Tarsus Pharmaceuticals, Inc. (TARS) Earnings Call Transcript & Summary

Great. Well, thanks, everyone, for joining us. Super pleased to have Jeff Farrow, CFO of Tarsus, join us. Thanks, Jeff.

Thank you, Andrea.

Maybe to start, if you could provide an overview of Tarsus, maybe what your drug XDEMVY is for. You were recently approved in August. And then provide some high-level comments here on your efforts at new category creation.

Sure. Yes. So Tarsus is a commercial-stage company that's focused on eye care. We also have an exciting late-stage clinical pipeline. Some of it's outside of the eye care focus, and we're likely to partner those. But it really is a pipeline and a product that all comes from the same active ingredient. Our medicine, XDEMVY, got approved, as you highlighted, in August of last year. And we launched shortly thereafter. The label is for, very broad, for the treatment of Demodex blepharitis. And Demodex blepharitis is an eye disease that is thought to impact about 25 million patients in the United States. So it's a highly prevalent disease. It's characterized by -- it's an eye disease that is characterized by redness around the eyelid margin, itchiness, pain and something we call crusties, which is basically these collarettes and other scruff accumulates around the eye. We are the only approved FDA therapy out there for the treatment of Demodex blepharitis. And we go to the root cause of the disease. It's caused by these Demodex mites. And this drug of ours kills the mites very effectively. It's a 6-week course of treatment. It's an eye drop that you take in the morning and in the evening. It's very efficacious from our clinical studies. We showed that 85% of the patients had a clinically meaningful improvement of the disease. And it's got a very safe safety profile as well.

And before we dig into the specifics here, at a high level, how has the launch been progressing relative to your initial expectations?

Launch has done really well. I think we already had high expectations at the get-go from the launch, but it's exceeded our expectations. And I would say that is really given 4 factors. One, the company did a great job early days of pre-commercial launch to do disease education. And this kind of goes hand-in-hand in terms of your category creating question as well, too. So got out there early and there wasn't much known about this disease. There were some doctors that see it and treat it, but there really wasn't an efficacious therapy before XDEMVY came along. So getting out there educating on the disease was really crucial to the success such that, out of the gate, we started seeing scripts when we got the approval. Number two, it's super easy to diagnose. There's no unusual paradigm to diagnose this disease. All patients that come in for an eye exam put their heads in slit lamp typically, which is normal process of an eye exam. All we're asking is that the doctors tell the patient to look down and look for the sense of these collarettes, that scruff that you typically see on the eyelids. And so very easy to diagnose. Thirdly, the patients feel better and look better, right? It's the holy grail of a therapeutic. It's not like a statin where you don't necessarily feel better. You see improvements in the redness, you see reduction in the collarettes. You see a reduction in the pain and the inflammation. So patients are feeling better. They're coming in and telling their doctors that they're feeling better, and you get this nice virtuous circle then because the doctors are hearing this feedback. And then finally, the patients -- or the payers are actually seeing value in it. And out of the gate, we got a much better gross-to-net because some of these patients were covering it even without contracts. And so we're seeing coverage already with both Medicare and the commercial side of the house, despite the fact that we haven't contracted with everybody yet. So I think that has led to the really great launch. We had about $13 million in revenue in the fourth quarter. And this most recent quarter, we announced $24.7 million in product sales.

So maybe digging into the -- some of the metrics that you provided on your last earnings call. At the time, you had over 8,000 prescribers, half of which had been -- are being classified as repeat prescribers. Maybe if you could walk us through some of the details around the nature of those prescribers, optometrists versus ophthalmologists, what really makes a prescriber a repeat prescriber as you're defining it?

Sure. So we are targeting about 15,000 eye care professionals, half of which are ophthalmologists, half of which are optometrists. And the number of optometrists out there are about 40,000, so it's a very narrow segment of the optometrists. These are optometrists that have historically prescribed dry eye drugs, so they're used through the sort of the medical process and the medical insurance billing process. And so they are target at this point. I would say right now we are seeing more optometrists prescribing. So it's about 60% optometrists, about 40% ophthalmologists. We do think that they'll get closer to the 50-50 as time progresses there. But please, as you highlighted, we have gotten, out of those 15,000, we've had 8,000 of those doctors write at least 1 script and more than half of them have written 2 or more.

Okay. What is -- maybe what is stopping a prescriber from being a prescribers? Is it just a matter of time? They haven't seen sufficient number of patients to be able to trigger that second script? Or is anything holding them back?

