Tarsus Pharmaceuticals, Inc. Q1 FY2026 Earnings Call

Good afternoon, and welcome to Tarsus' first quarter 2026 financial results conference call. As a reminder, this call is being recorded, and all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. At this time, I would like to turn the call over to David Nakasone, Head of Investigation, to lead up the call. David, you may begin.

Before we begin, I encourage everyone to visit the Investors section of the Tarsus website to be the earnings release and related materials we will be discussing today. Joining me on the call this afternoon are Bobby Azamian, our Chief Executive Officer and Chairman, Aziz Matawala, our Chief Commercial Officer, and Jeff Farrow, our Chief Financial Officer 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. 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 details. With that, I'll turn the call over to Bobby.

Good afternoon, and thank you for joining us. We are off to a strong start in 2026, with a quarter that reflects the continued momentum of Xdenby's launch and the strength of our key growth drivers. We've always believed Xdenvi would be revolutionary, and our strong first quarter results reflect that. Every key metric we track, including the number of riders, depth of prescribing, awareness and evidence generation, continue to grow substantially quarter over quarter. These are the same drivers we have committed to delivering on, and we are on track to achieve our full year guidance, reach blockbuster status in the next couple of years, and realize $2 billion in peak sales potential. In the first quarter of 2026, Xdenvy delivered more than $145 million in net product sales, an increase of more than 85% year over year, reflecting consistent patient outcomes and expanding eye care physician, or ECP, utilization across their practices. Having spent time in the field and at several medical conferences over the past few months, I can tell you what we're hearing directly from ECPs. They describe Xdenvi as one of the most impactful medicines they've ever used, with consistent outcomes, clear utility across their practices, and broad access that is nearly universal. Said differently, it works, it's easy to use, and access is outstanding. When those elements come together, behavior changes. ECPs are no longer looking only for the most symptomatic cases. They are beginning to screen every patient for colorets. And that is what ultimately drives a larger addressable market over time, more patients identified, and more patients treated. What we're building at Tarsus, however, is not a one-product story. We have developed a disciplined, repeatable playbook for identifying diseases with clear root causes and significant unmet needs, and transforming how they're treated. That playbook is driving the future of our pipeline. In the first quarter of 2026, we initiated Calliope, an approximately 700-participant Phase II trial of TPO5 for the potential prevention of Lyme disease. Enrollment is progressing well, with the first wave of participants already dosed, and we expect top-line data during the first half of 2027, which would support readiness for a Phase III trial. Lyme disease represents one of the largest and fastest-growing unmet needs in infectious disease prevention, affecting millions of Americans each year. Yet, there are no FDA-approved prophylactic options available today. It seems like I can't go a week without reading something in the news about the impact of the disease and the increasing burden on the U.S. healthcare system. TPO5 is a first-of-its-kind investigational, oral, on-demand prophylactic designed to target and kill ticks before they transmit disease, and we believe it has the potential to fundamentally shift the current paradigm from management to disease prevention. We've seen tremendous interest in this program from patients, potential partners, federal agencies and the broader medical community, reflecting both the scale of the opportunity and the need for a new approach. Another program I hear increasing excitement about is TPO4, particularly with the initiation of our Phase II core study in ocular rosacea. Ocular rosacea is another significant and underdiagnosed disease affecting an estimated 15 to 18 million Americans with no FDA-approved treatments today. Similar to demodex blepharitis, or DB, it is a mite-driven disease that impacts the area around the eye, including the eyelids and surrounding skin, that can meaningfully affect how patients look, feel, and see. We hear it all the time from ECPs. A treatment like TPO4 could be game-changing, and they can't wait to offer their patients an option like this. TPO4 is a novel, sterile, investigational ophthalmic gel designed to treat Demonex mites, the root cause of disease, and we believe it has the potential to become another first and only FDA-approved medicine for an underdiagnosed and underappreciated eye disease. The core study is progressing as planned, and we continue to expect top-line data in the first half of 2027. Turning back to XTENV, the drivers are clear. Broader physician adoption, a DTC campaign bringing more patients through the door, and an expanding evidence base, all pointing to a larger, treatable population over time. But XTENV is only one piece of a larger story. We are deliberately building Tarsus to create and lead new categories in eye care and beyond with the pipeline and playbook to do it repeatedly. And with that, I'll pass it to Aziz.

