Tarsus Pharmaceuticals Inc

NASDAQ:TARS

Earnings Call Analysis

Tarsus's Strong Q2 with Promising Growth Strategies

Tarsus has exceeded expectations with its FDA-approved therapy XDEMVY, generating over $40 million in Q2 sales, a 65% increase from Q1. The company has expanded its market significantly, with approximately 11,000 eye care providers now prescribing XDEMVY. To further boost growth, Tarsus is planning to expand its sales force and launch a consumer TV campaign. Gross margins were stable at 93%, and the firm ended the quarter with $323.6 million in cash and marketable securities. Looking ahead, Tarsus anticipates continued momentum into Q4 and 2025, driven by robust sales strategies and broader Medicare coverage.

Strong Performance in Q2 2024

In the second quarter of 2024, Tarsus celebrated a significant achievement with over $40 million in sales, marking a 65% increase from the previous quarter. This growth was fueled by the successful launch of XDEMVY, the first FDA-approved therapy for Demodex blepharitis, and the company delivered more than 37,000 bottles to patients. The adoption rate among eye care providers (ECPs) has also been promising, with approximately 11,000 out of a target of 15,000 now prescribing XDEMVY.

Market Penetration and Future Outlook

The company is further expanding its sales force to enhance market penetration, with expectations for complete deployment by the end of Q3. Tarsus plans to launch its first direct-to-consumer television campaign, anticipated to boost visibility and demand from patients. Looking ahead, Q3 is expected to see a modest growth of around 10% from Q2, projecting approximately 41,000 bottles dispensed, while more aggressive growth is expected in Q4 and into 2025.

Revenue Growth and Pricing Power

Tarsus achieved an impressive gross-to-net discount of about 44%, reflecting the strong market access secured. This improvement in gross-to-net discount is a substantial decrease from 55% in the previous quarter, and the company anticipates this metric to stabilize within the mid-40s for the remainder of the year. Furthermore, the net price of XDEMVY is reported at over $1,000 per bottle, establishing a strong position in the therapeutic segment. Management expects continued high acceptance rates as new payer contracts come into effect.

Expansion of Patient Base and Long-term Value

With around 1.5 million patients currently seeking treatment for Demodex blepharitis and additional segmentation into 5.5 million with related eye conditions, Tarsus is targeting a multibillion-dollar market opportunity. The almost universal positive feedback from ECPs regarding XDEMVY's effectiveness serves as a catalyst for its uptake, with doctors increasingly finding more patients suitable for treatment. The expansion of the sales force is crucial to ensuring ongoing education and support for ECPs, further facilitating wider adoption.

Expectations for 2025 and Beyond

Looking towards 2025, Tarsus anticipates improved performance through the increased volume of bottles sold and a strengthening payer mix, especially with the introduction of Medicare coverage scheduled to start this year. The company projects its gross-to-net discount to range from approximately 42% to 46% exiting the year, after adjustments for Medicare dynamics. Moreover, retreatment rates are expected to become more significant as more patients return for additional courses of treatment, likely leading to substantial continuing revenue growth.

Conclusion

Overall, Tarsus demonstrated exceptional commercial execution in Q2 2024. With significant revenue growth, strong adoption rates among a growing number of ECPs, and an expanded marketing strategy, the company is well-positioned for future growth. Investors should find the company’s trajectory intriguing as it opens new avenues in eye care, potentially leading to long-term value and sustained market presence.

Earnings Call Transcript 2024-Q2

[Operator]

Good afternoon, and welcome to the Tarsus Second Quarter 2024 Financial Results Conference Call. As a reminder, this call is being recorded. 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.

[David Nakasone, executive]

Thank you. Before we begin, I encourage everyone to go to the Investors section of the Tarsus website to be the earnings release and related materials we will be discussing today. Joining me on the call this afternoon are Azamian, our Chief Executive Officer and Chairman; Aziz Mottiwala, our Chief Commercial Officer; Jeff Farrow, our Chief Financial Officer and Chief Strategy Officer, and joining us for the question-and-answer session, Sesh Neervannan, our Chief Operating Officer.



I'd like to draw your attention to Slide 3, 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 Bobby.

