Tarsus Pharmaceuticals — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net product sales for the quarter ended September 30, 2026, were $194.6 million, a 64% increase year-over-year from $118.7 million in the same period in 2025.
• Year-to-date net product sales were $513.9 million compared to $299.7 million in the same period in 2025.
• License fees and collaboration revenue for the year-to-date period were $16.7 million, including a $15.0 million regulatory milestone from a China out-license partner.
• Gross margins remained consistent at approximately 93% for both the quarter and year-to-date periods.
• Cost of sales was $13.9 million for the quarter (vs. $8.3 million in 2025) and $35.4 million year-to-date (vs. $19.8 million in 2025), driven by manufacturing costs, royalties, and amortization of milestone payments.
• Research and development expenses were $44.2 million for the quarter (vs. $16.3 million in 2025) and $97.6 million year-to-date (vs. $46.3 million in 2025).
• Acquired in-process research and development (IPR&D) expenses were $632.2 million for the quarter and year-to-date, resulting from the acquisitions of iRenix Medical ($81.0 million) and Alkeus Pharmaceuticals ($551.2 million).
• Selling, general and administrative (SG&A) expenses were $168.0 million for the quarter (vs. $108.6 million in 2025) and $455.1 million year-to-date (vs. $296.6 million in 2025).
• Net loss was $668.3 million for the quarter, compared to $12.6 million in 2025; basic and diluted net loss per share was $(14.40) vs. $(0.30).
• Year-to-date net loss was $693.9 million, compared to $58.0 million in 2025; basic and diluted net loss per share was $(15.67) vs. $(1.40).
• Cash, cash equivalents, and marketable securities totaled $309.6 million as of September 30, 2026.
• Long-term debt was $72.9 million as of September 30, 2026, compared to $72.4 million as of December 31, 2025.

Guidance and Future Outlook:

• Topline data for the Phase 2 Kore trial (TP-04) for ocular rosacea is expected in the first half of 2027.
• Topline results for the Phase 2 Calliope trial (TP-05) for Lyme disease prevention are expected in the first half of 2027 and are anticipated to support a Phase 3-ready package.
• The Phase 3 Comfort study (IRX-101) is planned to initiate in the first half of 2027, with topline results expected in 2028.
• Topline results for the Phase 3 Northstar trial (gildeuretinol) for Stargardt disease are expected in 2029.
• Management aims to bring five medicines to patients in the next five years.

Business Segments and Product Lines:

• XDEMVY (lotilaner ophthalmic solution) surpassed one million bottles dispensed and $1 billion in cumulative net product sales since launch.
• The average number of Eye Care Professionals (ECPs) prescribing XDEMVY at least daily increased approximately 20% from the beginning to the end of the third quarter.
• Refills accounted for approximately 20% of XDEMVY prescriptions in the third quarter.
• Direct-to-consumer initiatives drove a 75% increase in high-value actions and higher prescription conversion compared to the prior year.
• TP-04 is an investigational sterile aqueous gel formulation of lotilaner for ocular rosacea.
• TP-05 is an investigational oral systemic formulation of lotilaner for the prevention of Lyme disease.
• IRX-101 is an investigational ocular antiseptic for reducing post-procedural pain and corneal toxicity in patients receiving intravitreal injections.
• Gildeuretinol is an investigational once-daily oral medicine for Stargardt disease.

Market and Competitive Landscape:

• Real-world evidence presented at the American Academy of Optometry indicated that 98% of ECPs with retreatment experience were satisfied with XDEMVY's efficacy and tolerability.
• Disease recognition data showed Demodex blepharitis was found in 65% of patients presenting with chalazia or hordeola, rising to 91% among those with recurrent cases.
• In an ongoing observational study, 73% of XDEMVY-treated patients reported improvement in itchy eyelids at nine months, compared with 29% of patients receiving non-lotilaner options.

Risks and Challenges:

• The press release notes that actual results may differ materially from forward-looking statements due to various important factors detailed in SEC filings, including risks related to regulatory approvals, clinical trial results, and commercial success.
• Acquired IPR&D expenses of $632.2 million were expensed because the assets have no alternative future use.
• A change in the fair value of contingent consideration related to the Alkeus regulatory milestone resulted in a $1.6 million decrease, driven by a one percentage point increase in the discount rate.

Management Commentary and Tone:

• CEO Bobby Azamian stated that XDEMVY has demonstrated the company's focus on patients with overlooked diseases and that the company is "only getting started" with continued robust growth.
• Management highlighted the strength of the pipeline in building one of the most differentiated pipelines in eye care.
• Neera Clase was appointed Chief Commercial Officer, recognized for creating a new market for XDEMVY, building the commercial team, and securing broad coverage.

Other Key Points:

• Tarsus completed the acquisition of iRenix Medical (IRX-101) and Alkeus Pharmaceuticals (gildeuretinol).
• The company recorded a $15.0 million regulatory milestone payment from its China out-license partner in the first quarter of 2026.
• A $2.0 million upfront payment was made in February 2026 for an in-license agreement.
• Total R&D non-cash stock-based compensation expense was $10.2 million for the quarter and $16.2 million year-to-date.
• Total SG&A non-cash stock-based compensation expense was $16.8 million for the quarter and $35.7 million year-to-date.