Title

Presentation

Tarsus Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-0.16, expectations were $-0.40033.

Operator: Good afternoon, and welcome to Tarsus Pharmaceuticals, Inc. 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 speakers’ 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 misalation, to lead the call. David, you may begin.

David Nakasone: Thank you. Before we begin, I encourage everyone to visit the Investors section of the Tarsus Pharmaceuticals, Inc. website to view the earnings release and related materials we will be discussing today. Joining me on the call this afternoon are Bobak R. Azamian, our Chief Executive and Chairman, Aziz Mottiwala, our Chief Commercial Officer, and Jeffrey S. Farrow, our Chief Financial Officer and Chief Strategy Officer. I would 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 detail. With that, I will turn the call over to Bobak R. Azamian.

Bobak R. Azamian: 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 XTENVI’s launch and the strength of our key growth drivers. We have always believed XTENVI would be revolutionary and our strong first quarter results reflect that. Every key metric we track, including the number of prescribers, depth of prescribing, awareness, and evidence generation, continues 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 over the next couple of years, and realize $2 billion in peak sales potential. In the first quarter of 2026, XTENVI 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 are hearing directly from ECPs: they describe XTENVI as one of the most impactful medicines they have ever used, with consistent outcomes, clear utility across their practices, and broad access that is nearly universal. It works, it is 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 collarette. That is what ultimately drives a larger addressable market over time—more patients identified, and more patients treated. What we are building at Tarsus Pharmaceuticals, Inc., however, is not a one-product story.

We have developed a disciplined, repeatable playbook for identifying diseases with clear root causes and significant unmet need, and transforming how they are 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 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 cannot 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 the 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 have 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, and 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 cannot wait to offer their patients an option like this. TPO4 is a novel sterile investigational ophthalmic gel designed to treat Demodex 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 2027. Turning back to XTENVI, 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. XTENVI is only one piece of a larger story. We are deliberately building Tarsus Pharmaceuticals, Inc. to create and lead new categories in eye care and beyond, with the pipeline and playbook to do it repeatedly. And with that, I will pass it to Aziz.

Aziz Mottiwala: Thanks, Bobak. As just highlighted, in Q1 we delivered more than $145 million in XTENVI 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 have 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 thousand target ECPs prescribed XTENVI at least once a week, up approximately 10% from Q4 2025.

As Bobak noted, ECPs continue to see incredible outcomes with XTENVI 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 are 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 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 XTENVI. Further, we continue to see millions of visitors to the xtenvi.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, and we are 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 are amplifying what is 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 are also continuing to make investments in evidence generation that reinforce the broad utility of XTENVI 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—and we are hearing directly from doctors that they are 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 is 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 XTENVI. And as Jeffrey will discuss, these drivers give us confidence in achieving full-year guidance while continuing to expand the long-term opportunity for XTENVI. Over to you, Jeffrey.

Jeffrey S. Farrow: Thanks, Aziz. Building on what Bobak and Aziz outlined, we delivered net product sales of $145.4 million, reflecting strong year-over-year growth from growing demand for XTENVI 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 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 to $700 million, SG&A expenses of $545 million to $565 million including approximately $40 million in stock-based compensation, R&D expenses of $115 million 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 Bobak 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 TPO5 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 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 Bobak, 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 XTENVI and a robust and advancing pipeline with top-line results in 2027. With that, I will turn it back to Bobak for closing remarks.

Bobak R. Azamian: Thanks, Jeff. Tarsus Pharmaceuticals, Inc. continues to execute on one of the most successful launches in eye care, and we have delivered so much 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 XTENVI into routine care. This is a direct result of how we deepened utilization in ECP practices, meaningfully grew 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 XTENVI and establish Tarsus Pharmaceuticals, Inc. as a leader in creating new standards of care. Operator, please open the line for questions.

Operator: Thank you. To ask a question at this time, you will need to press 1-1 on your touch-tone telephone and wait for your name to be announced. To withdraw your question, simply press 1-1 again. Please stand by while we compile the Q&A roster.

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Operator: Our first question comes from the line of Yuchen Ding with Jefferies. Your line is now open.

Yuchen Ding: Hi, thanks for taking our questions. We have two. On the second quarter, I was surprised that you did not give bottle guidance, but when I look at consensus, which is $168 million, it should imply around 145 thousand to 150 thousand dispensed bottles. That is 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? And then second, Glaukos has a Phase II readout later this year for DB. They are delivering physostigmine, which is approved for glaucoma. You have mentioned before that you have looked at all these different assets, so I am curious what you think about the potential tolerability issues there since the drug actually constricts pupils. From your own due diligence, are vision changes or blurry vision a liability with that asset? Thanks so much.