[Bobak Azamian, executive]

Good afternoon, everyone, and thank you for joining us. I am excited to share yet another quarter of impressive results as we continue to exceed launch expectations for XDEMVY, including our own. This call is particularly special as we have just surpassed the 1-year mark of XDEMVY being the first and only FDA-approved therapy for the treatment of Demodex blepharitis, or DB for short. It was an important opportunity to reflect on one of the most transformative moments in Tarsus history while also looking forward to redoubling our efforts in this next phase of the XDEMVY launch. With just 3 full launch quarters under our belt, we are well on our way to creating what we believe will be one of the largest categories in eye care based on 3 key metrics: the number of patients we are serving, the speed with which eye care providers or ECPs have adopted XDEMVY and the exceptional high-quality payer coverage we have secured to date. To further accelerate our success, we are investing in an expanded sales force that we expect will be fully deployed by the end of this quarter and the planned launch of our first-ever consumer television campaign later this year. You'll hear more about these plans from Aziz in a moment.



But first, let's turn to our outstanding Q2 results, which include generating more than $40 million in sales. That's a 65% increase over Q1 2024, delivering more than 37,000 bottles to patients, increasing traction among our target base of 15,000 ECPs. Currently, approximately 11,000 of these ECPs are prescribing XDEMVY with more than 60% prescribing XDEMVY to multiple patients. And finally, recognizing an exceptional gross to net discount of approximately 44% that reflects the unique value of XDEMVY and the dedicated efforts of our market access team. As a result, we are now recording a net price of more than $1,000 per bottle. That's an impressive standard by any measure and one that is rarely seen with other front-of-the-eye therapeutic launches. Importantly, we expect to maintain this high value throughout the remainder of 2024 with even more improvement anticipated in early 2025 when broad Medicare coverage comes online. Our mission since our founding has been to pioneer new medicines for diseases with significant unmet need. And while creating a new category is not easy or fast, Tarsus is doing just that. Thanks to years of research, strong clinical trial results, months of prelaunch educational efforts and the relentless work of the entire team, we are delivering on the promise of a potential blockbuster.



Perhaps the most exciting element is our strong belief that we are just scratching the surface of the potential of XDEMVY. We have made significant traction in reaching the roughly 1.5 million patients already diagnosed with and seeking treatment for DB. This initial address in both segment alone represents a potential $1 billion market opportunity. Beyond that, we are already expanding into the additional segments, we believe, make up the remaining 5.5 million patients who visit ECPs with complementary eye conditions such as dry eye disease, cataracts and patients who struggle to stay on their contact lenses. Not to mention the additional 18 million patients with DB visiting ECP offices who can ultimately be served with XDEMVY. Together, they represent a multibillion-dollar potential opportunity. Any way you look at it, the enormous market potential of XDEMVY is clear. Millions of patients are actively seeking solutions. ECPs are excited by the success stories within their practices and motivated to identify and help more patients. We are seeing increasing adoption and utilization in the additional DB patient segments of dry eye, cataracts and contact lens users. And with the support of our field teams, more and more ECPs are moving along the continuum from trialing XDEMVY to championing it as a consistent prescriber.



As a physician, I really enjoy being in the field, listening and learning from our ECPs who consistently tell me about the positive impact of XDEMVY on their patients. I recently met with a father-daughter team in Denver, whose practice has been around for 30 years. During my visit, the father couldn't wait to pull me aside to say that XDEMVY has delivered the best outcomes he's seen in his entire career. And the good news is I'm hearing that same sentiment everywhere I go. Regardless of whether the ECP is an early user or an established champion, I am uniformly hearing how well XDEMVY is working for their patients. And every day, they are finding more and more people to treat. And now with an expanded sales force entering the field and planning for our consumer television campaign underway, I am even more convinced of our ability to further accelerate the number of patients served and deliver on the promise of this novel medicine. Before I pass the call to Aziz, I want to remind you that we are simultaneously advancing a robust pipeline based on lotilaner the same promising antiparasitic molecule used in XDEMVY. We remain on track to bring our 3 programs focused on meibomian gland disease, lyme disease prevention and rosacea to the FDA by the end of this year and look to continue creating and leading in eye diseases that have not yet been effectively served. With that, I'll turn the call over to our Chief Commercial Officer, Aziz Mottiwala, for more details on our commercial progress.

