Q4 2023 Tarsus Pharmaceuticals Inc Earnings Call

Good morning, and welcome to <unk> fourth quarter and year end 2023 financial results conference call as.

Good morning, and welcome to Tarsus's fourth quarter and year-end 2023 Financial Results Conference call. As a reminder, this call is being recorded. At this time, I would like to turn the call over to David Naxony, Head of Investor Relations, to lead off the call. Please begin.

As a reminder, this call is being recorded at this time I would like to turn the call over to David next Tony <unk> head of Investor Relations to lead off the call. Please begin.

Thank you before we begin I encourage everyone to go to the investors section of <unk> website to view the earnings release and related materials, we will be discussing today.

Thank you. Before we begin, I encourage everyone to go to the investor section of the Tarsus website to view the earnings release and related materials we will be discussing today. Joining me on the call this morning are Bobby Azamian, our Chief Executive Officer and Chairman, Aziz Modawala, our Chief Commercial Officer, Sesha Nirvana, our Chief Operating Officer, and Jeff Barrow, our Chief Financial and Chief Strategy Officer.

Joining me on the call. This morning are Bobby as Emil our Chief Executive Officer, and Chairman as these mobile wallet, our chief commercial officer, safeguard Nirvana, our Chief operating officer, and Geoff Farrell, our chief financial and Chief strategy Officer.

I'd like to draw your attention to slide three which contains our forward looking statements. During this call we will be making forward looking statements that are based on our current expectations and beliefs.

I'd like to draw your attention to slide three, which contains our forward-looking statements. During this call, we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors contained in our SEC filings for additional detail. With that said, I would like to turn the call over to Bobby.

Payments are subject to certain risks and uncertainties and our actual results may differ materially.

Courage you to consult the risk factors contained in our SEC filings for additional detail.

With that I would like to turn the call over to Bobby.

Thank you, Dave. Good morning, everyone, and thank you for joining us on the call today. 2023 was the defining and foundational year for Tarsus, as we successfully started our next chapter as a commercial company. We made significant progress on several programs in our pipeline, and most importantly, launched our first commercial product, XMD, the first and only FDA-approved treatment for demonex blepharitis. Since its launch in late August, we have seen tremendous demand and growing uptake of Exemvi among eye care professionals, or ECPs, and Demonex blepharitis patients who have long awaited an effective treatment for this damaging and impactful eyelid disease. Today, I am pleased to report on the great progress made in Xtembe's first full quarter in the marketplace as we continue to reach patients affected by this disease for the full year 20 We reported nearly $15 million in net product sales and delivered more than 17,400 bottles of Xtambi to patients.

Thank you Dave.

Morning, everyone and thank you for joining us on the call today.

423 was the defining and foundational year for <unk> as we successfully started our next chapter as a commercial company.

We made significant progress on several programs in our pipeline and most importantly launched our first commercial product extending the first and only FDA approved treatment for debit export for items.

Since its launch in late August we have seen tremendous demand and growing uptake of <unk> among eyecare professionals, our ECP and.

And Devin export Freitas patients, who have long awaited an effective treatment for this damaging and impactful island disease.

Today I am pleased to report on the Great progress made makes <unk> first full quarter in the marketplace as we continue to reach patients affected by this disease.

For the full year 2023, we reported nearly $15 million and net product sales and delivered more than 17400 bottles of <unk> to patients.

These are impressive early numbers, exceeding even our own expectations. Throughout the fourth quarter of 2023 and early weeks of 2024, Xtemvi has continued to solidify its place as an innovative category-creating therapeutic. Patients with Demonex blepharitis, or DB for short, have driven initial demand for XtemV, and we expect this to continue as we work to reach the 1.5 million patients in the U.S. who were already diagnosed prior to the approval of XtemV.

These are impressive numbers exceeding even our own expectations.

Throughout the fourth quarter of 2023 and early weeks of 2024.

<unk> has continued to solidify its place as an innovative category, creating therapeutic.

Diagnose patients with Demining quite Freitas, our DB for short.

Driven initial demand for extended and we expect this to continue as we work to reach the one 5 million patients in the U S who are already diagnosed prior to the approval of <unk>.

In parallel, we are seeing early signals that we are reaching the next wave of DB patients proactively visiting ECPs, complementary eye conditions, such as dry eye disease, cataracts, and patients who struggle to maintain their use of contact lenses. We estimate that these groups make up a significant portion of the more than 7 million patients currently visiting ECPs who we aim to reach with Xtemvi, and we are already seeing increasing use across all these patient segments. This traction is attributed to the tremendous strides we've made with ECPs over the last couple of years. We've engaged with all of our 15,000 target ECPs. More than a third have written at least one dispensed prescription.

In parallel we.

We are seeing early signals that we are reaching the next wave of DB patients proactively visiting ecp's for complementary eye conditions.

Such as dry eye disease cataracts.

And patients who struggle to maintain their use of contact lenses.

We estimate that these groups make up a significant portion of them more than 7 million patients currently visiting the ECP.

We aim to reach with <unk> and.

And we are already seeing increasing use across all of these patient segments.

This traction is attributed to the tremendous strides we've made with ecp's over the last couple of years.

We've engaged with all of our 15000 target ECP.

More than a third have written at least one dispense prescription and more than half have become repeat prescribers, who see the clear benefit of extending and are taking action to help their patients find relief.

And more than half have become repeat prescribers who see the clear benefit of Xtemvi and are taking action to help their patients find relief. Just this past weekend, we met with many of the top surgeons at the American-European Congress of Ophthalmic Surgery, or ACOS for short, and we heard very consistent and positive feedback about their experiences with XMV and, more importantly, the benefits their patients are experiencing. Our focus for 2024 is serving more ECPs and more patients. We expect to accelerate Xtembi's reach by adding to the base of current prescribers, increasing the number of prolific writers, and working with payers to secure broad coverage. In fact, our improving growth to net underscores the strong traction we've already made with payers in just the first few months of launch.

Just this past weekend, we met with many of the top surgeons at the American European Congress of ophthalmic surgery or <unk> for short.

And we heard very consistent positive feedback about their experiences with <unk>.

And more importantly, the benefits their patients are experiencing.

Our focus for 2024 is serving more ecp's and more patients.

We expect to accelerate extend <unk> reach by adding to the base of current prescribers, increasing the number of prolific writers and working with payers to secure broad coverage.

In fact, our improving gross to net underscores the strong traction we have already made repairs in just the first few months of launch.

We are delivering on the high expectations we set for ourselves and look forward to making even more progress throughout the year. I am also proud of our continued pipeline progress as we work to bring more new categories of therapeutics to patients with meibomine gland disease, rosacea, and Lyme disease prevention. Finally, I would like to thank all Tarsans for their incredible contributions, relentless execution, and passion for serving patient needs.

We are delivering on the high expectations, we set for ourselves and look forward to making even more progress throughout the year.

I am also proud of our continued pipeline progress as we work to bring more new categories of therapeutics to patients with my bromine Grand disease, Rosacea, and Lyme disease prevention.

Finally, I would like to thank all <unk> for their incredible contributions relentless execution and passion for serving patient needs.

Together, we look forward to serving countless more patients and advancing additional category-creating medicine. And with that, I will turn the call over to our Chief Commercial Officer, Aziz Motowalla, for more on the strong launch of Xtend. Thanks, Bobby.

Together, we look forward to serving countless more patients and advancing additional category, creating medicines.

With that I will turn the call over to our Chief commercial officer as these motorola or more on the strong launch of extending.

Thanks, Bobby.

As I said last quarter, the response to Xtembi has been truly remarkable, and the results we're seeing so far demonstrate that our unique strategy and executional strengths are delivering exactly as planned. It's clear from our results that the launch of Xtendi is off to a tremendous start. During the first month of launch, we served a significant number of patients with DV, engaged and educated a broad foundation of prescribing ECPs, and made significant early progress with payers. We've noted from the beginning that creating the next category in eye care takes time and requires teams to educate providers, not only on the strengths of extending care, but also on the disease itself. As such, high-impact disease education campaigns and ECP engagement have been among the key pillars of our success, and we're beginning to see the initial waves of ECP adoption leading to growing prescription volumes and meaningful patient outcomes.

As I said last quarter. The response to <unk> has been truly remarkable and the results. We're seeing so far demonstrate that our unique strategy and execution strengths are delivering exactly as planned.

It's clear from our results that the launch of <unk> is off to a tremendous start during.

During the first month of launch we observed a significant number of patients with DB engagement educated a broad foundation of prescribing Ecp's and made significant early progress with payers.

We've noted from the beginning that creating the next category in Eyecare takes time and requires teams to educate providers not only on the strength of extending but also on the disease itself.

As such high impact disease education campaigns, and ECP engagement had been among the key pillars to our success and we're beginning to see the initial waves that ECP adoption, leading to growing prescription volumes and meaningful patient outcomes.

Prior to approval, we launched action oriented visually focused physician and patient education campaigns to familiarize both groups with the impacts of DB and reinforced the simplicity and ease of diagnosis.

Prior to approval, we launched action-oriented, visually focused physician and patient education campaigns to familiarize both groups with the impacts of DV and reinforce the simplicity and ease of diagnosis. We've also kept ECPs engaged through active peer-to-peer scientific exchanges conducted by our entire optometrist medical force. Clearly, these efforts are paying off. As of February 23rd, approximately 6,000 ECPs have started patients on Xembi, and more than half are repeat prescribers. As a result, more than 17,400 bottles will be delivered to patients in 2020.

Kept ecp's engaged through active peer to peer scientific exchanges conducted by our all Optometrists Medical force.

Clearly these efforts are paying off as of February 23rd approximately 6000, Ecp's have started patients on <unk> and more than half are repeat prescribers.

As a result more than 17400 bottles have been delivered to patients in 2023.

We're thrilled with these results and the impact we're having on patients. We've also learned a lot and we're leveraging these insights to further optimize our sales strategy, particularly when it comes to transforming the next wave dcp's into routine and repeat prescribers.

