Welcome to the UBS virtual event. Ashwani Verma, you may begin. Great. Thanks for that. Hi, everybody. Welcome to UBS Virtual Ophthalmology Day. My name is Ash Verma. I cover Smid Cap Biotech and Spec Pharma here at UBS, and our next company session is Tarsus Pharmaceuticals. With me today, I'm really excited to host Aziz Munsif, who is the Chief Commercial Officer at Tarsus. Hey, Aziz. Hey, Ash. Thanks so much for having us. I'm real delighted to be here and share a little update on how things are going for us. Excellent. Thanks, and just as a reminder for the audience that are listening in, if you have any questions that you want me to ask, feel free to email me or ping them to me on Bloomberg, and we can, you know, like, bring that into the conversation. Maybe, Aziz, I guess, like, it might be helpful just if you can give, like, a brief overview of the company for the benefit of the audience, and we can get started from there. Certainly. Thank you. So Tarsus, we are a commercial stage company that recently launched, about a year ago, the first-ever approved product for Demodex blepharitis. This is a disease that affects over 25 million Americans. It's, you know, essentially inflammation, irritation of the eyelids that's caused by a microscopic organism called the Demodex mite. So this is our first area of launch. A year in, the launch is going exceptionally well, and I'd say the way you can think about Tarsus is a commercial stage company with great launch momentum, a lot more to come, and then a budding pipeline that we're really excited about. And I'll tell you a little bit about the launch, and then I'll touch briefly on the pipeline, and then certainly, I'm sure you have some questions. I think the launch so far has been a real surprise for a lot of folks, but one that's even exceeded our expectations, I would say. As of the second quarter, we have delivered nearly 100,000 bottles to patients, so we've treated almost 100,000 patients, and that's remarkable. What's really exciting is that we're really just scratching the surface. There's so many patients. We focus on about 7 million patients out of the 25 that are currently in the clinic, and, you know, treating 100,000 of those patients is great, but we have a lot more to do there and a lot more opportunity to be had. Secondly, I think the other highlight of the launch has been categorized by really great progress in reimbursement, and this was shown with our better-than-expected gross-to-net discount of 44% in the second quarter, really underscores the value. We're netting over $1,000 a bottle for Xdemvy, and I think that's been a great value driver, and I think that's something that folks are starting to appreciate, how impactful this product is and the value it provides with each prescription. Then the third really exciting thing is just the physician receptivity. The physician receptivity has been remarkable. We talked to about 15,000 doctors on a routine basis, and as of the second quarter, we had over 11,000 of them prescribe, meaning we've got to about three-quarters of our core audience in less than a year. And that is also very exciting and bodes well for the future trajectory of the launch as these doctors now become more routine writers and deepen their prescribing habits. When you look at the totality of that effort, that yielded us about $40 million in revenue in the second quarter, and of course, we're excited about where we're gonna be taking things forward. And as we look forward on the launch, there's really a few things that we think about in terms of building and maintaining this momentum. One is continued education of the physician and just building that deepening of prescribing with the doctors. For that, we've actually increased the sales force size by about 50%. We started at launch with about 100 sales reps, and we're now fully deployed with 150 reps. They're out there, and they are seeing these doctors more frequently, which is driving increased prescribing per doctor. Secondly, we see a great opportunity with continuing to build that great reimbursement. The 44% discount was really based on establishing great commercial coverage. But we also announced that we got at least one Part D payer on board, and as we expect to see the rest of the Part D payers come in in 2025, we expect stability and improvements on that 44% discount, and that'll maintain throughout, you know, in the low 40s%, at steady state. And then the third exciting thing we see here is the opportunity to really engage the consumer. We see this as a consumer-driven disease, one where patients will be very motivated to seek treatment, and to that end, we are launching a direct-to-consumer campaign in the fourth quarter, so I think what you're seeing is a great launch so far and many more levers to pull in terms of sales force, reimbursement, and consumer activation that will continue to accelerate this launch, and we're real excited about that, and the other part I mentioned is the pipeline, right? We've got a pipeline that's essentially a pipeline in a molecule with lotilaner, and we expect updates across the pipeline programs in prevention of Lyme, in rosacea, and also in meibomian gland disease, which is essentially a great extension into the eye, so lots going on, lots of great opportunities to increase the value of the company as we progress the quarter. But the launch trajectory is obviously the primary focus, and as I mentioned, we've got a lot of great things coming