Thanks, Bobby. As just highlighted, in Q1, we delivered more than $145 million in extending net product sales, an increase of more than 85% year-over-year, and we meaningfully outperformed the market. Additionally, every key metric we track has grown, and as we've moved into the second quarter, prescriptions continue to grow, with some of the highest weekly numbers since launch. Our outstanding performance continues to be driven by three key factors, increasing depth of prescribing, expansion of the patient funnel, and ongoing evidence generation. In terms of depth of prescribing, we continue to see growth, not just in the number of ECPs prescribing XTENVI, but in how often they prescribe. In the first quarter, nearly half of our 15,000 target ECPs prescribe XTENVI at least once a week, up approximately 10% from Q4 2025. As Bobby noted, ECPs continue to see incredible outcomes with Xdenvi and are looking for more patients they can serve across their practices. At the American Society of Cataract and Refractive Surgery, or ASCRS, conference, we met with countless physicians and heard in several podium discussions that they are broadly incorporating DV screening and treatment as part of their routine preoperative procedures, where every cataract patient is assessed prior to surgery. To further accelerate the growth we're seeing within our existing base of ECPs, we are preparing to deploy our key account leaders, or CALs. This is a highly targeted investment focused on our largest and highest potential practices, where ECPs are actively prescribing and there remains significant opportunity to expand utilization. This role attracted exceptional talent from across the industry, and we expect this team to be a meaningful driver of incremental growth starting in the second half of 2026. Additionally, retreatment rates are increasing to the mid-teens range as ECPs formalize long-term DV management protocols. As a reminder, we expect steady-state retreatment rates of approximately 20%, turning direct-to-consumer, or DTC. Our DTC campaign is delivering strong and improving return on investment, or ROI, that is exceeding our expectations and is at the higher end of benchmarks. This is also reinforced by what we consistently hear from ECTs. More and more patients are coming into the office proactively asking about DV and Xdenvy. Further, we continue to see millions of visitors to the XTEMV.com website, and high-value engagement, including quiz completion and use of the Find a Doctor tool, is up nearly 40% quarter over quarter, continuing to exceed even our own Lockheed expectations. With over a year of experience, we now have a much clearer understanding of what specifically maximizes DTC performance, and we're applying those learnings to continuously improve how and where we deploy our investment. focusing on the channels and messages that generate the highest value engagement. In short, we're amplifying what's already working. Additionally, we have several exciting new things planned in the coming weeks, including a creative refresh and expanded disease state messaging designed to help even more patients recognize their symptoms, normalize DB, and ultimately drive more patients into the office. We're also continuing to make investments in evidence generation that reinforce the broad utility of Xdenbi and expand how ECPs think about DB. One key example is the data we presented at ASCRS on the association between DB with Chalazian and Hordiola, conditions that are estimated to impact several million patients in the U.S. These conditions can cause patients significant discomfort, impact their vision, and lead to invasive procedures in ECP offices. This data showed that a large portion of patients assessed also had underlying DB, more than 70% overall, and even higher in recurrent cases. And we're hearing directly from doctors that they're excited about this data and are proactively screening and treating these patients. The takeaway is simple. Our ongoing evidence generation is doing exactly what we intended, expanding our market opportunity by giving ECPs more compelling reasons to look for and treat DB across a broader and larger set of patients. As we look ahead, there's great momentum across the key drivers of the business, and we expect to build on that momentum with the deployment of our Cal team, the scaling ROI of our DTC campaign, new patient-focused initiatives, and additional evidence that further supports the broad utility of XtendMe. And as Jeff will discuss, these drivers give us confidence in achieving full-year guidance while continuing to expand the long-term opportunity

