TARS - NASDAQ

Good afternoon, welcome to Tarsus First Quarter 2026 Financial Results conference call. As a reminder, this call is being recorded and all participants on a listen-only mode. After the CEO'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 Investor Relations, to lead off the call. David, you may begin.

Thank you. Before we begin, I encourage everyone to visit 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 afternoon are Bobby Azamian, our Chief Executive Officer and Chairman, Aziz Mottiwala, 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 statement. 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. 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. Thank you for joining us. We are off to a strong start in 2026, with a quarter that reflects the continued momentum of XDEMVY's launch and the strength of our key growth drivers. We've always believed XDEMVY would be revolutionary, and our strong first quarter results reflect that. Every key metric we track, including the number of writers, 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, XDEMVY 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 XDEMVY 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 collarettes. 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 TP-05 for the potential prevention of Lyme disease. Enrollment is progressing well with the first wave of participants already dosed, we expect topline 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. 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. TP-05 is a first of its kind investigational, oral on-demand prophylactic designed to target and kill ticks before they transmit disease. 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 TP-04, 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 million-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 TP-04 could be game-changing, and they can't wait to offer their patients an option like this. TP-04 is a novel, sterile investigational ophthalmic gel designed to treat Demodex mites, the root cause of disease.

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 topline data in the first half of 2027. Turning back to XDEMVY, 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. XDEMVY 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. With that, I'll pass it to Aziz.

Thanks, Bobby. As Jeff highlighted, in Q1, we delivered more than $145 million in XDEMVY 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. 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 XDEMVY, but in how often they prescribe. In the first quarter, nearly half of our 15,000 target ECPs prescribed XDEMVY at least once a week, up approximately 10% from Q4 2025.

As Bobby noted, ECPs continue to see incredible outcomes with XDEMVY 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 DB 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 KALs. 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 DB management protocols. As a reminder, we expect steady state retreatment rates of approximately 20%. Turning to 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 ECPs. More and more patients are coming into the office proactively asking about DB and XDEMVY.

Further, we continue to see millions of visitors to the xdemvy.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 lofty expectations. With over a year of experience, we now have a much clearer understanding of what specifically maximizes DTC performance. 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 XDEMVY and expand how ECPs think about DB. One key example is the data we presented at ASCRS on the association between DB with chalazion and hordeolum, 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. 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 KAL team, the scaling ROI of our DTC campaign, new patient-focused initiatives, and additional evidence that further supports the broad utility of XDEMVY. As Jeff will discuss, these drivers give us confidence in achieving full year guidance while continuing to expand the long-term opportunity for XDEMVY. 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 XDEMVY 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. As we entered the second quarter, XDEMVY 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 TP-03 for DB 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 million-$700 million, SG&A expenses of $545 million-$565 million, including approximately $40 million in stock-based compensation, R&D expenses of $115 million-$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 TP-05 for the potential prevention of Lyme disease during the first quarter.

Lyme disease is the most common vector-borne disease in the U.S., 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 TP-05 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 may have benefited from prophylactic Lyme therapies just like TP-05.

From a financial and operational standpoint, we are advancing this program with a clear development path and defined milestones, including expected topline data in the first half of 2027. Similarly, our ocular rosacea program continues to progress as planned, with topline data also anticipated in the first half of next year. Outside of the U.S., we continue to advance our global expansion efforts for TP-03 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 XDEMVY, and a robust and advancing pipeline with topline results in the first half of 2027. 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,. 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, more physicians are continuing to embed XDEMVY into routine care. This is a direct result of how we've deepened utilization in ECP practices, meaningfully grown awareness about DB, 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 XDEMVY and establish Tarsus as a leader in creating new standards of care. Operator, please open the line for questions.

Thank you. Ladies and gentlement, to ask a question at this time, you will need to press star one one on your touch-phone telephone and wait for your name to be announced. To withdraw your questions, simply press star one one again. Now first question coming from the line of Dennis Ding with Jefferies.