We're thrilled with these results and the impact we're having on. We've also learned a lot, and we're leveraging these insights to further optimize our sales strategy, particularly when it comes to transforming the next wave of VCPs into routine and repeat prescribers. While we continue to call on existing riders, we are shifting gears with a focus on reaching the next group of ECPs who are familiar with DV and ready for a solution but may need a little more experience with XtemV before becoming regular riders. Based on our experience, this behavioral shift often requires multiple visits by our veterinarian. Our goal is to make Xambie a regular part of ECP clinical practices. We found that this usually happens after prescribers write five to ten prescriptions and see the positive impact of Xambie on their patients. This threshold is not only important because they become frequent riders.

While we continue to call on existing riders, we are shifting gears with a focus on reaching the next group of Ecp's, who are familiar with DB and ready for solution that may need a little more experience with <unk> before becoming routine writers.

Based on our experience this behavior shift often requires multiple visits by our sales force.

Our goal is to make <unk>, a regular part of ECP clinical practices and we found that its usually happened after prescribers right, 5% to 10 prescriptions and see the positive impact of <unk> on their patients.

This threshold is not only important because they become frequent riders.

They also become more confident and look more proactively across all the patient segments for additional DB patients that can be helped by Xtend. Our most recent market research indicates that 75% of DCPs plan to more proactively look for and diagnose DV. And 90% of those that have prescribed Xembi expect to write more, given their positive experience with this medicine. These numbers are powerful and reflect the strong potential growth opportunity ahead.

Also become more confident and look more proactively across all the patient segments for additional DB patients that can be helped by <unk>.

Our most recent market research indicates that 75% of Dcp's plant and more proactively look for and diagnose TB and.

90% of those that are prescribed extended expect to write more given their positive experience with this medicine.

These numbers are powerful and reflect the strong potential growth opportunity yet.

So having the next 6000 target Ecp's prescribed may take more time and effort on the part of our sales team we have great confidence in our ability to convert this next wave of Ecp's to proactive prescribers.

So while having the next 6,000 target ECPs prescribed may take more time and effort on the part of our sales team, we have great confidence in our ability to convert this next wave of ECPs into proactive prescribers. In addition to the tremendous strides we've made in reaching ECPs and their patients, we've also had great success with payers. We are pleased to report that we have secured several payer contracts since our last earnings call, including a major commercial plan with more than 19 million covered lives that has put Extembi on preferred status.

In addition to the tremendous strides we've made in reaching Ecp's in their patients. We've also had great success with payers.

I am pleased to report that we have secured several payer contracts since our last earnings call, including a major commercial plan with more than 19 million covered lives that is put extend beyond preferred status.

We should begin to see the benefits of this coverage in the first quarter of 2024. In the meantime, and due to the clear value proposition of Xenbi, we continue to see initial non-contracted coverage that resulted in better than expected gross net discounts of 58%. This substantial improvement in gross net discounts is based on our differentiated approach to distribution and patient all the work we've done over the past couple years and will continue to do with payers. Before I turn the call over to Sesha, I would like to take this opportunity to express how proud I am of our commercial organization. This is a team that was strategically and thoughtfully assembled based on their expertise in eye care and successful new product launch experience, and they've executed exceptionally, and we are setting a new standard in product line. I will now turn the call over to Sesha Nirvanan, our Chief Operating Officer, who also leads our research and development, to discuss the progress we're making on our clinical programs. Sesha?

We should begin to see the benefits of this coverage in the first quarter of 2024.

In the meantime, and due to the clear value proposition to be Debbie we continue to see initial non contracted coverage that resulted in better than expected gross to net discounts of 58%.

A substantial improvement in gross to net discounts is based on our differentiated approach to distribution and patient access and all the work we've done over the past couple of years and we'll continue to do with Payors.

Before I turn the call over to Asia, I would like to take this opportunity to express how proud I am of our commercial organization.

This is a team that was strategically and thoughtfully assembled based on their expertise in eyecare and successful new product launch experience.

And they've executed exceptionally and we are setting a new standard and product launches.

I will now turn the call over to <unk> <unk>, our Chief operating Officer, who also leads our research and development to cover the progress we're making on our clinical programs.

Thank you Rajeev I am pleased to share that we have made significant progress across our entire clinical portfolio. Since our last earnings call reporting three very positive topline data sets for all of our phase II programs. These data highlight the potential of <unk> in <unk> disease, <unk>, and Pamela personalization and Tpa.

Thank you, Aziz. I'm pleased to share that we have made significant progress across our entire clinical portfolio since our last earnings call, reporting three very positive top-line data sets for all our Phase II programs. These data highlight the potential of TPO3 in meibomian gland disease, TPO4 in papillopustular rosacea, and TPO5 for the prevention of Lyme disease.

Five for the prevention of Lyme disease.

All three product candidates target high-unmet needs and are based on Lotalainer, the same active ingredient found in Exdemvir, and like XMV, all three target the underlying cause of disease. In December 2023, we announced top-line results from a IHRSA Phase IIa clinical trial evaluating TPO3 for the treatment of myeloma gland disease, or MGD, in patients with demodex mites. CPO-3 demonstrated statistically significant and clinically meaningful improvements compared to baseline in two objective measures of disease. One is the presence and quality of liquid secretion as measured by the Mergomin Gland Secretion Score.

All three product candidates target high unmet needs and are based on lot leaner. The same active ingredient found in externally.

And legacy MB, all key target the underlying cause of disease.

In December 2023.

<unk> top line results from the <unk> phase Iia clinical trial evaluating <unk> for the treatment of myeloma gland disease are mgd in patients with <unk>.

<unk> demonstrated a statistically significant and clinically meaningful improvements compared to baseline in two objective measures of disease one.

Vince and quality of liquid secretion as measured by the government plan secretion score.

Two, the number of glands secreting normal or clear liquid as measured in the central 15 glands of the lower eyelid, and the treatment was well tolerated. Much like XMV4DB, these data demonstrate the immense potential of TPO3 in addressing the underlying cause of MGD, a disease that can lead to permanent changes in the tear film and progressive gland loss. We plan to present the complete data set from this trial at a major medical meeting later this year and look forward to discussions with the FDA before the end of the year regarding the path forward for TPO3 in MGP. As you may have seen in this morning's earnings release, we announced positive top-line results from the Phase 2a Galatea trial evaluating TPO4 for the treatment of papilloplastoma rosacea, or PPR TPR4 is a topical aqueous gel formulation of Lortelaner in development for the potential treatment of PPR, a chronic skin disease characterized by facial redness, inflammatory lesions, burning, and stinging.

The number of land secreting normal are clear liquid as measured in the central 15 glance of the lower island.

And the treatment was well tolerated.

It looks like ex MB four DB. These data demonstrated the immense potential of <unk> III in addressing the underlying cause of mgd.

That can lead to permanent changes in the telephone and progressive land loss.

We plan to present, the complete dataset from this trial at a major medical meeting later this year and look forward to discussions with the FDA before the end of the year regarding the platform for <unk> and Mgd.

As you may have seen in this morning's earnings release, we announced positive topline results from the phase Iia Galatea trial evaluating <unk> for the treatment of parallel postulate rosacea or PPR.

<unk> is a topical aqueous gel formulation of lot later in development for the potential treatment of PPR, a chronic skin disease characterized by facial redness inflammatory lesions burning and stinging.

<unk> is designed to potentially treat PPR by eradicating Demodex mics, which may play a key role in triggering inflammatory responses associated with the disease.

PPR4 is designed to potentially treat PPR by eradicating demodex mites, which may play a key role in triggering inflammatory responses associated with the disease. In the Galatea trial, statistically significant improvements in inflammatory lesions and IgA score were observed at week 12 compared to week 7. These are well-established regulatory endpoints for PPR, and the data also show that TPO4 was generally well-tolerated. The next steps for TPO4 will be complete data analysis and a potential meeting with the FDA by the end of the year to determine a path forward. Last but certainly not least, last week we reported results from the Phase IIa CARPO trial for TPO5 for Lyme disease prevention. As a reminder, CPO5 is an oral tablet designed to be an on-demand solution for the prevention of Lyme disease.

In the <unk> trial Sigma statistically significant improvements in inflammatory lesions and Iga score where observed at week 12 compared to vehicle.

These are well established regulatory endpoints for PPR and the data also show that <unk> was generally well tolerated.

The next steps for <unk> will be complete data analysis, and a potential meeting with the FDA by the end of the year to determine our platform.

The last of the three studies, but certainly not the least last week, we reported results from the phase Iia Carbo trial for CPO five for Lyme disease prevention.

As a reminder, CPO five is an oral tablet designed to be an on demand solution for prevention of Lyme disease. It.

It is believed to be the only non-vaccine, drug-based, preventative therapeutic in development that targets and kills infected ticks before they can transmit the Borrelia bacteria that causes Lyme disease. Results from the CARPOR trial demonstrated a statistically significant benefit in killing attached seraltex versus placebo within 24 hours at both day one and day 30 after a single dose. No significant differences were observed between the high- and low-dose groups, and TPO5 was generally well-tolerated.

It is believed to be the only non vaccine drug based preventative therapeutics in development that targets until in fact, it takes before they can transmit the barilla bacteria that causes Lyme disease.

From the carpet trial demonstrated statistically significant benefit in killing attached Celtics versus placebo within 24 hours at both day, one and day 30 after a single dose.

No significant differences were observed between the high and low dose groups and the <unk> was generally well tolerated.

These data demonstrate that TPO5 has the potential to provide both rapid and durable protection against multiple tick-borne diseases. We plan to report the full data set from this trial later in 2024 and look forward to providing updates on our conversations with the FDA regarding the regulatory path forward. In parallel with the incredible success we've had with XGenV, we're also advancing a clinical pipeline that we believe has the potential to deliver even more category-creating medicines, and we look forward to additional catalysts later in the year. Lastly, I would like to take a minute to thank all the investigators and patients who made these studies successful. With that, I will turn the call over to Jeff to discuss the finances. Thank you, Sesha.

