Tarsus Pharmaceuticals, Inc.

Hello and welcome to Tarsus Pharmaceuticals' second quarter 2026 financial results conference call and announcement to acquire Alkias Pharmaceuticals. As a reminder, this call is being recorded and all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. At this time, I would like to turn the call over to Sarah Knives, Investor Relations, to lead off the call.

Thank you. Before we begin, I encourage everyone to visit the Investors section of the TARCIS website to view the press releases issued today and related materials we will be discussing today. Joining me on the call are Bobak Azamian, our Chief Executive Officer and Chairman, Mira Clates, our Interim Chief Commercial Officer, Seshadri Neervannan, our Chief Operating Officer, and Jeff Farrow, our Chief Financial Officer and Chief Strategy Officer. and joining us for Q&A is Dr. Liz Yeu, our Chief Medical Officer. I'd 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 details. With that, I'll turn the call over to Bobby.

Hello, and thank you for joining us. Today is an important day for Tarsus. We're reporting another exceptional quarter for Extenvi in announcing the acquisition of Alceus Pharmaceuticals and Gilder Retinol, or ALK001, a late-stage investigational therapy for Stargardt disease. When we launched Xtemvi, we believed deminexliferitis, or DB, was one of the largest diseases in eye care, hiding in plain sight. Our ambition was never simply to commercialize a single medicine. It was to demonstrate that by identifying diseases that have been overlooked for years, creating categories, developing medicines with the potential to redefine the standard of care, and executing with excellence, we could fundamentally change patient care while building a leading eye care company. Extenby continues to prove that thesis. Nearly three years after launch, more than 700,000 patients have been treated. Extenby has generated almost $1 billion in net product sales reported to date, and we are well on our way to over $2 billion in potential annual peak sales. This quarter alone, Extenby generated approximately $174 million in net product sales, representing more than 69% year-over-year growth. Extenvi has never been stronger, and we believe we are still in the early stages of realizing its full commercial opportunity. What's more, Extenvi is powering innovation at Tarsus, and that's precisely why we have the confidence to make strategic investments like the one we are announcing today. We are investing in assets with novel disease-modifying approaches, compelling clinical evidence, and a clear strategic fit to build a leading eye care company. ALK001 is exactly that, as it has the potential to preserve vision for longer and become a foundational treatment for Stargardt disease. This devastating inherited retinal disease often affects children and young adults, and today there are no FDA-approved treatment options. It also broadens our presence in retina, one of the largest and most important specialties in eye care. We've already begun building capabilities through our recent acquisition of IRX101 and aim to create a distinct portfolio positioned to address serious retinal diseases over time. I would like to take a moment and thank the Altheus team for all their passion and commitment in developing ALK001, a truly novel medicine. To date, they have developed one of the most robust clinical data sets. and we believe ALK001 has the potential to preserve vision longer in patients suffering from Stargardt disease. Xtemvi remains the cornerstone from which we're building a leading eye care company, one with the capability, pipeline and innovation to repeatedly bring meaningful medicines to patients. And with today's announcement, we took an important step on this journey. This acquisition is expected to build upon the commercial success of Xtemvi and with the addition of ALK001, create one of the most exciting pipelines in eye care and beyond. One that is positioned to deliver multiple potential blockbuster medicines over the next several years. Before I turn the call over, I would like to welcome Neera Klase, our Interim Chief Commercial Officer, to her first earnings call. Neera has been instrumental in building our commercial organization and ensuring the ongoing success of Extenvi and we are thrilled to apply her leadership and expertise to this new chapter. Neera, over to you.