Hi. Thanks for taking our questions. We have two. On the second quarter, you know, I was surprised that you guys didn't give bottle guidance, but when I look at consensus, which is $168 million, it should imply around 145,000 or 150,000 dispensed bottles. That's about 13% or 14% 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? Number two, Glaukos has a phase II readout later this year for DB. They're delivering physostigmine, which is approved for glaucoma. You've mentioned before that you've looked at all these different assets. I'm curious what you think about the potential tolerability issues there since the drugs actually constrict pupils. In your own due diligence, are vision changes or blurry vision a liability with that asset? Thanks so much.

Hi, Dennis, this is Jeff. I'll take the first part of the question and then turn it over to Bobby for the second part. As we've moved into full-year guidance, we stepped away from the quarterly updates in terms of bottles dispensed, gross to net, absent some material change, right, where we don't believe we're going to be able to meet that guidance. Our expectation is really just to continue to provide updates on the guidance that we provided earlier. We're still believing 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. You shouldn't expect a 30% growth similar to what we saw between Q1 and Q2. You know, take into account the fact that we are starting on a bigger base now and, you know, make your adjustments accordingly.

Thank you, Dennis. This is Bobby. With respect to how we see the landscape, we're really focused on XDEMVY. You know, we've been creating a really important marketing category for patients, and we see that growing. I think the evidence we're generating around XDEMVY is robust with more to come. We believe that XDEMVY'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. In terms of XDEMVY'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. 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 of Graig Suvannavejh with Mizuho Group. Your line is now open.

Hi. This is Sam on for Graig. Thanks for taking our questions. Congrats on 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 Demodex blepharitis umbrella? Specifically, we're interested in the cataract surgery patient population. Second, given the reaffirmed guidance of $670 million-$700 million, can you walk us through some of the assumptions and drivers required to achieve that guidance, the prescription growth, gross-to-net normalization, and overall run rate through the balance of the year? Thank you.

Yeah. 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. 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. We think about not just cataract, dry eye. We think about, as we mentioned, patients that have hordeolum or chalazia, for example, and even other cases.

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 our 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. We've got some exciting things on our direct-to-consumer initiatives as well.

A lot more drivers to come, and I'll let Jeff speak to the mechanics in terms of the guidance.

Yeah. There's one other thing I would add. This is Bobby. You know, based on what I hear, these drivers are really playing out. As we've 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 chalazion 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. 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 KAL team, that'll sort of impact the growth over the quarter, particularly in the back half of the year. We continue to see the seasonality that we saw last year and the year prior to that. Much like we saw last year, Q1 was, you know, tempered. We saw some nice robust growth in the second quarter as the deductible sort of got blown through by the individual patients. Then we also see growth in the summertime, but much more tempered growth than say, between Q1 and Q2.

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. We anticipate that type of impact on a seasonal basis as well.

Thanks for the color. Thanks so much for the question.

Yeah. Thank you, Frank. I appreciate that question. I know you've tracked our story for a long time. You've seen the playbook that we've really applied in the development of XDEMVY, and we're applying that same playbook in OR. You know, to your point, it starts with a disease that has a clear root cause, and clearly identifiable patients. We see that in OR. To your question, we see that the majority of patients with OR have Demodex. It is harder to measure. You don't have the benefit of a collarettes that you can pull from around the eye, you do have clear signs. Those are signs of inflammation, signs of redness, erythema, and telangiectasias, they're called.

Thank you, Frank.

Thank you. Our next question coming from the line of Jenna Davidner with Barclays. Your line is now open.

Hi. Thank you for taking my question. I had one on Lyme disease. As Bobby mentioned, there's a lot of elevated concern right now around ticks. 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? Just given the elevated concern 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. 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. 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, TP-05, which is an oral on-demand. Really, patients can take it, you know, where they fit and on demand. That's, I think, a very unique potential medicine.

You know, in this trial, we're gonna get some good data. We hope, on safety, on dosing, and really be prepared for a phase III. Be phase III-ready, as I mentioned. 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 III. I think delivering a package with a great, robust phase II 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. You know, we have other vaccines that have been developed in this space, so we're largely following that guidance.

I think the phase III is TBD based on our phase II, but, you know, our base case is that we'd have to conduct a large vaccine-like phase III. That's something we'd have clarity around as we got ready for that and talk to potential partners.

