Tarsus Pharmaceuticals, Inc.
For the period ended Dec 31, 2025. Filed Feb 23, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 23, 2026
TARS$68.60+1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-25.
0001819790-25-000011
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-23.
0001819790-26-000019
Item 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 175 previous paragraphs and 138 current paragraphs.
75 unchanged; 43 reworded; 19 added; 55 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Recent Business and Corporate Highlights
Current report
•XDEMVY is one of the best-selling prescription eye drops.
Current report
◦Net product sales were $151.7 million and $451.4 million for the fourth quarter and full year 2025, respectively.
Current report
•Direct-to-consumer (“DTC”) campaign on streaming platforms and network television generated a positive return on investment in 2025 that continues to grow.
Current report
◦Unaided awareness of Demodex blepharitis is now approximately 25% versus 2% of patients surveyed at the beginning of the campaign.
Current report
•We continued to execute on our category-creating strategy, advancing a robust pipeline.
Current report
•Strengthened our leadership with the appointment of David E.I. Pyott, a renowned Biopharmaceutical leader and former Chief Executive Officer and Chairman of Allergan Inc., to the Board of Directors.
Current report
◦Mr. Pyott joined our Board of Directors in February 2026 and brings decades of global leadership experience spanning innovative R&D, product development, and commercial execution. He was instrumental in transforming Allergan from a focused eye care business with approximately $1 billion in revenue into a global specialty pharmaceutical and medical device leader generating more than $7 billion in revenue.
Current report
After review of the Galatea trial data with the FDA and key opinion leaders (“KOLs”), we decided to pursue development of TP-04 for the potential treatment for ocular rosacea, a highly prevalent and underserved eye disease with no FDA-approved therapy. In December 2025, we initiated a Phase 2 trial for the potential treatment of ocular rosacea with topline results expected in the first half of 2027.
Current report
•Ongoing discussions continue with regulatory authorities in Japan on a potential path to approval of TP-03 for Demodex blepharitis. The Elara prevalence trial showed high prevalence and significant impact of Demodex blepharitis in Japan, consistent with U.S. findings.
Current report
•Our partner in Greater China, GrandPharma, expects potential approval of TP-03 for Demodex blepharitis in 2026.
Current report
Recent global economic conditions have been marked bysignificant volatility and heightened trade tensions. In addition, persistent inflationary pressures, a prolonged higher interest rate environment, energy supply disruptions in certain regions, evolving trade policies, regulatory uncertainty, and ongoing and emerging geopolitical conflicts, including war, have contributed to regional and global macroeconomic challenges. These conditions have created uncertainty in global markets and may continue to impact economic conditions for an extended period.
Current report
During the year ended December 31, 2025 and 2024, we recognized $451.4 million and $180.1 million, respectively from product sales, net of rebates, chargebacks, discounts, and other adjustments. This increase was primarily driven by approximately 400,000 bottles of XDEMVY delivered to patients during the year ended December 31, 2025, compared to approximately 163,000 bottles delivered to patients in the prior year period, as well as an increase in net sales price compared to the prior period driven primarily by an improvement in the gross-to-net discount as we secured greater payer coverage in 2025.
Current report
Cost of Sales
Current report
Other Income (Expense), Net
Current report
Other income (expense), net increased by $1.6 million for the year ended December 31, 2025, primarily due to $1.9 million of loss on debt extinguishment related to the 2022 Credit Facility, which was recognized in the prior year period, and $0.7 million of increased interest income earned on our cash, cash equivalents and marketable securities. These increases were partially offset by $1.1 million of increased interest expense related to our 2024 Credit Facility.
Current report
Provision for Income Taxes
Current report
In July 2025, the OBBB Act was enacted in the U.S, which contains a broad range of tax reform provisions affecting businesses, including permitting the immediate expensing of domestic research and development expenditures. Provision for income taxes was $2.1 million for the year ended December 31, 2025, primarily due to state income tax expense resulting from states that do not conform to the OBBB Act and therefore continue to require the capitalization and amortization of domestic research and development expenditures. There was no provision for income taxes recorded during the year ended December 31, 2024.
Current report
The following table provides a summary of activity with respect to our sales allowances and accruals for the years ended December 31, 2025 and 2024 (in thousands):
Removed paragraphs (55)
Previous report
Recent Business and Clinical Highlights
Previous report
•We recognized $66.4 million and $180.1 million in XDEMVY net product sales for the fourth quarter and full year 2024, respectively.
Previous report
•We established broad Eye Care Professional ("ECP") utilization across more than 15,000 targets.
Previous report
•The expanded sales force deployed in the third quarter 2024 started to deliver meaningfully to the increased ECP utilization and prescription volumes reported for the fourth quarter 2024.
Previous report
•Broad commercial, Medicare, and Medicaid reimbursement of XDEMVY now extends to more than 90% of covered lives, as of February 25, 2025.
Previous report
•We activated a memorable and action-oriented Direct-to-Consumer ("DTC") campaign on streamlining platforms in the fourth quarter 2024 and initiated a trial-run on network televisions in January 2025, including spots on the Golden Globes, the GRAMMYs and the National Football League playoffs.
Previous report
◦The initial patient response from this campaign has been positive across multiple leading indicators, including the downloading of materials, taking the Demodex blepharitis quiz and utilizing the "find an eye doctor tool on the XDEMVY website.
Previous report
◦DTC initiatives will continue on streamlining platforms and will meaningfully expand into a network television campaign beginning in the first quarter of 2025.
Previous report
Officer and Board Appointments
Previous report
We expanded and strengthened our eye care leadership with two key appointments to our executive team and Board of Directors. Elizabeth Yeu, M.D. was appointed Chief Medical Officer in November 2024. Dr. Yeu is a distinguished ophthalmologist with more than two decades of experience who transitioned from her role as our Chief Medical Advisor and a member of our Board of Directors. Katherine H. Goodrich, M.D., MHS was appointed to our Board of Directors in November 2024. Dr. Goodrich is currently the Chief Medical Officer of Humana Inc., and brings decades of experience driving innovative and value-based initiatives designed to improve patient outcomes.
Previous report
In Japan, we expect to share results from a Demodex blepharitis prevalence study in the first half of 2025 and meet with Japanese regulatory authorities to help determine a regulatory path forward.
Previous report
The Chinese regulatory agency, National Medical Products Administration, accepted the New Drug Application ("NDA") submitted by our partner, Grand Pharmaceutical Group Ltd., for TP-03 for Demodex blepharitis.
Previous report
Recently, the economy has experienced downward pressure, and together with high rates of inflation and energy supply issues experienced in certain regions, war and geopolitical conflicts, have led to regional and/or global macroeconomic challenges, the effects of which may be of an extended duration.
