know, sort of reimbursement under that scenario, and they’ll typically have you typically have you come back, you know, to see how the, you know, the drug has been doing and and continue to follow you on that. And then it also is an opportunity to if the patient’s perhaps got you know, was previously intolerant to contact lenses, now they can try contact lenses. And so it’s a little bit of a

Lachlan Henry Brown, Research Analyst, William Blair: the OD. Yeah. Sort of makes for a sticky patient. Yes. Yeah.

Okay. So for for this year, you’ve highlighted several sort of growth factors that are gonna keep driving, you know, adoption of Xtampi. Probably the first to highlight would be the Salesforce. You expanded them in September. They were sort of fully in the field for q four and q one.

Are they sort of at full efficiency now? Do they continue to get more effective over time? Or

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Yeah. No. I think so we did and basically introduced the field force around right after Labor Day, the incremental sales force. And so q four and q one, I think they’re still sort of getting their sea legs, but, you know, we anticipate them really kinda getting up to speed here, you know, in the second quarter and beyond. It essentially, you know, made the territories cut in half.

So it made less windshield time, as we call it, less time spent on the road traveling between appointments and more time being able to actually interact with the doctors. And so that, you know, I would say, you know, the continued growth that we’ve been seeing this year is probably being driven by the primarily those new sales reps coming on board and and driving that demand there, but it will continue to go on as as before. Some of the other initiatives, you know, is the DTC campaign that we talked about. You know, that typically takes, you know, one to two quarters to see the impact of that. It takes a while for the, really, the light bulb to go off on the patient, the patient to get online and make an appointment, and then it they have to, you know, go into the the office.

And so we typically say it’s it’s not an immediate impact on the typical, investment there. It takes a quarter or two. So we expect to see that impact to hit in the second half of this year. And then we have the recent MGD data, which seems to be really resonating with the physicians as well. There’s really been nothing out there that has, demonstrated what we’ve been able to demonstrate there.

So as we get out there and educate the physicians on this patients that have diabetic encephalitis and MGD, we expect that to be some of the pull through that we see in the back half of this year as well.

Lachlan Henry Brown, Research Analyst, William Blair: Okay. K. So on the Salesforce, are there I guess, how hard of metrics can you look at to see how effective they are, how much how much impact they’ve had on prescribing by a given physician. Mhmm. Yeah.

To to sort of evaluate their efficiency or the kind of ROI.

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Yeah. Yeah. No. We’ve got great data there, so we can actually, you know, trace the prescribers and, you know, how many scripts they’ve written. We monitor, to your point earlier, you know, are they monthly writers?

Are they weekly writers? Are they daily writers? How many scripts are written? How many are dispensed? So we’ve got really good data on the impact of the Salesforce.

Okay.

Lachlan Henry Brown, Research Analyst, William Blair: Awesome. And then and then DTC, obviously, is another one where, conceptually, at least measuring the impact seems a little challenging. You know, if I see the ad on TV and then go and get go see my optometrist and get diagnosed and fill a script, how do you can you track that? How do you measure the impact of DTC? Yeah.

No. It is.

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: It’s a little it’s more difficult, particularly as you move into network TV. It’s quite frankly a little scary what you should get on streaming TV, you know, unless you disable, you know, your your your button to to give that data, but you could actually track a patient going from a geography and getting a script on streaming TV. When you move to network TV, it’s more a sort of mathematical algorithm that you you need to use, and, you know, there’s a little bit more of an art to it. So you you you don’t have the clarity of the data you get on streaming, but you can get some good metrics there in terms of the return on investment.

Lachlan Henry Brown, Research Analyst, William Blair: Okay. And and how long does it take to see that? I mean, you said it takes probably a couple of quarters Right. To actually see it flow through to describing volume of of scripts. Are there metrics you can see before that that tell you it’s working or probably

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Yeah.

Lachlan Henry Brown, Research Analyst, William Blair: Having effects?

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Yeah. There are. And and one of the things that we’re very pleased with is we’re getting a lot of active engagement at our website. And what I mean by active, they’re not just clicking into, you know, the XtendV website. They’re actually going in and taking the quiz.

You know? And the quiz is, you know, essentially, do I have dermalex blepharitis? And so they’re going through that process of the the questionnaire. They’re also there’s a slider that can show you a before and after picture that they’re spending a lot of time on. And then finally, find a doctor that so they’re diving in and actually saying, you know, where’s a doctor in my area that I could go to that treats demidex And so that active engagement is really encouraging.