Thank you, Bobby. I'm honored to step into this role at such an exciting time for Tarsus and I look forward to advancing the playbook that has put Xtendi on the path to more than $2 million in potential peak sales. As Bobby mentioned, Xtendi is the cornerstone of our company and across every metric that matters I Care Professional Adoption, Consumer Activation, and Commercial Execution, the business has never been stronger. These three priorities are reinforcing one another, which is exactly why Extendi continues to outperform. The clearest evidence is the change we're seeing in ECP behavior. I recently spent time in the field hearing firsthand from doctors about how the conversation around DB has evolved. Eye care professionals, or ECPs, are no longer asking whether they should treat DB. They're asking how broadly they should be screening for it and how many more patients can they treat. And the numbers reinforce the acceleration we are seeing. Over the past year, the number of ECPs prescribing Xtemby at a near daily cadence has doubled. and our top doctors have continued to increase prescribing month after month. That's an important shift. It signals that the market has moved beyond initial adoption and towards the standard of care. We're also seeing retreatment rates advancing to the high teens, creating an increasing source of demand alongside new patient prescriptions. Combined with broader ECP adoption, That gives us even greater confidence in the long-term trajectory of the business. Our growing body of clinical evidence is also helping to deepen that conviction. Recent studies have shown that DB is common in patients with tralasia, which further reinforces XtemD as the standard of care over tea tree oil and highlights the potential infection risk associated with demodet and bacterial co-infestation. Together, these findings are encouraging ECPs to screen more consistently during routine eye exams and identify patients with DV they may not have diagnosed previously. In addition, our key account leaders, or CALs, are now fully deployed across our highest potential practices. They are helping those practices embed screening more consistently, identify more patients, and expand treatment over time. And the field feedback I'm hearing was echoed in a recent survey of these same doctors. More than 80% of physicians told us that they expect to increase extended prescribing over the next year and beyond. This strongly signals continual medicine as we work to reach the estimated 25 million Americans living with DB. While ECT behavior is deepening the market, our consumer efforts are expanding the top of the phone. Our consumer campaigns are introducing millions of people to a disease that they never heard of. John Cena, our celebrity spokesperson, brings credibility and authenticity through his own experience with DB, while our new unbranded DTC campaign featuring Bury the Cat helps patients recognize symptoms in a way that's approachable Memorable and easy to understand. As a result of these efforts, many patients are now asking for Xtendi by name. We've also seen a 19% increase in high-value actions on the Xtendi.com website, including the use of our Find a Doctor tool, and lastly, our AI-powered concierge, which helps patients better understand their symptoms and take the next step with their ECP. Unaided awareness of DB has also climbed to approximately 30%, which is remarkable when you think about how far we've come since we first launched our DTC campaign. The response has been powerful and clearly resonates with patients. They aren't simply hearing the message. They're becoming educated, engaged, and motivated to seek care. Our commercial pillars are working in concert just the way we envisioned. Greater awareness brings more informed patients into eye care practices. Stronger evidence and field execution help physicians identify and treat more patients. And positive clinical experience further reinforces confidence and adoption. When I look at the business today, I see a potential $2 billion opportunity that is unfolding exactly as we planned. That's why my confidence in Extendi has never been stronger. Its continued success is not only driving growth, it is creating the foundation for Tarsus to invest in programs like Gildo Retinol and expand our impact for patients across eye care. With that, I'll turn it over to Sesha.