[Aziz Mottiwala, executive]

While echoing everything Bobby just said, what a phenomenal quarter. We're obviously very pleased with the launch to date and our ability to continue delivering XDEMVY to more patients in need. We are also delighted with the significant improvement in gross net discount this quarter, which, as Bobby said, reflects payer recognition of the significant value of XDEMVY. This exciting development is primarily a result of contracts we secured with 2 of the 3 big commercial payers and one of the largest Medicare payers, which is now covering XDEMVY without a prior authorization. The quality of coverage we've secured in such a brief period of time is truly remarkable and rarely seen in eye care. As a result, we expect the gross to net discount rate to remain relatively stable within the mid-40s through the end of the year. Another incredible outcome is the rapid level of adoption among our target ECPs that is happening much more quickly than we anticipated.



As of August 7, approximately 11,000 ECPs have started patients on XDEMVY with more than 60% prescribing XDEMVY to multiple patients. What those numbers mean is that on average, each sales rep has changed the behavior of more than 100 ECPs, all of whom are now prescribing XDEMVY. This is a remarkable metric, but also a stark reminder of the importance of frequent and quality ECP interactions. I'm incredibly proud of the strides we've made so far with our current target of 15,000 physicians, but we know it can take an average of 5 to 10 visits to move an ECP from trialists to Champion. Our current sales team is already maximizing both their time and their interactions with ECPs at a level of intensity and intentionality I've never seen before. But time is a finite resource. So we need more people in the field calling on our ECPs more often. This is going to allow us to realize the full potential of XDEMVY. As you know, we have always planned on a sales force expansion and the timing for executing on that plan was very well considered. We wanted to have a couple of strong revenue quarters under our feet, which we've now done, and we wanted to begin the expansion during a time that would be least disruptive to the business. We knew it would be a heavy lift for the sales team because we needed to take them out of the field to interview, hire, train and onboard approximately 50 new employees, all while continuing to call on their target less ECPs. I've been there before, and it's really no easy feat. That's why we made the very deliberate decision to begin the hiring process in the summer when ECPs, their staff and their patients typically take vacations and things generally slow down.



To be clear, there's never a good time to pull your sales team out of the field, particularly with such a promotionally sensitive product. And you'll see some of those loss days reflected in the Q3 numbers alongside the general ECP office slowdown you see each summer. But I'm confident that once the expanded sales force is fully deployed, our strong upward trajectory will continue alongside the increasing ECP adoption of XDEMVY. And with our plans to turn up the dial on our marketing efforts in Q4, we are truly pouring fuel on the fire. DP patients are highly motivated by and responsive to the visual aspects of this disease. So we're planning a hard-hitting, action-oriented DTC TV campaign that will be key to driving in more patients to their doctors to get screened for DB.



In closing, our tremendous results this quarter speak to the compelling value proposition of XDEMVY and the power of category creation. With our expanded sales force preparing to enter the field, our anticipated consumer advertising campaign and ongoing strong payer coverage, we expect a rapid acceleration of our current momentum, a strong close to the year and continued opportunities for growth for years to come. As always, thank you so much for your time and interest. I will now turn the call over to Jeff Farrow, our Chief Financial Officer and Chief Strategy Officer, to discuss our second quarter financial results and outlook for the third quarter.

[Jeffrey S. Farrow, executive]

Thanks, Aziz. As highlighted by the team, Q2 marked yet another exceptional quarter of strong commercial execution that generated $40.8 million in XDEMVY net product sales, driven by more than 37,000 bottles suspense to patients. Several new and impactful payer contracts, the results of which we expect to be reflected in the gross to net discount beginning next quarter and a substantial improvement in gross to net discount of 44% compared with 55% in Q1, demonstrating a strong understanding of the disease burdened by payers and their recognition of XDEMVY as the only FDA-approved therapeutic for disease with high unmet need. The improved gross to net discount, which evolved much more quickly than we anticipated, primarily reflects the significant commercial coverage we gained during the second quarter as well as a lower estimated impact for the Medicare donut hole in this quarter.



