Tarsus Pharmaceuticals, Inc. (TARS): Business Model Canvas [Dec-2025 Updated]

You're looking at a biotech that successfully launched a first-in-class product, and now the real work-scaling that success-is defintely underway. Tarsus Pharmaceuticals, Inc. isn't just sitting on its laurels; they've successfully commercialized XDEMVY, booking $118.7 million in net sales by Q3 2025, putting them squarely on track for a projected full-year revenue between $440 million and $445 million. Honestly, the model shows a classic pivot: from R&D risk to commercial execution, balancing high Selling, General, and Administrative (SG&A) costs with a deep pipeline including TP-04 and TP-05. So, if you want to see exactly how they are turning that single FDA approval into a scalable, multi-asset business, dive into the full Business Model Canvas below.

Tarsus Pharmaceuticals, Inc. (TARS) - Canvas Business Model: Key Partnerships

You're looking at the structure that supports Tarsus Pharmaceuticals, Inc.'s commercial engine, especially around XDEMVY (lotilaner ophthalmic solution, 0.25%). Here are the hard numbers detailing the key external relationships as of late 2025.

License Agreement with Elanco Tiergesundheit AG for lotilaner IP

The foundation of XDEMVY rests on intellectual property licensed from Elanco Tiergesundheit AG. Tarsus Pharmaceuticals, Inc. has specific financial obligations tied to this license, though Elanco monetized some of its upside in 2025.

Tarsus Pharmaceuticals, Inc. made several payments related to the Eye and Derm Elanco Agreement:

• Upfront payment at execution (January 2019): $1.0 million
• Required clinical milestone payment (September 2020): $1.0 million
• Second pivotal trial milestone payment (April 2021): $2.0 million
• Contractual prepayment (June 2022): $1.5 million
• Payment to Elanco following LianBio proceeds (Q2 2021): $2.5 million

In May 2025, Elanco sold certain future tiered royalties and commercial milestones associated with U.S. net sales of XDEMVY to Blackstone Life Sciences for $295 million in cash. These royalties apply from April 2025 through August 2033. Elanco retains rights to royalties on net sales outside the U.S. and any future human applications beyond ophthalmic solutions.

Underwriters like Goldman Sachs for Equity Financing

Tarsus Pharmaceuticals, Inc. has utilized investment banks to raise capital, including a significant offering in early 2025.

The March 12, 2025, underwritten public offering involved the following key figures:

Detail	Amount/Value
Gross Proceeds Target	$100.0 million
Underwriters (Joint Book-Running Managers)	Goldman Sachs & Co. LLC, BofA Securities, Barclays
Shares Sold in Offering	2,808,988 shares
Price to the Public per Share	$44.50
Underwriters Purchase Price per Share	$41.83
Underwriters Option to Purchase (Additional)	Up to 421,348 shares (for 30 days)

Payer and Pharmacy Benefit Managers (PBMs) for Formulary Access

Commercial success for XDEMVY depends heavily on payer coverage. As of the end of the third quarter of 2025, Tarsus Pharmaceuticals, Inc. reported strong access metrics.

• Commercial, Medicare, and Medicaid lives covered: more than 90%
• Gross-to-net discount for Q3 2025: 44.7%
• Weekly multi-patient prescribers growth (Q3 2025 vs Q2 2025): approximately 30%

For context, the gross-to-net discount percentage was in the low 40s as of the end of Q3 2024.

LianBio Ophthalmology Limited for Development and License Agreements

The partnership with LianBio Ophthalmology Limited, which was later novated to Grand Pharmaceutical Group Limited's subsidiary, secured early capital for Tarsus Pharmaceuticals, Inc.'s pipeline development.

Terms of the original agreement included:

• Upfront payment received by Tarsus Pharmaceuticals, Inc.: $15 million
• Total potential development and commercialization milestones: up to $185 million
• Near-term clinical milestones by June 30, 2021: $10 million
• Tiered royalties on sales in Greater China: low double-digit percentages

The agreement for TP-03 in Greater China was assigned to Xi An Grand Chang An Pharmaceutical Co., Ltd. ('GrandPharma') in March 2024 via a Novation Agreement, which included an upfront payment of USD15 million and certain registration milestone fees to Tarsus Pharmaceuticals, Inc.