Fundamentally, as CFO, I wanna see, you know, scripts of revenues, but that’s a good early indicator of, you know, things that are they’re actively engaged and are resonating based on that commercial.

Lachlan Henry Brown, Research Analyst, William Blair: Okay. So one of the other growth drivers this year was Part D coverage, which came online at the start of the year. From memory, the population is pretty evenly split commercial Part D. I think in the past, you’d said even though you didn’t have much Part D coverage last year, you were still seeing pretty good volumes in prescriptions in Part D. So what what impact does having this coverage have?

Does it directly drive Part D scripts, or does it drive prescribing more broadly? Because physicians no longer have to think about this is this patient commercial Part D? Do I have to worry about a prior authorization? And does it sort of open up their sort of prescribing behaviors more broadly than just Medicare patients?

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Yeah. No. That’s that’s a a great question, and it is more the latter. So I think it reduces friction, you know, because there we did hear that some doctors were saying, look. I’m I’m just not gonna prescribe to my Medicare patients because it’s a pain.

But a lot of times, the doctors don’t know what insurance you have. Right? And so I think, you know, the fact that now that we’ve got Medicare Part D starting to kick in, it creates less friction within the system, and it makes it easier for, you know, them to write for all of their patients now. So, and we’re hearing that the, access is is, you know, much better now that that Medicare is starting to come online. K.

Lachlan Henry Brown, Research Analyst, William Blair: Yeah. Great. And so that you know, again, as as the CFO, that translates into, you know, net price, obviously, with coverage. Gross to nets have been pretty good. I think you’ve said that they are sequentially gonna be declining this year to your longer term target of 42 to 43.

That’s right. Next year, I think, you know, q one is always high for the seasonality. Should we expect a similar sequential decline quarter over quarter, or is it more what at least I would think of typical as we have a big drop down after q one, and it’s pretty steady for q two through four? Yeah. No.

We we expect sort of a stepwise reduction in our gross to net discount to end the fourth quarter somewhere in

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: the range of, you know, the low forties, the 42 to 43 that you highlighted there. We’re still, you know, working through some of the Medicare impacts, and so that’s what is causing that step down in the second quarter. But that we should have that, you know, full coverage by, you know, the middle of the year. And we will always have that dynamic that you referenced in the in the quarter where, you know, copays resets and deductibles reset. So there typically is a higher gross to net.

But sort of at a steady state, absent the q ’1 dynamics, we expect to be in the low forties. Okay.

Lachlan Henry Brown, Research Analyst, William Blair: Great. I guess I was gonna ask several other things. In the interest of time, maybe we should touch on the pipeline a bit. Sure. Earlier this year, you guys sort of outlined your plans to develop t p zero four, the topical for ocular rosacea, which is another new market that that nobody’s really developed in.

Can you maybe talk about how you came to that decision and the opportunity that you see there?

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Sure. It’s, I think, an example of us really listening to our customers, the eye care professionals. And so we had originally shown some data, phase two data in a dermatologic indication called papillary pustular rosacea. It’s a type of rosacea where you get these pustules that develop, and you get the typical redness. We got, you know, clinically meaningful results.

We hit our primary endpoints. The challenge there was, you know, we were really looking at this as a outlicensing opportunity because we’re not a derm company. And it’s a very competitive dynamic, you know, out there in the in the derm space. And so when we showed this data to our eye care professionals and ad boards and various other sort of forums, they came to us and said, hey. Have you thought about ocular rosacea?

I see it all the time in my practice. There’s nothing out there from an FDA approved perspective. You should take a look at this. And so first thing we did is well, that’s interesting, but let’s make sure it’s not a bunch of, you know, just independent noisy KOLs, right, focused on this one area. So we did some market research, and there really is a there there.

There’s about fifteen to eighteen million patients that are impacted by this disease, and the vast majority are caused by Demedex mites. And we know we’re very effective at killing mites. And so, we did the the market research and decided, wow, this really could be a game changer, that there’s nothing else out there. It’s synergistic with our call point, and it’s really about, you know, defining the scale that we’re gonna be utilizing. So in discussions with the agency, there’s two primary complaints that the patients have and the eye care professionals see.