These data demonstrate that <unk> five has the potential to provide both rapid and durable protection against multiple tick borne diseases. We plan to report the full data set from this trial later in 2024 and look forward to providing updates on our conversations with the FDA regarding the regulatory path forward.

In parallel with incredible success, we've had with <unk>. We're also advancing a clinical pipeline that we believe has the potential to deliver even more category, creating medicines and we look forward to additional catalysts later in the year.

Lastly, I would like to take a minute to thank all the investigators and patients who made this study is successful.

With that I will turn the call over to Jeff to discuss the financial results.

Thank you Sasha.

In 2023, we made great progress on our goal to further strengthen our financial foundation in support of our strategic priorities. Our fourth quarter and full year results reflect our ability to generate meaningful revenue while continuing to advance our pipeline of innovative therapeutics. And I'm proud to report that we generated fourth quarter XtemV net product sales of approximately $13.1 million, and full year 2023 product sales of approximately $14.7 million. As a reminder, we recognize revenue when we ship XtemV from our warehouse to distributors, not on bottles received by patients, as mentioned earlier. Sales for the year were driven by the thousands of ECPs who started their patients on XtemV, more than 17,400 bottles that were delivered to patients, and better-than-expected gross-to-net discounts of approximately 58 percent. As stated 2024 is off to a strong start.

In 2023, we've made great progress on our goal to further strengthen our financial foundation in support of our strategic priorities.

Our fourth quarter and full year results reflect our ability to generate meaningful revenue, while continuing to advance our pipeline of innovative therapeutics.

And I am proud to report that we generated fourth quarter <unk> net product sales of approximately $13 1 million and full year 2023 product sales of approximately $14 7 million.

As a reminder, we recognize revenue when we ship it stemmed from our warehouse to the distributors.

Not on bottles received by patients.

As mentioned earlier.

<unk> for the year were driven by the thousands with Ecp's, who have started their patients on <unk>.

More than 17400 bottles that were delivered to patients.

And better than expected gross to net discounts of approximately 58%.

As stated.

2024 is off to a strong start.

We are pleased with the increasing number of bottles dispensed thus far, and we have secured several payer contracts since our last earnings call, including, as Aziz noted, a major commercial plan with more than 19 million covered lives. We remain on track for broad commercial coverage by the end of the year and Medicare coverage beginning in 2025. Be clear, the benefits of this new major commercial plan are not reflected in the fourth quarter numbers we are reporting today. As many of you are likely aware, signing a contract with a payer does not have an immediate impact, and it can take time for coverage to be reflected in the gross DINF.

We are pleased with the increasing number of bottles dispensed thus far.

And we have secured several payer contracts since our last earnings call.

<unk> is disease noted a major commercial plan with more than 19 million covered lives.

And we remain on track for broad commercial coverage by the end of the year and Medicare coverage beginning in 2025.

To be clear the benefits of this new major commercial plan are not reflected in the fourth quarter numbers, we are reporting today as.

As many of you are likely aware signing a contract with a payer does not have an immediate impact and it can take time for coverage to be reflected in the gross to nets.

So we expect to begin recognizing the benefits of these contracts in the first quarter of 2024.

So we expect to begin recognizing the benefits of these contracts in the first quarter of 2024. I also want to note that while the gross-to-net discounts we're reporting today are very strong, this improvement is primarily due to an increase in the non-contracted coverage we saw in the fourth quarter. Remember, payers have the ability to make changes that could impact growth to NETs in future quarters until we secure these additional payer contracts. This could include increasing co-pays or co-insurance, which could result in greater bridging and higher gross-to-net discounts. Furthermore, expect to see the typical first-quarter dynamics on scripts and net sales, including Higher patient out-of-pocket costs, due to the planned resetting of deductibles and the Medicare coverage gap, both of which would increase the gross to net deficit, the impact of the holidays, winter storms across the country, and the out-of-office impact of medical conferences, as well as other potential patient dynamics, all three of which could impact script numbers, as such.

I also want to note that while the gross to net discounts. We're reporting today is very strong. This improvement is primarily due to an increase in the non contracted coverage we saw in the fourth quarter.

Remember <unk>.

<unk> have the ability to make changes that could impact gross to nets in future quarters until we secure these additional payer contracts.

This could include increasing co pays or co insurance, which could result in greater bridging and higher gross to net discounts.

Further.

We expect to see the typical first quarter dynamics on scripts and net sales including <unk>.

Higher patient out of pocket costs due to the planned resetting of deductibles.

Medicare coverage gap, both of which would increase the gross to net discounts.

The impact of the holidays.

Winter storms across the country.

And the out of office impact of medical conferences, as well as other potential patient dynamics.

All three of which could impact script numbers.

As such we.

We expect gross to net discounts to be flat, slightly higher in the first quarter, and then improving to our expected steady state of 50% in 2025. Turning to our P&L, our total operating expenses were approximately $57.5 million and $160.6 million for the fourth quarter and full year 2023, respectively. The increase in operating expenses quarter over quarter and year over year was primarily driven by increases in selling, general, and administration expenses due to the addition of commercial infrastructure, marketing, and education efforts.

We expect gross to net discounts to be flat to slightly higher in the first quarter.

And then improving to our expected steady state of 50% in 2025.

Turning to our P&L, our total operating expenses were approximately $57 $5 million and $160 6 million for the fourth quarter and full year 2023, respectively.

The increase in operating expenses quarter over quarter and year over year was primarily driven by increases in selling general and administration expenses due to the addition of commercial infrastructure.

Marketing and education efforts and the sales force to support the launch of X Debbie.

Francois Brisebois: Salesforce to support the launch of Xdem. Gross margins for the fourth quarter were 91%, which included the royalties that we pay to Alonco. Looking at Q1, we expect total operating expenses to be in line with the fourth quarter of 2023. With that, I'll turn the call back to Bobby for final remarks. Thank you, Jeff. Looking at the progress we've made within our pipeline and in the early months of launch, I remain confident about Tarsus' ability to become a leading eye care company. And we look forward to keeping you updated as we continue executing on an already successful launch trajectory. Operator, please open the line for questions. Thank you. At this time, we'll conduct the question and answer session. As a reminder, to ask a question, you will need to press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment for our first question. Our first question comes from Francois Brisebois with Oppenheimer. Your line is open.

Gross margins for the fourth quarter were <unk>, 91%, which includes the royalties that we pay to <unk>.

Looking at Q1, we expect total operating expenses to be in line with the fourth quarter of 2023.

With that I will turn the call back to Bobby for final remarks.

Thank you Jeff <unk>.

Looking at the progress we've made within our pipeline and in the early months of launch.

Remain confident about <unk> ability to become a leading eye care company.

And we look forward to keeping you updated as we continue executing on an already successful launch trajectory.

Operator, please open the line for questions.

Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.

With Charlie Your question. Please press Star one again, one moment our first question.

Our first question comes from Francois first bra with Oppenheimer. Your line is open.

Hey, Thanks, guys for taking the questions and congrats on a very nice quarter here.

Hey, thanks guys for taking the questions and congrats. A very nice full quarter here. Just in terms of a couple of questions, and thanks, Jeff, for the clarity on the gross net. Very helpful. Is there any possibility here that your peak 50% gross net can end up being better, or are we sticking to that, and this is kind of more of an effect of non-contracted plans with the gross net? Thank you, Frank. This is Bobby.

In terms of a couple of questions and thanks, Jeff for the clarity on the gross to net very helpful is there any possibility here that your peak, 50% gross to net can end up being better or are we sticking to that and this is kind of a more of an effect of a non contract contracted a plan.

With the growth in next year.

Thank you Frank this is Bob I'm, just going to reflect for a moment sitting here with the team at this early point in our launch about a couple of things I'm really proud of and then pass it to Jeff.

I'm just going to reflect for a moment sitting here with the team at this early point in our launch on a couple of things I'm really proud of and then pass it to Jeff. Just to reiterate, first and foremost, what an excellent first quarter, serving our patients, doctors, payers, as you note, and generating revenue. And all of these, as you've seen, are above target and signify the large impact that we anticipate with XtemV and really the category-creating commercial leadership that we're pioneering in iCare. Secondly, I'm really proud that we can create additional categories through our now-demonstrated ability to deliver other new medicines, three positive phase 2a readouts in the last three months. And I think all this signifies a very bright future for Tarsus with both XtemV and our future products en route to becoming an eye care leader. So with that, I'll pass to you, Jeff, to answer Frank's question. Thanks, Bobby. And good morning, Frank.

Just to reiterate first and foremost.

Excellent first quarter, serving our patients doctors payers as you note.

And generating revenues.

And all of these as you've seen are above target and signify the large impact that we anticipate with <unk> and really the category, creating commercial leadership.

We're pioneering in eyecare, secondly, I'm really proud that we can create additional categories through our now demonstrated ability to deliver other new medicines three positive phase III readouts over the last three months.

And I think all this signifies a very bright future for tarses with both the <unk> and our future products and routes to becoming an eye care leader.

So with that.

Jeff to answer the question Alright, Thanks, Bobby and good morning, Frank.

It's early days yet, but I think, you know, we're cutting a new pathway here with XtemV, and we don't really have a strong analog we can point to. So I think, you know, we're going to continue to guide to an ultimate steady state gross net of around 50 percent at this point. You know, as time goes on and we print a few more quarters, we might adjust that. But at this point, I think it's appropriate to keep it at that 50 percent gross net. Great.

It's early days, yet I think we're cutting a new pathway here with <unk> and we don't really have a.

Strong analog we can point to so I think we're going to continue to guide to a <unk>.

<unk> steady state gross to net of around 50% at this point as time goes on and we print a few more quarters, we might adjust up but at this point I think it's appropriate to keep it at 50% gross to net.