Contract Manufacturing Organizations (CMOs) for Drug Production Outside the U.S.

Tarsus Pharmaceuticals, Inc. contracts with third parties for the commercial manufacture of XDEMVY and for the manufacture of product candidates for preclinical studies and clinical trials. The company is permitted to use certain third parties for lotilaner manufacture, subject to Elanco's consent. Specific financial terms or names of non-U.S. CMOs were not publicly detailed in the latest filings reviewed.

Cost of sales for Q3 2025 was $8.3 million, which included manufacturing costs related to XDEMVY.

Tarsus Pharmaceuticals, Inc. (TARS) - Canvas Business Model: Key Activities

Commercializing XDEMVY, the first Demodex blepharitis treatment.

Metric	Q1 2025 Data	Q2 2025 Data	Q3 2025 Data
Net Product Sales	$78.3 million	$102.7 million or $181.0 million	$118.7 million
Bottles Dispensed/Delivered	Approximately 72,000	Approximately 91,000 or 163,000	More than 103,000
Year-over-Year Sales Growth	217%	152% (vs Q2 2024)	Approximately 147% (vs Q3 2024)
Gross-to-Net Discount	Broad coverage for over 90% of U.S. patients (Q1 2025)	Improved to 44% (Q2 2024)	44.7%, expected to stabilize around 43-45%

Conducting Phase 2 clinical trials for TP-04 (Ocular Rosacea) and TP-05 (Lyme disease).

• TP-04 (Ocular Rosacea) Phase 2 study initiation planned for the second half of 2025.
• TP-04 Phase 2 results anticipated in 2026.
• TP-05 (Lyme disease prevention) is in Phase 2 clinical studies.
• Research and development expenses for the TP-04 program increased by $0.8 million in Q3 2025 compared to Q3 2024.
• TP-05 program expenses decreased in Q3 2025 compared to Q3 2024.

Expanding the specialized sales force targeting Eye Care Professionals (ECPs).

The ECP base writing multiple prescriptions is growing, with more than 20,000 ECPs now prescribing XDEMVY. This represents a more than 30% increase since the beginning of 2025. The company's target list for ECPs is approximately 15,000. The sales force expanded to approximately 150 reps, up from approximately 100, with an additional 50 reps hired by the end of Q3 2024.

Executing large-scale Direct-to-Consumer (DTC) advertising campaigns.

The annual DTC advertising budget is set at $70-80 million, contingent on return on investment. The DTC campaign drove a 140% increase in average weekly website visits in March 2025 compared to December 2024. Consumer unaided awareness of XDEMVY has more than tripled since the start of the DTC campaign.

Managing regulatory filings and post-marketing surveillance for XDEMVY.

Tarsus Pharmaceuticals expects meetings with regulatory authorities in Japan to remain on track for H2 2025. The company anticipates a potential European regulatory approval for a preservative-free formulation of XDEMVY in 2027.

Tarsus Pharmaceuticals, Inc. (TARS) - Canvas Business Model: Key Resources

You're looking at the core assets that Tarsus Pharmaceuticals, Inc. uses to run its business, especially now that XDEMVY is established. These aren't just things on a balance sheet; they are the engines driving revenue and future potential.

The most tangible resource is the product itself, the only FDA-approved treatment for Demodex blepharitis. This is XDEMVY (lotilaner ophthalmic solution 0.25%). The commercial success of this drug is evident in the latest figures.

Financially, Tarsus Pharmaceuticals, Inc. maintains a solid liquidity position. As of September 30, 2025, the company reported $401.8 million in cash, cash equivalents, and marketable securities. This cash pile is critical for funding ongoing operations and pipeline advancement.

The foundation of XDEMVY's existence rests on the intellectual property (IP) and data licensed for the lotilaner molecule. Tarsus Pharmaceuticals, Inc. in-licensed this from Elanco AG in 2019 [cite: 4 (from previous turn)]. This resource comes with obligations, as the cost of sales includes the royalty Tarsus pays on net product sales and the amortization of milestones paid to its licensor. To be fair, the licensor's future royalty stream was monetized by Elanco in May 2025 for $295 million in cash from Blackstone Life Sciences [cite: 6 (from previous turn)].