for XTENV. Over to you, Jeff. Thanks, Aziz. Building on what Bobby and Aziz outlined, we delivered net product sales of $145.4 million, reflecting strong year-over-year growth from growing demand for XTENV and exceptional execution by our team. As expected and highlighted on our year-end earnings call, the first quarter included typical seasonal dynamics, such as deductible resets and higher out-of-pocket costs, as well as some impact from severe winter weather, particularly in the northeast part of the country. Despite these factors, our underlying demand remains significantly stronger than our peers. According to third-party data, peers experienced double-digit prescription declines versus our low single digits. And as we entered the second quarter, XTENVI prescription trends rebounded to all-time highs. Turning to other revenue items, license fees and collaboration revenues were $16.7 million in the quarter. This includes a one-time $15 million regulatory milestone payable by our partner Grand Pharma following the approval of TPO3 for DBE in Greater China, as well as approximately $1.7 million related to the required China withholding tax. This approval represents an important step toward helping the more than 40 million people in the region affected by DB and underscores our commitment to serving patients. Over time, we do expect to generate additional royalties from this partnership, although they are not expected to be meaningful in 2026 or 2027, as Grand Pharma seeks to secure payer coverage. We look forward to supporting Grand Pharma as they prepare for commercial launch later this year. For additional details on our Q1 financial performance, please refer to the earnings release issued earlier today. Looking ahead, we reiterate our full year 2026 guidance of net product sales of $670 to $700 million, SG&A expenses of $545 to $565 million, including approximately $40 million in stock-based compensation, R&D expenses of $115 to $135 million, including stock-based compensation of approximately $20 million, and gross margins of approximately 93%. Our guidance reflects continued strength in the underlying fundamentals of the business, including increased depth of prescribing, expansion of the patient funnel, continued execution by our exceptional sales force, including the deployment of our new key account leaders, and ongoing evidence generation, expanding the addressable patient population. From a quarterly perspective, growth in 2026 is expected to follow patterns consistent with our prior experience and broader sector dynamics, that is, strong growth in the second quarter, more modest growth in the third quarter, and robust growth in the fourth quarter. Finally, turning to the pipeline, as Bobby mentioned, we initiated our Phase II Calliope trial evaluating TPO5 for the potential prevention of Lyme disease during the first quarter. Lyme disease is the most common vector-borne disease in the United States, with more than 35 million people considered to be at high or moderate risk of contracting the disease, and hundreds of thousands of new cases diagnosed annually. Yet, there are still no FDA-approved prophylactic options. What makes KPO5 compelling is not just the size of the market, but the strength of the science and the differentiated nature of our approach. This oral, on-demand investigational therapeutic is designed to directly target the root cause of Lyme disease by potentially killing ticks before disease transmission occurs. An approach that is simple, fast, and practical for patients. In fact, it is already approved for Lyme disease prevention in dogs and cats, and they have benefited from prophylactic Lyme therapies just like TPO5. From a financial and operational standpoint, we are advancing this program with a clear development path and defined milestones, including expected top-line data in the first half of 2027. Similarly, our ocular rosacea program continues to progress as planned with top-line data also anticipated in the first half of next year. Outside of the U.S., we continue to advance our global expansion efforts for TPO3 and are on track to complete the key technical work required to support potential future filings. At the same time, we are taking a thoughtful approach to timing and evaluating next steps in the context of the broader geopolitical regulatory and macro access environment before i hand the call off to bobby i want to restate that we firmly believe that we are well positioned for the remainder of 2026 with strong and growing underlying demand for extendby and a robust and advancing pipeline with top line results in the first half of 2027. With that, I'll turn it back to Bobby for closing remarks.

Thanks, Jeff. Tarsus continues to execute on one of the most successful launches in eye care, and we've delivered, so much so that the addressable market continues to expand beyond our initial estimates. More patients are being identified, more patients are being treated, and more physicians are continuing to embed XTEMV into routine care. This is a direct result of how we've deepened utilization in ECP practices, meaningfully grown awareness about DB, and generated compelling clinical evidence showing just how important it is to treat the condition. We are now applying that same category-creating model across our pipeline, including in Lyme disease prevention and ocular rosacea, as we work to replicate the success of Extenvi and establish Tarsus as a leader in creating new standards of care. Operator, please open the line for questions.

Thank you. Ladies and gentlemen, to ask a question at this time, you will need to press star 1-1 on your touchtone telephone and wait for your name to be announced. To withdraw your question, simply press star 1-1 again. Please stand by while we compile the Q&A roster. Now, first question coming from the lineup, Dennis Ding with Jeffrey Fielin is now open.

Hi. Thanks for taking our questions. We have two. So, on the second quarter, you know, I was surprised that you guys didn't get bottle guidance, but when I look at consensus, which is 168 million, it should imply around 145 to 150,000 dispensed bottles. That's about 13 or 14 percent quarter over quarter growth and similar to the Q2 bounce that we saw in 2025. How do you feel about those numbers and does our math make sense? And then number two, Laucos has a phase two readout later this year for DB. They're delivering phytostigmine, which is approved for glaucoma. So you've mentioned before that you've looked at all these different assets. So I'm curious what you think about the potential tolerability issues there since the drug actually constrict pupils. So in your own due diligence, are vision changes or blurry vision a liability with that asset? Thanks so much.