Thank you, Neera. This is a momentous day for Tarsus and her mission to serve patients. We believe ALK001 is the most compelling program in development for Stargardt disease. and as you heard from Bobby, it has the potential to become a foundational medicine for patients with no approved therapies today. Sardar is a serious inherited retinal disease that often begins in childhood or adolescence with more than 36,000 diagnosed patients and a total estimated 86,000 patients in the United States. Vitamin A is essential for healthy vision and is a key component of the visual cycle. Torgard is caused by a genetic mutation that leads to formation of toxic vitamin A dimers known as bisretinoids. These toxic dimers can damage the retinal cells responsible for central vision and over time can cause blindness. The consequences can be devastating. Half of patients diagnosed before age of 20 are expected to become legally blind within seven years. Seven years. That's a reality facing many children and young adults living with Sjogård disease today, and it's also the urgency for this program. ALK001 is an investigational modified vitamin A analog designed to slow the formation of these toxic byproducts while preserving the normal visual cycle. It has the potential to address the dimensions that matter most to patients, slowing the progression of a blinding disease and preserving visual function. To date, the program has generated encouraging evidence of visual function preservation with no evidence of negative treatment-related effects on night vision, dark adaptation, or color vision. As you can see here, the TE studies showed ALK001's potential to preserve the visual cycle and acuity, slow retinal atrophy, and its unmatched long-term tolerability profile. Together, these studies give us confidence that ALK001 can be a breakthrough medicine that can potentially prevent the progression of Stargardt disease. As with any chronic therapy, especially one that impacts pediatric and adolescent patients that may ultimately be taken for a lifetime, the long-term safety profile is paramount. ALK001 has been evaluated in more than 400 patients, demonstrating a favorable tolerability profile and with treatment exposure extending up to seven years. This is exactly the type of program we look for. Differentiated disease modifying approach, compelling long-term tolerability and a potential to meaningfully alter the course of the disease for patients with no approved treatment options today. Turning to next steps in the program. North Star, the ongoing phase three study is designed to demonstrate that ALK001 can slow disease progression in patients with Stargardt disease. The study is expected to enroll approximately 230 patients between ages of eight and 45. The primary endpoint will measure the rate of retinal lesion growth over 24 months, and the secondary endpoint will assess a key aspect of visual function, change in low luminescence visual equity. Coupled with the compelling data from these trials, ALK001 is expected to generate a differentiated and the most robust clinical dataset in Sorghast disease. The program has been developed with the FDA, and we anticipate top line results in the second half of 2029. We are also considering a potential second phase retrial to support approval. The trial to be discussed with the FDA is envisioned to focus on younger and faster progressors and include additional exploratory . We believe ALK001 has the potential to become a foundational treatment for patients with Sorghast disease, one which can blind a child within seven years. ALK001 is a differentiated disease-modifying medicine that protects the retina without impacting the normal visual cycle. It advances our pipeline in retina, and most importantly, gives these patients something they've never had, an investigational medicine with the potential to meaningfully slow progression of this gliding disease. Jeff, over to you.

Thank you, Sesha, and good morning, everyone. All around, this was another outstanding quarter for Tarsus. We delivered record-extending revenue, continued expanding our leadership in eye care, and ended the and other important steps in our long-term growth strategy through the acquisition of Irenix and today's announced pending acquisition of Alkias. In the second quarter, Xtendi net product sales were $173.9 million, representing more than 69% growth year-over-year and approximately 20% growth quarter-over-quarter. Gross margins were flat at approximately 93%, and we ended the quarter with cash, cash equivalents and marketable securities of $449.7 million. For additional details on our Q2 financial performance, please refer to the earnings release we issued today. Turning to guidance, we have updated our outlook for the remainder of 2026 and increased Xtemvi's full-year net product sales guidance to 685 Thank you for joining us. We expect more robust growth in the fourth quarter, supported by the usual year-end patient dynamics, and this cadence is reflected in our increased full-year guidance. Moving to operating expenses, we continue to expect gross margins of approximately 93% and SG&A expenses of $545 to $565 million. We now expect full-year R&D expense to be in the range of $190 million to $210 million, an increase from a previous guidance of $115 million to $135 million. This increase reflects the upfront consideration of $75 million for the acquisition of Irenix Medical. This guidance does not include the pending acquisition of Alkius. Turning to the financial terms of the Altius transaction, the upfront consideration is $450 million, consisting of $270 million in cash and $180 million in Tarsus Common Stock. The transaction includes up to $350 million in potential must-haves tied to regulatory approval in the United States and the first commercial sale, as well as low single-digit tier decreasing royalties on future net sales. In addition, we secured $125 million through our private placement financing from a syndicate of leading healthcare investors, including several shareholders of Altius. This transaction reflects the discipline structure which we've discussed with investors over the past several years. We're investing from a position of strength while maintaining the financial flexibility to continue executing on Xdebi and advancing our broader pipeline. The Altius transaction is expected to close later this year, subject to the expiration or termination of an applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. Financially, this transaction strengthens our long-term growth profile while remaining consistent with our strategic approach to capital allocation. It expands our presence in RETNA and adds a differentiated, late-stage program Thank you, Jeff.