Yes. It's probably more the latter. We haven't seen anything where a doctor or patients had a bad experience that would say, "Well, I'm not going to prescribe this drug anymore." It's potentially just the fact that patients are coming in for a regular visit and the timing of such that they haven't had an opportunity to prescribe a second one. But we've seen just through our data that it typically takes -- there was a certain group of folks that were ready out of the gate, the KOLs and some of the folks that maybe participated in the clinical study, wrote right away. But it does take some time, maybe 4 to 5 visits, before -- by a sales rep, before a doc that might write scripts. And then there are some other docs that maybe are a little slower to adopt that maybe takes more visits before they write their first scripts. But generally, what we've heard, and this is my fourth drug launch, and I've never seen a situation where docs stop you in the hallway and say, "This is really a big game changer for my patients. They feel better, they look better," and nothing but positive remarks. We get a lot of doctors that shoot pictures of their patients with the before-and-after. So there is a real visual perspective of how these patients are improving over time. So it's really kind of cool to see.

And when you think about the prescribers, as you've mentioned, some are ready to go right out of the gate, some require a little bit more handholding or some effort from your team, the 15,000 prescribers, how does that get split between either those 2 camps or the 3 buckets you've spoken about in the past? How does that differ maybe when you think about the 8,000 that you've been able to reach to date?

Yes, I think it's evenly split between the 2 groups. Maybe a little slower adopters on the ophthalmology side of the house than the optometrists just by nature of how the practices are defined. But yes, to your point, we've sort of categorized the patients into sort of 3 buckets. We've -- the early adopters, the eager to treat, and then the new to DB. The eager to treat typically take 4 to 5 scripts before they write their first one, and they're going to want to see 4 or 5 patients within a good outcome before they maybe broadly write for a lot of their patients that they see the collarettes on. And then the more hesitant doctor category, you can take 7, 8, 9 visits before they write their first script. They just tend to be more conservative by nature. Maybe they want to talk to a colleague before and get that experience before they start writing their scripts. But we've made good progress amongst all of those. And it is just a matter of time. Once they've had that patient experience, it typically turns out to be a recurring prescription that happens.

And on your last earnings call, when you've spoken about the number of new bottles dispensed, and you've looked forward to 2Q and you've said the number of new bottles dispensed will be similar to the number of new bottles dispensed between 4Q and 1Q.

Right.

Maybe speak to us about the dynamics that are underpinning that comment and -- because that would imply somewhat of a de-acceleration of growth. Just help us understand that.

No, it's a great question. I'm glad you asked it, because I think it's a little bit of a misunderstanding from some folks. I think the key reminder here is that we don't have the benefit of refills at this point, right? So on April 1, we started 0 again. So we're not getting any of those refills just given the durability of our drug. So we're growing from 0 to 35,000 new patients. It's not growing from the 25,000 that we got dispensed last quarter. It was not 10,000 growth, it's 35,000 growth. So we'll see the benefit of those patients coming back in about a year, is our expectations on the refill. So it's really quite a profound number of growth there as you think about it.

Maybe on that point, since you just mentioned it on retreatment, what are you hearing to that extent? And remind us what you've seen in your clinical trial that's kind of underpinning your belief that it will be a 1-year process before you see patients come back on?

Sure. Yes. Maybe I'll start there. So our clinical study, we had a 1-year safety follow-up. And we saw that the drug is obviously very efficacious. And what happens is around month 6 through month 12, we see the mites migrate back up into the eye, so we start to see collarettes reforming and we see some other issues with the disease occurring. So that's our best data that we have right now, is that the efficacy sort of wanes between 6 and 12 months. We are in the midst of enrolling a registry table to get more real-world evidence, and we'll be able to, I think, have more data once that comes out. But that's what the basis is. We think that some patients will be coming back, or most patients might come back, in a 12-month period based upon that clinical study. We have seen, and if you subscribe to IQVIA, you will see that there is a small number of patients that are seeing retreatments, but it's sub-5% at this point, which makes sense to us at this point.

Is that a true, I guess, maybe repeat prescription because they need to be retreated? Or are you seeing prescribers perhaps give 2 scripts at the same time? Like, I guess, maybe what is driving that, that need for retreatment so quickly?

So it's -- we think it's probably one of 2 things. One is a lot of docs just habitually say, allow refills, right? And I think what we've heard anecdotally is that these patients are saying, "Boy, after this 6-week course treatment, I feel great. My eyes look better, I feel better. I better take a next -- I better get a refill because I want to keep that treatment going," right, without knowing that, typically, that is curative for a period of time. The other anecdotal piece of news that we've heard is that the -- some docs have given a second bottle when the patient comes back in that perhaps had a very high level of collarettes and didn't cure all of the collarettes at the point of the second visit. And so just to be safe, they've given another script just to extend that course by 1 bottle.

Yes. Maybe talk to us about the efforts that you are putting into place or that you already have in terms of your social media campaigns to be able to reach patients?

