Tarsus Pharmaceuticals Inc. (TARS:NASDAQ) has announced that XDEMVY (lotilaner ophthalmic solution) 0.25% is now available at pharmacies nationwide for prescription. The U.S. Food and Drug Administration (FDA) approved XDEMVY on July 24, 2023, for the treatment of Demodex blepharitis.
According to Bobak Azamian, MD, PhD, CEO and Chairman of Tarsus, "We are delighted that within weeks of FDA approval, XDEMVY is now available to millions of patients with Demodex blepharitis. The efforts of our team have created incredible interest in XDEMVY, the first and only approved solution for this highly prevalent disease . . . We are proud to introduce XDEMVY to the eye care community and look forward to its potential to significantly change the way this disease is treated."
The drug is unique because it is the sole FDA-approved medication that targets Demodex mites rather than symptoms of Demodex blepharitis. Symptoms of the condition include redness and inflammation, misplaced or malformed eyelashes, itching on the base of the eyelid, and collarettes. This is a prescription eye drop that is administered with one drop in each eye twice a day for six weeks.
Tarsus has stated that it is committed to ensuring that patients have affordable and broad access to XDEMVY and developed Tarsus Connect, a suite of assistance programs that provide financial support for eligible patients.
Eye Care Market Growth
In its investor presentation, Tarsus noted the expected Ophthalmic market is US$36 billion by 2028.
Future Market Insights also touched on the global eyecare market, saying, "The global vision care market is valued at US$ 83.72 billion in 2022. The market is expected to be valued at US$ 169.37 billion by 2032. The CAGR is expected to be 7.3% during the forecast period."
Catalysts Through 2025
In the same company presentation mentioned above, Tarsus noted its pathway to what it believes is "blockbuster potential" for XDEMVY.
This year, the company plans to focus on getting physicians to adopt their medication and garnering better accessibility for it through patient bridge programs.
In 2024, Tarsus' goals are to broaden the commercial range of its products, reach net revenue expectations, and add to its prescriber base.
In 2025, the company has an eye for growth. Tarsus will attempt to receive broad Medicare coverage and advance expected net revenue.
The presentation notes that Tarsus believes there is a US$1 billion peak net sales potential for XDEMVY.
As for its other products, Phase 3 data for TP-03 is anticipated for the last quarter of 2023, and Phase 2a data for TP-04 is anticipated to be released in H1 2024.
Outperform Rating
In an August 11 note, LifeSci Capital rated Tarsus Pharmaceuticals Outperform, gave the company a target price of CA$60 per share.
According to LifeSci, "We assume a WACC of 15%, a 2% terminal growth rate, and fully diluted shares of 38.7 million. We assume a 90% probability of success for TP-03 in Demodex blepharitis, with 2030 sales of approximately CA$1 billion . . . We consider an investment in Tarsus to be a high-risk investment, for risks not limited to regulatory, competitive, commercial, intellectual property, and financial."
Oppenheimer Equity Research also rated Tarsus Pharmaceuticals as "Outperform" in an August 24 research note.
They gave the company a target price of CA$55 and said of the company, "With the salesforce deployed, we expect their efforts to start bearing fruit as they target ophthalmologists and optometrists nationwide. Based on the strength of the P3 trials and the positive reception by the ECPs, we believe XDEMVY is well-poised for commercial success."
Ownership and Share Structure
In terms of management and institutions, Michael Ackermann owns 3.70% of the company with 1.21 million shares.
Institutions own 49.37% of the company. RTW Investments LP owns 7.81% with 2.55 million shares, Vivo Capital, LLC, owns 6.94% with 2.26 million shares, Cowen & Co., LLC, owns 6.13% with 2.00 million shares, Frazier Healthcare Partners owns 5.48% with 1.79 million shares, BlackRock Institutional Trust Company NA owns 5.46% with 1.78 million shares, Tang Capital Management, LLC, owns 5.45% with 1.78 million shares, Cormorant Asset Management, LP, owns 4.36% with 1.42 million shares, Perceptive Advisors LLC owns 3.97% with 1.30 million shares, and The Vanguard Group, Inc. owns 3.77% with 1.23 million shares.
There are 32.62 million shares outstanding and 28.42 million free-float traded shares. The company has a market cap of CA$567.53 million. It trades in the 52-week period between CA$11.33 and CA$25.25.
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