Previous report
In addition, we may be exposed to credit risk on deposits at financial institutions to the extent our account balances exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). We maintain cash held in deposit at financial institutions in the U.S. While these deposits are insured by the FDIC in an amount up to $250,000 for any depositor, to the extent we hold cash deposits in amounts that exceed the FDIC insurance limitation, we may incur a loss in the event of a failure of any of the financial institutions where we maintain deposits. We invest our excess cash in highly liquid investments, including money market fund accounts, that are readily convertible into cash without penalty. We believe the Company is not exposed to significant credit risk due to the financial position of the depository institutions and the types of accounts we hold, but we will continue to monitor regularly and adjust, if needed, to mitigate risk, including any ongoing or new events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions.
Previous report
Components of our Results of Operations
Previous report
We recognize product sales, net when a customer obtains control of promised goods or services, which occurs at a point in time, typically upon delivery of the Company's product to the customer. We record the amount of revenue that reflects the consideration we expect to receive in exchange for those goods or services. We apply the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are capable of being distinct; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue as each performance obligation is satisfied.
Previous report
We sell XDEMVY to customers in the U.S., which became available for commercial sale during the third quarter of 2023. We sell XDEMVY to a limited number of specialty pharmacies and distributors (i.e., its customers) who in turn sell it directly to clinics, hospitals, pharmacies and federal healthcare programs. Revenue from product sales is primarily recognized upon physical delivery of the product (when the customer obtains control of the product), in return for agreed-upon consideration. Shipping and handling activities are considered to be fulfillment activities rather than a separate performance obligation and are recorded within selling, general and administrative expenses in the Statements of Operations and Comprehensive Loss.
Previous report
Revenues from product sales are recorded at the net sales price, or the transaction price, which may include fixed or variable consideration for (i) invoice discounts for prompt payment and distribution service fees, (ii) commercial and government rebates, chargebacks, discounts and fees, (iii) product returns and (iv) costs of co-pay assistance programs for patients, as well as other incentives. Estimates of variable consideration are calculated based on the actual product sales each reporting period and the nature of the variable consideration related to those sales. Where appropriate, we utilize the expected value method to determine the appropriate amount for estimates of variable consideration based on factors such as the current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The amount of variable consideration that is included in the transaction price may be constrained and is included in product sales, net only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. These estimates reflect our best estimate of the amount of consideration to which we expect to be entitled based on the terms of the contract. Actual amounts of consideration ultimately received may differ materially from estimates. If actual results in the future vary from estimates, we will adjust these estimates, which would affect product sales, net and earnings in the period such variances are adjusted. We categorize product sales deduction estimates as follows:
Previous report
Distribution Service Fees: We engage with wholesalers and specialty pharmacies to distribute our products to end customers. We pay the wholesalers and certain specialty pharmacies a fee for services such as: inventory management, chargeback administration, and service level commitments. We estimate the amount of distribution services fees to be paid to the customers and adjust the transaction price with the amount of such estimate at the time of sale to the customer. An accrued liability is recorded for unpaid distribution service fees.
Previous report
Prompt Pay Discounts: We provide our customers with a percentage discount on their invoice if the customers pay within the agreed upon timeframe. We expect that our customers will earn prompt pay discounts. We estimate the probability of customers paying promptly based on the percentage of discount outlined in the purchase agreement between the two parties, and deduct the full amount of these discounts from gross product sales and accounts receivable at the time revenue is recognized.
Previous report
Product Returns: Our customers are contractually permitted to return the product within the contractual allowable time before and after the applicable expiration date. In the initial sales period, we estimate a provision for returns based on industry data and adjust the transaction price at the time of the product sale to the customer. Once sufficient history has been collected for product returns, we will utilize that history to inform our returns estimate. Once the product is returned, it is destroyed since it cannot be resold.
Previous report
Chargebacks: A chargeback is the difference between our invoice price to the wholesaler and the wholesaler’s customer's contract price. The wholesaler tracks these sales and charges us back for the difference between the negotiated prices paid between the wholesaler's customers and the wholesaler's acquisition cost. We estimate the percentage of goods sold that are eligible for chargeback and adjust the transaction price and accounts receivable at the time of sale of the product to the customer.
Previous report
Co-payment Assistance: Patients who meet certain eligibility requirements may receive co-payment assistance funded by the Company. We record contra-revenue for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. An accrued liability is recorded on unredeemed co-payment assistance related to products for which control has been transferred to the customer.
Previous report
License fees and collaboration revenue is primarily attributable to contractual milestones under the China Out-License. These amounts represent the contractual milestones achieved or allocated under the China Out-License that had been fully or partially completed by period end. These allocated amounts represented the satisfaction of the transfer of license rights to LianBio and GrandPharma and the completion of related performance obligations. License fees and collaboration revenue also includes the satisfaction of performance obligations under an existing clinical supply agreement.
Previous report
We will recognize additional license fees and collaboration revenue under the China Out-License to the extent other events occur, specifically related to (i) milestone achievement of an additional drug supply agreement execution, (ii) milestone achievement of certain regulatory events in the China Territory, and (iii) royalties and milestones from our licensee's product sales of TP-03 in the China Territory. As of the date of this filing, it is uncertain if and when we will receive any royalties or future milestone consideration under the China Out-License, including but not limited to the milestone achievement of an additional drug supply agreement execution.
Previous report
Cost of sales consists of direct and indirect costs related to the manufacturing and distribution of XDEMVY, including raw materials, third-party manufacturing costs, packaging services, freight-in, third-party royalties payable on our product sales, net and amortization of capitalized intangible assets associated with XDEMVY. Cost of sales may also include period costs related to certain inventory warehouse and distribution operations and inventory adjustment charges. Prior to FDA approval of XDEMVY, manufacturing and other inventory costs were recorded to research and development expenses in the Statements of Operations and Comprehensive Loss. As of December 31, 2024, we have sold materially all inventory that was recorded to research and development expense prior to FDA approval of XDEMVY.
Previous report
Cost of License Fees and Collaboration Revenue
Previous report
Cost of license fees and collaboration revenue includes the expense recognized under the terms of the China Out-License payable under the terms of our in-license agreement for lotilaner.
Previous report
Research and development expenses consist of expenses incurred in connection with the development of our product candidates, including:
Previous report
•fees paid to third parties to conduct certain research and development activities on our behalf, including under agreements with CROs;
Previous report
•payments under licensing agreements, such as our upfront in-license fee for lotilaner;
Previous report
•consulting costs and certain allocated payroll, employee benefit and other employee-related costs (including stock-based compensation, salaries, payroll taxes) for personnel engaged in research and development functions;
Previous report
•costs related to compliance with clinical regulatory requirements;
Previous report
•costs of procuring drug products for use in our preclinical studies and clinical trials; and
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•facilities expenses, which include direct and allocated expenses for rent of our laboratory.
Previous report
We expense both internal and external research and development expenses as incurred or as certain upfront or milestone payments become contractually due to licensors upon achievement of clinical or regulatory events. We recognize external research and development costs based on an evaluation of the progress-to-completion of (i) specific tasks performed or deliverables provided by CROs and CMOs and (ii) patient visits for dosing or other follow-up. To estimate period expense for recognition, we use information provided to us by our service providers and we then apply the corresponding fee schedule.
