• Net Product Sales: $48.1 million in the third quarter of 2024.

• Bottles Dispensed: More than 41,400 bottles delivered to patients.

• Gross Margin: Approximately 93% for the third quarter.

• Gross to Net Discount: Approximately 40%, with an adjustment leading to a reduction of about 3% or $2 million.

• Operating Expenses: Approximately $73.3 million for the third quarter.

• Cash and Marketable Securities: $317 million at the end of the third quarter.

• Sales Force Expansion: Increased from approximately 100 to 150 by the end of the third quarter.

• Coverage: Secured additional commercial and two large Medicare contracts, covering more than 80% of patient lives.

• Fourth Quarter Guidance: Expected 50,000 to 55,000 bottles to be delivered to patients.

• Expected Gross to Net Discount: Range of approximately 42% to 46% for the fourth quarter.

• Warning! GuruFocus has detected 5 Warning Signs with TARS.

Release Date: November 13, 2024

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Positive Points

• Tarsus Pharmaceuticals Inc (NASDAQ:TARS) reported its most successful quarter to date with over $48 million in net product sales.

• The company expanded its sales force by 50%, which has already shown a positive impact on prei style="display:none;"ion volumes.

• Tarsus Pharmaceuticals Inc (NASDAQ:TARS) secured additional commercial coverage and two large Medicare contracts, covering more than 80% of patient lives.

• The company launched a direct-to-consumer campaign on streaming television, which has received positive feedback and is expected to boost sales.

• Positive data from trials in patients with MGD was presented, showing significant improvements, which has been well-received by key opinion leaders and eye care professionals.

Negative Points

• The company faces traditional fourth-quarter headwinds such as multiple eye care conferences and holidays, which may impact sales.

• Despite the expanded sales force, the company has not yet seen meaningful retreatment volumes, indicating potential challenges in patient retention.

• Gross to net discount adjustments were necessary due to Medicare pool estimates, reflecting complexities in financial forecasting.

• The company anticipates a potential increase in gross to net discount due to the Medicare donut hole, which could affect profitability.

• Seasonal trends such as summer slowdowns and first-quarter deductible resets pose challenges to maintaining consistent sales growth.

Q & A Highlights

Q: Will the MGD expansion require another sales force expansion or targeted DTC? Also, when might you expect to see the impact of retreatments? A: (Aziz Mottiwala, Chief Commercial Officer) The MGD data falls within the current indication and call panel, so no changes to the sales force or DTC are needed. Regarding retreatments, it's early, but we expect a 20% retreatment rate over time.