The specialized commercial team's effectiveness is measurable by market penetration metrics. The team has successfully driven adoption across the eye care professional (ECP) base.

Metric	Value/Status	Date/Period
Net Product Sales (XDEMVY)	$118.7 million	Q3 2025
Bottles Delivered (XDEMVY)	More than 103,000	Q3 2025
Total Prescribing ECPs	More than 20,000	Q3 2025
Cash, Cash Equivalents, and Marketable Securities	$401.8 million	Q3 2025

The market access infrastructure is another key resource, ensuring patients can get the drug. Tarsus Pharmaceuticals, Inc. has secured broad payer coverage.

• Payer coverage for XDEMVY extends to over 90% of commercial and government lives.
• The gross-to-net discount for Q3 2025 was reported at 44.7% [cite: 9 (from previous turn)].
• The company is advancing its pipeline, planning to initiate a Phase 2 study of TP-04 for ocular rosacea in December 2025.

This combination of an approved product, significant cash reserves, established market access, and a growing prescriber base forms the current resource foundation for Tarsus Pharmaceuticals, Inc. Finance: draft 13-week cash view by Friday.

Tarsus Pharmaceuticals, Inc. (TARS) - Canvas Business Model: Value Propositions

You're looking at the core value Tarsus Pharmaceuticals, Inc. (TARS) delivers with XDEMVY, their flagship product. It's a classic case of creating a category where one didn't officially exist before the FDA approval.

First and only FDA-approved treatment for Demodex blepharitis.

This is the bedrock of the value proposition. XDEMVY (lotilaner ophthalmic solution) 0.25% is the first and only treatment for Demodex blepharitis (DB) to receive FDA approval, which happened in July 2023. This exclusivity right out of the gate is a massive advantage. Before this, physicians were relying on off-label uses or over-the-counter cleansers, which clearly weren't cutting it for many patients who lived with the condition for an average of 4.3 years before diagnosis in some studies.

The commercial traction since launch shows you the pent-up demand. For instance, Tarsus Pharmaceuticals reported net product sales of $102.7 million in the second quarter of 2025, driven by approximately 91,000 bottles delivered to patients in that quarter alone. The momentum continued into the third quarter of 2025, with net sales hitting $118.7 million, with more than 103,000 bottles dispensed. The company projects full-year 2025 revenue to land between $440 million and $445 million.

Addresses a large, underserved patient population (estimated 25 million US patients).

The market size here is substantial, which is why the financial numbers are scaling up so quickly. The estimated number of Americans affected by Demodex blepharitis is as high as 25 million. This prevalence suggests DB is as common as dry eye disease (DED) in the US. The adoption by Eye Care Professionals (ECPs) reflects this need being met:

• More than 20,000 ECPs are now prescribing XDEMVY.
• This represents a more than 30% increase in prescribing ECPs since the start of 2025.
• The number of ECPs writing more than one prescription per week increased by nearly 110% from the end of Q3 2024 to the end of Q1 2025.

Here's the quick math: Tarsus's target list of ECPs was around 15,000, so they've definitely expanded beyond their initial core group. What this estimate hides is the depth of prescribing, but the fact that the number of ECPs prescribing more than one bottle per week increased by approximately 30% from Q2 2025 to Q3 2025 shows growing confidence and routine use.

Potential to create new therapeutic categories (e.g., ocular rosacea, Lyme prophylaxis).

Tarsus Pharmaceuticals isn't stopping at just one category; they are leveraging their platform technology for adjacent, underserved ophthalmic conditions. This pipeline development is key to long-term value. The company is actively working on expanding its therapeutic footprint:

Pipeline Asset	Indication	Status/Timeline (as of late 2025)
TP-04 (lotilaner ophthalmic gel)	Ocular Rosacea	On-track to initiate a Phase 2 study in H2 2025.
TP-05 (investigational oral tablet)	Lyme Disease Prevention	On-track to initiate a Phase 2 study in 2026.

Ocular rosacea is noted as a highly prevalent and underserved eye disease with no FDA-approved therapy. This pipeline diversification de-risks the business model beyond the initial success of XDEMVY.