Previous report
We track our external research and development expenses on a program-by-program basis, such as fees paid to CROs, CMOs, and research laboratories in connection with our pre-clinical development, process development, manufacturing and clinical development activities. However, we do not currently track employee time on a program-by-program basis. Prior to commercialization of XDEMVY, the vast majority of our external and internal research and development expenses were attributable to the development of XDEMVY.
Previous report
Selling, general and administrative expenses consist of personnel-related costs including salaries, benefits, stock-based compensation and other personnel-related expenses for our executive, finance, sales and marketing, and other administrative functions. Selling, general and administrative expenses also include sales and marketing costs to support our commercial launch starting in August 2023, consulting fees, legal services, rent and other facilities costs, patient assistance donations, the U.S. healthcare reform federal excise fee on Branded Pharmaceutical Manufacturers and Importers, and other general operating expenses, not otherwise classified as research and development expenses.
Previous report
We expect that our selling, general and administrative expenses will increase substantially in the future as a result of expanding our operations, including hiring personnel, continued commercialization of XDEMVY, preparing for potential commercialization of our other product candidates, and additional facility occupancy costs, as well as various incremental costs associated with being a public company, including: increased legal and accounting fees, regulatory costs associated with maintaining compliance with the rules of Nasdaq and SEC regulations, investor relations activities, directors and officers liability insurance premiums, and other accompanying compliance and governance costs.
Previous report
Other Income, Net
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Reworded paragraphs (43)
Previous wording
We are a commercial stage biopharmaceutical company focused on the development and commercialization of therapeutics, starting with eye care. We launched XDEMVY® (lotilaner ophthalmic solution) 0.25%, formerly known as TP-03, for the treatment of Demodex blepharitis, in August 2023 after receiving the U.S. Food and Drug Administration ("FDA") approval in July 2023. Demodex blepharitis is caused by the infestation of Demodex mites. Blepharitis (“Blephar” is a reference to eyelid and “itis” is a reference to inflammation) is an ophthalmic lid margin disease characterized by inflammation of the eyelid margin, redness and ocular irritation, including a specific type of eyelash dandruff called collarettes, which are pathognomonic for Demodex blepharitis. Poorly controlled and progressive blepharitis can lead to corneal damage over time and, in extreme cases, blindness. There may be as many as approximately 25 million people in the U.S. who suffer from Demodex blepharitis. XDEMVY is the first and only therapeutic approved by the FDA and we believe is the definitive standard of care for the treatment of Demodex blepharitis.
Current wording
We are a commercial stage biopharmaceutical company focused on the development and commercialization of therapeutics, starting with eye care. We launched XDEMVY® (lotilaner ophthalmic solution) 0.25%, formerly known as TP-03, for the treatment of Demodex blepharitis, in August 2023 after receiving U.S. Food and Drug Administration (“FDA”) approval in July 2023. Demodex blepharitis is caused by the infestation of Demodex mites. Demodex blepharitis (“blephar” is a reference to eyelid and “itis” is a reference to inflammation) is an ophthalmic lid margin disease characterized by inflammation of the eyelid margin, redness and ocular irritation, including a specific type of eyelash dandruff called collarettes, which are pathognomonic for Demodex blepharitis. Poorly controlled and progressive Demodex blepharitis can lead to corneal damage over time and, in extreme cases, blindness. There may be as many as approximately 25 million people in the U.S. who suffer from Demodex blepharitis. XDEMVY is the first and only therapeutic approved by the FDA and we believe is the definitive standard of care for the treatment of Demodex blepharitis.
Previous wording
To date, we have completed seven clinical trials that include a Phase 3 Saturn-2 trial, a Phase 2b/3 Saturn-1 trial, four Phase 2 trials, and a Phase 1 trial for XDEMVY in Demodex blepharitis, all of which met their primary, secondary and/or certain exploratory endpoints, with the drug well tolerated throughout each trial. We have also completed, and/or have ongoing clinical trials for the potential treatment of Demodex blepharitis in patients with Meibomian Gland Disease ("MGD"), including the Ersa clinical trial involving XDEMVY, and the Rhea clinical trial involving an XDEMVY vehicle; TP-04 for the potential treatment of Ocular Rosacea; and TP-05 for potential Lyme disease prophylaxis, among others.
Current wording
To date, we have completed seven clinical trials that include a Phase 3 Saturn-2 trial, a Phase 2b/3 Saturn-1 trial, four Phase 2 trials, and a Phase 1 trial for XDEMVY in Demodex blepharitis, all of which met their primary, secondary, and/or certain exploratory endpoints, with the drug well tolerated throughout each trial. We have also completed clinical trials in Demodex blepharitis patients with Meibomian Gland Disease (“MGD”), including the Phase 2a clinical trial (the “Ersa Trial”), and a pilot clinical trial (the “Rhea Trial”) involving an XDEMVY vehicle.
Previous wording
We intend to further advance our pipeline with the lotilaner API to address several diseases in human medicine, including eye care, and infectious disease prevention. We are investigating the development of our product candidates to address targeted diseases with high unmet medical needs, which currently include TP-04, a novel gel formulation of lotilaner for the potential treatment of Ocular Rosacea, and TP-05, a novel investigational oral formulation of lotilaner, for potential Lyme disease prophylaxis and community malaria reduction.
Current wording
We intend to further advance our pipeline with, e.g., lotilaner API to address several diseases in human medicine, including eye care, and infectious disease prevention. We are investigating the development of our product candidates to address targeted diseases with high unmet medical needs, which currently include TP-04, an investigational sterile aqueous gel formulation of lotilaner for the potential treatment of ocular rosacea, and TP-05, an investigational oral tablet formulation of lotilaner, for potential Lyme disease prophylaxis and community malaria reduction.
Previous wording
•We dispensed more than 58,500 and 163,000 bottles of XDEMVY to patients during the fourth quarter and full year 2024, respectively.
Current wording
◦Delivered approximately 130,000 and 400,000 bottles to patients during the fourth quarter and full year 2025, respectively.
Previous wording
◦Recognized a gross-to-net discount of approximately 45% in the fourth quarter and full year 2024.
Current wording
◦Maintained over 90% of commercial, Medicare, and Medicaid covered lives and recognized a gross-to-net discount of approximately 44% and 45% in the fourth quarter and full year 2025, respectively.