Great and then just maybe a question on.

And then maybe a question on, you know, patients coming back. And I'm just wondering, obviously, some prescribers are going to want to see how this works with their patients and any feedback there that you're getting in terms of patients coming back. Just to make sure everyone stays confident here that this isn't kind of a bullet start and these prescribers will keep going, and just any anecdotal feedback of patients coming back for a checkup after. Hey, Frank, it's Aziz.

Patients coming back and I'm, just wondering obviously some prescribers are going to want to see how this works with their patients and any feedback there that youre getting in terms of patients coming back just to just to make sure everyone stays confident here that this isn't kind of a bolus start and these prescribers will keep going and just any.

Mcdonnell feedback of patients coming back for a checkup after having extended.

Hey, Frank disease. Thanks for that additional question I'll tell you that one of the most exciting parts of this launch is hearing that feedback from doctors and patients.

Thanks for that additional question. I'll tell you that one of the most exciting parts of this launch is hearing feedback from doctors and patients. Almost every single prescriber we talk to has had an extremely positive experience.

Every single Prescriber, we talked to has had a extremely positive experience. So youre seeing physicians bring patients back mid treatment at the end of treatment and almost universally youre hearing vast improvements in these patients positive feedback I think thats actually one of the reasons, we've been able to penetrate 40% of the prescriber base. So quick.

So you're seeing physicians bring patients back mid-treatment and at the end of treatment, and almost universally, you're hearing vast improvements in these patients, and positive feedback. I think that's actually one of the reasons we've been able to penetrate 40% of the prescriber base so quickly is that these doctors are hearing from their colleagues how great things are working. So I think this is going to continue to be a strength for us going forward. The drug doesn't disappoint.

<unk> is that these doctors and hearing from their colleagues how great things are working so I think this is going to continue to be a strength for us going forward. The drug doesn't disappoint feedback is positive and I think doctors are really taken it back by how impactful. This has been on their patients and I think ultimately what happens is the attach rates the physicians to think about additional patients in the <unk>.

The feedback is positive, and I think doctors are really taken aback by how impactful this has been on their patients. And I think ultimately what happens is it motivates physicians to think about additional patients in the practice. So you're starting to see them more proactively diagnosed, moving on beyond just the typical demodex plevoritis patient but thinking about potentially their recalcitrant dry eye patient, their cataract surgery patient, or someone that can't stay in their contact lenses.

So you're starting to see them more proactively diagnose.

Moving on beyond just the typical demodex blepharitis station, but thinking about potentially theyre recalcitrant dry eye patient their cataract surgery patient or someone that can't stay on their contact lenses. So I think it's really two things that we're seeing there one is positive experiences leading to additional uptake and two really broadening the funnel in terms of how doctors think about the patient.

Bobby: So I think there are really two things that we're seeing there. One is positive experiences leading to additional uptake, and two, really broadening the funnel in terms of how doctors think about the patient. Okay, great. And then, Bobby, I think in your remarks, you talked about the team just being in Europe for the conference, you helped us understand the thought process of extending these potential us versus x us. Yeah, thanks, Frank. To be clear, the conference I was referring to was called ACOS. It's the American-European Congress of Surgeons, actually held here and in Europe. So we were at the one here. But it's a good question about Europe.

Yes.

Okay, Great and then.

Ravi I think in your remarks, you talked about the teams are seeing in Europe for the conference.

Can you just help us understand the thought process of extent with potential U S versus ex U S.

Yes, thanks, Frank to be clear.

The conference I was referring to was called <unk>, The American European Congress of Surgeons sexually health here.

Europe. So so we were at the one here, but but it's a good question about Europe and I'll pass to <unk> to talk about some of the regulatory and opportunities. There and then also Jeff to talk about some of the broader strategic potential there.

Sesha: And I'll pass to Sesha to talk about some of the regulatory and opportunities there, and then also Jeff to talk about some of the broader strategic potential. Thanks, thanks Bobby. Hey Frank, Sesha here.

Thanks, Bobby Hey, Frank Sasha here.

Sesha: Yeah, with respect to Europe, we are proceeding with our plans to develop a preservative-free product for Europe. As you know, Europe is very big on preservative-free medicines and really prefers them over preserved products, so we are developing a preservative-free medicine. And in parallel, we are also in the process of seeking input from the European Medicines Agency on a pathway for regulatory filing and approval, and hopefully, we'll be able to report on that later in the year. Jeff, do you want to address the other part? Sure.

Yes with respect to Europe.

We are proceeding with our plans to develop a product because it would give <unk> III product for Europe as you know.

Europe is very big on preservative free.

<unk> medicines and really <unk>.

<unk> that over preserve products. So we are developing a preservative free medicine and in parallel we are also in the process of seeking input from the European Medicines agency.

Pathway for regulatory filing and approval and hopefully we'll be able to report on that later in the year and Jessica will address the other part sure. Yes. So we frankly are in the process of doing.

Jeff: Yeah, so we, Frank, are in the process of doing a study that looks at both pricing and launch strategy in Europe. You know, I think right now it's a little early to make an ultimate decision on which pathway we're going. We're exploring all opportunities, whether it be a build-it-yourself, distributor relationship, or licensing. So that'll probably be something we'll update later during the year. Okay, great. Well, thank you, and congratulations guys on a great start. Thank you, Frank.

Study that looks at both pricing and launch strategy over in Europe.

I think right now it's a little early to make it ultimate decision on which pathway. We will go and we're exploring all opportunities whether it be a build it ourselves distributor relationship or licensing so.

That'll be probably something will update later during the year.

Okay, great well, thank you and congrats guys on a great start here.

Thank you Rick.

One moment our next question.

Francois Brisebois: One moment for our next question. Our next question comes from Andrea Tan with Goldman Sachs. Your line is open. I'll take the line on for Andrea.

Our next question comes from Andrew <unk> with Goldman Sachs. Your line is open.

Ill.

So long on for Andrea Congrats on the quarter and thanks for taking the questions.

Andrea Tan: Congratulations on the quarter and thanks for taking the questions. First here, what's your level of confidence that the ramp-up seems to date with Xenvy can continue as prescriber education goes on and more patients are treated? And then related to that, could you characterize the level of inventory stocking for 4Q? Yes, I'll start with the ramp.

First here, what's your if you could describe your level of confidence that <unk> seen to date with extended to continue as the prescriber education goes on and more patients are treated and then related to that could you characterize the level of inventory stocking for <unk>.

Yes, so I'll start with the ramp and I think as I mentioned earlier, we've been really pleased I think the key things here are one penetration.

And I think, as I mentioned earlier, we've been really pleased. I think the key things here are one, the penetration into the ECP market, right? We've got 6000 prescribers already writing this product. And we're seeing a very high repeat prescriber rate of over 50%, and that's only after six months.

Penetration into the ECP market right. We've got 6000 prescribers already writing this product, we're seeing a very high repeat prescriber rate of over 50% and that's only in six months and I think that's really remarkable I've been doing this for a long time and to get to that level of penetration in just a few short months really speaks to the impact <unk> has on.

And I think that's really remarkable. We've been doing this for a long time. And to get to that level of penetration in just a few short months really speaks to the impact Xtembi has on patients and also the need in the marketplace that's there longer term. I think secondly, we've made great progress with payers, and I think as we continue to do that, that'll also enhance the uptake as we have consistency and depth in our payer coverage. And then, as I mentioned in the earlier question, the feedback here is really remarkable. I think that we're seeing a lot of additional support as doctors are on the podium at these conferences, sharing their before and afters, and the impact it's having on patients. We actually had to update our website to let doctors upload their before and after pictures because they were so excited about the results they're seeing.

And also the need in the marketplace that they're longer term.

I think secondly, we've made great progress with payers and I think as we continue to do that that will also enhance the uptake as we have consistency and depth in our in our payer coverage.

And then I think lastly, as I mentioned in the earlier question. The feedback here is really remarkable I think that we're seeing a lot of additional support as doctors are on podium at these conferences sharing there before and after the impact it's having on patients we actually had to update our website to let doctors upload their before and after pictures because they are so excited about the results there so I.

So I think we remain very confident in the continued progress that we're gonna make in the launch. With that said, we mentioned in the opening comments that 6,000 doctors is a really remarkable number. Getting to the next 6,000, it's gonna take additional work, right?

We remain very confident in the continued progress that we are going to make in the launch with that said we mentioned in the opening comments that <unk>.

6000 doctors are really remarkable number getting to the next 6000, it's going to take additional work right. We've gotten through sort of the early adopters of the next wave is going to take a little bit more work sales forces out there hitting the pavement.

We've gotten through sort of the early adopters, so the next wave is gonna take a little bit more work. Salesforce is out there hitting the pavement. So I think we're gonna continue to make that progress, but it's definitely gonna take continued efforts and consistency in those efforts to have that come to fruition. And I'll let Jeff speak to the other part of the call. Good morning, Tulani.

We're going to continue to make that progress, but it's definitely can take continued effort and consistency in those efforts to have that come to fruition and I'll, let Jeff speak to the other part of the question there <unk> good morning, Johnny on.

Jeff: On inventory, much like any manufacturer, there's always going to be a certain amount of inventory in the channel, be it in our case at the pharmacies. We've contractually limited the amount of inventory that these pharmacies can hold to between two to three weeks. And I would just say that we are within that contractual period. If there is any sort of event that causes us to sort of go outside of that realm, we'll certainly highlight it because it could impact the following quarter. But at this point, we're within that realm. Perfect. Thank you both. It was really helpful.

On the inventory much like any manufacturer theres always going to be a certain amount of inventory in the channel and.

In our case at the pharmacies, we have contractually limited the amount of inventory that these pharmacies can hold two between two to three weeks.

I would just say that we are within that contractual period. If there is any sort of event that causes us to sort of go outside of that Rob will certainly highlight it because it could impact the following quarter, but at this point, we're within that range.