Before we open the line this morning, let me leave you with one final thought. Everything we've talked about today starts with StemV. Its success has changed the standard of eye care, created extraordinary momentum for our business, and most importantly, it's possible for Tarsus. Today's announcement is another important step in that journey. Together with our other retina acquisition, IRX 101, strengthens our retina portfolio and reinforces our mission to build one of the most innovative and different We're incredibly excited about the opportunity ahead. Operator, please open the line for questions.

Thank you. As a reminder, if you have a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question comes from Greg Sivanovic of Mizuho. Your line is open.

Hey, good morning. This is Ryan Riton today for Greg Sivanovic. Thanks for taking our question. I just wanted to ask a little bit about the new asset and how

You see it comparing an efficacy to Tinlarabant, the Stargardt medication in phase three trials for B-Lite, which has a head start. Is there any differentiating factor that you think could help Gilda to capture more market share relative to Tinlarabant? Thanks.

Thank you, Ryan. Yeah, this is Bobby. We're really excited about this asset. We really served the landscape and found a very compelling late stage opportunity. and we understand that we're likely going second here and we're still very compelled by this. So in terms of overall profile, we see something that can really change the course of this disease that demonstrated effectiveness in a couple of dimensions that are really important for patients. Both the progression of disease is measured by atrophy and the progression of disease is measured by visual acuity, low-light visual acuity in particular. And that's unique in this field. We also see a great safety profile with up to seven years of data over 400 patients treated. So we think that presents a compelling opportunity. I'll pass to our chief operating officer, Sesha, to talk a little bit more about that profile. And we can certainly dig deeper here over the course of the call.

Thank you, Bobby. And thanks for the question, Greg. As I mentioned in the prepared remarks, Gildaretinol or ALK001 is a medicine that has been designed to reduce or curtail the toxic dimers in the eye without impacting the visual cycle. That's a very key dating factor for us with this particular molecule and this particular mechanism. Toxic dimers are the key cause of retinal death, and we also want to make sure that the and many more. Especially in a binding disease, it will not impact the visual sight.

And Ryan, maybe I'll add, this is Jeff, just we did some market research on what Sesha just highlighted there, you know, showing structural benefit, functional benefit with LLVA, and just a really nice safety profile. And we surveyed 100 retinal DOS, and based on that, we really think that this is a billion-dollar-plus opportunity based on that micro, by that differentiation there.

Great. All right. Thanks, guys.

Thank you. And our next question comes from Eddie Hickman of Guggenheim. Securities, your line is open.

Hey guys, good morning and thanks for the question and congrats on all the progress and the deals. So now that you're building towards two retinal launches sort of on different timelines, can you talk about, you know, the difference in sort of call points that you need to sort of build out and sort of how we should think about the sequencing of that commercial build in terms of size and scope? Appreciate it.

Thank you. Yeah, Adi, I'll start and I'll pass to Arts Commercial Officer Neera. So it's a great point. We're entering a new field, retina. We're really excited to have now two phase three drugs. I'd kind of go back to, you know, six years ago when we were at that same stage with Xtemvi and, you know, we took a very diligent approach to understanding the eye care provider and really educating. And I know we'll do that here as well. So, you know, we have two drugs in phase three, one IRX-101, a little bit ahead of ALK001, so I think it positions us well. And I'll pass to Neera to talk about some of the Synergy CCs.

Yes, thank you, Bobby. We believe both of these assets are a great commercial fit for Tarsus. It really helps us to build the pipeline to become that broad eye care leader. And it plays exactly to what we've been doing with Adembe. And here are a couple of reasons why, because we're still servicing an underserved population with a high in that need. will plan to deliver evidence to differentiate the science. And what's different here in terms of the call points is we're talking about a more concentrated physician base, about 3.5 thousand of the physicians out there today. And our focus will be on securing broad access and launching efficiently into a concentrated physician audience. So it's a different playbook from the DB, but very similar footprint. As you know, we've proven that we can execute, and we're really excited about this opportunity.