Provides a targeted, non-antibiotic solution for a mite-driven disease.

The mechanism of action is a core differentiator. XDEMVY treats Demodex blepharitis by targeting and eradicating the root cause-the Demodex mite infestation. The active ingredient, lotilaner, is an anti-parasitic drug, which is a targeted approach rather than a broad-spectrum antibiotic. This specificity is important for ECPs looking for precise treatments for mite-driven pathology. The clinical data supported this, with both pivotal trials meeting primary and secondary endpoints with statistical significance and no serious treatment-related adverse events reported. For example, in one trial, 56% of treated patients achieved a complete collarette cure (defined as 0 to 2 collarettes per eyelid) at day 43.

Finance: review Q4 2025 guidance against Q3 actuals by next Tuesday.

Tarsus Pharmaceuticals, Inc. (TARS) - Canvas Business Model: Customer Relationships

You're looking at how Tarsus Pharmaceuticals, Inc. connects with the people who prescribe and use their product, XDEMVY®. It's a mix of direct professional engagement, broad consumer advertising, and programs to manage the cost to the company.

High-touch, educational engagement with over 20,000 ECP prescribers

Tarsus Pharmaceuticals, Inc. focuses heavily on educating Eye Care Professionals (ECPs) to establish XDEMVY® as the standard of care for Demodex blepharitis. This engagement goes beyond initial awareness; it aims for deep integration into clinical practice.

As of the end of the third quarter of 2025, more than 20,000 ECPs have written multiple prescriptions, showing growing confidence in the product. This number is beyond the company's initial target list of approximately 15,000 ECPs. Furthermore, the depth of prescribing within this group is increasing; at the end of Q3 2025, the number of ECPs prescribing more than one bottle per week increased by approximately 30% compared to the second quarter of 2025.

The relationship strategy involves consistent sales force engagement to encourage ECPs to screen every patient and expand treatment across all segments. Market research confirmed that eighty percent of surveyed ECPs are now treating across all Demodex blepharitis patient segments, which is a 100% increase since the sales force expansion and DTC campaign launch.

Direct-to-Consumer (DTC) marketing to drive patient-initiated demand

Driving patient demand is a core part of the relationship strategy, using significant investment in DTC advertising to build awareness. The company anticipated spending between $70 million to $80 million for DTC costs in the full year 2025.

This investment is showing results in consumer engagement metrics:

• Consumer unaided awareness of XDEMVY has more than tripled since the beginning of the DTC campaign.
• Active consumer engagement on XDEMVY.com was up nearly 400% since the beginning of 2025 as of the second quarter of 2025.
• The DTC advertising drove a 140% increase in average weekly website visits in March 2025 compared to December 2024.

Patient support programs to manage the 44.7% gross-to-net discount

Patient support programs are necessary to manage the difference between the list price and the net revenue received after rebates, fees, and discounts. This is often referred to as the gross-to-net discount. Tarsus Pharmaceuticals, Inc. is managing this while maintaining strong gross margins.

Here are the key financial metrics related to net realization:

Metric	Q1 2025 Value	Q2 2025 Value	Q3 2025 Value	Guidance for Exiting 2025
Gross-to-Net Discount	Averaged 47%	Approximately 45%	44.7%	Low 40s%
Gross Margin	Approximately 93%	Approximately 93%	Not explicitly stated, but margins remained strong	Not explicitly stated

The company achieved net product sales of $118.7 million in the third quarter of 2025, with more than 103,000 bottles delivered to patients during that quarter. Broad coverage across commercial, Medicare, and Medicaid lives was more than 90% as of Q3 2025.

Dedicated investor relations for capital markets communication

Tarsus Pharmaceuticals, Inc. maintains active communication with the capital markets through a dedicated Investor Relations function, led by David Nakasone, Head of Investor Relations. This engagement involves regular updates on financial performance and business achievements.

Examples of recent capital markets interactions include:

• Reporting Third Quarter 2025 Financial Results on November 4, 2025.
• Management participation in the Wells Fargo 20th Annual Healthcare Conference on September 3, 2025.
• Management participation in the H.C. Wainwright 27th Annual Global Investment Conference on September 9, 2025.