This is Jeff. And I'll take the first part of the question and then turn it over to Bobby for the second As we've moved into full year guidance, we've stepped away from the quarterly updates in terms of bottles, dispense, gross to net, absent some material change, right, where we don't believe we're going to be able to meet that guidance. And so our expectation is really just to continue to provide updates on the guidance that we provided earlier. So we still believe in the full-year guidance, both on the revenue side and the SG&A side. To your question on growth between Q1 and Q2, just a reminder that 2025 was the second full year of launch, and we were starting from a bigger or a smaller base at that point in terms of total bottles. So we shouldn't expect a 30% growth similar to what we saw between Q1 and Q2. So, you know, take into account the fact that we are starting on a bigger base now and, you know, make your adjustments accordingly.

Yeah, and thank you, Dennis. This is Bobby. And with respect to how we see the landscape, we're really focused on Xdenvy. You know, we've been creating a really important market and category for patients, and we see that growing. I think the evidence we're generating around Xdenvy is robust with more to come. So we believe that XTEMV's profile is going to be the standard of care for the foreseeable future. We certainly track everything we see in terms of pipeline, and we're not surprised that, you know, people are also looking at this market. But in terms of XTEMV's effectiveness, its safety, the product profile, it's just such a great standard of care. I hear time and again, like I did in the field this quarter, just how this is the best medicine a lot of doctors have seen. So we're really focused on building on that success and creating a lasting standard of care.

Okay, thank you.

Thank you. Our next question coming from the line-up, Greg. So the Navite with Muzoho Group, Elon is now open.

Hi, this is Amon for Greg. Thanks for taking your questions and congrats from the quarter. Maybe two from us. First, how much of the current growth is you're seeing coming from the expansion use cases under called the demodexplofitis umbrella? Specifically, we're interested in the cataract surgery patient population. And then second, given the reaffirmed guidance of 670 to 700, can you walk us through some of the assumptions and drivers required to achieve that guidance that cause prescription growth, growth to net normalization, and overall run rate through the balance of the year? Thank you.

Yeah, so when we think about the market and how the product is performing, one of the great things that we highlighted in the prepared comments and what we're hearing very clearly from physicians here is the continued expansion of use throughout the patient population. So we started early on with some of the most obvious cases, dry eye, cataract surgery, contact lens intolerance. We're definitely seeing a lot of utilization across all of those segments, and we've really shifted our strategy now to not only go after those segments to even go more broadly, right? There's 25 million Americans out there, and they're coming into the funnel, and we think about not just cataract, dry eye. We think about, as we mentioned, patients that have hortiolum or chalasia, for example, and even other cases. So I think the way to think about this is physicians are using this across every segment that we've highlighted, and they continue to expand to new segments, and that's where evidence generation strategy will fuel. In terms of some key drivers, I'll let Jeff speak to the mechanics, but I would highlight that coming off of this quarter, we saw progression in every metric. We track commercially, depth of prescribing, all of our consumer metrics, which sets us up nicely for the rest of the year where we have our key account leaders deploying. They'll start to make an impact in the third quarter and in the back half of the year. And we've got some exciting things on our direct-to-consumer initiatives as well. So a lot more drivers to come, and I'll let Jeff speak to the mechanics in terms of the guidance.

Yeah, Ziz, one other thing I would add. This is Bobby. You know, based on what I hear, these drivers are really playing out. As we mentioned, I'm hearing doctors that are really treating regardless of symptoms, treating with any comorbidity in the setting of cataract surgery. I'm so excited about the evidence that we generated and evidence to come. You know, I think Chalazian is one of those examples where there's just lots of reasons to treat, and that's really leading to the expansion of the patient population that's the addressable market here. And so, Jeff, I'll pass to you. Thanks, Sam, for your question.