Okay. Thank you Bill it's really helpful. And then a second question here on the back of the Lyme disease or not they should that I believe you touched on it earlier, but if you could just reiterate the next steps and then how youre thinking about strategic options regarding partnering versus.

Andrea Tan: And then a second question here on the back of the Lyme disease innovation data, I believe you touched on it earlier, but if you could just reiterate the next steps and then how you're thinking about strategic options regarding partnering versus helping externally. And lastly, if you could share details again around the commercial opportunity. Thanks, Andrea, for the question. This is Sesha again.

Helping internally and lastly, if you could share details again around the commercial opportunity.

Thanks, Andrea for the question. This is <unk> again first let me let me highlight again.

Yeah, you know, first, let me highlight again the data from the Carport trial. It's, it's remarkable data to see. This is a very unique trial where we attach sterile ticks to healthy volunteers to look for tick kill, which is our purported mechanism of action for preventing Lyme disease with our drug.

The data from the <unk> trial.

It's a remarkable.

Data to see if this is a very unique trial, where we attach sterile picks to healthy volunteers to look for.

<unk>, which is our.

Purported mechanism of action for preventing Lyme disease with our drug.

And then the data, we're really, really pleased with the data and to see that tick kill within 24 hours before it has a chance to prevent Lyme disease is a very important component. Our plan is to continue to complete our analysis from this trial and take it to the FDA later this year and explore a pathway for additional studies in this particular indication. And we'll It's too early to predict how those studies are going to go, but we'll we'll have a chance once we have a chance to talk to them. We'll be happy to report that. And then I'll pass it on to Jeff for the partnership question. Thanks, Seysha.

And then the data were really really pleased with the data and to see that fixed skills within 24 hours before it has a chance to prevent lung disease is a very important component.

R.

Our plan is to continue to complete our analysis from this trial and take it to the FDA later this year and explore a pathway.

For additional studies in this in this particular indication.

And it's too early to predict how that studies those studies are going to go but we'll.

Over time, once we have a chance to talk to them.

We'll be happy to report that.

And then I'll pass it onto Jeff for the partnering question that yes sure.

Sure. Thanks Asia.

So, as Seysha mentioned, we're going to be developing TPPs for both of these products, and we'll have some discussions with the agency. What's interesting about Rosacea is that eye care professionals have been expressing quite a bit of interest in this program. They see Rosacea in their patients, and they want to ultimately treat that if they have an opportunity to.

No.

As Jim mentioned, we're going to be developing TPP for both of these products and we will have some discussions with the agency. What's interesting about rosacea is up the eyecare professionals have been expressing quite a bit of interest in this program.

Rosacea and their patients and they want to ultimately treat that if they have an opportunity to.

So we're going to explore that from a market research opportunity and see if there's an opportunity to potentially drop this into our sales reps' bag, and then potentially, the DERM indication could be partnered with maybe a DERM company. On the Lyme program, we are really excited about this program. I mean, the data is pretty profound.

So we're going to explore that from our market research opportunity and see if there is a opportunity to potentially drop this into our sales rep's bag and then potentially the.

<unk> indication could be partnered with maybe a <unk> company.

On the line program.

We are really excited about this program I mean, the data is pretty profound I think what we would like to do is it also have some discussions with the agencies and then potentially talk with some partners about a pathway forward. It is likely large clinical study ultimately as a pivotal study and the call point will likely be sort of a general practitioner. So.

I think what we would like to do is also have some discussions with the agencies and then potentially talk with some partners about a pathway forward. It is likely to be a large clinical study. Ultimately, it's a pivotal study, and the call point will likely be sort of a general practitioner. So we would probably partner that one out, either following this program readout, or potentially, we might do a smaller phase 2B if we think there's a good return on investment. Great. Thank you so much.

Probably partner that one out either fall away this program readout or potentially we might do a smaller phase III.

And if we think there's a good return on investment there.

Great. Thank you so much congrats again.

Andrea Tan: Congratulations again. Thank you, Tony. One moment for our next question. Our next question comes from Jason Gerberry with Bank of America. Your line is open. Hey, guys. Good morning.

Thank you Tony.

One moment our next question.

Our next question comes from Jason <unk> with Bank of America. Your line is open.

Hey, guys. Good morning, Thanks for taking my questions and congrats on all the progress here so.

Jason Gerberry: Thanks for taking my questions and congrats on all the progress here. A couple of questions for me, just, um... Love to get your comment on this sort of early adopter, 6,000 prescribers, how that nets out between optometrists and ophthalmologists and early observations from the field in terms of whether you've got the right-sized field force to go after the next kind of leg of prescribers or if you feel like there may be a need down the line to increase the size of And then ultimately, given the massive prevalence, is there a revenue threshold that you reach where a DTC advertising campaign to either patients or providers is something that you can justify and make sense? Thanks. Hey Jason, it's Aziz.

A couple for me.

Love to get your comment on the sort of early adopter 6000, prescribers, how that nets out between optometrists and ophthalmologists.

Early observations.

From the field in terms of whether <unk> got our right sized field force.

To go after the next kind of leg of prescribers or if.

If you if you like there maybe a need down the line to increase the size of the field force and then ultimately ultimately given the massive prevalence.

Our revenue threshold that you get to that.

DTC advertising campaign to either patients or providers.

It's something that you can justify and make sense. Thanks.

Hey, Jason it's disease, thanks for those questions.

Aziz: Thanks for those questions. I think, you know, first off, when we think about the uptake, as we mentioned, we've been really pleased with how things are going. Salesforce has done a remarkable job here. And I think the 85 territories we have were absolutely suitable for the 15,000 targets that we've had, okay?

First off when we think about the uptake as we mentioned we've been really pleased with how things are going the sales force has done a remarkable job here.

And I think the 85 territories, we have with absolutely suitable for the 15000 targets that we'd add right and when you think about how we reach those doctors that 6000 is roughly 60% optometrist, 40% ophthalmologists, but we're seeing great uptake in utilization across both those segments.

Aziz: And when you think about how we reach those doctors, the 6000 are roughly 60% optometrists and 40% ophthalmologists, but we're seeing great uptake and utilization across both those segments. I think as we look ahead, one thing we have seen is that there's a high degree of promotional sensitivity, which makes sense when we're making calls. Doctors are more proactive about seeing things here, and as we think about converting the next wave of adopters, we certainly do think about things like salesforce expansion, primarily focused on frequency. Can we see these doctors more often accelerate that change in behavior and create more deep adoption among these doctors, including having them think about additional patient types?

I think as we look at going forward. One thing we have seen is that there's a high degree of promotional sensitivity, which makes sense when were making calls doctors are more proactive about seeing things here and as we think about converting the next wave of adopters. We certainly do think about things like sales force expansion, primarily focused on frequency can we see these doctors more.

Often accelerate that change in behavior and create more deep adoption. Among these doctors, including having them think about additional patient types. So it is something we are contemplating I think thats something if we continue the momentum we have we could do sooner than later, but it's something that will be really rigorous and disciplined in how we approach.

Aziz: So it is something we're contemplating. I think that's something if we continue the momentum we have, we could do sooner than later, but it's something that will be really rigorous and disciplined in how we approach. I think the same thing applies here in terms of direct-to-consumer. I think it's less of a revenue threshold, to your point.

I think same thing applies here in terms of direct to consumer I think it's less of a revenue threshold to your point I think it's a little bit more around do we continue to see the level of physician adoption do we have enough doctors out there that would provide a quote unquote landing pad for these patients if we drive them in and then the second factor, we really think about its continued progress in coverage and gross to net.

Aziz: I think it's a little bit more around, do we continue to see the level of physician adoption? Do we have enough doctors out there that would provide a quote-unquote landing pad for these patients if we drove them in? And then the second factor we really think about is continued progress and coverage and growth to net, so that we're able to drive the highest value for those incremental patients we drive through a campaign. And I would also say that we think about those things sequentially, right? You can think about a salesforce expansion to really help broaden that adoption parallel with coverage getting going. And then when you have a great base, both on prescribers as well as growth to net, then you'd layer in a more assertive direct-to-consumer campaign to educate and drive patients. And so a really good point in terms of how we think about those levers. And I think we're contemplating both of those in the not-too-distant future. And Jason, I can say that Bobby and I are in the field every month as a team.

So that we're able to drive the highest value for those incremental patients we drive into a campaign and I would also say that we think about this thing sequentially right. You can think about our sales force expansion to really help broaden that adoption in parallel with coverage going and then when you have a great base, both on prescribers as well as gross to net than you'd layer in a more assertive direct to consumer campaign.

<unk> drive patient center.

Really good point in terms of how we think about those levers and I think we're contemplating both of those.

They're not too distant future.

And Jason I can tell you that Bobby.

We're in the field every month as the team I mean I'm personally in the field every month of the team and it's been really striking.

Bobby: I mean, I'm personally in the field every month with the team, and it's been really striking the waves of adoption that Aziz alluded to. We're certainly seeing some of those folks that are still being educated about DB and taking a few visits from the sales force. But more and more, we're seeing doctors that have had great experience with XMV and are thinking about other patients in their practice. We've even heard doctors thinking about family members and treating them.

The waves of adoption the disease alluded to.

We're certainly seeing some of those folks that are still being educated about DB and take a few visits from the sales force, but more and more we're seeing doctors that have had great experience with <unk> and are thinking about other patients in their practice, we've even heard of doctors thinking about family members.

Treating them there is such a strong response to this medicine.

There's such a strong response to this medicine, and we're seeing really no shortage of uptake by the ECPs. So I just want to reiterate that. And you know, as Aziz mentioned, this is very promotionally sensitive.

We're seeing really no shortage of uptake by the ECB.

So I just want to reiterate that.

As <unk> mentioned this is very promotional sensitive so that would with the strategy that we've implemented commercially that would be.