And the other thing I'd point out is there's a lot of overlap in the call here. So about 1,500 doctors will be serving with IRX11 that are doing VTs, and then a subset of those, actually 2,000, are prescribing, we think, are likely to prescribe over 80% of the Stargardt's therapies here. So that presents some real synergy in terms of the sales force itself that we'll be building here.

Got it. And in terms of access, is that the same timeline as Xtemvi in terms of sort of getting payer reimbursement set up? Do we think about it the same as Xtemvi, or is it different for this space?

Different in that it's rare, but very similar in terms of how we've gone about access, right? A differentiated value story, but very comparable in terms of fast access, broad access.

The other thing I'll have Liz Yu, our CMO, talk about, we're in front of the iCompany, and This is often where patients with Stargardt's present. So Liz, you might speak to your experience and how you see kind of the initial assessment in the eye care provider landscape there.

Thank you, Bobby. When we think about the patients that we're taking care of, certainly I'm taking a view of it from the patient perspective. And while most of the diseases that we see as eye care providers see, they worsen with aging, what's so unique and so humbling about Stargardt's disease Thank you for joining us. They may complain or fail a vision test at school, but it's going to be primed by those primary eye care physicians who are seeing them because of those complaints, failed vision tests, or because they're coming in for glasses. It will be then diagnosed by the retina specialist, but it will be a shared opportunity. So there is that, yes, we have the blueprint of the education and the evidence generation but the retina doctors, it is a small subset that we will definitely extend, leverage the relationships, educate and certainly generate the evidence.

Great. Thank you so much for that, Colleen.

Thank you. And our next question comes from Jason Gerberry of Bank of America. Your line is open.

Hey, guys. Thanks for taking my questions. I'm just trying to think about just, A, the market opportunity here. I think you said something like 30-some thousand patients. B-Lights talked about a pricing in the $350,000 to $500,000 territory. So I'm trying to get a sense of what proportion of these patients are actually under the care of a retinal specialist and is an addressable sort of market. Secondly, just a question around how to think about the use of natural history. On BCVA changes over, say, a two-year period versus lesion growth, I think the competitor had flagged you typically would lose one letter every two years or so. Just wondering how you think about the need for longer-term follow-up and the durable BCVA benefit. Thanks.

Yes, thank you for your question. In terms of pricing, that price range that you articulated is the price range that we would consider also for this asset, around that $350,000 price point. And it's really about value creation, understanding the differentiated profile here. And as we think about this particular asset, there is a safety and tolerability value We're excited to launch this, and as you mentioned, the natural history is a good way to create that value over time and to position this for optimal pricing and durability. With that, I'll turn it over to Stacia to provide additional comments.

Thank you, Neera. So, with respect to your question on a long-term follow-up on division benefit, what we saw in the trial is that the worsening of low-light visual acuity, which is actually even more of a sensitive measure than a BCVA, was statistically significant. We saw benefit within two years in those trials. And that is a great measure to follow up because low-light visual acuity is a precursor of BCVA loss. BCVA tends to worsen slower. and LLVA. And so that's a great measure for the physicians to monitor and look at the progress of the vision loss. So the tools are there and they are very much needed.

Our next question comes from Lachlan Hanbury-Brown of William Blair. One moment.

Yeah, hi. I'm just wondering if the team is there. I think they cut out on that last question. We're here.

No, we're here. Okay, great.

Yeah, thanks for the questions. Congrats on the deal. I guess maybe a couple quick ones. Just first, you've been talking a lot about the Stargardt program with Gilderoy and all, but I know that Alkias was, at least until recently, I'm not sure if it's still going, but looking at geographic atrophy. So wondering if you're thinking there's an opportunity there, if you've ascribed any value to that, or if this is really just about Stargardt. And then Maybe a second question. You said you're thinking about a potential second phase three for approval. I just wanted to clarify, are you expecting a second phase three would be needed, or is that more of a, you know, you're thinking about that maybe for commercial purposes to add a different data set or a different layer of data, a different population, that kind of thing?