Previous wording
TP-03 Demodex blepharitis in patients with Meibomian Gland Disease, Ersa and Rhea Trials
Current wording
TP-03 Demodex blepharitis in patients with MGD, Ersa and Rhea Trials:
Previous wording
In December 2023, we announced positive topline results of the Ersa trial evaluating XDEMVY administered twice daily ("BID") or three times a day ("TID") for 6 weeks and 12 weeks for the treatment of MGD in patients with Demodex mites. XDEMVY demonstrated statistically significant and clinically meaningful improvements compared to baseline in two objective measures of the disease: the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; and the number of glands secreting normal or clear liquid. In November 2024, additional positive data was presented from the Ersa trial as well as data from the Rhea trial, a pilot study evaluating XDEMVY vehicle for the treatment of MGD in patients with Demodex mites, at the American Academy of Optometry ("AAOpt") Annual Meeting 2024. The Rhea trial enrolled a similar patient population as the Ersa trial, and evaluated the same outcomes, with the same dosing regimens, except the Rhea trial participants received XDEMVY vehicle. Both the Ersa and Rhea trials also assessed patient reported outcomes for some of the most commonly reported patient symptoms in Demodex blepharitis and MGD, namely fluctuating vision, itching, redness, and burning.
Current wording
In December 2023, we announced positive topline results of the Ersa Trial evaluating XDEMVY administered twice daily (“BID”) or three times a day (“TID”) for 6 weeks and 12 weeks for the treatment of MGD in patients with Demodex mites. XDEMVY demonstrated statistically significant and clinically meaningful improvements compared to baseline in two objective measures of the disease: the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; and the number of glands secreting normal or clear liquid. In November 2024, additional positive data was presented from the Ersa Trial as well as data from the Rhea Trial, a pilot study evaluating XDEMVY vehicle for the treatment of MGD in patients with Demodex mites, at the American Academy of Optometry (“AAOpt”) Annual Meeting 2024, and in April 2025 at the American Society of Cataract and Refractive Surgery (“ASCRS”) Annual Meeting 2025. The Rhea Trial enrolled a similar patient population as the Ersa Trial, and evaluated the same outcomes, with the same dosing regimens, except the Rhea Trial participants received XDEMVY vehicle. Both the Ersa and Rhea Trials also assessed patient reported outcomes for some of the most commonly reported patient symptoms in Demodex blepharitis and MGD, namely fluctuating vision, itching, redness, and burning.
Previous wording
The AAOpt presentation, which combined the Ersa and Rhea trials data in a pooled analysis, demonstrated that XDEMVY provided statistically significant and clinically meaningful improvements from baseline and when compared to vehicle. These improvements were shown across three objective measures of MGD: 1) the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; 2) the number of glands secreting normal or clear liquid; and 3) the number of glands yielding any liquid. Improvements were also demonstrated across certain patient reported outcomes, including fluctuating vision, itching and redness. Further, XDEMVY demonstrated statistically significant rates of collarette cure and lid margin erythema cure that are consistent with previous XDEMVY studies. No statistically significant differences were observed between the BID and TID treatment arms in both the Ersa and Rhea trials, respectively, and XDEMVY and the XDEMVY vehicle were well tolerated. Given the positive results of these trials, plus the FDA’s feedback that these patients are already covered under XDEMVY’s label for the treatment of Demodex blepharitis, our medical affairs team is moving forward with sharing this data with ECPs.
Current wording
The presentations, which combined the Ersa and Rhea Trials data in a pooled analysis, demonstrated that XDEMVY provided statistically significant and clinically meaningful improvements of the meibomian glands from baseline and when compared to vehicle, including at least three times more glands secreting normal or clear liquid in patients treated with XDEMVY compared to vehicle at day 43. These improvements were shown across three objective measures of MGD: i) the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; ii) the number of glands secreting normal or clear liquid; and iii) the number of glands yielding any liquid. Improvements were also demonstrated across certain patient reported outcomes, including fluctuating vision, itching and redness. Further, XDEMVY demonstrated statistically significant rates of collarette cure and lid margin erythema cure that are consistent with previous XDEMVY studies. No statistically significant differences were observed between the BID and TID treatment arms in both the Ersa and Rhea Trials, respectively, and XDEMVY and the XDEMVY vehicle were well tolerated. Given the positive results of these trials, plus the FDA’s feedback that these patients are already covered under XDEMVY’s label for the treatment of Demodex blepharitis, our medical affairs team is continuing to move forward with sharing this data with ECPs.
Previous wording
In March 2023, we initiated the Galatea trial, a Phase 2a trial evaluating TP-04, a novel gel formulation of lotilaner, for the treatment of rosacea. In February 2024, we announced positive topline results from the Galatea trial evaluating TP-04 for the treatment of rosacea which demonstrated statistically significant improvements (p<0.05) in inflammatory lesions and Investigator's Global Assessment score (change in baseline and success rate) were observed compared to vehicle at week 12. TP-04 was generally well tolerated. After review of this data with the FDA and Key Opinion Leaders, we decided to pursue development of TP-04 for the potential treatment for Ocular Rosacea. In January 2025, we announced plans to initiate a Phase 2 study in the second half of 2025 for the potential treatment of Ocular Rosacea.
Current wording
In February 2024, we announced positive topline results from the Galatea trial, a Phase 2a trial evaluating TP-04, an investigational sterile aqueous gel formulation of lotilaner, for the potential treatment of papulopustular rosacea. The positive topline results demonstrated statistically significant improvements (p<0.05) in inflammatory lesions and Investigator’s Global Assessment score (change in baseline and success rate) were observed compared to vehicle at week 12. TP-04 was generally well tolerated.
Previous wording
We believe TP-05 is currently the only non-vaccine, drug-based prophylaxis in development that targets ticks, and potentially prevents Lyme disease transmission. It is designed to rapidly and durably provide systemic blood levels of lotilaner potentially sufficient to kill infected ticks attached to the human body before they can transmit the Borrelia bacteria that causes Lyme disease.
Current wording
We believe TP-05 is currently the only on-demand, oral tablet in development that targets ticks, and potentially prevents Lyme disease transmission. It is designed to rapidly and durably provide systemic blood levels of lotilaner potentially sufficient to kill infected ticks attached to the human body before they can transmit the Borrelia bacteria that causes Lyme disease.
Previous wording
In February 2024, we announced positive topline results from the Carpo trial, which demonstrated statistical significance in the mortality of ticks compared to vehicle (p<0.001), regardless of treatment arm, and was well tolerated. The Carpo trial is designed to evaluate TP-05, a novel investigational oral, non-vaccine pharmacological prophylactic for the potential prevention of Lyme disease in humans. The Carpo trial evaluated the efficacy of TP-05 in killing lab grown, non-disease carrying ticks after they have attached to the skin of healthy volunteers, as well as confirm the safety, tolerability, and blood concentration of TP-05.
Current wording
In February 2024, we announced positive topline results from the Carpo trial, which demonstrated a statistically significant increase in tick mortality compared to vehicle (p<0.001), regardless of treatment arm, and was well tolerated (the “Carpo Trial”). The Carpo Trial was designed to evaluate TP-05, an investigational oral systemic, non-vaccine pharmacological prophylactic for the potential prevention of Lyme disease in humans. The Carpo Trial evaluated the efficacy of TP-05 in killing lab grown, non-disease carrying ticks after they have attached to the skin of healthy volunteers, as well as confirm the safety, tolerability, and blood concentration of TP-05.