Jeffrey S. Farrow: Hi, Dennis—this is Jeff, and I will take the first part of the question and then turn it over to Bobak for the second part. As we have moved into full-year guidance, we have stepped away from the quarterly updates in terms of bottles dispensed and gross-to-net, absent some material change where we do not believe we are going to be able to meet that guidance. Our expectation is to continue to provide updates on the guidance that we provided earlier. 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 smaller base at that point in terms of total bottles, so we should not expect 30% growth similar to what we saw between Q1 and Q2 last year. Take into account the fact that we are starting on a bigger base now and make your adjustments accordingly.

Bobak R. Azamian: Thank you, Dennis. With respect to how we see the landscape, we are really focused on XTENVI. We have been creating a really important market category for patients, and we see that growing. I think the evidence we are generating around XTENVI is robust, with more to come, so we believe that XTENVI’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 are not surprised that people are also looking at this market, but in terms of XTENVI’s effectiveness, its safety, and the product profile, it is just such a great standard of care. I hear time and again, like I did in the field this quarter, how this is the best medicine a lot of doctors have seen, so we are really focused on building on that success and creating a lasting standard of care.

Operator: Thank you. Our next question comes from the line of an Analyst with Mizuho. Your line is now open.

Analyst: Hi, this is Emma for Greg. Thanks for taking our questions and congrats on the quarter. Maybe two from us. First, how much of the current growth is coming from the extension use cases under the Demodex blepharitis umbrella? Specifically, we are interested in the cataract surgery patient population. And then second, given the reaffirmed guidance of $670 million to $700 million, can you walk us through some of the assumptions and drivers required to achieve that guidance, including prescription growth, gross-to-net normalization, and overall run rate through the balance of the year?

Aziz Mottiwala: When we think about the market and how the product is performing, one of the great things we highlighted in the prepared comments and what we are hearing clearly from physicians 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 are definitely seeing a lot of utilization across all of those segments, and we have really shifted our strategy now to not only go after those segments but to go more broadly. There are 25 million Americans out there and they are coming into the funnel. We think about not just cataract and dry eye; we think about, as we mentioned, patients that have hordeolum or chalazia, for example, and even other cases.

The way to think about this is physicians are using this across every segment we have highlighted, and they continue to expand to new segments—that is where our evidence generation strategy will fuel growth. In terms of some key drivers, I would highlight that coming off of this quarter, we saw progression in every metric we track commercially—depth, and all of our consumer metrics—which sets us up nicely for the rest of the year. We have our key account leaders deploying; they will start to make an impact in the third quarter and in the back half of the year, and we have some exciting things on our direct-to-consumer initiatives as well. A lot more drivers to come, and I will let Jeff speak to the mechanics in terms of the guidance.

Bobak R. Azamian: Aziz, one other thing I would add—based on what I hear, these drivers are really playing out. I am hearing doctors that are treating regardless of symptoms, treating with any comorbidity, and in the setting of cataract surgery. I am excited about the evidence that we generated and evidence to come. I think chalazion is one of those examples where there are lots of reasons to treat, and that is really leading to the expansion of the patient population and the addressable market here. Jeff, I will pass to you.

Jeffrey S. Farrow: Thanks, Emma, for your question. In addition to the broad strokes Aziz mentioned—growing depth of prescribing, DTC impact, and evidence generation that Bobak highlighted—and the impact of the KAL team, those will impact growth over the quarters, particularly in the back half of the year. We continue to see the seasonality that we saw last year and the year prior. Much like last year, Q1 was tempered, but we saw some nice robust growth in the second quarter as the deductibles got blown through by individual patients. We also see growth in the summertime, but much more tempered than 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, have run through their deductibles, and are trying to use up their FSA. We anticipate that type of seasonal impact as well.

Operator: Thank you. Our next question comes from the line of an Analyst with LifeSci Capital. Your line is now open.

Analyst: Congrats on the quarter. Just a couple of questions. I am getting some questions on ocular rosacea. You mentioned it is the root cause of the disease. I think with blepharitis, in the trials you were plucking eyelashes and you can legitimately see the mites, and it is a pathognomonic sign when you see the collarettes now. How comfortable do we feel that ocular rosacea is—Demodex mites are causing the ocular rosacea?

Bobak R. Azamian: Thank you, Frank, and I appreciate that question. You have tracked our story for a long time, and you have seen the playbook that we applied in the development of XTENVI and are applying in OR. To your point, it starts with a disease that has a clear root cause and clearly identifiable patients, and 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 do not have the benefit of a collarette that you can pull from around the eye—but you do have clear signs. Those are signs of inflammation, redness, erythema, and telangiectasia. We know that when patients have those signs, they are very likely to have Demodex as an underlying root cause.

