Tarsus Pharmaceuticals, Inc.

Previous wording

This Quarterly Report on Form 10-Q contains certain forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, future revenue, business strategy, product candidates, planned preclinical studies and clinical trials, results of clinical trials, research and development costs, regulatory approvals, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that are in some cases beyond our control and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q contains certain forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, future revenue, business strategy, product and product candidates, planned preclinical studies and clinical trials, results of clinical trials, research and development costs, regulatory approvals, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that are in some cases beyond our control and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Previous wording

•any statements regarding our ability to achieve distribution and patient access for our products including XDEMVY and timing and breadth of payer coverage; our expectations of the potential market size, pricing, gross-to-net yields, eye care provider and patient acceptance of our product and product candidates, opportunity and patient populations for our product and product candidates, including XDEMVY;

Current wording

•any statements regarding our ability to achieve distribution and patient access for XDEMVY and timing and breadth of payer coverage; our expectations of the potential market size, pricing, gross-to-net yields, eye care professional and patient acceptance of our product and product candidates, opportunity and patient populations for our product and product candidates, including XDEMVY;

Previous wording

•our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;

Current wording

•our plans and ability to obtain, maintain, or protect intellectual property rights, including extensions of existing patent terms where available;

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 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.

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 clinical trials in Demodex blepharitis patients with Meibomian Gland Disease (“MGD”) including the Ersa clinical trial involving XDEMVY (the “Ersa Trial”), and the Rhea clinical trial involving an XDEMVY vehicle (the “Rhea Trial”), all of which met their primary, secondary, and/or certain exploratory endpoints, with the drug well tolerated throughout each trial.

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, e.g., 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, an investigational sterile aqueous gel formulation of lotilaner for the potential treatment of ocular rosacea and TP-05, an investigational oral systemic 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

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.

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 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 treatment of rosacea (the “Galatea Trial”). 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. 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, a highly prevalent and underserved eye disease with no FDA-approved therapy. In January 2025, we announced plans to initiate a Phase 2 study for the potential treatment of ocular rosacea in the second half of 2025, which we expect to initiate in December 2025, with topline results expected by year-end 2026.

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, for which Demodex mites is believed to be one of the root causes. 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 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.

Current wording

We are exploring the therapeutic potential of TP-05 as a novel investigational lotilaner-based oral prophylactic designed to kill ticks. There are approximately 80 million people in the U.S. at risk of Lyme disease exposure with nearly 30 million of which are moderate to high risk. Further, there are approximately 400,000 reported cases of Lyme disease in the U.S. each year, but it is believed that the actual number of cases could be much higher. 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”). 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.

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 of TP-05 (an investigational oral tablet), which would include several hundred subjects with planned trial initiation expected sometime in 2026. 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 planned initiation of the Phase 2b study or after the completion of the study.

Current wording

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 continue to believe that partnering this program, following completion of the Calliope Trial, could be the best approach to potentially deliver this prophylactic therapy candidate to patients.

Previous wording

We believe we are on track for potential European regulatory submission expected in 2026, and approval expected in 2027, for a preservative-free formulation of XDEMVY for the potential treatment of Demodex blepharitis.

Current wording

In Europe, we believe we are on track to complete stability work of a preservative-free formulation in 2026 and continue to evaluate the path to approval of TP-03 for the potential treatment of Demodex blepharitis.

Previous wording

Communications with regulatory authorities in Japan are ongoing to help determine a regulatory path forward for Demodex blepharitis. The Elara prevalence study showed high prevalence and significant impact of Demodex blepharitis in Japan, consistent with U.S. findings.

Current wording

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.

Previous wording

Prospectus, as well as proceeds from net product sales, our China Out-License, and drawdowns from the 2024 Credit Facility 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”).