Previous wording
In December 2024, we met with the FDA about our Lyme disease program. The FDA agreed to our proposed approach for a Phase 2b clinical trial, which would include several hundred subjects. Additionally, the FDA confirmed that a Phase 3 clinical study would require a disease prevention field study that would likely require the enrollment of thousands of patients. We continue to believe that the best approach to get this potential prophylactic therapy to patients is to partner this program either prior to the initiation of the Phase 2b study or after the completion of the study.
Current wording
Given ongoing discussions with the FDA about our Lyme disease program, they agreed to our proposed approach for a Phase 2 clinical trial of TP-05 (an investigational oral tablet), which would include several hundred subjects with planned trial initiation expected in the second quarter of 2026. Additionally, the FDA confirmed that a Phase 3 trial would require a disease prevention field study that would likely require the enrollment of thousands of patients. We believe that partnering this program, following completion of the Phase 2 clinical trial, could be the best approach to potentially deliver this prophylactic therapy candidate to patients.
Previous wording
We are on track for potential European regulatory approval of a preservative-free formulation of XDEMVY for the potential treatment of Demodex blepharitis in 2027. We have initiated market development work, including Key Opinion Leader engagement, disease education and scientific presentations at major conferences.
Current wording
•In Europe, we are on track for the potential approval of a preservative-free formulation of TP-03 for the potential treatment of Demodex blepharitis expected in 2027.
Previous wording
To date we have financed our operations through private placements of preferred stock, convertible promissory notes, net proceeds from issuance of common stock in our Initial Public Offering ("IPO"), our subsequent follow-on public offerings in May 2022 (the "May 2022 Public Offering"), August 2023 (the "August 2023 Public Offering"), and March 2024 (the "March 2024 Public Offering", collectively the "Follow-On Public Offerings"), and our Open Market Sale Agreement TM (the "2023 ATM Prospectus"), as well as proceeds from net product sales, our China Out-License, and drawdowns from the Credit Facilities.
Current wording
To date, we have financed our operations through private placements of preferred stock, convertible promissory notes, net proceeds from issuance of common stock in our initial public offering (“IPO”), our subsequent follow-on public offerings in May 2022 (the “May 2022 Public Offering”), August 2023 (the “August 2023 Public Offering”), March 2024 (the “March 2024 Public Offering”), and March 2025 (the “March 2025 Public Offering”, collectively the “Follow-On Public Offerings”), and our Open Market Sale Agreement TM (the “2023 ATM Prospectus”), as well as proceeds from net product sales, our China Out-License, and drawdowns from the loan and security agreement (the “2024 Credit Facility”) with funds associated with Pharmakon Advisors, LP (“Pharmakon”), and the previous loan and security agreement with Hercules Capital, Inc. and Silicon Valley Bank, a division of First Citizens Bank & Trust Company (the “2022 Credit Facility”, and collectively the “Credit Facilities”).
Previous wording
We have incurred significant net operating losses ("NOLs") in every year since our inception and expect to continue to incur significant operating expenses as we commercialize XDEMVY for Demodex blepharitis, and, as we advance our other product candidates through clinical trials, regulatory submissions, and potential commercialization. Our net losses were $115.6 million, $135.9 million and $62.1 million for the years ended December 31, 2024, 2023, and 2022, respectively. Our net losses may fluctuate significantly from quarter to quarter and year to year and could be substantial. We anticipate that our operating expenses will increase significantly as we:
Current wording
We have incurred significant net operating losses (“NOLs”) in every year since our inception and expect to continue to incur significant operating expenses as we commercialize XDEMVY for Demodex blepharitis and as we advance our other product candidates through clinical trials, regulatory submissions, and potential commercialization. Our net losses were $66.4 million, $115.6 million and $135.9 million for the years ended December 31, 2025, 2024, and 2023, respectively. Our net losses may fluctuate significantly from quarter to quarter and year to year and could be substantial. We anticipate that our operating expenses will increase significantly as we:
Previous wording
•add information systems and personnel to support our product development and commercialization efforts, and to enable us to operate as a public company.
Current wording
•add information systems and personnel to support our product development and continued commercialization efforts, and to enable us to operate as a public company.
Previous wording
We began generating product sales during the year ended December 31, 2023, following the FDA approval of XDEMVY in July 2023 and our subsequent commercial launch in August 2023. Our reported revenue within license fees and collaboration revenue is from our China Out-License and clinical supply agreement; we expect to report additional revenue under this caption in future periods.
Current wording
We began generating XDEMVY product sales in August 2023, following FDA approval in July 2023. Our reported revenue within license fees and collaboration revenue is from our China Out-License and clinical supply agreement; we expect to report additional revenue under this caption in future periods.
Previous wording
Until such time as we can generate significant revenue from product sales and achieve profitability, if ever, we expect to finance our operations through public equity or debt financings, or collaborations, strategic alliances, or licensing arrangements with third parties. Adequate funding may not be available to us when needed on acceptable terms, or at all. If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional capital or enter into such agreements as and when needed, we could be forced to significantly delay, scale back, or discontinue our product development and/or commercialization plans, which would negatively and adversely affect our financial condition.
Current wording
We expect to finance our operations through existing capital balances, revenue from product sales, public equity or debt financings, or collaborations, strategic alliances, or licensing arrangements with third parties. Adequate funding may not be available to us when needed on acceptable terms, or at all. If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional capital or enter into such agreements as and when needed, we could be forced to significantly delay, scale back, or discontinue our product development and/or commercialization plans, which would negatively and adversely affect our financial condition.
Previous wording
As of December 31, 2024, our aggregate cash, cash equivalents and marketable securities was $291.4 million – see the section below titled "Management's Discussion and Analysis of Financial Condition and Results of Operations —
Current wording
As of December 31, 2025, our aggregate cash, cash equivalents and marketable securities was $417.3 million – see the section below titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Previous wording
See the section titled "Risk Factors" for a further discussion of the potential adverse impact of unfavorable global and geopolitical economic conditions on our business, results of operations and financial condition.
Current wording
For additional information regarding the potential adverse effects of unfavorable global and geopolitical economic conditions on our business, results of operations and financial condition, please see “Risk Factors”in Item 1A of Part I of this Annual Report on Form 10-K.
Previous wording
For the year ended December 31, 2024, we recognized $2.9 million of license fees and collaboration revenue including (i) $2.5 million for the Termination Payment related to the Novation Agreement, and (ii) $0.4 million for the Warrant Termination Payment. For the year ended December 31, 2023, we recognized $2.7 million related to (i) the achievement of a $2.5 million contractual milestone under the China Out-License, and (ii) $0.2 million from the satisfaction of performance obligations under an existing clinical supply agreement. These allocated amounts represented the satisfaction of the transfer of license rights to LianBio and the completion of related performance obligations.
Current wording
During the year ended December 31, 2025, we did not recognize any license fees and collaboration revenue. During the year ended December 31, 2024, we recognized $2.9 million of license fees and collaboration revenue including (i) $2.5 million for a termination payment related to the Novation Agreement, and (ii) $0.4 million for a warrant termination payment (see Note 10).