there. And then the pipeline, I think, is gonna provide some great, great updates for folks as we progress. Excellent. Thanks. Thanks for starting us off on a strong footing here. So I think, yeah, maybe, maybe just, like, talking about the market a little bit, just so that people understand, like, Demodex blepharitis. I think you said that, like, the core is, like, the 7 million out of the 25 million prevalence. And just if you can, like, go through the numbers, in terms of, like, what do you think is the eventual addressable market? I remember, like, from back in when we used to interact, when I covered the stock, I think there was a lot of focus on just, like, driving, like, diagnosis expansion, and you used to talk about, like, dry eye disease as a positive analogue. Like, where are we in that type of journey? Where do you think eventually you might like, what portion of the market may you eventually be able to tap into? Correct. Yeah, so, you know, as we mentioned, there's about 25 million Americans that suffer from the disease. We focus on 7 million as the core audience, as you mentioned, Ash, and that's really comprised of a few different segments. One is, you've got 1.5 million patients that are already diagnosed in the clinic. These patients have been historically diagnosed. There was no good solution for these patients, and now they have one, and we think that that's sort of the lowest hanging fruit, right? Patients that are suffering, have been identified, and haven't had a good solution until Xdemvy. So that's an opportunity for us to continue to expand. As we mentioned, only treated a fraction of patients so far. The other segments, as you alluded to, include the areas where you have a high overlap or high propensity to have the disease. Areas like dry eye, where we see 60% of patients who are on a dry eye medication actually have either Demodex blepharitis or concomitant disease. So either they were misdiagnosed or they have concomitant disease, and you can imagine that's a great intervention point. These patients come in, they typically fail a medication. That would be a great opportunity for the doctor to assess the eyelids and see if there's an opportunity to treat the root cause of the blepharitis, if that's what the core issue is. Similarly, we see an opportunity in cataract surgery, where over half the patients presenting for cataract surgery have Demodex blepharitis, and as we talk to ophthalmologists, there's a desire to optimize the eye prior to surgery, where you wanna eliminate the inflammation, irritation, all these things that can confound and provide complications for the surgical outcomes, and we think that's a great opportunity. And we're hearing doctors apply Xdemvy as part of their pre-cataract screening, and then of course, the routine pre- before the patient hits the OR. And then in optometry, which is another core audience for us, contact lens discomfort is a major issue, and a large proportion of these contact lens-intolerant patients are actually intolerant due to blepharitis. So we think that these are core segments that are easy to identify. To your point, now that we have Xdemvy, we'd expect the diagnosis rates to increase within the core audience of just core blepharitis, but also as a secondary diagnosis that patients are presenting with either dry eye, showing up for cataract surgery or contact lens discomfort. These are core areas that the doctor can identify, diagnose, and then subsequently treat patients. And we are making great progress across all of these. I think the typical journey as a doctor starts. They usually start with those routine blepharitis patients. Once they see about 5- 10 cases, and they get some good confidence and success, because the product doesn't disappoint, it's very consistent in terms of great outcomes, then they start to look at other segments in the office, right? They say, "Okay, let me look at my dry eye patients, or let me put this into my cataract routine." And we see that natural progression as we visit the doctor more and more often, and as they build experience with the product. Yeah. Do you think that the, like, the patient segmentation that you have in terms of, like, where the severity of the patients is, is that where most of the use is happening right now? Or do you think that you could start to tap into more, like, moderate or less severe patients, eventually also? Yeah, we're seeing utilization across the board, Ash. I think as you would expect, the doctors typically start with the very obvious cases, right? Heavy collarettes, patients actively complaining. And because the drug works so well and because the results have been so positive for the patients and the physicians, you know, as I mentioned, they get about five to ten cases, and then they start opening up the utilization. So the doctor says, "Okay, I'm gonna start looking for this more proactively. I'm going to start thinking about any and all patients coming in the door that have collarettes." So their threshold to treat quickly comes down as they get experience, and that really underpins why we decided to expand the sales force, because the more often we can get to the doctors, we can reinforce the great outcomes they're having and then sort of remind them to think about this for a broader set of patients. And, and we see that pretty instinctively as we make more routine sales calls, as these doctors get to conferences, hear from other colleagues. That experience, that surround