Yeah, in addition to sort of the broad strokes that Aziz mentioned in terms of growing depth of prescribing, ETC impact, evidence generation that Bobby just highlighted, and the impact of the KLL team, that'll sort of impact the growth over the quarter, particularly in the back half of the year. But we continue to see the seasonality that we saw last year and the year prior to that. So much like we saw last year, Q1 was, you know, tempered, but we saw some nice robust growth in the second quarter as the deductibles sort of got blown through by the individual patients. And then we also see growth in the summertime, but much more tempered growth than, say, between Q1 and Q2. And then Q4 tends to be one of our highest growth quarters as patients come into the end of the year, they've run through their deductibles, and they're trying to use up their FSA. So we anticipate that type of impact on a seasonal basis as well.

Thanks so much for the question.

Thank you. Our next question, coming from the line of Rensa Bisabal with Lifestyle Capital. Your line is now open.

Hi, thanks for taking the questions. Congrats on the quarter. Just a couple questions. I'm getting some questions on arcular rosacea, And I was just wondering, when you mentioned, you know, root cause of the disease, I think with blepharitis, you guys in the trials and whatnot, we're plucking eyelashes and you can legitimately see the mites and then it's pathognomonic sign when you see the colorettes now. But is there, how comfortable do we feel that ocular rosacea is, you know, the demodex mites are causing the ocular rosacea?

Yeah, thank you, Frank. And I appreciate that question. I know you've tracked our story for a long time, and you've seen the playbook that we've really applied in the development of X-Dem-V, and we're applying that same playbook in OR. And, you know, to your point, it starts with a disease that has a clear root cause in clearly identifiable patients. And we see that in OR. To your question, we see that the majority of patients with OR have Demodex, and it is harder to measure. You don't have the benefit of a colorette that you can pull from around the eye, but you do have clear signs, and those are signs of inflammation, signs of redness, erythema and telangiectase, as they're called. And we know that when patients have those signs, they're very likely to have Deminex as an underlying root cause. So that's really the basis of our approach here. I will also add, we're hearing a lot of great interest in OR as well. When I'm out in clinics or talking to doctors about XTEMV, they raise OR. They say, I'm looking at these patients that have something great for the added margin, but I don't have anything for the inflammation around their eyes. And they're seeing how important this disease is now that they're taking a close look around the eyes. So we see basically an opportunity to create a category with a very similar playbook to your question.

Great. And then just on the endpoint side, just to kind of compare it to what you guys have done in the past, the Colorette cure rate was very interesting for blepharitis. But in this case, can you just – you talked about the science. Can you just remind us maybe what the endpoints are and the comfort on the regulatory side of those endpoints?

Absolutely. So, we are enrolling patients by OR and we're looking at OR endpoints. And so those are those same telangiectasias and erythema. We've aligned with the FDA that we need to look at those endpoints, and we need to see an improvement in one of them. And that's really how we're structuring the trial, and that's the bar we expect for success in the Phase II trial that we're conducting.

Great. If I could sneak in a last one, too, I promise. In terms of the second quarter, Jeff, thanks for kind of breaking out second quarter, first quarter seasonality, second, third, and fourth. But in the second quarter, can you give any granularity as to what is to be expected maybe in the months of the second quarter?

In terms of revenue, Frank?

Yeah, or sometimes there are some weeks or whatnot that are definitely harder, or there's the summer months with holidays and conference time and stuff. I was just wondering any granularity on what goes on in that second quarter that maybe we should take close attention to.

Got it. Yeah. No, part of that was the impact of the spring break timeframe, which we've already passed through by in large part in the early part of April. So that's kind of behind us. And so, you know, there are some conferences that, you know, could pull some of the doctors out of the office. But we don't anticipate that to be, you know, much greater than what we've seen historically. So, you can sort of think about this as on a growth trajectory upwards for the rest of the quarter here.

Okay, great. And do you guys break out how your patients are broken down between, like, for age groups? Is it the older crowd or are you actually, you know, just because it seems like this does get worse with time, right? I think after 70 years old, everyone has this. So, is it mostly the older or the younger crowd that you guys are treating?

Dr. Frank, it's disease. We see utilization across quite a wide array of patients. You can think about your cataract patients. That's typically an aging patient. So we see a lot of utilization there. But you think about patients in contact lenses or dry eye, and that spans the entire patient population. So while there is a higher propensity in elderly patients, you're right about that, we see more and more younger patients, professionals that are working, looking at the screen all day, noticing their eyes are bothering them. They see the ad, they're motivated to go talk to their doctor. So we're seeing utilization across the front. And I think that cataract is obviously an elderly population, but everywhere else you're seeing a pretty diverse population of patients getting treated. Okay, great. Sorry, I think

I promised one last question, but I guess I lied. That's all good for me.