One is obviously the rosacea, the redness that you see. The other is this, sort of pronounced vessel growth on the upper eyelid. And so what the feedback from the agency is if we can show a reduction in both of those, we don’t have to show a cure. If we show a reduction in both of those, you know, that would be, you know, clinically meaningful, you know, to the patients and and approvable endpoints. So we’re basically now developing a scale that’s reproducible from eye care professional to eye care professional such that, you know, a perspective of somebody looking at a patient that has redness, you know, will say, okay.

Well, that’s a grade three. And the next physician will say the same thing. That’s grade three. You want consistency there. Consistency there.

Same thing with the reduction in the vessels as well. So we wanna make sure we can develop a scale that is reproducible, you know, from physician to physician. So that’s the process we’re undergoing right now, and we’ll kick that phase two study off in the second half of this year with proof of concept data in the second half of next year, but a big opportunity and something we’re really excited about.

Lachlan Henry Brown, Research Analyst, William Blair: K. And so for that for that scale, how much validation do you need to do before the phase two with the FDA to to make sure that they would be comfortable with it as a phase three approval endpoint?

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Yeah. So we’ve already had that discussion with them in terms of those two key endpoints there. So it’s really for use us to just develop that scale. You know, we don’t have to go back to the agency on that particular scale development since it’s already been sort of established that, you know, this will do it. So but if we don’t design a, you know, a reproducible scale, then, you know, there’s less certainty on the outcome.

Outcome. So we’re being very thoughtful as we think about, you know, moving into that initiation there. Okay.

Lachlan Henry Brown, Research Analyst, William Blair: So the onus is on you really to to prove or ensure that it’s it’s reproducible before you start the phase two? Exactly. Exactly. K. You’ve also got the Lyme disease program.

As someone that spends a good amount of time in the Northeast, I’m very familiar with the fun of having to check yourself and text every time you go outside in summer. So that one’s particularly interesting to me. You’ve said I think you’d probably look to out license that, but you’ve also talked about a phase two next year. I guess for those in the audience that aren’t familiar with the program, could you just give a, you know, quick overview of of what it is and how you see that progression?

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Yeah. No. It’s a really exciting program, but we’re not, you know, really infectious disease focused or, you know, in that area there. So and it phase three study would be, you know, thousands of patients. We’re talking seven to 9,000 patients to enroll.

So it is expensive study. It’s not our call point. So that’s why we think about out. But it’s a really cool program. Basically, it’s the same active ingredient that, you know, kills these mites, also kills ticks.

And so the thought is and we showed data, phase two data that showed we killed ninety eight percent of the ticks within twenty four hours of this oral dosage. So you you get to therapeutic levels within eight hours of taking it. And the thought here is you kill the tick before it transmits the bacteria that causes Lyme disease. It’s not an immediate transmission. It takes twenty four to thirty six hours.

And so this data showed that we, you know, killed them within that before that window, and it was also durable to thirty days. So, we’re looking at a phase two study. We’re deciding whether we’re going to do it ourselves and, you know, maybe create more value, you know, by showing positive data there and then outlicensing it or perhaps partnering it, you know, before the initiation of the phase two study next year. So that’s the process we’re going through right now. But we’ve had feedback from the agency, you know, that we can use biomarkers of Lyme disease in this phase two study to show proof of concept.

The phase three will will be will require disease prevention, though. So that’s why it’s so big

Lachlan Henry Brown, Research Analyst, William Blair: and thus so expensive. Okay. Great. I guess plenty more I could ask, especially, you know, have you been trying to read the tea leaves on MFN and tariffs and so on. But but given we’re on time, maybe you could just talk about the, you know, cash balance.

Everybody always wonders biotechs should If when you’ll perhaps be sustainable, you’re gonna need to raise again. So just talk about the cash that you have now and where that gets you.

Jeff Farrow, CFO and Chief Strategy Officer, Tarsus Pharmaceuticals: Yeah. We we ended q one with about 408,000,000 in in cash. We haven’t guided to a cash flow positive at this stage just because we haven’t guided on revenues, which is a big component of it. So, you know, stay tuned on that. You know, we’re evaluating the revenue guidance on a quarter by quarter basis.

The big unknown is is really the impact of the DTC network TV. So I think once we get that behind us, you know, we’ll be in a position to provide that type of guidance.

Lachlan Henry Brown, Research Analyst, William Blair: Awesome. Well, thank you everyone for joining us. Think we now have a breakout in Burnham Bay, I think, upstairs for those who would like to join. Great. And thank you, Jeff Thank you.

For joining us. Yeah. Appreciate it.

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