Tarsus Pharmaceuticals (NASDAQ:TARS) reported fourth-quarter and full-year 2025 results highlighting rapid growth for XDEMVY, the company’s FDA-approved treatment for Demodex blepharitis (DB), and outlined a 2026 plan that includes first-time annual revenue guidance, a modest sales force expansion, and advancing two clinical-stage pipeline programs.
2025 results and XDEMVY commercial update
CEO Bobak Azamian described 2025 as a “breakout year,” with more than $450 million in full-year net sales and more than 500,000 patients treated since launch. Management emphasized that XDEMVY is the “first and only” FDA-approved therapeutic for Demodex blepharitis, which the company estimates affects more than 25 million Americans.
Mottiwala said unaided awareness of DB and XDEMVY increased from 2% at the start of the DTC campaign to 25%. He also said weekly refills are trending in the “low to mid-teens” as practices formalize retreatment protocols, moving toward an expected steady-state refill rate of approximately 20%.
Peak sales outlook and demand drivers
Management increased its stated ambition for the product, saying XDEMVY can reach blockbuster status within the next couple of years and see U.S. sales potential exceeding $2 billion. In the Q&A, Azamian attributed increased conviction to having two years of launch performance to evaluate, continued growth with no signs of slowing, and the large gap between patients treated to date and the estimated U.S. prevalence.
Mottiwala also discussed prescribing dynamics across ophthalmology and optometry. He said the company’s prescription split is roughly two-thirds optometry and one-third ophthalmology, with both segments growing strongly. He added that about 40% of the company’s core target audience is now prescribing weekly (at least once per week), and the number of “daily writers” (at least five prescriptions per week) grew 20% in the most recent quarter.
2026 guidance, seasonality, and expense outlook
CFO Jeff Farrow reported Q4 2025 net product sales of $151.7 million with a 44% gross-to-net discount. For the full year, the company posted $451.4 million in net product sales with an approximately 45% gross-to-net discount. Total operating expenses for 2025 were $522.3 million, which Farrow said was driven largely by commercial investments supporting the XDEMVY launch. Tarsus ended 2025 with approximately $418 million in cash, cash equivalents, and marketable securities.
For 2026, Tarsus issued full-year net product sales guidance for the first time, projecting $670 million to $700 million in net product sales. Farrow cautioned that growth is not expected to be linear, citing typical first-quarter seasonality from deductible resets that raise out-of-pocket costs and reduce new patient visits, as well as higher gross-to-net in the first quarter. The company expects Q1 2026 revenue to be flat to slightly below Q4 2025, followed by strong growth in Q2, more tempered growth in Q3, and robust growth in Q4, including tailwinds from expiring FSAs and deductibles.
Tarsus expects 2026 gross margin of approximately 93%, SG&A expenses of $545 million to $565 million (including about $40 million of stock-based compensation), and R&D expense of $115 million to $135 million (including about $20 million of stock-based compensation). Farrow said the 2026 SG&A range includes continued DTC investment and XDEMVY marketing/commercial support at levels consistent with 2025, which he quantified as approximately $80 million.
On gross-to-net, Farrow said the company expects Q1 pressure but continues to view 43% to 45% as the long-term range, and said it could return to that range around the middle of the year, with a stepwise decrease in Q2.
Asked about operating expense growth beyond 2026, Farrow said the company does not expect a “big step-up” absent a major change in the business, though variable costs such as pharmacy fees and patient support programs should rise with revenue. He also said the company could potentially reduce, pulse, or otherwise adjust DTC spending in 2027 and beyond depending on results.
Commercial investments: sales force and DTC strategy
Mottiwala said Tarsus plans to add approximately 15 to 20 key account leaders in 2026, describing it as a modest, targeted investment aimed at increasing depth within high-opportunity practices. He said the company expects this to contribute meaningfully to growth in the second half of the year.
On DTC, Mottiwala said performance has been “exceptionally well” and ahead of internal expectations in reaching a positive ROI. Despite that, the company plans to maintain a similar level of DTC spend as in 2025, focusing on channels and formats that generate the strongest returns, while making incremental investment in the sales force to support prescription conversion in physician offices.
Pipeline updates: ocular rosacea and Lyme disease prevention
Chief Operating Officer Sesha Neervannan provided updates on TP-04 and TP-05.
- TP-04 (ocular rosacea): Neervannan said ocular rosacea affects an estimated 15–18 million Americans and has no FDA-approved treatments. TP-04 is a lotilaner-based sterile investigational ophthalmic gel designed for application around the eye. Tarsus initiated what it described as the first-ever Phase II trial in ocular rosacea in December 2025. The trial will evaluate safety and improvements in erythema and telangiectasias using proprietary grading scales informed by FDA feedback. The company expects top-line data in the first half of 2027. Farrow said the Phase II trial is expected to cost $7 million to $10 million, with most costs recognized in 2026.
- TP-05 (Lyme disease prevention): Neervannan said Tarsus plans to initiate a Phase II trial in Q2 2026 enrolling approximately 700 participants during one tick season. The trial will assess safety and include measurement of blood levels of lotilaner to build confidence for a Phase III-ready package; top-line data is expected in the first half of 2027. Farrow said the Phase II trial is expected to cost approximately $25 million to $30 million in total.
Neervannan also said the company continues to make progress on TP-03 globally, with Europe on track for potential regulatory approval in 2027, ongoing engagement with Japanese regulators on a development pathway, and partner Grand Pharma expecting approval in China later in 2026.
In closing remarks, Azamian said the company believes it has built a repeatable model that combines science, commercial execution, and disciplined investment, and reiterated expectations for a clear path to U.S. peak sales potential of more than $2 billion for XDEMVY.
About Tarsus Pharmaceuticals (NASDAQ:TARS)
Tarsus Pharmaceuticals, Inc is a clinical‐stage biopharmaceutical company focused on developing novel therapies for diseases of the eye and ocular surface. The company’s research platform centers on neuro‐effector modulation to address underlying disease mechanisms rather than solely treating symptoms. Tarsus’s lead candidate, OC-01 (varenicline solution), is an intranasal formulation in Phase 3 development for the treatment of dry eye disease, a condition affecting millions worldwide and associated with significant patient discomfort and reduced quality of life.
In addition to its dry eye program, Tarsus is advancing preclinical and early‐stage programs targeting other ophthalmic indications, including allergic conjunctivitis and retinal disorders.