Yeah, thank you. And I'll take the first part of that, and Sesha will take the second part. So we really looked at this in terms of the acquisition. We see that there's been a foreigner patients treated, including GAs, and that provides a really strong foundation. So while we're acquiring the entire company, our focus is really on Stargardt's in terms of the value ascribed here. Thank you, Bobby.

Yeah, you know, as I mentioned, our current phase three trial, NordStar, is a very We have a very robustly designed trial in patients, in a large set of patients. In fact, it's potentially the largest progressive prospective trial that's been conducted in Stargardt disease. And it's powered very conservatively and very robustly for meeting both the primary and secondary endpoints. So we are very confident about this trial. providing a very robust clinical package along with the very strong phase two data as well. So that is our primary approach and we are very confident that it will be a very compelling evidence for registration and approval. The way we think about the second trial is really proactively thinking about any medication if we need it and also any potential upside where we could enhance the data, enhance the exercise and others to enhance it. So it's really more of a risk mitigation and potential upside strategy and we still need to talk to the FDA about how that study may look like. So stay tuned for how that progresses.

Thank you. And our next question comes from Mazi Alimohamed of Oppenheimer. Your line is open.

Thank you. Thanks, Bobbie, and thank you for taking the question. So, yeah, I think one of the is that I think when we were looking, so it sounds like Alkis has previously mentioned that the cleanest signal in Starbark came from the pre-symptomatic and early stage patients, but we noticed that North Star is enrolling advanced disease. So, how do we square the pivotal population with the mechanism? is the expectation just at a slower atrophy, excuse me, front at the lesion margin? And I guess a second follow-up to that is that if that's the case, then what reduction there do you consider clinically meaningful?

Yeah, thank you. Thank you, Nazir, for the question. So the North Star trial is designed for advanced patients, but also includes younger and progressive patients. As I mentioned, it includes patients from age of 8 to 45, and so we're really capturing those patients in their disease state. The atrophic lesion, the growth of atrophic lesion, which is very well-known and precedented by the FDA for approval, and that's how it is designed. and the TEAS data showed that there's a very robust, you know, reduction of that atrophic lesions in the trials. You know, we saw about 20, 29% reduction compared to SIBO. So I think the study is designed to hit on the primary endpoints that and secondary endpoint of visual equity that is presented with the FDA and really it's, is positioned to win on those endpoints.

And I'll just add, when we looked at the data package here, we saw, you know, really good signals throughout multiple Phase II studies in both moderate disease, advanced disease, and in some early patients. So, you know, we got confident across the spectrum of disease that Stacey is describing here in North Star.

Got it. Thank you. And then, I guess with that, so if Kinlarabent is approved, could that affect trial enrollment going forward?

We don't think so. The trial, the North Star trial is being conducted globally at many sites, and the trial is already enrolling. We started the trial two months ago, Altria started the trial two months ago, and it's enrolling as expected, and we anticipate that by the time other products could be approved and launched, we'll be well underway in terms of our enrollment. And also, as I mentioned, Thank you for taking our questions.

Thank you. And our next question comes from Francois Boussois of LifeSide Capital. Your line is open.

Hi, thanks for taking our questions. This is Dan on for Frank. Congrats on all the progress. I guess firstly on The Xtambi retreatment rates reaching high teens, could you give us some color on what you're seeing in terms of Xtambi's durability of treatment response and physician retreatment behavior? As you think about, I believe you have previously mentioned, that rate kind of stabilizing around 20% and your confidence there. And secondly, in terms of the DTC efforts, Could you give us some color on how that kind of, in terms of website engagement, what that conversion rate is to sort of treated patients? Thank you.