The company ended the third quarter of 2025 with cash, cash equivalents, and marketable securities of $401.8 million.

Finance: review the Q4 2025 gross-to-net forecast against Q3 actuals by next Tuesday.

Tarsus Pharmaceuticals, Inc. (TARS) - Canvas Business Model: Channels

You're looking at how Tarsus Pharmaceuticals, Inc. gets its product, XDEMVY, into the hands of patients and covered by payers as of late 2025. It's a multi-pronged approach, heavily reliant on the medical community and payer acceptance.

Eye Care Professionals (ECPs) as the primary prescribers

The channel starts with the medical professional. Tarsus Pharmaceuticals, Inc. built its commercial infrastructure to target the specific doctors who treat Demodex blepharitis. The sales force expansion and targeting efforts reflect this focus.

The depth of prescribing among Eye Care Professionals (ECPs) shows clear adoption momentum through 2025.

Metric	Data Point (as of late 2025)	Reference Period
Targeted ECPs	15,000	Focus for sales force
ECPs Writing Multiple Prescriptions (Cumulative)	More than 20,000	End of Q3 2025
ECPs Prescribing >1 Bottle/Week (vs Q3 2024)	Increased by nearly 110%	End of Q1 2025
ECPs Prescribing >1 Bottle/Week (Sequential Growth)	Increased by approximately 30%	Q3 2025 vs Q2 2025

Specialty and retail pharmacies for product dispensing

Once prescribed, the product moves through the distribution network, which includes specialty and retail pharmacies. The volume of product dispensed reflects the success of the prescription channel.

Here's a look at the physical movement of the product through the supply chain:

Metric	Amount/Volume	Reference Period
Bottles Delivered to Patients	More than 103,000	Q3 2025
Bottles Dispensed to Patients	Approximately 91,000	Q2 2025
Bottles Delivered to Patients	Approximately 72,000	Q1 2025
Distributor Inventory Level	Approximately 2.5 weeks	Q2 2025

Direct-to-Consumer (DTC) media (TV, digital) for patient awareness

Tarsus Pharmaceuticals, Inc. is actively investing in DTC media to drive patients to ask their doctors about XDEMVY. This spend is a key part of the SG&A expenses.

The investment in patient awareness is substantial and growing:

• Full-Year 2025 DTC advertising budget is anticipated to be in the range of $70 million to $80 million.
• DTC advertising costs contributed to Q1 2025 SG&A expenses of $25.6 million in increased commercial and marketing costs.
• Unaided awareness more than tripled since the start of 2025 (as of Q2 2025).
• Website engagement increased by approximately 400% since the start of 2025 (as of Q2 2025).
• The DTC campaign launched in Q4 2024 with streaming and expanded to network TV in early 2025.

Insurance and government payers (Medicare, Medicaid) for reimbursement

Payer coverage is critical for patient access and dictates the gross-to-net discount Tarsus Pharmaceuticals, Inc. must absorb. The company has successfully negotiated broad coverage for XDEMVY.

Reimbursement channel metrics show strong payer acceptance:

Metric	Value/Percentage	Reference Period
Lives Covered (Commercial/Medicare/Medicaid)	More than 90%	Q3 2025
Gross-to-Net Discount	44.7%	Q3 2025
Gross-to-Net Discount	Approximately 47%	Q1 2025
Guided Gross-to-Net Discount	"low 40s"	By year-end 2025

The company's SG&A for Q3 2025 included variable costs associated with these payer interactions, such as prior authorization support.

Tarsus Pharmaceuticals, Inc. (TARS) - Canvas Business Model: Customer Segments

You're looking at the core groups Tarsus Pharmaceuticals, Inc. (TARS) serves right now, and where they plan to expand next. It's all about defining who gets the benefit of XDEMVY and who will eventually get the pipeline candidates.

US patients diagnosed with Demodex blepharitis

This is the immediate, established customer base for XDEMVY (lotilaner ophthalmic solution) 0.25%, the first and only FDA-approved treatment for Demodex blepharitis (DB). Honestly, the market size is substantial, which is why the launch momentum is so strong.