That is the basis of our approach here. I will also add we are hearing a lot of great interest in OR as well. When I am out in clinics or talking to doctors about XTENVI, they raise OR. They say, “I am looking at these patients; I have something great for the added margin, but I do not have anything for the inflammation around their eyes.” They are seeing how important this disease is now that they are taking a close look around the eyes. We see an opportunity to create a category with a very similar playbook.

Analyst: Great. And then just on the endpoint side, to compare it to what you have done in the past, the collarette cure rate was very interesting for blepharitis. In this case, can you remind us what the endpoints are and the comfort on the regulatory side of those endpoints?

Bobak R. Azamian: Absolutely. We are enrolling patients by OR, and we are looking at OR endpoints—those same telangiectasias and erythema. We have aligned with the FDA that we need to look at those endpoints and we need to see an improvement in one of them. That is how we are structuring the trial, and that is the bar we expect for success in the Phase II trial that we are conducting.

Analyst: If I could sneak in a last one. In terms of the second quarter, Jeff, thanks for breaking out first-quarter seasonality and the cadence. In the second quarter, can you give any granularity as to what is to be expected in the months of the second quarter?

Jeffrey S. Farrow: In terms of revenue, Frank?

Analyst: Yes, or scripts. Sometimes there are weeks that are harder, or there are summer months with holidays and conference time. Any granularity on what goes on in the second quarter that we should pay close attention to?

Jeffrey S. Farrow: Part of that was the impact of the spring break timeframe, which we have already passed through in large part in April, so that is behind us. There are some conferences that could pull some doctors out of the office, but we do not anticipate that to be much greater than what we have seen historically. You can think about this as on a growth trajectory upwards for the rest of the quarter.

Analyst: Great. And do you break out how your patients are broken down between age groups? Is it the older crowd or the younger crowd you are treating?

Jeffrey S. Farrow: We see utilization across a wide array of patients. Cataract patients are typically an aging population, so we see a lot of utilization there. But patients with contact lenses or dry eye span the entire patient population. While there is a higher propensity in elderly patients—you are right about that—we see more and more younger patients, professionals working and looking at the screen all day, noticing their eyes are bothering them. They see the ad, they are motivated to talk to their doctor. We are seeing utilization across the board—cataract is obviously an elderly population, and elsewhere it is a diverse population of patients getting treated.

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

Jenna Davidner: Hi, thank you for taking my question. I had one on Lyme disease. As Bobak mentioned, there is a lot of elevated concern right now around ticks, so I was 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. Given the elevated concern and that there is no FDA-approved prophylactic treatment, do you think there is any pathway toward an accelerated approval timeline? Thank you.

Bobak R. Azamian: Thank you so much, Jenna. Thanks for highlighting the Lyme program. We hear a lot of interest in this program. There is not really a week that goes by that I do not see something in the press or media about Lyme disease, and tick season has now started. We are very excited about the program. We have advanced it into this Phase II trial that is groundbreaking in many ways—700 patients across a broad array of participants and geographies. We are using a very novel investigational medicine, TPO5, which is an oral on-demand option—patients can take it where they sit and on demand—and that is a very unique potential medicine. In this trial, we expect to get good data on safety and dosing and be Phase III ready, as I mentioned.

That will allow us to assess where this fits. Our base case is this is better in someone else’s hands as it goes to Phase III, but delivering a robust Phase II data set with FDA clarity on the path forward will be important. In terms of the FDA’s guidance, they have been very collaborative. There have been other vaccines developed in this space, so we are largely following that guidance. The Phase III is TBD based on our Phase II, but our base case is that we would have to conduct a large vaccine-like Phase III, and that is something we would have clarity around as we get ready for that and talk to potential partners.

Operator: Our next question comes from the line of Jason Matthew Gerberry with Bank of America. Your line is now open.

Analyst: Hi, this is Melanie on for Jason. Thanks for taking our question. You 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 think about that incremental impact on top of the seasonality you flagged, with a stronger second half? Thank you.

Jeffrey S. Farrow: Melanie, adding these key account leaders is going to be a great catalyst for us in a lot of ways. We have shown when we added people, we can get a response right away—we did this when we expanded our sales force prior, and we are using a very similar approach. The key account leader is a unique position targeted toward the increasing depth of prescribing we are seeing. Two things I will tell you: no one in our called-on audience, no physicians we are talking to, have capped out yet—even our top doctors have room to grow—and we are 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, and again, this is against a very high bar because we have a great sales team.

