Tarsus Pharmaceuticals, Inc. ((TARS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Tarsus Pharmaceuticals, Inc. conveyed a strong performance, particularly in the sales and market penetration of XDEMVY. This success is largely attributed to effective direct-to-consumer (DTC) campaigns and active prescriber engagement. Despite facing challenges such as high gross-to-net discounts and increased expenses, the company remains optimistic about the growth potential of XDEMVY and future pipeline developments.
Record-Breaking Sales for XDEMVY
In the second quarter of 2025, Tarsus Pharmaceuticals achieved a milestone with over $100 million in net sales for XDEMVY, dispensing approximately 91,000 bottles. This achievement marked a more than 30% sequential quarterly revenue growth, setting a new record for the product.
Direct-to-Consumer Campaign Success
The DTC campaign has been pivotal in boosting prescription volumes, with unaided awareness of XDEMVY more than tripling. Additionally, interactions on the XDEMVY.com website have surged nearly 400% since the start of the year, underscoring the campaign’s effectiveness.
Strong Market Penetration and Prescriber Engagement
XDEMVY has seen robust market penetration, with over 20,000 eye care professionals prescribing the product. The consistent engagement has led to increased treatment across all Demodex blepharitis patient segments, highlighting the campaign’s success in prescriber engagement.
International Expansion and Pipeline Development
Tarsus is actively pursuing international expansion, with anticipated European regulatory approval in 2027. Furthermore, a Phase II study for TP-04 targeting ocular rosacea is expected to commence later in 2025, indicating a strong pipeline development.
High Gross-to-Net Discounts
The gross-to-net discount for XDEMVY remains a challenge, currently at approximately 45%. However, there is an expectation for slight improvement into the low 40s by the end of 2025, which could positively impact future financial performance.
Increased SG&A Expenses
Sales, General, and Administrative (SG&A) expenses rose by about $44 million in Q2 2025, primarily due to sales and marketing costs, including the DTC advertising campaign. This increase reflects the company’s investment in driving product awareness and market penetration.
R&D Expenses Increase
Research and development expenses saw a rise of $3.3 million in Q2 2025, attributed to the TP-04 program and other research initiatives. This increase supports the company’s commitment to advancing its pipeline.
Forward-Looking Guidance
Looking forward, Tarsus projects continued momentum with Q3 guidance for bottles dispensed ranging from 95,000 to 100,000. The company anticipates a slight improvement in the gross-to-net discount to approximately 43%-45% by year-end. Tarsus is also preparing for the initiation of a Phase II study for TP-04 later this year, with expected increases in R&D expenses. With a solid financial position, including $381 million in cash and cash equivalents, Tarsus is well-positioned to support its strategic growth initiatives.
In conclusion, Tarsus Pharmaceuticals’ earnings call highlighted a robust performance driven by XDEMVY’s market success and strategic initiatives. Despite challenges with discounts and expenses, the company’s optimistic outlook for future growth and pipeline development remains strong, making it an interesting prospect for investors and stakeholders in the pharmaceutical sector.