Tarsus Pharmaceuticals NASDAQ: TARS reported first-quarter 2026 results highlighted by continued commercial momentum for XDEMVY and progress across its development pipeline, including newly initiated and advancing Phase II programs in Lyme disease prevention and ocular rosacea.
XDEMVY sales climb as prescribing and awareness expand
Chief Executive Officer and Chairman Bobby Azamian said the company is “off to a strong start in 2026,” pointing to growth across metrics the company tracks, including “the number of writers, depth of prescribing, awareness, and evidence generation.” He said the company remains on track with its full-year outlook and reiterated a long-term view that XDEMVY could reach “blockbuster status in the next couple of years” with “$2 billion in peak sales potential.”
In the first quarter, XDEMVY delivered more than $145 million in net product sales. Chief Financial Officer and Chief Strategy Officer Jeff Farrow reported net product sales of $145.4 million, describing demand as strong despite typical first-quarter headwinds such as deductible resets, higher out-of-pocket costs, and “some impact from severe winter weather, particularly in the Northeast.” Farrow added that third-party data showed peers had double-digit prescription declines while Tarsus experienced low single-digit declines, and he said prescription trends “rebounded to all-time highs” as the company entered the second quarter.
Chief Commercial Officer Aziz Mottiwala attributed performance to three main drivers:
- Increasing depth of prescribing
- Expansion of the patient funnel
- Ongoing evidence generation
Mottiwala said that in the first quarter, nearly half of Tarsus’ 15,000 target eye care physicians prescribed XDEMVY at least once per week, up about 10% from the fourth quarter of 2025. He also said retreatment rates have increased “to the mid-teens range” as physicians implement long-term management protocols, with Tarsus continuing to expect steady-state retreatment of roughly 20%.
On direct-to-consumer efforts, Mottiwala said the DTC campaign is generating an improving return on investment that is “exceeding our expectations and is at the higher end of benchmarks.” He pointed to “millions of visitors” to xdemvy.com and said “high-value engagement,” including quiz completion and use of the Find a Doctor tool, was up nearly 40% quarter-over-quarter. He said the company plans a “creative refresh” and expanded disease-state messaging in the coming weeks.
Evidence generation aims to broaden the treated population
Management emphasized that evidence generation is intended to expand how physicians identify and treat Demodex blepharitis (DB). Mottiwala highlighted data presented at the American Society of Cataract and Refractive Surgery (ASCRS) meeting on the association between DB and chalazion and hordeolum. He said the dataset showed that more than 70% of assessed patients had underlying DB, with even higher rates in recurrent cases, and that physicians are responding by proactively screening and treating these patients.
Azamian said that, in his discussions with eye care providers, some are now screening broadly rather than focusing only on the most symptomatic cases. He also said he is hearing that physicians are treating “regardless of symptoms” in certain settings and that evidence such as the chalazion example adds “lots of reasons to treat,” contributing to an expanding addressable market.
Key Account Leaders to target high-potential practices
Tarsus said it is preparing to deploy Key Account Leaders (KALs) focused on high-volume and high-potential practices. Mottiwala described this as a “highly targeted investment” and said the KAL team is expected to contribute incremental growth starting in the second half of 2026.
Responding to a question on timing and impact, management said the KAL initiative involves roughly 17 to 20 people and is designed to increase depth of prescribing at practices that already show strong utilization but still have room to expand. The company said KALs are expected to be “out there in the third quarter,” with management expecting to see an impact as they begin engaging target accounts, while noting seasonality is driven by patient-flow dynamics.
Guidance reaffirmed; collaboration revenue boosted by China milestone
Farrow reiterated full-year 2026 guidance, including:
- Net product sales: $670 million to $700 million
- SG&A: $545 million to $565 million (including about $40 million in stock-based compensation)
- R&D: $115 million to $135 million (including about $20 million in stock-based compensation)
- Gross margin: approximately 93%
Farrow said 2026 quarterly performance is expected to follow patterns seen previously: strong growth in the second quarter, more modest growth in the third quarter, and robust growth in the fourth quarter, which he linked to deductible dynamics and end-of-year spending such as flexible spending accounts.
Outside of product sales, Farrow reported $16.7 million in license fees and collaboration revenue, including a one-time $15 million regulatory milestone from partner Grand Pharma following the approval of TP-03 for DB in Greater China, as well as approximately $1.7 million related to required China withholding tax. While the company expects royalties over time, Farrow said they are not expected to be meaningful in 2026 or 2027 as Grand Pharma seeks payer coverage ahead of a commercial launch planned for later this year.
On gross-to-net, Farrow said the company will no longer provide quarterly gross-to-net updates now that it has moved to full-year revenue guidance. However, he said the company remains comfortable exiting the fourth quarter in the “43% to 45% range” and expects to be within that range for the year. He also said refill prescriptions are “not likely to change” gross-to-net dynamics materially because refills still generally require prior authorization and may also involve co-pay assistance.
Pipeline updates: TP-05 Lyme prevention and TP-04 ocular rosacea
Tarsus also discussed progress in its pipeline, which Azamian framed as part of a broader “disciplined, repeatable playbook” focused on diseases with clear root causes and unmet need.
In Lyme disease prevention, Azamian said the company initiated Calliope, an approximately 700-participant Phase II trial of TP-05. Enrollment is “progressing well,” with the first wave of participants already dosed, and topline data is expected in the first half of 2027 to support readiness for a Phase III trial. Farrow described Lyme disease as the most common vector-borne disease in the U.S. and said TP-05 is an oral, on-demand investigational approach designed to potentially kill ticks before disease transmission occurs.
Asked about partnering and the regulatory path, Azamian said the company’s “base case” is that TP-05 may be “better in someone else’s hands as it goes to phase III,” adding that Tarsus aims to deliver a robust Phase II dataset and FDA clarity before engaging potential partners. He said the FDA has been collaborative and that Phase III could resemble a large vaccine-like trial, with the specifics depending on Phase II results.
In ocular rosacea, Azamian said Tarsus has initiated a Phase II core study of TP-04, a sterile investigational ophthalmic gel designed to treat Demodex mites. He described ocular rosacea as underdiagnosed and affecting an estimated 15 million to 18 million Americans, with no FDA-approved treatments. He said topline data is expected in the first half of 2027. In response to questions on disease biology and trial endpoints, Azamian said the company believes the “majority of patients with OR have Demodex,” though it is harder to measure than DB, and that the trial is evaluating endpoints tied to ocular rosacea signs including telangiectasias and erythema. He said Tarsus has aligned with the FDA on the need to assess those endpoints and expects success to be defined by improvement in one of them.
In closing remarks, Azamian said Tarsus is executing on what he called “one of the most successful launches in eye care,” while applying the same approach across its pipeline to “replicate the success of XDEMVY and establish Tarsus as a leader in creating new standards of care.”
About Tarsus Pharmaceuticals NASDAQ: TARS
Tarsus Pharmaceuticals, Inc is a clinical‐stage biopharmaceutical company focused on developing novel therapies for diseases of the eye and ocular surface. The company's research platform centers on neuro‐effector modulation to address underlying disease mechanisms rather than solely treating symptoms. Tarsus's lead candidate, OC-01 (varenicline solution), is an intranasal formulation in Phase 3 development for the treatment of dry eye disease, a condition affecting millions worldwide and associated with significant patient discomfort and reduced quality of life.
In addition to its dry eye program, Tarsus is advancing preclinical and early‐stage programs targeting other ophthalmic indications, including allergic conjunctivitis and retinal disorders.
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