Thank you. Our next question coming from the line of Jason Gerberry with Bank of America, your line is now open.

Hi. This is Melanie on for Jason, thanks for taking our question. 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. How should we be thinking about kind of that incremental impact on top of the typical, like, seasonality that you guys flagged with like a stronger second half? Thank you.

Yeah, Melanie, I think adding these key account leaders is gonna 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 sales force prior. We're using a very similar approach. The key account leader is a very unique position in that it's really targeted toward just increasing depth of prescribing we're seeing. 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. Even our top doctors have room to grow, and we're seeing a broader opportunity with doctors being able to prescribe more in general. These key account leaders are some of the most experienced and sophisticated sales individuals.

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. We are able to deploy them and train them. They are in the process of finalizing that training, and then they will be out there in the third quarter. I think you are going to start to see that. Now, again, it is about 17 to 20 people. This is not like a massive expansion of the sales force, but what I think you are going to see is that this is going to catalyze even more depth of prescribing. It is a key element of this being a driver to get to the targets we have this year. I would expect you to see that right away.

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. I think about this as depth of prescribing, change of behavior over time, and allowing us to continue a great growth short, growth trajectory. Again, you are gonna see seasonality in the quarters, as Jeff mentioned.

Thank you.

Thank you. Our next question coming from the line of Mazahir Alimohamed 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? 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, Mazi. The retreatment's 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. As a reminder, what we said is that we'd expect retreatments to be a 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. Again, that's up quarter-over-quarter, one of those key metrics. We're seeing that steadily progress. We'd expect that to even out at around 20%. To answer your question, when we think about the long-term potential, you can assume that about a steady state, 20%. In a future revenue, 20% of that would be due to retreatments, because that implies that steady state, 20%.

Yeah. Yeah, that makes a lot of sense. Well, thanks. That's all from us. 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 know, you have a stronger than expected gross to net in the first quarter. Can you maybe elaborate on what drove that? Is that, you know, the mix shift? Is it driven by the changes in Medicare or some one-off items? How should we think about that sort of flowing through? You know, we typically have a cadence of gross to net stepping down throughout the year. Should we still expect that, or is it gonna 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. 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, you know, I think we are still very comfortable that we will be exiting, you know, Q4 in that 43%-45% range. I would just guide you to the fact that we would expect to be somewhere within that range for the year.

Okay, great. Thanks. Maybe one for Aziz. You know, the continued sort of strong growth in website visits, especially the high value sort of activities on the website, seems pretty encouraging. Has the conversion rate to the extent you can sort of track it, the conversion rate from, you know, website visits and e-scripts sort of maintained constant, so sort of tracking in line with the increase in visits?

Sure. When we look at DTC, this is an area that's really compelling, an area that we're really excited about the trajectory here. You highlighted the increased HVAs. You know, we're really pleased because the ROI overall is continuing to improve. It's already ahead of what the benchmarks are. Ahead of our expectations. 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? What you're seeing is Q1 is a patient flow thing, right, where we lost days of weather. 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.

I think you're gonna 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. 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 gonna be. 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. Our next question coming from the line of Eddie Hickman with Guggenheim. Your line 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-to-net profile change between a refill prescription and a new start? Like, do you get a better sort of net price realization if a patient sort of is coming back and doesn't need to go through the whole co-pay assistance program? Just sort of curious how that dynamic may shift beyond the sort of typical seasonal gross 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, you know, the prior auth proposal as well as potentially provide some co-pay [assistance] for that product as well. It's not likely to change much.

Got it. Maybe somebody already asked this, but did you sort of talk specifically about which federal agencies have tremendous interest in TP-05, 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 highlighted, and Jenna highlighted as well that there's a lot of interest here. There's a LymeX group that is looking at opportunities to speed up approvals, particularly in the phase III realm, and sort of stepping away from the disease prevention approach that vaccines typically do. They're invested in looking at diagnostics and some other areas that can speed up the development pathway there. RFK, who is part of the HHS program, has made this a high priority, as has Makary. The FDA has really taken an aggressive approach here and is looking to speed therapeutics to market as quickly as we can.

Got it. Appreciate that.