Given the general characteristics of our patient population, most of whom appear not to have as many comorbid diseases, we now expect to see more of an impact related to the donut hole in the second half of the year. Accordingly, with further commercial and Medicare coverage to come, we now anticipate our gross to net discount to range from approximately 42% to 46%, exiting 2025 at the lower end of the range. Due to the Medicare donut hole dynamic I mentioned earlier, we expect to see the potential for a 1 to 2-point increase in the gross to net discount from Q2 in the second half of this year. In other words, at the higher end of the range provided.



Turning to our P&L. Our total operating expenses were approximately $74.8 million for the second quarter of 2024. The sequential increase in operating expenses of approximately $9.5 million was primarily driven by increases in the cost of sales of XDEMVY due to the growing number of bottles sold and increases in selling, general and administrative expenses due to sales and marketing costs, the expanded sales force to further support the launch of XDEMVY and other corporate expenses. Gross margins for the second quarter remained flat at approximately 93%, which includes the royalty and the amortization of any milestones will be paid to Elanco. Finally, we ended the quarter with approximately $323.6 million in cash and marketable securities, inclusive of the approximately $40 million net drawdown from the Pharmacon credit facility signed in April 2024.



Looking ahead to the third quarter, we do anticipate inventory levels will be similar to what we saw in the second quarter, and we expect operating expenses to increase incrementally due to the sales force expansion and other XDEMVY-related marketing efforts. Additionally, and as Aziz mentioned, there are some specific dynamics in play that will likely impact our bottles dispensed, namely a very deliberate and strategic decision we made to begin the sales force expansion process during the summer. We understood that there would be some disruption as we trained and prepared these new sales representatives and leaders. And we did this to ensure we were on the ground and ready to go during some of the most productive months of the year. This resulted in us pulling some team members from the field to interview, hire and onboard the new sales force.



We also anticipate the following factors could further impact our expectations for bottles dispensed. First, the traditional summer slowdown that occurs at ECP offices. Over the last several years, we have seen this result in a decrease in new patient bottles dispensed for eye care products in general during the third quarter. Second, summer vacations and holidays such as the 4th of July and Labor Day. With that in mind, we expect the number of bottles dispensed to patients in the third quarter to grow at a relatively modest rate of approximately 10% over Q2, meaning we expect approximately 41,000 bottles to be delivered to patients in the third quarter. The vast majority of these bottles will be to new patients as we are not yet seeing the benefits of meaningful retreatment volumes. Now looking ahead to the fourth quarter, we expect to see a much stronger growth trajectory in bottles dispensed, resulting from our fully expanded sales team out in the field and patients making multiple ECP visits to maximize their insurance plan benefits before they reset in 2025.



And finally, with the planned launch of our first direct-to-consumer television campaign, we expect our momentum to continue accelerating into 2025 when we will see the first roots of those marketing efforts realized. In summary, we are pleased with both our ongoing launch performance and financial metrics and look forward to sharing more updates with you next quarter as we embark on the next phase of launch. I will now turn the call back to Bobby for final remarks.

[Bobak Azamian, executive]

Thank you, Jeff. [indiscernible] messages about our launch. I am more confident than ever in XDEMVY's growth because I hear from doctors every week, including this week, where I met with several who stressed how they've never seen a medicine this effective and also describe their own prescribing journey and how they see no limit on patients to diagnose and treat in their clinics. Second, I am excited about the near-term acceleration in serving DB patients [indiscernible] champions of XDEMVY. We expect to see [indiscernible] TV campaign. I know we are just scratching the surface with [indiscernible]

[Operator]

Great. We will now conduct the question-and-answer session. [Operator Instructions] The first question comes from Tim Lugo with William Blair.

[Tim Lugo, analyst]

Congratulations on a great quarter. Given the strong performance in the quarter and all clarity around GTA and borrows expense expected in Q3. I just want to hear your thoughts around what I see as consensus of about $38.8 million or $39 million for Q3. You don't need to give exact guidance, obviously, but I'd love to hear your thoughts around consensus in Q3 and maybe even how it looks for Q4 as well.

[Bobak Azamian, executive]

We can explicitly provide guidance on that because we would be providing guidance on that if we do that [indiscernible] If you do the math [indiscernible] We expect the last Q3 to Q4 given the sales can start sometime before.

[Tim Lugo, analyst]

That's fine. I understand. Maybe also, can you just broadly talk about when Medicare kicks in, in 2025, given all the granulation on GTN in 2024, directionally, is it probably going GTN maybe take the hit due to Medicare, but obviously, the volumes should be at a much higher level. Can you just directionally speak to that?