Sure. In terms of retreatment, it's maturing just as we've described in the past. It continues to advance into the high teens, and we see it stabilizing at about a 20% steady state. The why really matters here when we think about retreatment. DB is a recurring condition, and only ECPs can make that decision to retreat. And so we're seeing exactly what we want. Patients who actually have good experience with Xtendi to begin with come back when their symptoms recur, and this is still very much a new prescription story as it relates to retreatment. The second part of your story was around, or your question was around the CDC piece. And our consumer engine is really performing ahead of our own expectations. What we've seen is increasing awareness through branded, unbranded, and our celebrity campaign with Sina. The unaided awareness is now up to 30%. And if you think about it, where we started, we were at 2%. One in every three patients can recognize Xtendi by name, so that's really quite exceptional velocity for a disease that most people really never heard of. And our website engagement is also up by 30%, and patients are, as we mentioned, asking for Xtendi by name. On spend, you can think about it as being very efficient and very disciplined, and the returns continue to support the continued investment. Thank you.

Thank you. And our next question comes from Matthew Caulfield of HC Wainwright. Your line is open.

Hi. Good morning, guys. Really great to see the range of updates this morning. So two questions from us. With the evolving pipeline, now with data catalysts across the coming years, Is there any shift to the prioritization of programs other than the partnership potential for Lyme disease? And then separately, regarding the Alkias acquisition, what milestones would define success over the next 12 to 24 months, considering the Phase III North Star top line are expected later into second half 29? Just in terms of judging whether the acquisition is tracking kind of above or below your near-term expectations.

Thanks a lot. Good morning, Matt. This is Jeff. Happy to answer those questions. So, no pipeline shift. We have, you know, a robust balance sheet that will continue to allow us to focus on the existing pipeline. You know, we're really excited about the ocular rosacea program. You highlighted the line, which our baseline assumption is to partner with a face-ready package. But also the Irenix product is something that we're really excited about getting into the market here in the next couple, three years. So we're fully committed to the pipeline, including the Alkias Phase 3 study. And then on sort of the data flow on the Alkias, the LK001, in essence, you know, one of the things we'll obviously be tracking is the patient enrollment. And so that'll be something key. There is a design within the study that would allow for an intra-analysis. That is something that we are going to be discussing internally and see if it makes sense to do, but that is a potential option for us to do. And then, of course, there will be the top-line data, which we expect to be sometime in the second half of 2020.

Excellent. Thank you, guys. Really exciting to see all the updates.

Thank you.

Thank you. And our next question comes from Anthea Lee of Jefferies. Your line is open.

Hi, this is Anthea on for Dennis. Thank you for taking our questions. Just two questions from us. On the Xtembe guidance, the implied script trajectory looks fairly conservative, even accounting for holidays and seasonality. Is there anything we're missing in terms of script acceleration in the second half outside of seasonality? and then secondly, how are you thinking about profitability now that you need to probably ramp up R&D spend for these two new assets and then also expand the sales force? I think consensus has Tarsus becoming EPIC positive in 27. Do you still think that's fair? Thank you.

Sure, happy to take that question. No, we believe the guidance that we gave is appropriate guidance based on what we've historically seen in terms of seasonality and the expectations for various meetings and holidays. So we stand by that guidance. Of course, we always have an opportunity to update that in subsequent quarters, but right now we're pleased how we've moved that up. I think it shows robust growth.

On the profitability, we haven't commented on profitability yet.

That said, if you take a look at the guidance that we have provided, take the top end of the revenue and the bottom end of the OPEX, You could see us going profitable sometime in 27. Even with the incremental spend on Irenix and the Alkius in the time frame of when those data will turn over, we shift our ability to go profitable, maybe perhaps by a quarter or two.

And then the last part of that question was the Salesforce piece. and I'll take that in terms of as we think about Salesforce, the new assets, you can think about a different Salesforce of between 50 to 75 complete team. Okay, great.

Thank you so much. This concludes our question and answer session and today's conference call. Thank you for participating and you may now disconnect.