Previous wording
Cost of sales increased by $11.2 million for the year ended December 31, 2024 to $12.8 million, as compared to the prior year period as a result of the increase in bottles of XDEMVY that were dispensed. Cost of sales consists of direct and indirect costs related to the manufacturing and distribution of XDEMVY, including raw materials, third-party manufacturing costs, packaging services, and freight-in, as well as third-party royalties payable on our product sales, net and amortization of capitalized intangible assets associated with XDEMVY.
Current wording
During the year ended December 31, 2025 and 2024, we recognized $30.7 million and $12.8 million, respectively, in cost of sales of XDEMVY and gross margins remained consistent at 93% for both periods. Cost of sales consists of direct and indirect costs related to the manufacturing and distribution of XDEMVY, including raw materials, third-party manufacturing costs, packaging services, and freight-in, as well as third-party royalties payable on our product sales, net and amortization of capitalized intangible assets associated with XDEMVY.
Previous wording
Research and development expenses increased by $3.1 million for the year ended December 31, 2024 to $53.4 million, as compared to the prior year period. The increase was primarily due to (i) $3.5 million of increased indirect expenses related to payroll and personnel-related costs (including increased stock-based compensation expense of $1.0 million) for employee additions to drive our product development initiatives, (ii) $0.7 million of increased other indirect expenses, (iii) a $1.5 million increase in milestone expense related to our in-license agreements (see Note 9), and (iv) $1.2 million of increased TP-03 program expenses. These increases were partially offset by (i) $2.7 million of decreased TP-05 program expenses including $1.5 million for the food effect study and $1.2 million for the Carpo trial, and (ii) a $1.2 million decrease in TP-04 program expenses related to completion of the Galatea trial.
Current wording
Research and development expenses increased by $10.9 million for the year ended December 31, 2025, as compared to the prior year period. The increase was due to (i) $8.9 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $3.2 million) for employee additions to drive our product development initiatives, (ii) $1.6 million of increased other indirect expenses, (iii) $3.3 million of increased early-stage programs, and (iv) $2.4 million of increased TP-04 program expenses. These increases were partially offset by (i) $2.7 million of decreased TP-03 expenses, (ii) $2.5 million of decreased milestone expenses related to our in-license agreements in the prior year period (see Note 9) and (iii) $0.1 million of decreased TP-05 program expenses.
Previous wording
Selling, general and administrative expenses increased by $128.6 million for the year ended December 31, 2024, to $237.3 million as compared to the prior year period. The increase was primarily due to (i) $39.7 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $6.6 million) for commercial and corporate employee additions to support our business growth and commercial leadership hires for XDEMVY, (ii) $52.0 million of increased commercial and marketing costs as we continued our commercial expansion of XDEMVY, (iii) $36.8 million of increased information technology applications, legal, professional and other corporate expenses. Our field sales headcount and associated vendor expenses continued to increase during 2024 due to further growth and expansion of our commercial activities for XDEMVY. XDEMVY was approved by the FDA in July 2023 and was commercially launched in August 2023.
Current wording
Selling, general and administrative expenses increased by $190.0 million for the year ended December 31, 2025, as compared to the prior year period. The increase was primarily due to (i) $112.6 million of increased commercial and marketing costs, including direct to consumer advertising costs, as we expanded our promotional efforts for the commercial launch of XDEMVY, (ii) $46.8 million of increased patient support functions, information technology, legal, and professional expenses, and (iii) $30.6 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $10.6 million) for commercial and corporate employee additions to support our business growth and commercial leadership hires for XDEMVY. Additionally, our field sales headcount and associated vendor expenses increased in 2025 due to further growth and expansion of our commercial activities for XDEMVY and other corporate initiatives.
Previous wording
Since our inception, we have financed our operations substantially through private placements of preferred stock, net proceeds from the issuance of common stock through our IPO, Follow-on Public Offerings, and the 2023 ATM Prospectus, as well as proceeds from product sales, net, the China Out-License, and drawdowns from our Credit Facilities. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $291.4 million.
Current wording
Since our inception, we have financed our operations substantially through private placements of preferred stock, net proceeds from the issuance of common stock through our IPO, Follow-on Public Offerings, and the 2023 ATM Prospectus, as well as proceeds from product sales, net, the China Out-License, and drawdowns from our Credit Facilities. As of December 31, 2025, we had cash, cash equivalents and marketable securities of $417.3 million.
Previous wording
In February 2024, we filed an automatic shelf registration statement on Form S-3 ASR (the "2024 Shelf Registration Statement"). In March 2024 we completed the March 2024 Public Offering. The 2024 Public Offering was an underwritten follow-on public offering under the 2024 Shelf Registration Statement, pursuant to which we sold 2,812,500 shares of our common stock, and, in lieu of common stock to a certain investor, pre-funded warrants to purchase 312,500 shares of our common stock. The price to the public was $32.00 per share and $31.9999 per pre-funded warrant, which was the price to the public of each share of common stock sold in the March 2024 Public Offering, minus the $0.0001 exercise price per pre-funded warrant. We also granted the underwriters a 30-day option to purchase up to 468,750 additional shares of its common stock at the public offering price of $32.00 per share, which the underwriters exercised in full in March 2024. We received $107.7 million in aggregate net proceeds, after deducting underwriting discounts, commissions, and other estimated offering-related expenses.
Current wording
In February 2024, we filed an automatic shelf registration statement on Form S-3 ASR (the “2024 Shelf Registration Statement”). In March 2024, we completed the March 2024 Public Offering. The 2024 Public Offering was an underwritten follow-on public offering under the 2024 Shelf Registration Statement, pursuant to which we sold 2,812,500 shares of our common stock, and, in lieu of common stock to a certain investor, pre-funded warrants to purchase 312,500 shares of our common stock. The price to the public was $32.00 per share and $31.9999 per pre-funded warrant, which was the price to the public of each share of common stock sold in the March 2024 Public Offering, minus the $0.0001 exercise price per pre-funded warrant. We also granted the underwriters a 30-day option to purchase up to 468,750 additional shares of our common stock at the public offering price of $32.00 per share, which the underwriters exercised in full in March 2024. We received $107.7 million of aggregate net proceeds, after deducting underwriting discounts, commissions, and other estimated offering-related expenses.
Previous wording
In August 2023, we completed the August 2023 Public Offering in which 5,714,285 shares of our common stock were sold at a public offering price of $17.50 per share. In September 2023, the underwriters partially exercised an option to purchase an additional 355,164 shares of common stock at the public offering price of $17.50 per share. After giving effect to the exercise of the underwriters' option, we sold a total of 6,069,449 shares and received aggregate net proceeds of $99.3 million, after deducting underwriting discounts, commissions, and other offering-related expenses.