Sesha: So that, with the strategy that we've implemented commercially, that would be the rationale for potential expansion to really bring doctors along that journey more rapidly in the future. If I could squeeze a pipeline question in, with Lyme, the update there, just curious, you know, now that you've got this initial data, do you think that there's a stronger argument now for a pathway that's different than the Valor study that Pfizer is running, which is nearly a 10,000 patient study, given that they seem to have demonstrated being able to deliver something that's more on demand with maybe a faster clinical So just curious, I mean, obviously, you don't want to front run your FDA interactions here, but just your thoughts. It seems like probably a key swing point, perhaps, in how you can partner and secure value for the asset. Thanks, Jason. Sesha again here.

The rationale for potential expansion to really bring.

Bring doctors along that journey more rapidly in the future.

If I could squeeze a final question.

With lime the update there I'm just curious now that you've got this initial data.

Do you think that there is a stronger argument now for a pathway that's different than the valor study that Pfizer is running which is nearly a 10000 patient study given that.

You seem to have demonstrated being able to deliver something thats more on demand with maybe a faster clinical proof point. So just curious I mean, obviously don't want to front run your FDA interactions here, but just your thoughts it seems like probably a key swing point, perhaps and how you can partner and secure value for the asset.

Thanks, Jason again here.

Yes, we're really pleased with the with the results that we saw as I mentioned earlier.

Sesha: Yeah, we're really pleased with the results that we saw, as I mentioned earlier. And the FDA hasn't, you know, we haven't taken this to the FDA, obviously, but our hope is that the FDA views this data favorably as well. And as far as the comparison to Lyme disease, sorry, the vaccine is a very different approach compared to what we have. As you know, we have a tick kill mechanism where the vaccine targets the actual bacteria that causes Lyme disease and is very specific for the strains of those bacteria, whereas we are not.

And the FDA hasn't we haven't taken this to the FDA, obviously, but our hope is that the FDA views as data favorably as well.

And as far as the comparison to the Lyme disease of sort of the vaccine.

The vaccine is at very different approach compared to what we have as you know.

Yes.

We have a deep kill mechanism, whereas vaccine targets.

The actual bacteria that causes the lung disease and is very specific for the strains of those bacterias. There is we are not and so the mechanism is inherently different.

Sesha: And so the mechanism is inherently different. But you know, and the way we approach it is very different. It's early to speculate how the FDA will view our data, but this is a brand new idea.

But.

And the way we approach it is very different it's early to speculate how the FDA will view our data.

This is a brand new mechanisms. So this is something that they have to absorb and understand as well.

Sesha: So this is something that they have to absorb and understand as well. And we do hope to negotiate a trial that can effectively assess Lyme prevention through this mechanism. But it's too early to tell exactly how we will, how that will go. And we'll certainly keep that, you know, in mind when we talk.

And we do hope to negotiate as a trial that can that can effectively.

Assess the airline prevention through this mechanism, but its too early to tell exactly how we will how that will go and we will certainly keep that.

In line with when we talk to them.

Jason Gerberry: Thank you, guys. Thank you, Jason. One moment for our next question. Our next question comes from Oren Livnat with HC Wainwright. Your line is open.

Got it thank you guys.

Thank you Jason.

One moment our next question.

Our next question comes from Oren <unk> with H C. Wainwright Your line is open.

Oren Livnat: Thanks for taking the question. I was hoping we could just talk a little bit more about gross to net. After the 3Q call, so in November, you told us to be cautious going forward on gross to nets and or volume, I guess, given some expected, you know, maybe unbudgeted, pushback from payers given the early uptake. And clearly, you dramatically outperformed that, improving meaningfully quarter over quarter. So you just help us better understand, I guess, how is that happening? Is this just due to persistence of docs getting through prior objections and getting, I guess, essentially full coverage for some mix of this product, you know, balanced out with bridging volume? Or is there something different going on behind the scenes that we don't understand?

Thanks for taking my question I was hoping we could just talk a little bit more about gross to nets.

After the <unk> call so in November.

Just to be cautious going forward on gross to nets, and our volume I guess given some expected.

Maybe and budgeted.

<unk> back from payers, given the early uptake and clearly.

Dramatically outperformed that improving meaningfully quarter over quarter. So can you just help us just better understand.

Yes.

I guess how is that happening is this just due to persistent.

Docs getting through prior offs and getting I guess essentially full coverage for some mix of this product a balanced out with bridging volume or is there something different going on behind the scenes that we don't understand and I have a follow up thanks.

Aziz: And I have a follow-up. Hey, Oren, thanks for the question. Yeah, I think what you're seeing here is a real uptick in non-contracted coverage. And I think this is due to a couple of things, right?

Hey, good morning. Thanks for the question, Yes, I think what Youre seeing here is a real uptick in non contracted coverage and I think this is due to a couple of things right. One is.

Aziz: One is we've been working with the payers for quite some time, right? We initiated our engagement with them well in advance of launch with disease education and, obviously, post-approval, really sharing the value proposition that Xdembe brings. I think the other part of this is our really unique distribution network. That network really optimizes coverage for patients. We've obviously streamlined the process for PAs, appeals, what have you, for the physician's

<unk> been working with the payers for quite some time right. We've initiated our engagement them well in advance of launch with disease education, and obviously post approval really sharing the value proposition that <unk> brings I think the other part of this is a really unique distribution network that network really optimizes coverage for patients. We've obviously streamlined the <unk>.

<unk> for Tas appeal, what have you for the physician's office and I think that has allowed us to maximize this opportunity I think as Jeff mentioned in the opening comments. It is something that we want to keep an eye on in terms of headwinds because when you have non contracted coverage of course those policies can change at any given time and that's really what motivates us to <unk>.

Aziz: And I think that has allowed us to maximize this opportunity. But, as Jeff mentioned in his opening comments, it is something that we want to keep an eye on in terms of headwinds, because when you have non-contracted coverage, of course, those policies can change at any given time. And that's really what motivates us to continue to secure contracts, and we're making great progress there. We remain confident in our ability to get the vast majority of commercial lives covered by the end of this year, in 2024. And you see the progress there with the win that we mentioned earlier. And then Part D would kick in in early 2025.

To secure contracts and we're making great progress there.

We remain confident in our ability to get the vast majority of commercial lives covered by the end of this year in 2024 and you see the progress there with the win that we mentioned earlier and then part D would kick in in early 2025. So we're continuing to make progress there the way to think about that is that progress is to really solidify and secure where we are.

Aziz: So we're continuing to make progress there. The way to think about that is that progress is to really solidify and secure where we are. And I think the other point is, you know, we've obviously made great strides, and we have better than expected growth. But getting to that 50% threshold that Jeff mentioned earlier, that next step up is going to take a lot of work. And that's going to take those contracts coming into play.

And I think the other point is we've obviously made great strides and we had better than expected gross to net but getting to that 50% threshold that Jeff mentioned earlier that next step up is going to take a lot of work and that's going to take those contracts coming into play. So that's where our focus is now is securing those contracts securing the long term value potential, but again, we're really pleased with starting from a <unk>.

Aziz: So that's where our focus is now, securing those contracts, securing the long-term value potential. But again, we're really pleased with starting from a great point and the progress we've made so far. Okay, and I know it's really early, but you've talked about the conditions. Dr. Dan Leone, Francois Brisebois, Tarsus Pharmacist, I guess six months of efficacy, so to speak, or something approaching that, or are they already coming back for repeat treatment? And if there are refills or retreatments, how is that?

Right point and the progress we've made so far.

Okay, and I know, it's really early but you've talked about physicians.

A lot of positive experience and I guess has that already translated to.

And understanding of durability of response for the early I guess earliest patients.

Who might have been on drug for a while are we seeing them having.

I guess six months efficacy, so to speak or something approaching that or are they already coming back for repeat treatments and.

If there are refills are re treatments how is that.

Aziz: As far as you know, they are being treated by insurance. Is it any different than the first script? Is there more resistance to a refill, so to speak?

As far as you know being treated by insurance.

Is it any different than the first script is there more resistance.

To a refill so to speak.

Aziz: And how is that being contemplated in your contracting efforts? Thanks. Yeah, so it's still very early.

And how is that being contemplated in your contracting efforts. Thanks.

Yes, so it's still very early right. We're just six months into the launch so we wouldn't anticipate a lot of re treatments right. I think what we've said historically is that we would anticipate that really start to see that start kicking in.

Aziz: Right. We're just six months into the launch, so we wouldn't anticipate a lot of retreatments.

Aziz: Right. I think what we've said historically is that we'd expect to really start to see that start kicking in in twenty twenty five when you've got a large bolus of patients that have been treated and then would be coming back in. If you really think about it, even if a patient started six months ago, they probably haven't come back in for their follow-on visit. Right. Or their annual exam.

In 2025, when you've got a large bolus of patients that have been treated and then would be coming back and if you really think about it even if a patient started six months ago. They probably haven't come back in for their follow on visit right or their annual exam. So I think thats something that wed see later on down the line with that said, we do see some exceptional cases, where the doctors have had patients come in had a <unk>.

Aziz: So I think that's something that we'll see later on down the line. With that said, we do see some exceptional cases where doctors have had patients come in, have had a great response, and want to keep them on therapy. But I'd say that's more the exception than the rule.

Responds want to keep them on therapy, but I'd say, that's more of the exception than the rule and I think it's something we'd watch over time.

Aziz: And I think it's something we should watch over time in terms of how we view that from the payer perspective. That is something that we've contemplated in our planning and discussions with payers. But again, this is something that will really be a phenomenon. We'd see a little bit more meaningfully in twenty twenty five.

In terms of how we view that from the payer perspective that is something that we've contemplated into our planning and discussions with payers, but again. This is something that will really be a phenomenon, we see a little bit more meaningfully in 2025 in a course of the contracts that we're working on now would account for that in the go forward thinking.

Oren Livnat: And of course, the contracts that we're working on now would account for that in the future. All right, thanks, and congratulations on the great early performance. Appreciate it, Oren.

