Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) Q3 2023 Earnings Call Transcript

So payers are covering this. We’re having ongoing discussions with all the payers, and we’re not seeing a lot of pushback there. Of course, those are all negotiations and they’re active negotiations. But I think the payers derecognize the value proposition XDEMVY brings. They do acknowledge the unique aspect of the drug and the fact that it’s a first and only. So we feel really good about that and stay committed to the idea of building commercial coverage through ’24 and having Part D come in on 2025. And then when it comes to education, this has been a focus of ours even prior to the launch. We had multiple campaigns. Educating the physicians and patients on the disease. Our disease campaign was essentially as having physicians screened for the disease by having patients look down.

We’re seeing that momentum continue to build now that the product is approved. As we stated in our prepared comments, 70% of doctors we survey say that it’s important to look for collarettes. And furthermore, we know that if they’re looking for collarettes, they understand that collarettes are pathognomonic for Demodex blepharitis. So they are making the link. I think in early days, it’s still important to build that habit and make it a routine in every exam. And that’s our focus going forward. Right? You can see the sales force and our Medicare team are continuing to educate on disease. The sales force is out there linking the disease to the benefits of the product, and that’s going to be a continued focus for us, right? We’re building a new category.

It will take some time, but we are seeing great momentum there.

Bobak Azamian: And I just want to add to that, Aziz. This is Bobak Azamian. I’ve been in the field, as our executive team, roughly monthly. And I’ve seen that education take place. I was once in a very urban environment, and next in a more suburban environment. And just as Aziz said, you see some doctors that are immediately prescribing been doing multiples, and then you see some doctors that need a couple of visits, and start to understand the value proposition, start to look for patients and then come online and start prescribing. So we’re seeing that really, really week in, week out in terms of that education taking.

Operator: And our next question comes from Eddie Hickman of Guggenheim Securities.

Eddie Hickman: Just 2 from me. Can you give any additional color on what went into that 73% gross to net discount and how you think that will track over the next few quarters given it’s already better than where we thought it would start? How many of those 1,700 bottles were reimbursed? And how does the limiting sampling work for this project product? And then if you can give us sort of any data benchmark on the upcoming MGD study and sort of what you’re hoping to move forward in that program?

Jeff Farrow : It’s Jeff. I’ll start with the gross to net question. So we did do better than we anticipated. We ended up with an overall gross to net discount of about 73%. I think we were anticipating closer to 80%. The vast majority of that discounting was related to our bridging program. But what the delta between our expectations and what we ultimately saw was a little more coverage than what we were expecting from the commercial side in particular. We do think over time that as we start to get payer coverage in 2024 with commercial, we’ll see that gross to net improve. And then ultimately, in 2025, once Medicare comes on, we’ll get to a steady state of about 50% gross to net discount. I think the thing we’re cautioning folks on, as I mentioned earlier, is in the fourth quarter, now that some of these payers are seeing more scripts come through, they’re trying to manage their budgets if we are not currently contracted with them.

So we’re anticipating somewhat of a flat gross to net discount from the third quarter, because of that. We’re starting to see more owners’ prior offs. Again, that will be short term, and we do expect to see that improve over time starting in Q1 of 2024.

Eddie Hickman: And then the second question was about the upcoming MGD study. Jeff, do you want to take that one?