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 IPO, our subsequent Follow-On Public Offerings and our 2023 ATM Prospectus, as well as proceeds from net product sales, our China Out-License, and drawdowns from the 2024 Credit Facility 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 $12.6 million and $23.4 million for the three months ended September 30, 2025 and 2024, respectively, and $58.0 million and $92.4 million for the nine months ended September 30, 2025 and 2024, 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 continue to 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 $7.0 million and $25.1 million for the three months ended March 31, 2026 and 2025, 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

•advance the clinical development of TP-04 for the potential treatment of ocular rosacea and TP-05 for the potential Lyme disease prophylaxis;

Current wording

•advance the clinical development of various pipeline programs, including TP-04 for the potential treatment of ocular rosacea and TP-05 for the potential Lyme disease prophylaxis;

Previous 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.

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; we expect to report additional revenue under this caption in future periods.

Previous wording

As of September 30, 2025, our aggregate cash, cash equivalents and marketable securities was $401.8 million – see the section below titled “Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

Current wording

As of March 31, 2026, our aggregate cash, cash equivalents and marketable securities was $388.7 million – see the section below titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

Previous wording

During the three months ended September 30, 2025 and 2024, we recognized revenue of $118.7 million and $48.1 million, respectively, from product sales, net of rebates, chargebacks, discounts, and other adjustments primarily driven by approximately 103,000 bottles of XDEMVY delivered to patients compared to approximately 41,400 bottles delivered to patients in the prior year period.

Current wording

During the three months ended March 31, 2026 and 2025, we recognized revenue of $145.4 million and $78.3 million, respectively, from product sales, net of rebates, chargebacks, discounts, and other adjustments. This increase in revenue was driven by higher volume and improvement in the gross-to-net discounts.

Previous wording

For the three months ended September 30, 2025 and 2024, we recognized $8.3 million and $3.2 million, respectively, in cost of sales for XDEMVY. 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.

Current wording

For the three months ended March 31, 2026 and 2025, we recognized $9.4 million and $5.2 million, respectively, in cost of sales for XDEMVY, and gross margins remained consistent at 94% and 93% for the respective 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, freight-in, 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 $4.2 million for the three months ended September 30, 2025, as compared to the prior year period. The increase was primarily due to (i) $0.8 million of increased TP-04 program expenses, (ii) $2.9 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $1.2 million) related to employee additions to drive our product development initiatives, (iii) $0.7 million of increased early-stage programs, and (iv) $0.4 million of increased other indirect expenses. These increases were partially offset by $0.8 million of decreased TP-05 program expenses.

Current wording

Research and development expenses increased by $7.9 million for the three months ended March 31, 2026, as compared to the prior year period. The increase was primarily due to (i) $3.7 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $1.5 million) related to employee additions to drive our product development initiatives, (ii) $2.0 million related to an upfront payment upon execution of a new in-license agreement (see Note 8), and (iii) $1.4 million of increased TP-05 program expenses related to our Calliope Trial that was initiated in March 2026. These increases were partially offset by a decrease of $0.3 million of TP-04 program expenses.

Previous wording

Selling, general and administrative expenses increased by $50.7 million for the three months ended September 30, 2025, as compared to the prior year period. The increase was primarily due to (i) $7.4 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $3.5 million) for commercial and corporate employee additions to support our business growth and commercial leadership hires for XDEMVY, (ii) $26.1 million of increased commercial and marketing costs, including direct-to-consumer (“DTC”) advertising costs, as we continued our commercial expansion of XDEMVY and (iii) $17.2 million of increased variable costs including certain patient assistance programs, fees related to increased bottles dispensed, information technology applications, legal, professional and other corporate expenses. 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.

Current wording

Selling, general and administrative expenses increased by $51.4 million for the three months ended March 31, 2026, as compared to the prior year period. The increase was due to (i) $25.7 million of increased commercial and marketing costs, including DTC advertising costs, as we continue to expand our promotional efforts for XDEMVY’s commercial launch, (ii) $21.2 million of increased patient support functions, information technology, legal, and professional expenses, and (iii) $4.5 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $3.5 million) for commercial and corporate employee additions to support our business growth and commercial leadership hires for XDEMVY. We expect increased vendor expenses in 2026 due to further growth and expansion of our commercial activities for XDEMVY and other corporate initiatives.