They will be targeted against the highest-opportunity practices that are having good success but could be doing more. We are finalizing training, and they will be out there in the third quarter. I think you are going to start to see that. It is about 17 to 20 people; this is not a massive expansion of the sales force, but this will catalyze even more depth of prescribing and is a key element to drive to the targets we have this year. I would expect you to see that right away, and you will see that bear through the seasonality, but it does not alleviate the impact of seasonality—that is a patient-flow issue, not so much an execution issue. Think of this as depth of prescribing, change of behavior over time, and allowing us to continue a great growth trajectory.

You will still see seasonality in the quarters, as mentioned.

Operator: And our next question comes from the line of an Analyst with Oppenheimer. Your line is now open.

Analyst: Hi, thanks for taking our questions. A couple from us. First, can you give any additional color on what percentage of prescriptions dispensed in the quarter represent retreatment patients versus new starts? Second, thinking about the $2 billion peak sales number, how much of that is predicated on retreatment becoming recurring annual behavior versus purely new patient identification?

Aziz Mottiwala: Retreatment is something we get a lot of questions on and something we are tracking closely. It is also something we have seen progress nicely over the last several quarters. As a reminder, we have said we would expect retreatment to be at steady state around 20%, meaning at any given week of prescriptions, about 20% of the composition would be retreatments. What we are seeing so far is retreatment averaging in the mid-to-high teens, and that is up quarter over quarter—one of those key metrics—so we are seeing that steadily progress. We would expect that to even out at around 20%. To your question on long-term potential, at steady state you can assume about 20%, so in a peak-year revenue, approximately 20% would be due to retreatment.

Operator: Thank you. Our next question comes from the line of Lachlan Hanbury-Brown with William Blair. Your line is now open.

Lachlan Hanbury-Brown: Hey, thanks for the question. First for Jeff: you had stronger-than-expected gross-to-net in the first quarter. Can you elaborate on what drove that? Is that the mix shift, changes in Medicare, or some one-off items? How should we think about that 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?

Jeffrey S. Farrow: Lachlan, good to hear you. We are not providing gross-to-nets on a quarterly basis now that we have moved to full-year revenue guidance. I would say we did see the typical seasonality in the first quarter in terms of copays resetting and driving some additional support. That said, we are very comfortable that we will be exiting Q4 in the 43% to 45% range. I would guide you to expect it to be somewhere within that range for the year.

Lachlan Hanbury-Brown: Great, thanks. And maybe one for Aziz. The continued strong growth in web visits and especially the high-value activities on the website seems encouraging. Has the conversion rate—from website visits to e-scripts—to the extent you can track it, maintained constant so it tracks in line with the increase in visits?

Aziz Mottiwala: On DTC, this is an area that is really compelling and one we are excited about. You highlighted the increased high-value activities. We are pleased because the ROI overall continues to improve and is already ahead of benchmarks and our expectations. We do not get into specific conversion metrics, but if the ROI is improving, it implies more patients are getting on therapy. Q1 is a patient-flow thing—there were lost days due to weather—so I would not think about Q1 versus those engagement metrics as the comparator. Patients are ready to go, and we are seeing the impact even early in Q2 with prescriptions near all-time high levels. I think you will continue to see that stack over time. The great thing about DTC is once you get to a great ROI—and I have seen this in my career—you can start to see a stacking effect where patients are primed and ready to go.

This also validates the strategy of continuing to drive depth of prescribing. The more doctors looking for more patients, the better our conversion is going to be. This is the one-two punch we are working on, and you are seeing positive trajectory on both fronts.

Operator: Thank you. Our next question comes from the line of Francis Edward Hickman with Guggenheim. Your line is now open.

Francis Edward Hickman: Thanks for taking the question. Congrats on the progress. Another one on the gross-to-net. As this retreatment cohort expands toward that 20% that you have guided for, does the gross-to-net profile change between a refill prescription and a new start? Do you get better net price realization if a patient is coming back and does not need to go through the whole copay assistance program? Curious how that dynamic may shift beyond the typical seasonal gross-to-net changes you have already talked about.

Jeffrey S. Farrow: Great question, Eddie. It is not likely to change on a refill patient. They still have to go through the prior authorization process as well as potentially provide some copay for that product as well, so it is not likely to change much.

Francis Edward Hickman: Got it. And did you talk specifically about which federal agencies have interest in TPO5 and what that means for acceleration of the program?

Jeffrey S. Farrow: Sure, Eddie. We have a strong government affairs team that has been engaged. As you and Jenna highlighted, there is a lot of interest here. There is a Lyme-focused group looking at opportunities to speed up approvals, particularly in the Phase III realm, and stepping away from the disease-prevention approach that vaccines typically do. They are invested in looking at diagnostics and other areas that can speed up the development pathway. And then RFK, who is part of the HHS program, has made this a high priority. As has McCarray. The FDA has taken an aggressive approach here and is looking to speed therapeutics to market as quickly as we can.

Operator: Thank you. 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.

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