[Aziz Mottiwala, executive]

Sure, Tim. It's Aziz. Thanks for that question. [indiscernible] great coverage, and we're really pleased with that. That's been one of the levers that's gotten us to where we are today. We've also mentioned on the call earlier that we signed one large Medicare payer and that will go into effect later this year. So we're going to start to see some of that Medicare coverage this year. The remaining ones we do expect to kick in, in 2025. I think what you can expect based on that is essentially a stable gross to net between now and the end of the year [indiscernible] the discount [indiscernible].

[Operator]

Next question comes from Pavan Patel with [indiscernible].

[Unknown Analyst]

This is Alan on for Jason Gerberry. Two questions from us. Firstly, I appreciate the commentary for full year 2024 for gross discounts. I was wondering if the longer-term gross to net discounts you expect to be a steady state here at the low 40s? Or is that likely to evolve as payer mix changes and you gain further coverage in 2025 and beyond? And then my second question is regarding your DTC efforts. So when do you pick those off and how soon would you expect to see benefit from that in patient uptake?

[Jeffrey S. Farrow, executive]

Happy to take the first part of the [indiscernible] and I'll pass it over to Aziz to talk about the DTC. So what we anticipate is a slight increase in the gross to net discount, as I had mentioned, given the donut hole issue, where we're seeing essentially more patients coming into Q3, and we anticipate that to be in Q4. Of course, in Q1 of every year, you get co-pays reset and so frequently, there's a larger gross to net discount in that Q1 period. And then subsequent to that, in 2025, we expect that to improve sequentially to be sort of at, say, 42-ish percent at the low end of the range we provided. And that should be pretty consistent with our long-term gross to net discount beyond 2025.

[Aziz Mottiwala, executive]

Great. And then in terms of the DTC question, so we anticipate launching sometime in the fourth quarter. You'll see some impact to that this year but as you can imagine, it takes a few repetitions for the patients to be at a couple of times. And we think you'll start to see some impact this year, but you'll really start to see that really take hold as we scale that effort into next year.

[Operator]

Thank you. Stand by for our next question. The next question comes from Cory Jubinville with Life Finance Capital.

[Unknown Analyst]

This is Dennis on for Cory. Congrats on the quarter. As we near 2025, then we start to think about kind of the retreatment dynamics here, do you have any indication as to which patient profile is more likely to experience a re-infestation that calls for retreatment? And in your view, kind of what percent of DB patients will ultimately require one or more courses of XDEMVY long term?

[Aziz Mottiwala, executive]

Yes. Thanks for that question. So as you can imagine, it's still relatively early in terms of the retreatment volumes. I think if you look at the [IQVIA] data, [indiscernible] come in early 2025. [indiscernible] a bit more confident [indiscernible] with the patients get treated again sooner and which types of patients may have more durability with the drug.



In terms of what we expect to see long term, if you go back to our Phase III studies and the follow-up we did, about 40% of the patients recur at month 12. So you can expect some proportion of those patients will get retreated over time. And again, that's something that will scale over time. I don't think about it as a step-up, but essentially something that scales over time as patients get more or -- sorry, physicians get more and more experience with the drug, the patients come back and then doctors will get their groove of how they want to retreat. So I think the short answer is it's still very early. We expect to see retreatment volumes start to be more meaningful in 2025. And once we start to see that, we'll be able to dig in and really understand the dynamics there.

[Operator]

Next question comes from the line of Andrew Tan with Goldman Sachs.

[Unknown Analyst]

This is [indiscernible] for Andrea. Congrats on the quarter. A couple from us here. The first, wondering if you could characterize a little bit more about the quarterly growth in the number of the ECPs today, especially in the context of penetrating the more -- the eager doctors and the new to DB segments. And could you show the feedback that you've been getting on the disease education efforts from those providers?

[Aziz Mottiwala, executive]

Sure. Thanks, Tolani for that question. And when you look at the performance to date, I think one of the highlights has really been the performance of XDEMVY. It's very unique in terms of the wow effect it has for patients. And I think that's something that's really gotten the physician community very excited. I think that's one of the reasons we've seen continuing scaling in our ECP adoption with over approximately 11,000 doctors writing prescriptions at this point. So it really speaks to the broad appeal of the drug and the utility as in practice.