Current wording
In March 2025, we completed an underwritten follow-on public offering under the 2024 Shelf Registration Statement pursuant to which we sold 2,808,988 shares of our common stock. The price to the public was $44.50 per share. We also granted the underwriters a 30-day option to purchase up to 421,348 additional shares of our common stock at the public offering price of $44.50 per share, which the underwriters exercised in full in March 2025. We received $134.8 million of aggregate net proceeds, after deducting underwriting discounts, commissions, and other estimated offering-related expenses.
Previous wording
During the year ended December 31, 2023, we sold 1,000,000 shares of our common stock for $20.00 per share under a sales agreement prospectus filed in November 2023, pursuant to the 2023 Shelf Registration Statement (defined below) covering the sale of up to $100.0 million of our common stock pursuant to the 2023 ATM Prospectus with Jefferies LLC ("Jefferies"). This resulted in net proceeds of $19.2 million, after deducting broker commissions and offering related expenses.
Current wording
During the year ended December 31, 2023, we sold 1,000,000 shares of our common stock for $20.00 per share under a sales agreement prospectus filed in November 2023, pursuant to the 2023 Shelf Registration Statement (defined below) covering the sale of up to $100.0 million of our common stock pursuant to the 2023 ATM Prospectus with Jefferies LLC (“Jefferies”). This resulted in net proceeds of $19.2 million, after deducting broker commissions and offering related expenses. During the years ended December 31, 2024 and 2025, there were no sales of our common stock pursuant to the 2023 ATM Prospectus.
Previous wording
As of the date of this filing, we have received $86.1 million of total proceeds in connection with our China Out-License comprised of (i) $15.0 million of initial consideration, (ii) $67.5 million for the achievement of specified milestones, (iii) $0.7 million related to a special cash dividend, (iv) $2.5 million related to the Novation Agreement, and (v) $0.4 million related to the Warrant Termination Agreement.
Current wording
As of the date of this filing, we have received $86.1 million of total proceeds in connection with our China Out-License comprised of (i) $15.0 million of initial consideration, (ii) $67.5 million for the achievement of specified milestones, (iii) $0.7 million related to a special cash dividend, (iv) $2.5 million related to the Novation Agreement, and (v) $0.4 million related to a warrant termination agreement.
Previous wording
As of December 31, 2024 we are eligible to receive further consideration from GrandPharma upon the achievement of additional TP-03 events, including: (i) $20.0 million of potential future regulatory and/or patent milestones; (ii) $100.0 million of potential future China-based TP-03 sales threshold milestones; and (iii) tiered low-to-high-teen royalties for China Territory TP-03 product sales.
Current wording
As of the date of this filing, we are eligible to receive further consideration from GrandPharma upon the achievement of additional TP-03 events, including: (i) additional regulatory approval and/or patent issuance milestones and one-time payments of up to an aggregate of $20.0 million ; (ii) China-based TP-03 sales threshold milestones of up to an aggregate of $100.0 million; and (iii) tiered low-to-high-teen royalties for China Territory TP-03 product sales.
Previous wording
In April 2024, we executed the 2024 Credit Facility with Pharmakon with maturity in April 2029 (collectively, with the 2022 Credit Facility, the “Credit Facilities”). The 2024 Credit Facility is collateralized by substantially all of the Company's presently existing and subsequently acquired assets. Upon execution, we made a $75.0 million draw from the initial tranche, a portion of which was utilized to repay all outstanding indebtedness associated with the 2022 Credit Facility, for total net proceeds of $39.6 million. The 2024 Credit Facility provides for three potential additional term loan tranches in principal amounts up to $25.0 million, $50.0 million, and $50.0 million, respectively, subject to customary conditions to funding and, in the case of the last two tranches, achieving minimum net sales milestones. The three additional tranches may be requested on or prior to December 31, 2024, June 30, 2025 and December 31, 2025, respectively.
Current wording
In April 2024, we executed the 2024 Credit Facility with Pharmakon with maturity in April 2029. The 2024 Credit Facility is collateralized by substantially all of our presently existing and subsequently acquired assets. Upon execution, we made a $75.0 million draw from the initial tranche, a portion of which was utilized to repay all outstanding indebtedness associated with the 2022 Credit Facility, for total net proceeds of $39.6 million. The 2024 Credit Facility provided for three potential additional term loan tranches in principal amounts up to $25.0 million, $50.0 million and $50.0 million, respectively, subject to customary conditions to funding and, in the case of the last two tranches, achieving minimum net sales milestones, which were met. We did not draw on any of the three additional tranches, each of which expired on December 31, 2024, June 30, 2025, and December 31, 2025.
Previous wording
Our operating expenditures currently consist of cost of sales, research and development costs (including activities within our preclinical, clinical, regulatory, and drug manufacturing initiatives) and selling, general and administrative costs. Our use of cash is impacted by the timing and extent of payments for each of these activities and other business requirements. We have incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $360.2 million and $244.7 million as of December 31, 2024 and 2023, respectively.
Current wording
Our operating expenditures currently consist of cost of sales, research and development costs (including activities within our preclinical, clinical, regulatory, and drug manufacturing initiatives) and selling, general and administrative costs. Our use of cash is impacted by the timing and extent of payments for each of these activities and other business requirements. We have incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $426.6 million and $360.2 million as of December 31, 2025 and 2024, respectively.
Previous wording
We believe that our cash, cash equivalents and marketable securities of $291.4 million as of December 31, 2024 is sufficient to fund our current and planned operations for at least the next twelve months from the date of filing this Annual Report on Form 10-K. We also have additional availability from our 2024 Credit Facility of $100.0 million contingent on maintaining certain sales milestones. Our cash runway estimate is predicated on current assumptions for future revenue, operating expenses, and debt availability and may require future adjustments. Accordingly, we may be required to raise additional capital earlier than we currently expect based on our cash requirements and market dynamics.
Current wording
We believe our cash, cash equivalents and marketable securities of $417.3 million as of December 31, 2025 is sufficient to fund our current and planned operations for at least the next twelve months from the date of filing this Annual Report on Form 10-K. Our cash runway estimate is predicated on current assumptions for future revenue, operating expenses, and debt availability and may require future adjustments. Accordingly, we may be required to raise additional capital earlier than we currently expect based on our cash requirements and market dynamics.
Previous wording
As part of the 2023 Shelf Registration Statement, we concurrently filed the 2023 ATM Prospectus with Jefferies covering the sale of up to $100.0 million of our common stock pursuant to an Open Market Sales Agreement TM we entered into with Jefferies in 2021 (the "ATM Sales Agreement"). Under the terms of the 2023 ATM Prospectus and ATM Sales Agreement, Jefferies will act as the Company's sales agent and is entitled to compensation for its services equal to 3% of the gross proceeds of any shares of common stock sold. We have not sold any shares of our common stock under the 2023 ATM Prospectus during the year ended December 31, 2024. In December 2023, we sold 1,000,000 shares of our common stock under the 2023 ATM Prospectus for $20.00 per share and received net proceeds of $19.2 million, after deducting broker commission and offering-related expenses.