The potential patient pool in the U.S. is large; Demodex blepharitis may affect as many as 25 million Americans based on extrapolations from the Titan study, which suggested 58% of patients seen in U.S. eye care clinics show collarettes, the tell-tale sign of the mite infestation. Still, you have to remember that at least 45 million people annually visit an eye care clinic in the U.S. in general.

The commercial success reflects this segment's engagement. In the second quarter of 2025, Tarsus Pharmaceuticals, Inc. dispensed approximately 91,000 bottles of XDEMVY to patients. That followed approximately 72,000 bottles dispensed in the first quarter of 2025.

Eye Care Professionals (ECPs), including Ophthalmologists and Optometrists

These professionals are the gatekeepers; they diagnose DB and write the prescriptions. Tarsus Pharmaceuticals, Inc. has been aggressively targeting them with their sales force and direct-to-consumer (DTC) advertising. You want to see them moving from infrequent to consistent prescribing.

The company has successfully expanded its reach beyond its initial target list. As of the second quarter of 2025, more than 20,000 ECPs are prescribing XDEMVY. That represents a growth of more than 30% in the number of prescribers since the start of 2025. To show deeper engagement, in the first quarter of 2025, the number of ECPs writing more than one prescription per week increased by nearly 110% compared to the third quarter of 2024. The initial target list for this focused segment was approximately 15,000 ECPs.

Here's a quick look at the commercial traction in the first half of 2025:

Metric	Q1 2025 Value	Q2 2025 Value
Net Product Sales	$78.3 million	$102.7 million
Bottles Dispensed to Patients	Approximately 72,000	Approximately 91,000
Gross-to-Net Discount	Approximately 47%	Approximately 45%

US commercial and government health insurance payers

Payer coverage is what removes the financial barrier for both the ECP and the patient. Without it, even a great product stalls. Tarsus Pharmaceuticals, Inc. has made significant headway here, which is a huge enabler for the sales growth you see.

As of the second quarter of 2025, broad commercial, Medicare, and Medicaid reimbursement for XDEMVY now covers more than 90% of covered lives. This access is critical, especially since the prescription mix in the first quarter of 2025 showed a relatively equal split between Medicare and commercial patients. The gross-to-net discount, which reflects rebates and other adjustments, was around 47% in Q1 2025 and slightly improved to approximately 45% in Q2 2025.

Future: Patients with Ocular Rosacea and individuals at risk of Lyme disease

Tarsus Pharmaceuticals, Inc. is actively working to create new categories, which means defining and capturing these future segments. They are moving with a sense of urgency to address these high unmet needs.

For Ocular Rosacea (OR), the target population is significant, impacting an estimated 15-18 million people in the United States, and currently has no FDA-approved therapy. The company is on-track to initiate a Phase 2 study of TP-04 for OR in the second half of 2025.

For Lyme disease (LD) prevention, the target is the population at risk. Estimates for annual Lyme disease cases in the U.S. range from approximately 300,000 to 400,000. Tarsus Pharmaceuticals, Inc. is on-track to initiate a Phase 2 study for TP-05, the oral prophylactic tablet, in 2026.

The pipeline focus areas are:

• TP-04 for Ocular Rosacea (Phase 2 initiation in H2 2025).
• TP-05 for Lyme disease prevention (Phase 2 initiation in 2026).

Finance: review Q3 2025 payer contracting milestones against the 90% coverage target by end of year.

Tarsus Pharmaceuticals, Inc. (TARS) - Canvas Business Model: Cost Structure

You're looking at the cost side of Tarsus Pharmaceuticals, Inc.'s business model as they scale up the commercialization of XDEMVY. The costs are heavily weighted toward supporting this launch and advancing the pipeline. Honestly, the SG&A line is where you see the immediate impact of becoming a commercial-stage company.

High Selling, General, and Administrative (SG&A) costs for commercial launch are a major driver of the current cost structure. For the third quarter ended September 30, 2025, Tarsus Pharmaceuticals reported SG&A expenses of $296.6 million, a significant jump from $168.3 million in the third quarter of 2024. This increase reflects the heavy investment required to support the ongoing commercial launch of XDEMVY.