In terms of getting beyond from early treaters to those different segments, I think there's 2 factors that really drive this. One is physicians getting their experience, right? As they continue to get experience, seeing that wow effect in their practice, they start to think about using the product more broadly. So they typically start with a typical Demodex blepharitis patient, they see a handful of cases, they see the results and then they start to think about other patient segments that really expand the utilization in the practice. So you can think about or, say, a recalcitrant drive patient or proactively screening their cataract patients. So that's a level of experience that the doctor gets that really potentiates further use [indiscernible] the other factor that [indiscernible] is repeat visits from the sales force. Hearing that message again and again, and to your point, the feedback on the education has been very positive and the physicians are very receptive. And we have so many of them that want to hear it, and our sales force can only get to them so many times. And that's why we're really excited about the sales force expansion. This is really going to create some capacity for our team to see these doctors more often repeat that message, be that constant reminder and provide that staff support to really facilitate that broadening utilization in the practice.



So the 2 factors, I think, that are key here are getting those doctors multiple shots on goal and seeing that consistent response in the patient and then hearing that message in disease education on a consistent basis from our team. The first one is happening. And then I think with our sales force expansion, you're going to see that happen at even higher velocity now that our team can get to these doctors more often. And the last piece I'll add is the role of DTC here, empowering the patient and having the patient sort of raise their hand, if you will, and proactively bring this up, we'll further enhance this dynamic as well.

[Operator]

One moment for our next question. Next question comes from Frank Brisebois with Oppenheimer.

[François Brisebois, analyst]

Congrats on the quarter. I was just wondering, in terms of practices, is it a question of -- I'm sure first, there's some practices where physicians were a little more skeptical at first and then so maybe they try 1 patient or 2 patients and see how it works. Is it one of those situations where all of a sudden, they are convinced that this is working and they just switched the entire practice to say, "Hey, make sure you look for these and put a lamp on every patient"? Or is it more of a progressive, let's wait and see on the patient feedback and it's more the patients starting the conversation? Just what are the dynamics there?

[Aziz Mottiwala, executive]

Frank, it's Aziz. It's a great question. One, we see a lot of them were in the field and one we dig into a lot as well. And I think what you see is that our physicians are very curious that the drug is obviously getting a lot of attention in the space. So you do get doctors that want to write those first few cases, I think the -- it varies by doctors. So you have some doctors that get those first few cases, they see the results, they see the consistency and predictability and they implement it in their practice. I would say even with those doctors, in many cases, we're just scratching the surface because they're looking for it in certain areas, but they could be looking for in other areas and that's where our sales team plays a key role. You do have some doctors that take a little bit more time, as you can imagine. And in those cases, they want to see a handful more cases and typically, it's about 10 cases or so where they really hit that tipping point and then what I think happens is they start to look by segment. So I think the average physician doesn't just say, I am going to wholesale change the practice over. They say, okay, I'm having great results with these patients, who's the next patient? Okay, [indiscernible] dry patient. I've got dry patients that are in the practice that are cycling through meds. Let me look at their lids. Okay, I've got great success there. All right. Now let me look at my cataract patients and maybe start with premium cataracts and then broaden it.



So there's definitely a step-wise approach in which physicians adopt. And as we mentioned earlier, how can we facilitate that happening more quickly, and that's really getting in front of the doctor more often with the sales force. That constant education, that reminder to look forward in the different segments really enhances that. I know -- I know, Bob, you've been out in the field. Maybe you have some observations here as well.

[Bobak Azamian, executive]

Yes. Just to echo, what I hear time again is doctors, to your point, Frank, they get experience with the medicine and then they're just amazed. I have not heard the doctors say, you know it didn't work on this 1 or 2 patients. And that's just wind in our sales and obviously, when a doctor is able to deliver that to one of their patients, that gives them even more confidence. And then the other thing I hear time and again is the diagnosis becomes easier, the conversation becomes easier, doctors start looking for other patients with different reasons to treat than perhaps the first few, and that's those additional segments that you described. So I think we're in this very positive loop of doctors getting great experience and then looking for more and more of their patients and very notably not finding that they have reached a limit in finding patients in their own clinics they can serve and that's high-volume practices that are early adopters, but also more rural, single practices that are not typically the early adopters. And to get 11,000 to 15,000 at this point means that we've had a very meaningful impact on educating a broad swath of this community.