Current wording
In November 2023, we filed a shelf registration statement on Form S-3 that was declared effective by the SEC on November 21, 2023, (the “2023 Shelf Registration Statement”), and as part of the 2023 Shelf Registration Statement, we concurrently filed the 2023 ATM Prospectus with Jefferies. The 2023 ATM Prospectus covers the sale of up to $100.0 million of our common stock pursuant to an Open Market Sales Agreement TM we entered into with Jefferies in 2021 (the “ATM Sales Agreement”). Under the terms of the 2023 ATM Prospectus and ATM Sales Agreement, Jefferies will act as the Company’s sales agent and is entitled to compensation for its services equal to 3% of the gross proceeds of any shares of common stock sold.
Previous wording
We expect to incur significant operating losses for the foreseeable future, and for these losses to further increase, as we expand our clinical development programs for our other product candidates and continue to commercialize XDEMVY. We may also encounter unforeseen expenses, difficulties, complications, delays and other currently unknown factors that could adversely affect our business.
Current wording
While we have generated revenue from the launch of XDEMVY, we could incur operating losses in the future as we expand our clinical development programs for our other product candidates and continue to commercialize XDEMVY. We may also encounter unforeseen expenses, difficulties, complications, delays and other currently unknown factors that could adversely affect our business.
Previous wording
Our operating lease commitments reflect payments due for our active lease agreements in Irvine, California, for adjacent office and laboratory suites. In December 2024, we entered into a lease agreement for office space located in Irvine, California for a 10-year lease term. The lease payments are expected to commence in late 2025 following the earlier of: (i) eleven months following the lease execution date, or (ii) the date the Company commences its regular business activities at the premises following completion of tenant improvements. The base rent for the first year of the lease will be approximately $2.5 million and is subject to annual increases of 3% thereafter. The Company is entitled to an abatement of base rent for the first five full calendar months from the beginning of the lease commencement date for an aggregate amount of $0.7 million. As of December 31, 2024, our contractual commitments for our leases were $0.8 million, which will be paid over the remaining lease term of 0.8 years.
Current wording
Our operating lease commitments reflect payments due for our active lease agreement in Irvine, California, for office and laboratory suites. As of December 31, 2025, our contractual commitments for our leases were $28.4 million, which will be paid over a remaining lease term of 9.9 years.
Previous wording
The terms of our Eye and Derm Elanco Agreement, All Human Uses Elanco Agreement, and Other In-License Agreement requires us to make future development milestone payments aggregating up to $9.0 million and future commercial and sales-based milestone payments aggregating up to $249.0 million upon our achievement of the specified milestones. The amount and timing of such obligations are unknown or uncertain as of December 31, 2024.
Current wording
The terms of our Eye and Derm Elanco Agreement, All Human Uses Elanco Agreement, Other In-License Agreement, and February 2026 In-License Agreement require us to make future development milestone payments aggregating up to $11.5 million and future commercial and sales-based milestone payments aggregating up to $341.0 million upon our achievement of the specified milestones. The amount and timing of such obligations are unknown or uncertain as of December 31, 2025.
Previous wording
Net cash used in operating activities was $117.5 million for the year ended December 31, 2023, which primarily consisted of our net loss of $135.9 million, partially offset by net increases in non-cash and other charges of $18.1 million and net operating assets and liabilities of $0.3 million. The increase in net non-cash and other charges primarily related to stock-based compensation of $19.8 million. The increase in net operating assets and liabilities was primarily due to cash increases in accounts payable and other accrued liabilities of $13.2 million, accrued payroll and benefits of $7.7 million, partially offset by cash decreases including $16.6 million of account receivables, $2.9 million of prepaid expenses, and $0.7 million of other non-current assets.
Current wording
Net cash used in operating activities was $12.5 million for the year ended December 31, 2025, which primarily consisted of net loss of $66.4 million, partially offset by net increases in non-cash and other charges of $39.3 million and net operating assets and liabilities of $14.6 million. Our cash outflows primarily related to: (i) $638.8 million of vendor payments, (ii) $109.1 million of personnel-related costs, and (iii) $18.8 million of royalty payments. These cash outflows were partially offset by cash receipts including $734.4 million related to XDEMVY net product sales and $17.5 million from stock-related activities.
Previous wording
Net cash used in operating activities was $83.0 million for the year ended December 31, 2024, which primarily consisted of our net loss of $115.6 million, partially offset by net increases in non-cash and other charges of $28.7 million and net operating assets and liabilities of $3.8 million. The increase in net non-cash and other charges were primarily related to stock-based compensation expense of $27.8 million and a loss on debt extinguishment of $1.9 million. The increase in net operating assets and liabilities was primarily due to cash increases in accounts payable and other accrued liabilities of $40.3 million and $2.6 million of accrued payroll and benefits, partially offset by cash decreases including $30.1 million of accounts receivable, $7.0 million of prepaid expenses, and $2.0 million of inventory.
Current wording
Net cash used in operating activities was $83.0 million for the year ended December 31, 2024, which primarily consisted of our net loss of $115.6 million, partially offset by net increases in non-cash and other charges of $28.7 million and net operating assets and liabilities of $3.8 million. Our cash outflows primarily related to: (i) $290.0 million of vendor payments, (ii) $80.1 million of personnel-related costs, and (iii) $6.3 million of royalty payments. These cash outflows were partially offset by cash receipts including $280.7 million related to XDEMVY net product sales and $11.2 million from stock-related activities.
Previous wording
Net cash provided by investing activities was $140.6 million for the year ended December 31, 2023, and consisted of$174.8 million of proceeds from maturities of marketable securities, partially offset by (i) $28.7 million of purchased marketable securities, (ii) $4.0 million of intangible asset additions, and (iii) $1.5 million of purchased property, plant and equipment.
Current wording
Net cash used in investing activities was $42.1 million for the year ended December 31, 2025, and related to (i) $393.2 million of purchased marketable securities, (ii) $0.9 million of purchased long-term investments, and (iii) $9.9 million of purchased property, plant and equipment. These cash decreases were partially offset by $361.8 million of proceeds from maturities of marketable securities.
Showing the first 40 of 43 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net Cash Used in Investing Activities
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Rebates: We accrue rebates for contractually agreed-upon discounts with commercial payers and mandated discounts under government programs such as the Medicaid Drug Rebate Program, Medicare Part D Prescription Drug Program, and other government health care programs in the U.S. Our estimates for expected utilization of commercial payer rebates based on data received from our customers. The estimates for rebates under government programs are based on statutory discount rates and expected utilization as well as historical data we have accumulated since product launch. We calculate the accruals for commercial and government rebates based on various assumptions, including payer mix, with actual rebates potentially requiring accrual adjustments affecting product sales, net. Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current period's activity, plus an accrual balance for known prior periods’ unpaid rebates. An accrued liability is recorded for unpaid rebates related to product for which control has transferred to the customer.
Previous report — wording carried elsewhere
During the year ended December 31, 2024, there were no sales of our common stock pursuant to the 2023 ATM Prospectus.