Alright, thanks, and congrats on the great early performance.

I appreciate it.

Balaji Prasad: One moment for our next question. Our next question comes from Balaji Prasad with Barclays. Your line is open.

One moment our next question.

Our next question comes from velocity Prasad with Barclays. Your line is open.

Sesha: Hi, good morning, and congrats again. So it's great to see the pipeline progress. And what I seem to have heard from your comments till now is that most of the progress in the pipeline is dependent on FDA meetings, which are anticipated towards the end of the year. So can you kind of tie up these three data points that you've seen recently and take us through the next milestones that we need to await with each of these? Secondly, can you also comment on the business development environment you're seeing with both front and back-of-the-fire opportunities, what kind of, how competitive are these discussions, and how reasonable are the valuation expectations in this space? And what should we be expecting from you over the year in terms of BD? Thanks. Thanks, Balaji. This is Sesh.

Hi, Good morning, guys and congrats again, so it's great to see the pipeline progress on what I seem to hired from your comments till now is that most of the brokers and the pipeline is dependent on FDA meetings with char anticipated towards the end of the year. So can you kind of tie up these three faced.

<unk> three <unk>, so you've seen recently.

And take us through the next milestones that we need to lead with each of those.

Secondly.

Can you also comment around the business developed.

Business development environment, Youre, seeing with both front and back of buying opportunities.

What kind of.

How confident are you of these discussions and how reasonable valuation expectations within the space and what should we be expecting from you towards the year in terms of BD. Thanks.

Yes.

Thanks <unk>. This is Sasha I'll address the first part of it is back to the pipeline. Yes. You are correct I think all three of our programs. The next steps is really to complete the analysis from these from these studies, where we've just issue a top line and then look at.

Sesha: I'll address the first part with respect to the pipeline. Yeah, you're correct. I think all three of our programs, the next steps are really to complete the analysis from these studies where we've just issued a top line and then look at look at the pathways and discuss the pathways of the agency. Beyond that, these are actually very, very different programs. The pathways are slightly different, and the indications are obviously different. So they all take a different, different flavor, but the theme is that we are treating the underlying cause; we are showing the mechanism of eradicating the underlying root cause of all of these diseases. And, and it's really going to be a discussion with the FDA based on the results of these trials and how we want to contemplate taking it forward. It's, it's going to be a discussion that it's too early for me to predict how it will go. But the, the next steps clearly are on a development pathway because these are, are somewhat different paths for each of these programs. Yeah, and this is Bobby.

Look at the pathways and discuss the passengers at the agency.

Beyond that these are actually very different very different programs. The pathways are slightly different.

The.

Indications are obviously different so.

I'll take a different different flavor, but.

It's the team is that we are treating the underlying cause we are showing.

We're showing the mechanism of.

Eradicating the underlying root cause of all of these diseases.

And it's really going to be.

A discussion with the FDA based on the bids on these trials and how we want to contemplate taking it forward.

It's going to be a discussion that it's too early for me to predict how we can go.

But.

The next steps clearly is on a development pathway. Because these are these are somewhat different.

As for the each of these programs.

Yes.

As Bobby on the BD question, Thanks for asking that Badri.

Bobby: On the BD question, thanks for asking that, Balaji. You know, as we've mentioned, we see our expertise really in two areas at this point. One is creating new categories with really, you know, successful and focused development efforts.

As we've mentioned we see our expertise is really in two areas. At this 0.1 is creating new categories with really.

Successful and focused development efforts and the second is actually.

Bobby: And the second is actually pioneering a new category commercially. And so when we look at BD, we really think about those two capabilities that we believe we have in strength. And so, as you mentioned, we are looking actively at front of the eye opportunities. We're going to be diligent and patient there. We are really seeking things that could satisfy those two aims, creating new categories and new indications where we can serve patients that haven't really been served before in front of the eye.

Pioneering.

A new category of commercially and so when we look at BD, we really think about.

Those two capabilities that we believe we have in strength.

And so as you mentioned, we are looking actively at front of the eye opportunities.

We're going to be diligent and patient there.

We are really seeking things that could satisfy those to.

Ames, creating new categories.

And new indications, where we can serve patients that haven't really been served before and the front of the eye.

Bobby: And also, now we have a leading sales force, and they're calling on 15,000 ECPs. So we'd like to find additional medicines that we can serve those ECPs and patients with. Over time, we do expect to look beyond the front of the eye.

And also now we have a leading salesforce and they're calling on 15000 ecp's. So we'd like to find additional medicines that we can serve those ECP is in patients with <unk>.

Over time, we do expect to look beyond the front of the eye.

Bobby: And I think the back of the eye and even some adjacencies to our areas of expertise would be, you know, areas that we would expect to look at over the course of years. And you know, we see, in front of our eyes, a lot of promising assets out there, but we are going to be taking our time, and we're very mindful of our focus and our balance sheet at this point in time. One moment for our next question.

And I think the back of the eye and even some adjacencies to our areas of expertise would be.

Areas over the course of years that we would expect to look at.

We see in the front of the eye.

Lot of promising assets out there, but we are going to be.

Taking our time and we're very mindful of our focus.

Our balance sheet at this point in time.

One moment our next question.

Our next question comes from Cory <unk> with lifestyle capital. Your line is open.

Cora Juvenville: Our next question comes from Cora Juvenville with Lifescyle Capital; your line is open. Hey, thanks for taking our questions and congratulations on the early launch metrics. Just building off a question that was asked previously, again, last quarter, you spoke to us about the potential payer headwinds as non-contracted payers may start to implement more prior authorization. In particular, for any payers who have included Xtempia on their formularies, have you seen them step back on PriorAuth requirements?

Hey, Thanks for taking our questions and congrats on the early launch metrics just building off a question that was asked previously again last quarter, you spoke to us about the potential payer headwinds.

Non contracted payers may start to input implement more prior outs.

In particular for any payers request included extend beyond their formularies have you seen them step back on prior off requirements and also now that the <unk>.

Aziz: And also, now that the PriorAuth landscape in general has started to settle in a bit, what specifically are most payers requiring from these PriorAuth docs for reimbursement? Yeah, hey Corey, thanks for that question. I think the way to think about payer coverage so far, right, because it's not contracted, we've seen these PAs out there. And I think that's always good news, in the sense that that means there's a path to getting the product approved. And I think that that's something that's really promising.

Prior Ocwen Inscape in general has started to settle in a bit.

What specifically are most payers requiring on these prior op docs for reimbursement.

Yeah, Hey, great. Thanks for that question.

I think the way to think about the the payer coverage so far right because it's non contracted we have seen these peers out there and I think thats always good news.

That means there is a path to getting the product approved.

And I think that's something that's really promising it also provides incentive for contracting the payers are covering this we're seeing that volume go through I think in terms of any type of step back on NPA I think thats something that we see as a headwind as volume increases and the way to think about this is it's sort of a race right you want to get these contracts in place as your volume increase.

Aziz: It also provides incentives for contracting, if the payers are covering this, we're seeing that volume go through. I think in terms of any type of step back on a PA, I think that's something that we see as a headwind as volume increases. And the way to think about this is, it's sort of a race, right; you want to get these contracts in place as your volume increases so that you don't have any of these hurdles to that extent. When we see these PA's right now, typically, they're pretty straightforward; they're limited to an eye care doctor. So the patient needs to be seeing an ophthalmologist or optometrist, which, of course, makes sense because they're diagnosed with the slit lamp.

So that you don't have any of these hurdles to that extent when.

When we see these ppas right now typically they are pretty straightforward Theyre limited to an eye care doctors have the patient needs to be seeing an ophthalmologist or optometrist, which of course makes sense because they are diagnosed at the foot lab and then secondly, they are asking for a confirmation of diagnosis. This is typically via the slit lamp exam. So those are the two typical things of course, if you look out there youre going to see some except.

Aziz: And then secondly, they're asking for a confirmation of diagnosis; this is typically via the slit lamp exam. So those are the two typical things. Of course, if you look out there, you're going to see some exceptions where it might be a little bit more cumbersome.

<unk>, where it might be a little bit more cumbersome, but again that is our motivation for contracting is to simplify these ph keep them consistent and of course avoid any step back once the contracts are in place.

Aziz: But again, that is our motivation for contracting: to simplify these PAs, keep them consistent, and, of course, avoid any step backs once the contracts are in place. That's helpful. And can you also walk us through your bridging program? In your experience to date, do providers and patients have a good sense of how to access that program? And if you were to estimate, given the strong growth in nets we're seeing so far, approximately what percent of scripts have gone through that bridge program versus being fully covered by payers? Sure thing.

That's helpful.

Can you also walk us through your project program in your experience to date give providers and patients have a good sense of how to access that program and if you were to estimate given the strong gross to nets were seeing so far approximately what percent of scripts have gone through that bridge program versus being fully covered by <unk>.

Aziz: Yeah, so I think the way that the way to think about the bridging program here is a lot of that is managed on the back end through our pharmacy partners in our network. And essentially what happens is we appeal the insurance so we apply for coverage there if it's covered it goes through if it's rejected we appeal. And if it's still not covered at that point of the patient is truly uninsured, essentially their insurance is not covering the drug then we'll bridge it so there's a step through process that we manage on the back end. I think that's really helped us capitalize on the coverage that we have available today. In terms of what percentages bridge we're obviously not going to that level of detail today but I can tell you, even still, that is still the number one channel right so you think about commercial Medicare, and then bridging bridging is still the number one channel and again that's our motivation for contracting right is so that as we reach our steady state gross net of approximately 50%, as we get that commercial coverage at the end of this year Part D next year, then we can start the bridging down next year, and have it be the smallest components and have a very minimal volume going through that going forward. Fantastic.

Payers.