Previous wording

Other income (expense), net for the three months ended September 30, 2025 increased by $0.2 million primarily due to interest expense related to the 2024 Credit Facility.

Current wording

Other income (expense), net for the three months ended March 31, 2026 increased by $0.3 million primarily due to increased interest income earned on our cash, cash equivalents and marketable securities.

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 September 30, 2025, we had cash, cash equivalents and marketable securities of $401.8 million.

Current wording

Since our inception, we have financed our operations substantially through private placements of preferred stock, convertible promissory notes, 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 net product sales, the China Out-License, and drawdowns from our Credit Facilities. As of March 31, 2026, we had cash, cash equivalents and marketable securities of $388.7 million.

Previous 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 approximately $134.8 million of 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 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 at a price to the public of $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

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.

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, and (iii) $3.6 million related to the transition of the China Out-License from LianBio to GrandPharma.

Previous wording

As of September 30, 2025 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.

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 (of which $15.0 million was achieved in March 2026 and the Company is awaiting the corresponding cash receipt); (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. 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 have been met. We did not draw on the first or second additional tranches of $25.0 million and $50,0 million, respectively, each of which expired on December 31, 2024 and June 30, 2025. The one remaining $50.0 million tranche may be requested at our option on or prior to December 31, 2025.

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 $418.3 million and $360.2 million as of September 30, 2025 and December 31, 2024, 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 $433.6 million and $426.6 million as of March 31, 2026 and December 31, 2025, respectively.

Previous wording

We believe our cash, cash equivalents and marketable securities of $401.8 million as of September 30, 2025, is sufficient to fund our current and planned operations for at least the next twelve months from the date of filing this Quarterly Report on Form 10-Q. We have additional availability from our 2024 Credit Facility of $50.0 million contingent on reaching 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 $388.7 million as of March 31, 2026, is sufficient to fund our current and planned operations for at least the next twelve months from the date of filing this Quarterly Report on Form 10-Q. 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

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 AgreementTM 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. 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. We have not sold any shares of our common stock under the 2023 ATM Prospectus during the nine months ended September 30, 2025 and 2024.

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

While we have generated revenue from the launch of XDEMVY, 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

Net cash used in investing activities was $91.4 million for the nine months ended September 30, 2025, and related to $357.6 million of purchased marketable securities and $3.5 million of purchased property, plant and equipment. These cash decreases were partially offset by $269.7 million of proceeds from maturities of marketable securities.

Current wording

Net cash used in investing activities was $58.6 million for the three months ended March 31, 2026, and related to $126.8 million of purchased marketable securities and $5.8 million of purchased property and equipment, partially offset by $74.1 million of proceeds from maturities of marketable securities.

Previous wording

Net cash used in investing activities was $139.6 million for the nine months ended September 30, 2024, and related to $172.7 million of purchased marketable securities, $3.0 million of purchased long-term investments, and $1.5 million of purchased property, plant and equipment. These cash decreases were partially offset by $37.5 million of proceeds from maturities of marketable securities.

Current wording

Net cash used in investing activities was $34.9 million for the three months ended March 31, 2025, and related to $125.6 million of purchased marketable securities and $0.6 million of purchased property and equipment, partially offset by $91.2 million of proceeds from maturities of marketable securities.

Previous wording

Net cash provided by financing activities was $141.1 million for the nine months ended September 30, 2025, and related to $134.8 million of net proceeds from the issuance of common stock in the March 2025 Public Offering, $5.2 million of proceeds from employee stock option exercises and $1.1 million of proceeds from the issuance of common stock for our employee stock purchase plan (“ESPP”).

Current wording

Net cash provided by financing activities was $136.6 million for the three months ended March 31, 2025, and related to $135.1 million of net proceeds from the issuance of common stock in the March 2025 Public Offering and $1.4 million of proceeds from employee stock option exercises.