The R&D side shows a commitment to future growth through pipeline candidates. Significant R&D investment in pipeline candidates (TP-04, TP-05) contributed to the R&D expense for the third quarter of 2025 being $16.3 million, up from $12.1 million in the prior year period.

Here's a quick look at the key cost components for Q3 2025:

Cost Component	Q3 2025 Amount (Millions USD)	Context/Driver
Selling, General, and Administrative (SG&A) Expenses	$296.6	Commercial launch support, including marketing and personnel costs
Research and Development (R&D) Expenses	$16.3	Progression of pipeline candidates like TP-04 and TP-05
Cost of Sales	$8.3	Manufacturing, royalties, and milestone amortization for XDEMVY

The Cost of sales, including manufacturing and royalties, was reported at $8.3 million in Q3 2025, compared to $3.2 million in Q3 2024. This figure covers the direct costs associated with producing XDEMVY, plus the required royalty payments.

You see the commercial push clearly in the marketing spend breakdown. The increase in SG&A was primarily driven by commercial and marketing costs. For Q3 2025, the increase in commercial and marketing costs, which includes Direct-to-Consumer (DTC) advertising costs, was $81.5 million. This is part of a larger planned investment for the year.

The DTC budget is substantial, showing Tarsus Pharmaceuticals is spending heavily to drive patient demand. The full-year 2025 DTC budget was anticipated to be in the range of $70 million to $80 million.

Regarding the specific structure of the Cost of Sales, it includes several elements:

• Manufacturing costs related to XDEMVY.
• The royalty Tarsus pays on net product sales to its licensor.
• Amortization of milestones paid to the licensor, spread over the remaining useful life.

For R&D, the focus is on advancing the next wave of products. The increase in R&D expense in Q3 2025 was mainly due to $0.8 million of increased TP-04 program expenses. Conversely, TP-05 program spend saw a decrease of $0.8 million in that same quarter. Tarsus Pharmaceuticals plans to initiate a Phase 2 study of TP-04 for ocular rosacea in December 2025. Finance: draft 13-week cash view by Friday.

Tarsus Pharmaceuticals, Inc. (TARS) - Canvas Business Model: Revenue Streams

You're looking at the core of Tarsus Pharmaceuticals, Inc.'s current financial engine, which is heavily concentrated on one product right now. Honestly, this concentration is the biggest financial story for the company as of late 2025.

The primary, immediate revenue stream is the net product sales from XDEMVY, the treatment for Demodex blepharitis. The momentum here is significant, showing strong commercial execution.

• Net product sales from XDEMVY for Q3 2025 reached $118.7 million.
• The projection for full-year 2025 XDEMVY net sales is set in the range of $440-$445 million.

This single product's performance is what is driving the company's current top line. Here's a quick look at the recent quarterly sales trajectory:

Period	XDEMVY Net Sales
Q1 2025	$78.3 million
Q2 2025	$102.7 million
Q3 2025	$118.7 million

Beyond the immediate US commercial sales, Tarsus Pharmaceuticals, Inc. has built in other potential revenue streams, though these are less defined in terms of concrete 2025/2026 dollar amounts right now. These represent the future diversification you're looking for.

Potential future milestone or royalty payments from international partners represent a key secondary stream. While specific future payment amounts aren't published, progress with partners indicates activity:

• The New Drug Application (NDA) for XDEMVY (TP-03) submitted by the Chinese partner, Grand Pharmaceutical Group Ltd., is anticipated to receive a decision in 2027.
• The company is working toward a potential European regulatory approval for a preservative-free formulation of XDEMVY in 2027.
• Tarsus anticipates meeting with Japanese regulatory authorities in the second half of 2025 to determine the path forward for XDEMVY in Japan.

Future product sales from pipeline assets are the long-term growth catalyst, leveraging the same active ingredient, lotilaner. These are not generating revenue yet, but they represent significant future potential:

• TP-04 for Ocular Rosacea: The company plans to initiate a Phase 2 study in the second half of 2025, with results anticipated in 2026.
• TP-05 for Lyme disease prevention: The company is on-track to initiate a Phase 2 study in 2026.

Finance: draft 13-week cash view by Friday.