[François Brisebois, analyst]

Are you getting any doctors that are admitting that maybe they weren't looking correctly in the past? Or is that not coming up with the physicians?

[Aziz Mottiwala, executive]

We hear that all the time. It's actually the one part of the job, right, is doctors. And I think it's this value of category creation, right? As you hear that we're solving a problem that was being missed. And I think that's a really compelling piece of it, I think it's obviously very rewarding for us to hear that we're able to change how things are being practiced and change the outcomes through these patients. But I think it's also very compelling when doctors hear that from their colleagues at the conferences and on the podium. And that's one of the most compelling parts of the story is, hey, did you know we were missing this and now we have a very clear and impactful solution that gets consistent and predictable results. And I always say that's sort of the invisible hand on this launch is the physician testimonial. The doctors getting up on podium and talking about their positive experience to Bobby's point, this drug doesn't disappoint, the results are almost always consistent and patients come back with clear healthy lids becomes a very compelling story for us to hear, but more importantly, it becomes a compelling story for other doctors to hear from their colleagues. So that's a really exciting part of the launch that does underpin the rapid adoption we've seen.

[Bobak Azamian, executive]

And we're doing that, right, as these across so many of our efforts, whether it's marketing or medical affairs, the peer-to-peer engagement here is another powerful amplifier of spreading the word.

[Operator]

One moment for our next question. The next question comes from the line of Balaji Prasad with Barclays.

[Michail Paraskevopoulos, analyst]

This is Michail on for Balaji. Just wondering, of the 11,000 prescribers you called out, are you able to actually quantify the proportion that fall into the 3 buckets you called out? So how -- looking to understand how many are early adopters versus newer to DB at this point?

[Aziz Mottiwala, executive]

Yes. Thanks for the question, Michail. So obviously, we cut the data lots of ways. As you can imagine, it's very dynamic. So we don't go into that level of detail in this forum. But I think our focus is to say, okay, for each of these doctors, we've gotten to 11,000 of the 15,000. So we've gotten to the vast majority. Our focus is really going to be now how do we start to pull those doctors from folks that are just getting that early experience to what we talked about earlier, which is becoming routine writers, routine prescribers and how do we increase our frequency with our sales force expansion to facilitate that. So I think the way we think about this going forward is we've got a great prescriber base established. And now the focus is going to be on that depth of prescribing that enhanced utilization within the practice and that prescriber base. So the segmentation of the doctor becomes a little less important in terms of where they came from, but more important on where we think they're going to go in the future and how we can continue to move the middle layer.

[Operator]

One moment for our next question. The next question comes from Eddie Hickman with Guggenheim Securities.

[Eddie Hickman, analyst]

So I appreciate the added color on the third and fourth quarter dynamics in terms of bottle growth, but I'm wondering if you could help us think about 2025 and what the bottle growth should look like with the fully deployed sales force and DTC. It sounds like 4Q is going to be pretty strong. So I'm wondering like how many quarters beyond that, do you expect that level of growth before it steadies out? And then on the summer holiday slowdown, like is that unique to this early part of the launch? Or do you think that to be an annual pattern?

[Jeffrey S. Farrow, executive]

Eddie, it's Jeff. Maybe I'll answer your first question -- or second question first. It's a little early for us to know if it's specific to us annually, but we did note in general, for eye care products that there was a slump in new Rxs during the third quarter. So it's probably likely we'll see a similar effect in the third quarter. But again, we don't have a whole lot of history for XDEMVY at this point. In terms of your question in 2025, I think there's a couple of dynamics that we will continue to see impressive growth beyond the fourth quarter. One will be the full deployment, and we'll see some of the impact of the direct-to-consumer campaign, meaning streaming TV, potentially network TV should continue and should help drive patients in to go see their docs. And then secondly, as the sales force -- the incremental sales force begins to continue to get online and continue to have those frequency of visits, we expect that growth to continue as a result of that. So we continue to see quarter-over-quarter growth throughout 2025.

[Operator]

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