sound, as well as their personal experience, really propagates broadening of use and depth of prescribing in their practice. Great. Okay, so I think, like, in terms of the launch, just, as you look forward, like, what do you think are the major drivers? Like you, you called out, like, this, Medicare, coverage that's, like you got one payer on board and looking for more of an expansion in 2025. Just if you can elaborate on that, like, is that something that, you think that can drive, like, substantial ramp in 2025? Like, what's the... what are the volume pull through? What kind of, impact on pricing just from, from that, book of business? Yeah, no, it's a great point. So the way to think about this is our market is roughly 45% commercial, 45% Medicare. The remainder is, you know, your other government channels. So both commercial and Medicare are equally as important to us. 2024 was really about establishing commercial coverage, and we've done a great job. We're pretty much where we want to be. A couple of other plans we'd like to get into the fold, but we've got the vast majority of commercial lives where we'd like them to be. Part D was something we planned on having in 2025. Very fortunate that we had one major plan put us on early. I think that speaks to the value of the product and the experience we're having, and just the great work our payer team has done. We are confident with our estimate of having the rest of the Part D payers on in 2025. I think what that'll allow us to do is certainly enhance the patient-physician experience. The PAs become more consistent, the prior authorizations, that is. The experience becomes a little bit more easy. It opens the door for more patients, so it certainly opens up easier access for these patients. I think in terms of pricing or discounts, that'll allow us to maintain a stable discount. What we said is at steady state, through 2025, you know, by the mid-year point, we should be in the low forties. Some modest improvement from where we are today, which was actually better than we even expected to be. But a steady and consistent gross-to-net in the low forties once Part D completely kicks in, and then I think that'll also allow us to drive additional volumes of patients as that patient and physician experience becomes more consistent and even easier. Yeah, so I guess, like, if I think about, like, the commercial and the Medicare, like, roughly being the same, you know, lives, and you said that one of the largest Medicare plans has signed up. Have you put any numbers around it? Like, how much that might mean? I'm trying to figure out, like, how many additional, like, if we are looking at, like, 30%, I'm just making up a number- Of the 50% becoming available. So is that the upside? And, like, so you signed this recently, and, like, is that any kind of like a tailwind to 2024 numbers, or more likely volume coming in 2025? Yeah. So I do think that the plan that we signed, we did announce that in Q2, that's now taking into effect, so we should see some impact of that in 2024. I think that's another subtle driver here, opening the door to at least one of those large Part D payers. We do see some coverage in other Part D payers as well. Typically, that's through prior authorization, medical necessity or exception, so there are patients that are coming through. So I don't think about 2025 as a step up, I think about it as a steady progression that will continue to open the door. And, you know, we haven't gotten specific in terms of lives, et cetera. We really just focused on the quality of the coverage and the critical mass we're building, right? So I'd say at this stage, we've got the vast majority of commercial coverage that we wanna get, one of the large commercial Part D payers. And to put it in perspective, there's really three big Part D players- - and then a handful of others. But if you get the big three, if you will, you've got pretty much great Part D coverage. So, you know, we've got one of those big players, and I'm really delighted that that was actually done without even a prior authorization. So high quality Part D coverage for that first payer. We'll see where the other ones net out, but we do expect them to kick in in early 2025. And then just keep in mind, right, when you get into Q1, there's always some headwinds, right? Deductible resets, plan resets. So as you work through that, you start to see the appreciation. So what we've said is you'll start to see that meaningfully pull through as we progress through 2025, and I'd expect just a steady cadence of volume appreciation on the back of that increased coverage. Got it. Okay. So you're already at, like, a 44% gross-to-net, and, like, even with the, you know, almost like as many lives being added on the Medicare side, you still think that, like, low 40s% is, like, a good steady state? I mean, that's like how is that because, like, the reception in the Medicare channel has worked out to be far better than you were originally expecting? I know typically, like, you can see more gross-to-net type discounting in the Medicare channel. So just curious, what's driving that confidence in the low 40s%? Yeah, and, you know, to be clear, I think what you'd expect to see, you know, we're at 44 in the second quarter. You may see some fluctuations in either direction, you know, in the range of a couple of points, either up or down, depending on just how things shake out through the end of the year, things like the donut hole, plan resets, et