Thank you, Frank. Thank you.

Our next question coming from the lineup, Jenna Dibner with Barclays.

Hi, thank you for taking my question. I had one on Lyme disease, and as Bobby mentioned, there's a lot of elevated concern right now around ticks, so I was just curious if you could remind us what your strategic priorities for this program are and whether or not this might make sense to partner out, and just given the elevated concern and that there's no FDA-approved prophylactic treatment? Do you think there's any pathway towards an accelerated approval timeline? Thank you.

Thank you so much, Jenna. Yeah, thanks for highlighting the Lyme program. We hear a lot of interest in this program. There's not really a week goes by that I don't see something in the press or the media about Lyme disease and tick season, which has now started. So we're very excited about the program. We've advanced it into this Phase II trial that is groundbreaking in many ways, 700 patients across, you know, a broad array of participants, across geographies. We're looking at using a very novel investigational medicine here, TPO5, which is an oral on-demand. Really, patients can take it, you know, where they sit and on-demand. And that's, I think, a very unique potential medicine. So, you know, in this trial, we're going to get some good data, we hope, on safety, on dosing, and really be prepared for a phase three, be phase three ready, as I mentioned. And I think that will allow us to really assess where this fits. Our base case is this is better in someone else's hands as it goes to phase three. but I think delivering a package with a great, robust phase two data set with FDA clarity on the path forward will be important. In terms of the FDA's guidance here, they've been very collaborative. We have other vaccines that have been developed in this space, so we're largely following that guidance. And I think the phase three is TBD based on our phase two, but our base case is that we'd have to conduct a large vaccine like phase three, and that's something we'd have clarity around as we got ready for that and talked to potential partners.

Thank you. And our next question coming from the lineup, Jason Gerberi with Bank of America. Your line is now open.

Hi, this is Melanie on for Jason. Thanks for taking our question. So you've mentioned that with the addition of the key account leaders, most of that impact is likely to be seen in the back half of the year. So how should we be thinking about kind of that incremental impact on top of the typical seasonality that you guys flagged with like a stronger second half? Thank you.

Yeah, Melanie, I think adding these key account leaders is going to be a great catalyst for us in a lot of ways. We've shown when we've added people we can get a response right away. We did this when we expanded our Salesforce prior. We're using a very similar approach. The key account leader is a very unique position in that it's really targeted toward this increasing depth of prescribing we're seeing. And the two things I'll tell you there, one is no one in our called-on audience, no physicians that we're talking to have capped out yet. So even our top doctors have room to grow. And we're seeing a broader opportunity with doctors being able to prescribe more in general. So these key account leaders are some of the most experienced and sophisticated sales individuals. And again, this is against a very high bar because we have a great sales team. These folks are going to be targeted against the highest opportunity practices that are having good success but could be doing more. So we're able to deploy them and train them. They're in the process of finalizing that training, and then they'll be out there in the third quarter. And I think you're going to start to see that. Now, again, it's about 17 to 20 people, so this is not like a massive expansion of the sales force, but what I think you're going to see is that this is going to catalyze even more depth of prescribing. And it's a key element of this being a driver to get to the targets we have this year. And I'd expect you to see that right away. And you'll see that, you know, bear through the seasonality, but it doesn't alleviate the impact of seasonality, right? That's a patient flow issue. It's not so much of an execution issue. So, I think about this as depth of prescribing, change of behavior over time, and allowing us to continue a great growth trajectory. But again, you are going to see seasonality in the quarters as Jeff mentioned. Thank you. Thank you. And our

next question coming from the line of Masahir Ali Muhammad with Oppenheimer. Your line is now open.

Hi. Thanks all for taking our questions. Just a couple from us. I guess the first one is, can you give us any additional color on what percentage of prescriptions dispensed in the quarter represent retreatment patients versus new starts. And the second part is, I guess, as you think about the peak sales, the 2 billion peak sales number, how much of that is predicated on retreatment becoming recurring annual behavior, I guess, versus like a purely new patient identification? Yeah, Maisie. So the retreatment is something that we get a lot of questions on and something that we're tracking really closely. It's also something that we've seen progress very nicely over the last several quarters. So as a reminder, what we've said is that we'd expect retreatments to be at steady state around 20%, meaning at any given week of prescriptions, about 20% of the composition would be retreatments. What we're seeing so far is retreatments averaging in the mid to high teens. And again, that's up quarter over quarter, one of those key metrics. So we're seeing that steadily progress. We'd expect that to even add it around 20%. And then to answer your question, when we think about the long-term potential, you can assume that about at steady state 20%. So in a peak year revenue, 20% of that would be due to retreatments because that implies that steady state 20%. Yeah, that makes a lot of sense. That's all from us, but thank you for answering the question. Thank you. Our next

question coming from the line of Lachlan Hanbury Brown with William Blair. Your line is now open.

