On Tuesday, Oppenheimer sustained its positive outlook on shares of Tarsus Pharmaceuticals (NASDAQ:TARS), maintaining an Outperform rating and a $63.00 price target. The firm's analyst provided insights ahead of the company's third-quarter 2024 financial report, focusing on the performance of Tarsus's product XDEMVY, used for treating demodex blepharitis.
Despite expecting a slight overestimation of total prescription numbers by IQVIA, a pattern observed in recent quarters, Oppenheimer projects sales of approximately 40,020 bottles. This figure closely aligns with both the analyst's and the company's prior expectation of 41,000 bottles.
The analyst's revenue forecast has been marginally increased to $44.3 million, up from the previous estimate of $44 million and surpassing the consensus estimate of $43.1 million among other analysts. This revision reflects a better understanding of the impact of the recent price hike for XDEMVY from $1,850 to $1,920 that began around August. The adjustment in the sales projection takes into account this price increase.
Tarsus Pharmaceuticals has also initiated a direct-to-consumer (DTC) marketing campaign for XDEMVY, which is a significant step in promoting the product to a broader audience. The Oppenheimer analyst noted this development, along with the company's management continuing to deliver on their strategic initiatives, as additional reasons for reaffirming the Outperform rating and the $63 price target.
The anticipation of the third-quarter financial results for Tarsus Pharmaceuticals is high, with particular attention on the sales volume of XDEMVY and the company's overall performance. The maintained Outperform rating and price target by Oppenheimer reflect confidence in the company's prospects and its ability to meet expectations in the competitive pharmaceutical market.
In other recent news, Tarsus Pharmaceuticals has seen positive developments following the launch of their product, Xdemvy. Guggenheim maintains a Buy rating on Tarsus shares, highlighting the increase in total prescriptions of Xdemvy, which reached approximately 4,104 for the week of October 4, marking a record for the product's launch.
The third quarter of 2024 saw over 42,600 total prescriptions for Xdemvy, aligning with the company's management guidance of a 10% increase from the second quarter's figure.
Oppenheimer also maintains a positive outlook for Tarsus, reiterating an Outperform rating based on growing recognition of Demodex Blepharitis among Eye Care Professionals, leading to an uptick in prescriptions for Xdemvy.
Tarsus Pharmaceuticals reported a substantial increase in their second-quarter financial results for 2024, with sales exceeding $40 million, a 65% increase from the previous quarter, largely due to Xdemvy's success.
The company plans to expand its sales force and launch a direct-to-consumer advertising campaign later in the year. Broad Medicare coverage is anticipated in early 2025, and Tarsus aims to expand into additional market segments.
Despite potential challenges, including a possible slump in new prescriptions during the third quarter and slightly increased gross net discounts due to the Medicare donut hole issue, Tarsus remains optimistic about its growth trajectory.
InvestingPro Insights
To complement Oppenheimer's positive outlook on Tarsus Pharmaceuticals (NASDAQ:TARS), recent data from InvestingPro provides additional context for investors. The company's market capitalization stands at $1.39 billion, reflecting its current position in the pharmaceutical sector. Notably, Tarsus has demonstrated impressive revenue growth, with a 566.99% increase in the last twelve months as of Q2 2024, aligning with the analyst's focus on XDEMVY sales performance.
InvestingPro Tips highlight that Tarsus holds more cash than debt on its balance sheet, which could provide financial flexibility for marketing initiatives like the new DTC campaign for XDEMVY. Moreover, analysts anticipate sales growth in the current year, supporting Oppenheimer's increased revenue forecast.
The company's strong return over the last three months, with a 34.3% price total return, and an impressive 178.03% return over the past year, underscore the market's positive reception to Tarsus's strategic moves and product performance. These metrics align with the analyst's maintained Outperform rating and optimistic price target.
For investors seeking a deeper dive into Tarsus Pharmaceuticals' financial health and market position, InvestingPro offers 10 additional tips, providing a comprehensive view of the company's prospects in the competitive pharmaceutical landscape.
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