cetera. And then sort of settling in that low 40s as we get into steady state in 2025. What gives us confidence is, I think, just the quality of negotiations we've had with the payers. You alluded to this. You know, I think for folks, since it is the Eye Care Day, right, people may think about anterior segment drugs, where you've seen gross-to-net discounts upwards of 60-70%. So to be at a 44% discount is really remarkable, and I think that that's a testament to the work we did very early on educating the payers, and that we're continuing to do with the payers. And what I think really underpins this is, one, an appreciation that the fact that there's nothing for this disease today, right? There's no generics, there's no real over-the-counter market here. This is a really first-and-only, and best-in-class treatment for these patients. I think when the payers look at that, and they look at the quality of the product in terms of the very high outcomes, over 85% of patients get a meaningful clinical outcome here. The durability, you know, it's one treatment essentially gets the patient resolved for 6- 12 months, which is really remarkable. I think the payers see that this is a very high-value and impactful product. So that's really helped us in those negotiations. I think you're right, you know, that's very different because there's not competitors, there's not extrinsic forces pushing on us. It's really a discussion with the payer about the value of the market, the value of the product, and we've been able to do quite well in those negotiations. I think the last thing is the product is performed in the real world, right? So the Part D payers now have seen a year of performance of this product, and certainly they're tracking, does this product really deliver? What they're hearing very consistently is the product works very well, it works as promised, physicians are having a good experience, physicians are willing to do the prior authorizations and push for the medication. There's a pent-up demand, if you will, that the payers are seeing, which also helps in that process. Yeah. All right, great. So I wanted to ask just around any kind of like you know just retreatment opportunity here, and like how often do you expect patients to refill? So that's one part of the question. And then secondly, I think like I think the IQVIA data is like slightly under capturing the you know like the demand of the product. So to the extent that you can like help us understand like what sort of the dispense variability versus where IQVIA data is, and if you have any sense on like could that change. Yeah, so let's talk about retreatments first, right? So when we look at the- ... clinical data in our pivotal studies, we tracked a cohort of patients out for twelve months, and what we saw is about 40% of the patients recur by month twelve. So we would expect to have some meaningful retreatments as we continue to progress in the launch. I think you'd expect to get some proportion of that 40% on an annual basis. I think what we said as a conservative estimate is, could you see a 20% tailwind at steady state, where these patients are, you know, getting, you know, retreated on a routine basis? And think about it, the patient would recur, they have to make an appointment, they have to see the doctor, they have to have a certain threshold of disease to get retreated. So while we see in clinical studies a 40% retreatment, I think it's still early to say what the real-world impact is gonna be, but I would certainly estimate that we're gonna get some good proportion of those patients on an annual basis coming back in. I think, transitioning to IQVIA question, I think to be determined is how is that patient volume tracked? Because the timeline between the initial treatment and maybe a retreatment may be so long that IQVIA wouldn't record it as a retreatment, it may be recorded as an NRX again. So we see this as a tailwind on prescriptions overall as patients start coming in, and I think you'll start to see that more meaningfully in 2025 as we've got critical mass of patients and longer time out in the marketplace. You'll start to see those retreatment start to be a tailwind for us, certainly. I think to your question on IQVIA, that's always a hot question. I think the way to think about this is directionally it's pretty good. The trend is very consistent. With IQVIA, it's been relatively stable, but in any given week it can be up or down, it can fluctuate from what the actual numbers we see are, and we try to reconcile that for everyone every quarter. We report our actual dispensed numbers every quarter, and people can reconcile that versus the IQVIA numbers, so what I tell everybody about IQVIA is, you know, just take a step back instead of looking at it weekly, because the weekly will fluctuate. Look at this over several weeks, months, quarters, and those numbers are relatively consistent. The trend is consistent, but the actual number may vary. I can't predict how they're gonna project that on a weekly basis. I wish I could, but they have their own algorithm. You know, we provide them all the dispense data. We're not holding anything back. We've been pretty open about the data set, but IQVIA has their own process, and they project the data the way they do. So hard to say what that, you know, sort of factor would be on a weekly or quarterly basis. But what we've done traditionally is say at the end of every quarter, we'll reconcile that for everyone. And