Hey, guys. Thanks for the question. Maybe just first for Jeff, you had the stronger than expected gross to net in the first quarter. Can you maybe elaborate on what drove that? Is that a mixed shift? Is it driven by the changes in Medicare or some one-off items? And then how should we think about that sort of flowing through? We typically have a cadence of gross to net stepping down throughout the year. Should we still expect that or is it going to be relatively flat from here?

Yeah, Lachlan, good to hear you. We are still not going to be providing gross to nets on a quarterly basis now that we've moved over to full-year revenue guidance. And, you know, I would just say that we, you know, did see the typical seasonality that we usually see in the first quarter in terms of, you know, co-pays resetting and driving some additional support there. That said, I think we are still very comfortable that we will be exiting Q4 in that 43% to 45% range. So I would just guide you to the fact that we expect to be somewhere within

that range for the year. Okay, great. Thanks. And maybe one for Aziz. The continued sort of strong growth in website visits and especially the high value sort of activities on the website seems pretty encouraging, but has the conversion rate, to the extent you can sort of track it,

the conversion rate from, you know, website visits and these scripts sort of maintained

constant, so sort of tracking in line with the increase in visits? Sure. So when we look at DTC,

this is an area that's really compelling, an area that we're really excited about the trajectory here. So you highlighted the increased HVAs. You know, we're really pleased because the ROI overall is continuing to improve, and it's already ahead of what the benchmarks are, ahead of our expectations. So we don't get into specific conversion metrics, but I'd say the ROI is improving, which implies more patients are getting on therapy, right? And what you're seeing is Q1 is a patient flow thing, right, where we lost days of weather. So I wouldn't think about the Q1 versus those metrics as the comparator. I think about patients are ready to go, and I think we're seeing the impact of that even early in Q2 with our prescriptions being near our all-time high levels. And I think you're going to continue to see that stack over time. The great thing about DTC is once you get to a great ROI, and I've seen this on multiple campaigns in my career, you can start to see a stacking effect where these patients are primed and ready to go. And this also validates the strategy of continuing to drive depth of prescribing. The more doctors that are looking for more patients, the better our conversion is going to be. So this is sort of the one-two punch that we're working on. And I think you're seeing positive trajectory on both of those fronts. Great. Thanks.

Thank you. And our next question, coming from the lineup, Eddie Hickman with Guggenheim. Yelan is now open.

Hey, guys. Thanks for taking the question. Congrats on the progress. Just another one on the GTN. As this retreatment cohort expands towards that 20% that you've guided for, does the gross net profile change between a refill prescription and a new start? Do you get a better net price realization if a patient is coming back and doesn't need to go through the whole copay assistance program? just sort of curious how that dynamic may shift beyond the sort of typical seasonal growth to net

changes you've already talked about. Yeah, great question, Eddie. It's not likely to change on a refill patient. They still have to go through the prior auth proposal as well as potentially provide some copay for that product as well. So it's not likely to change much. Got it. And maybe

somebody already asked this, but did you sort of talk specifically about which federal agencies have tremendous interest in TPO5 and sort of what that means for the acceleration of that program?

Yeah, sure, Eddie. This is Jeff again. We have a great government affairs team that's been engaged on that side of the house there, as you've highlighted and Jenna highlighted as well, that there's a lot of interest here. And so there's a Limex group that is looking at opportunities to speed up approvals, particularly in the phase three realm, and sort of stepping away from the disease prevention approach that vaccines typically do. And so they're invested in looking at diagnostics and some other areas that can speed up the development pathway there. And then RFK, who is part of the HHS program, has made this a high priority, as has McCary. So the FDA has really taken an aggressive approach here and is looking to speed therapeutics to market as quickly as we can.

Got it. I appreciate that.

Thank you. And there are no further questions in the queue at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.