Sure thing, yes, so I think the way that the way to think about the bridging program here is a lot of that is managed on the back end through our pharmacy partners in our network and essentially what happens is we our pov insurance. So we apply for coverage there. If it's covered it goes through if it is rejected we appeal and if it is still not covered at that point of the patient is truly uninsured.

They are insurance is not covering the drug then we'll bridge. It. So there is a step through process that we manage on the backend I think thats really helped us capitalize on the coverage that we have available today.

In terms of what percentages bridge, we're obviously not go into that level of detail today, but I can tell you even still that is still the number one channel right. So when you think about commercial Medicare and then bridging bridging installed the number one channel and again thats our motivation for contracting right. So that as we reach our steady state gross to net of approximately 50% as we get that.

Commercial coverage at the end of this year part D. Next year, then we can start the wine that bridging down next year and have it be the smallest component and have a very minimal volume going through that going forward.

Fantastic Thanks for taking my questions and congrats again.

Cora Juvenville: Thanks for taking the questions and congratulations again. Thank you, Corey. One moment for our next question. Our next question comes from Eddie Hickman with Guggenheim Securities. Your line is open. Hey, good morning, guys. Congratulations on the strong launch. Just a few questions from me.

Thank you Corey.

One moment our next question.

Our next question comes from Eddie Hickman with Guggenheim Securities. Your line is open.

Hey, good morning, guys. Congrats on the strong launch just a few questions for me as you reach deeper into those 15000 target docs on how much of the hesitation is it related to lack of payer coverage in particular Medicare.

Eddie Hickman: As you reach deeper into those 15,000 target docs, how much of the hesitation is related to a lack of payer coverage, in particular Medicare, and how much is just the familiarity and education that you spoke about? Would you expect a significant inflection on getting Medicare coverage, given the DV population skews towards older patients? Thanks. Yeah, I think it's a combination, right?

And how much is just familiarity in education that you spoke about would you expect a significant inflection.

On getting Medicare coverage, given the DB population skews towards older patients. Thanks.

Yes, I think it's a combination right I think anytime you have physicians that are sort of sitting on the fence I think number one it's a new behavior right and Thats why we continue to put a lot of effort and market education, continuing these disease state efforts, having our sales force out there. It is any behavior to have physicians start looking for the disease, then trying the product and what we've seen is that.

Aziz: I think anytime you have physicians that are sort of sitting on the fence, I think, number one, it's a new behavior, right? And that's why we continue to put a lot of effort into market education, continuing these disease state efforts, and having our sales force out there. It is a new behavior for physicians to start looking for the disease, then try the product. And what we've seen is that there's a really clear threshold at which we're shooting for adoption, and that's about five to ten prescriptions. And I think there are two things that happen. One is the doctor begins the routine of looking for this.

There's a really clear threshold and which we're shooting for adoption and that's about 5% to 10 prescriptions and I think theres two things that happened. One is the doctor begins to routine of looking for this they see the results in the patients and the second to your point that is the doctor and the staff become more comfortable with the reimbursement process. So it takes a few shots on goal for them to build that muscle so to speak.

Aziz: They see the results in the patients. And the second, to your point, Eddie, is that the doctor and the staff become more comfortable with the reimbursement process. So it takes a few shots on goal for them to build that muscle, so to speak.

Aziz: And I think in terms of when you get part D, I wouldn't expect a huge inflection point. I think the way to think about coverage is we're going to build that steadily over time, and I think that's going to facilitate a ramp up steadily over time. So I don't imagine a massive step up.

I think in terms of when you get part D. I wouldn't expect a huge inflection point I think the way to think about coverages were going to build that steadily over time, and I think thats going to facilitate ramp up steadily over time, so I don't imagine like a massive step up what I imagine is continued progress and you think about this as the coverage comes in you're also building the utilization among the doctors were there.

Aziz: What I imagine is continued progress. And think about this as the coverage comes in. You're also building utilization among doctors where they're starting to think about more patient types. They're building that familiarity with the diagnosis. And, of course, the practice is building familiarity with the reimbursement process.

We're starting to think about more patient types. They are building that familiarity with the diagnosis and of course. The practice is building the familiarity with the reimbursement process. So I think those things will move in concert and I think youll see a steady ramp over time and that'll be on the back of both physician adoption and coverage improvement.

Aziz: So I think those things will move in concert, and I think you'll see a steady ramp over time, and that'll be on the back of both physician adoption and coverage.

Eddie Hickman: Thanks. And then what do you think you would need to see before you are comfortable giving formal guidance, either on a volume or revenue basis going forward? Yeah, it is, Jeff. I would say, you know, we'd like to get some more quarters under our belts, see how the payer coverage is proceeding, and then get a sense of some of the dynamics as it relates to scripts, right? Is there some seasonality that we need to be aware of during the summertime, for example, or some other things?

Got it thanks, and then what do you think you would need to see before you are comfortable giving formal guidance either on a volume or revenue basis going forward.

Yes, it's Jeff I would say, we'd like to get some more quarters under our belt and see how.

The payer coverage is proceeding and then get a sense of some of the.

Dynamics as it relates to scripts right is there some seasonality that we need to be aware of during the summertime for example, or some other things so.

Jeff: So, you know, it's probably sometime in 12 months down the road that we could probably start providing revenue guidance. Thanks guys, you can press the M. Thank you, Eddie. One moment for our next question. Our next question comes from Tim Lugo with William Blair. Your line is open.

Probably sometime in 12 months down the road, we could probably start providing revenue guidance.

Thanks, guys Congrats again.

Thank you Eddie.

One moment our next question.

Our next question comes from Tim Lugo with William Blair. Your line is open.

Tim Lugo: Thanks for the question and congratulations on the great launch so far. With the new pair contracts being signed and kicking in in Q1, do you expect a script ramp due to these contracts at all? Will these contracts impact their GCN at all in Q1? Maybe I missed it, but could you provide any Broad Economics on these contracts or any sort of at least thoughts on how these contracts will impact GTN? Yeah, I'll start there.

Thanks for the question and congratulations on the great launch so far.

With the new payer contracts being signed in.

Q1 <unk>.

We expect the script ramp these contracts at all and will have.

Contracts impacted at all in Q1.

Mr. Barrett, if you're providing.

Broad economics on these contracts are and sort of what we thought.

Thoughts on how these contracts will impact Q GTS.

Yes, so I'll start there and then maybe Jeff can chime in on the gross to net impacts here I think that there is a lot of great news here in terms of building that coverage getting a such a big commercial contract in making that progress towards building the commercial coverage this year.

Aziz: And maybe Jeff can chime in on the growth in net impacts here. I think that there's a lot of great news here in terms of building that coverage, getting such a big commercial contract and making that progress towards building commercial coverage this year. With that said, we do anticipate that should drive incremental utilization, but some of that is also offset by some of the headwinds we mentioned earlier, right? Q1 is always a difficult quarter.

With that said, we do anticipate that should drive incremental utilization, but some of that is also offset by some of the headwinds. We mentioned earlier Q1 is always a difficult quarter.

Aziz: You have plan resets; you have a lot of issues in terms of whether when doctors aren't in the office, they're unable to diagnose and treat these patients. And obviously, this is a product that's dependent on getting those new diagnoses in, right? So I think that you're seeing sort of an offsetting effort here where the contracts are going to drive incremental volume and utilization, but we are obviously in the first quarter seeing some of those headwinds come to fruition with doctors being out of practice for a multitude of reasons. And then the insurance impact that you see there. As we progress through the year, obviously, we should see continued improvements, both in volumes and growth to net, but I'll let Jeff speak more specifically.

Plan resets you have a lot of issues in terms of whether when practice when doctors aren't in the office are enabled to diagnose and treat these patients and obviously this is a product that's dependent on getting those new diagnoses end right. So I think that youre seeing is sort of an offsetting effort here, where the contracts are going to drive incremental volume and utilization, but we are obviously in the first quarter seeing some of those headwinds come due.

Fruition with doctors being out of the practice for a multitude of reasons and then the insurance impact that you see there.

As we progress the year, obviously, we should see continued improvements both in volumes and gross to net but I'll, let Jeff speak more specifically to that yes.

Aziz: Yeah, well said Aziz, not much more to add. I think, Tim, to your point, we do expect to see, you know, some improvement on the gross to net given some of this coverage, but that will likely be offset by some of the headwinds that we talked about, really the, you know, the plans resetting the Medicare coverage gap. So we've guided to, you know, flat to slightly higher gross to net discount, just given some of those dynamics. But as Aziz said, as time goes on, we still expect to have broad commercial coverage by the end of this year, with Medicare coming in in 2025 and ultimately ending at a 50% gross to net discount.

<unk> not much more to add I think to your point, we do expect to see some improvement on the gross to net given some of these this coverage, but that will likely be offset by some of the headwinds that we talked about really the plans resetting the Medicare coverage gap.

So we've guided to flat to slightly higher gross to net discount just given some of those dynamic but as he said as time goes on we still expect to have the broad commercial coverage by the end of this year with Medicare coming in in 2025, and ultimately ending at 50% gross to net discount Stacey.

Jeff: Stay safe. Okay, great, thank you. I'm showing no further questions at this time. I will now turn the call back to Bobbi Ozaimian for closing remarks. I wanted to thank everybody for joining us today. We're very proud of this strong first quarter, and we look forward to a steady build from here.

Okay, great. Thank you.

I'm showing no further questions at this time I will now turn the call back to Bob <unk> for closing remarks.

Just wanted to thank everybody for joining us today, we're very proud of this strong first quarter and we look forward to a steady build from here. So we really look forward to keeping everybody updated on our progress as we continue to pioneer new categories in <unk> and beyond.

Bobbi Ozaimian: So we really look forward to keeping everybody updated on our progress as we continue to pioneer new categories in iCare and beyond. Have a great day! Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Dane Leone, Francois Brisebois, Tarsus Pharms Dane Leone, Francois Brisebois, Tarsus Pharms Dane Leone, Francois Brisebois, Tarsus Pharms Thanks for watching!

Good day.

Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

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