in the interim, I'd say look at this on a longer-term basis instead of just on a week-to-week, because the week-to-week projection is gonna fluctuate. Yeah. Okay. All right, great. So let's talk about, like, the DTC, a little bit. So just, help me understand. So, like, so this is something that you're planning to initiate in Q4, you said, right? Like, what's the, what's the amount of investment that you're making? And, typically, like, I guess, when is, like, the, you know, the benefit that you start to see from, from this type of a DTC campaign? Any thoughts on that? And, yeah, like, is it like a mix of, like, social media, a TV advertisement, or just... Where is most of the focus at? Yeah, that's a great question. Very early on in the commercial planning for Xdemvy, we knew that the consumer activation would be a great part of the strategy here. It was just a matter of timing. And why now? I think now because we've established a pretty close to where we're gonna be in terms of gross to net, so we're getting a high-value prescription. Two, we've also penetrated a large proportion of the market, so we have a lot of doctors utilizing the product. So between the reimbursement and the physician base being established, we thought it was a great time to start to drive the patients into this space. What we see here is an investment that would bridge Q4 and Q1 of about $10-15 million. We'd start this effort on connected TV, which is like your streaming platforms, Amazon Prime, Hulu, Tubi, Peacock, et cetera. These online channels that you can be very targeted and direct with in hitting the right patients. We'll complement that with online, digital and social media, so you will have a surround sound effort. I think we'd start to see some impact as early as Q4. You'd typically start to see impacts pretty quickly. I think that impact tends to ramp over time, right? You're not gonna see the full impact right away. You'll start to see some impact in the fourth quarter, and then we'd expect that to continue in the first quarter. And certainly, if we're seeing a great result with the effort we put forth, we think about expanding that effort then more broadly to network TV, and really enhancing that investment over time. And again, that would be driven on seeing the right ROI and the right impact. But we're very bullish on this. All the research we've done tells us that patients are very receptive to the advertising, and that they're very motivated when they understand... You know, because this is a disease you can see and feel, right? They feel uncomfortable, they feel the discomfort, they can see the redness and crusting. So they're very receptive to understanding about the disease, because they're suffering. And then when they hear that it's a mite, you can imagine, they're pretty motivated to get the problem fixed, and they want to see their doctor right away. So, we're really bullish on this opportunity. We think that the patients are gonna respond very well to the advertising, and, we've got a very hard-hitting, action-oriented campaign that we're set to debut here in the coming weeks. Yeah. Okay. All right. So maybe just like switching gears to the pipeline a little bit. So for the like MGD, like what percentage of MGD patients have Demodex infection? And how these patients are currently being identified right now and treated, and how can that change? Yeah, meibomian gland disease is a really exciting area for us. You know, just to remind folks, the studies we've done is with the exact same formulation of Xdemvy, so it's the same drop, same bottle. The phase two data that we released at the beginning of this year showed improvements in secretion scores and the number of glands secreting. And that was with a six-week or twelve-week course of therapy. So it's the same product. In one case, we dosed it for six weeks, in one case, we did two rounds of treatment. Both showed great improvements. So we saw great improvements at six weeks and then, you know, continued improvements at twelve. And, you know, this opportunity represents probably a 20-30% expansion on the base use of Xdemvy today. So if you think about this, it would enhance that. It would open the door for this overlapping population, by about 20-30% versus the base population we have today. These patients are typically identified very easily in the practice. Actually, awareness for MGD is quite high. Doctors can see this, and typically, what they'll do is, during an eye exam, if the patient's complaining, they'll squeeze on the lower eyelid, and they'll express the meibum. And what they're looking for is that meibum should be, you know, clear, almost like an olive oil consistency... but if they express it and it looks waxy or, toothpaste-like, then you've got meibomian gland disease. and what they're looking for is how many of these glands are actually secreting, and how many of those glands are secreting oil that looks like olive oil, that clear liquid. And as I mentioned in our phase IIa study, we saw improvement in both the number of glands secreting, as well as the number of glands secreting that clear liquid. So, today, what patients are doing is typically a compress, some type of thermo pulsation, maybe an in-office procedure where the doctor's heating up the glands and expressing the meibum, but nothing that really gets to a root cause, where we know that the mites here are implicated, they cause inflammation, irritation, obstruction of the glands. So we do think that this is a very unique approach, and the data we had so far, when physicians see it, is very compelling. We expect to have a meaningful update here in the fourth quarter, additional data on the studies where we had a vehicle arm, as well as other endpoints that we explored. I think that data will be released later this year, and if that's as compelling as the first set of data we released, I think we've got a really, really exciting opportunity for physicians to treat another component of Lyme disease. Great. Excellent. All right, and just, in the few minutes that we have, like, so, just if you could, like, talk about the Lyme disease program, or TP-05, and just like frame the market opportunity here and any emerging competition that you're looking out for. Yeah, you know, Lyme disease is a very exciting space that we really see a really significant need here, right? The number of cases in the country are growing. Almost 30 million Americans are at risk of moderate to high exposure to Lyme disease. And what TP-05 would provide is an on-demand solution, an oral tablet that you could take, and within 24 hours, you would be protected from the bacteria that causes Lyme. And the way the drug works is, essentially, it would kill the tick before the tick can transmit the Lyme-causing bacteria. So it's very unique in that it's on demand, and it prevents any exposure to Lyme-causing bacteria totally. So this isn't an immune response. This is killing the tick before you get any exposure to the disease. And in the studies we looked at, we saw an immediate activation. You took it within 24 hours. You had meaningful thresholds of drug that was killing ticks [that] kills almost all the ticks that would be exposed to the patient. Then we challenged these patients again at 30 days, so it's a durable treatment. You could take this, per se, once a month, and you could be covered. In terms of competition, I think we look at this very differently. There's a vaccine that's being developed right now, and I think that's exciting for the space, but the challenges with vaccines are it takes multiple doses over several months to reach immunity. Whereas our solution would be something you could take on demand, and you'd get immunity right away. So, you know, if you're living in an endemic area and you're constantly exposed, perhaps you do a vaccine, but what if you're somebody that's only exposed seasonally or just going away for the weekend? This is gonna apply to a broader swath of patients. It's gonna be something that will empower patients to really prevent the disease themselves. We think it's gonna have a higher utility and open the door for a broader patient set. And again, that initial data set was very compelling, and we're gonna continue to have conversations with the agency to see what it would take to get this in through pivotal studies, and candidly, this is an area that we think would be ideal for a great partnership. Obviously, the call point here would be primary care, a much broader audience than we pursue. So, one that we expect to have more meaningful updates and then optimally look to partner with a larger organization. Got it. Okay. Yeah, so that was gonna bring me to my next question. Like, I guess, like, yeah, how do you think about, like, partnerships overall, like, for the platform? Is there... I mean, like, yeah, so Lyme disease is one, but are there any other areas that you think are amenable to, like, partnership and to maximize the return on the assets, or are some that you think that you can, like, kind of like do it standalone, on your own? Certainly, yeah. I think, the area- to think about, which is obvious, is the ex-US opportunity here, areas like Japan and Europe. We have an active partnership in China, as most folks are aware. And we'd be open to those. I think in terms of Europe, we're still doing the work, right? The reimbursement and regulatory pathway and evaluating, is that something we want to partner, or is that something we could do ourselves? You know, we see very similar market dynamics versus the U.S. I think reimbursement's always a little different in Europe, obviously, unique by each country. So that's something we're doing the assessment on and looking at the best way to get that product available to those patients, and that could be something we do on our own, it could be something we look to partner as well. Japan would be another ideal market to find a partner, so we think about these ex-US opportunities as opportunities to potentially partner, but certainly, we're also looking at the opportunities to go it alone, if that's what it takes. Yeah. Okay. All right, that's great. Thank you so much for this. So we are almost at the end of our time. This was great, and yeah, looking forward to keeping in touch, and good luck with all the progress that you've done and, you know, all other initiatives that you have in the pipeline. Great. Thanks so much, Ash. I really appreciate the time and as we mentioned, really, really great time to share the story as we're, you know, on the heels of great momentum in the early launch and now really getting to activate some really meaningful levers here in the fourth quarter to accelerate this launch with our sales force, the DTC. So I really appreciate the opportunity and really hope to keep everybody apprised of continued progress and great momentum as we move forward here. Yep, great. All right, thanks, Aziz. Have a good one. You too. Thanks so much, Ash. Yes, bye.