Yes. We've had several campaigns that have launched. We've had a Look at the Lids campaign, directed towards the prescribers. And then we've had a Mite Party campaign that was launched earlier this year. The mite campaign is kind of a cool sort of character-driven campaign that is -- seems to be resonating with patients. We get a lot of click-throughs on that. And because of some of that feedback, we are considering a direct-to-consumer TV campaign as well, potentially starting as early as the fourth quarter of this year.

Have you started seeing -- maybe the pass-through. The click-throughs, has that been translating to patients going to their ECPs, getting checked out, identifying that they do and in fact have DB?

It is. It's driving -- from the data that we've been able to collect, it does seem to be driving behavior to have the docs -- or have the patients go in and ask their docs about, "Do I have mites in my eye? Do I have this sort of scruff on my eyelids?" So it's engaging to the patients, for sure.

What are the symptoms that are most burdensome to a patient? Like what will really be the symptom that drives the patient to go in and actually be seen by a provider?

Generally, for the patients that are "symptomatic," they have a red eye sort of that is inflamed. There is pain and itchiness that occurs. Sometimes they have difficulty applying makeup because of the scruff around the eye. So that will drive the patients typically to say, "Something is wrong with my eye, I can't quite describe it, but it just doesn't feel right."

What is the -- maybe what is the extent of overlap between DB and other eye conditions? Because you've spoken about this large prevalence, and then also spoken about it potentially be even larger or being able to treat a much larger patient population. Help us understand how you think about those populations.

Yes. No, we have about, as I said earlier, but about 25 million patients that are thought to have Demodex blepharitis in the United States. We're initially targeting 7 million. And you probably remember that little box that we've got built, there's 1.5 million that have gone in and asked their doctors to get treated with Demodex blepharitis. They've been diagnosed, there's an ICD-10 code. So that is initially where we're focused and where we're probably seeing most of the patients at this stage. Secondly, there's a dry eye category of patients that have dry eye plus DB, it's about 1.2 million. The third category that we're looking at is cataract surgery. So we know that patients that have Demodex blepharitis typically have a worse outcome following cataract surgery, can, in fact, [ inflame ]. There's some literature out there that shows there's often a balloon in this after cataract surgery. So we're educating the docs that perhaps you'd want to consider giving a course of treatment prior to cataract surgery such that you can get a better outcome following surgery. And then finally, contact lens, where a lot of patients that have Demodex blepharitis cannot wear contacts, and if they can, it's typically for less than a day, typically for 4 or 5 hours versus a 6 to 8-hour typical course. And so we're doing a cataract lens study that will get out there into the literature such that we can show that this does help benefit patients that -- contact lens, wear.

Are the scripts that have been written to date, are they primarily in that first segment of patients where they only have Demodex blepharitis? Or are you also seeing it trickle through to these patients who are maybe going into their physician for another reason and then essentially getting diagnosed with this?

Yes. No. Our thinking is it's primarily coming from that DB-diagnosed patients just because that is patients that have historically gone into their office and asked for support. But anecdotally, we're hearing that we are hitting other categories, including -- in fact, we heard today from one of our investors that her husband went in and got a prescription for dry eye with XDEMVY. And so we're hearing that type of anecdotal across all categories, from the cataract surgeons that are saying, "Yes, I'm definitely going to be giving this to my patients because I want to get a better outcome from that." So it's all anecdotal at this point, but in a couple of quarters, we'll be able to actually go back and take a look at some of the chart files and get more concrete data there.

Do you think there needs to be additional evidence generation to maybe drive those prescribers to use XDEMVY in those instances? Or is the dataset that you've generated today sufficient?

I think more data is always helpful in these scenarios, and more specific data. So I do think there's -- the folks that are connecting the dots early on and are being proactive in this treatment. But I do think for broad type of utilization, having some of these Phase IV studies and additional evidence is always helpful. And that's why we started the registry such that we can get real-world evidence on all comers, essentially people that have DB, people that have DB with dry eye. So we'll be able to get that out in the public domain once that sort of ripens over time.

Maybe switching to the payer front. You've spoken here about better dynamics than maybe you were expecting previously. Remind us where you stand with that. And are you still on track to reach your goal of coverage -- commercial coverage this year, Medicare coverage next year? Where does that stand?

Yes. No, we are on track. We're pleased with how things have gone. So we expect to have broad commercial coverage by the end of this year. And then by the middle of next year, we expect to have the broad Medicare coverage. It will start early in 2025 and we'll pull it through the first half of that year, expecting that broad coverage. It's more of a statutory process you have to go through. The formulary discussions will be happening here soon, and then we'll hear about the outcome of that formulary later this year, and then we'll start pulling those through in the early part of 2025.

What would you attribute your success in terms of contracted coverage to be? Is it based off of the value proposition of XDEMVY that the payers are understanding? Any other dynamics that you would point to?

No. We have a great payer team, and I think they realized early on that, even before a launch, you could engage with the payers and describe the disease burden, you can talk about the pharmacoeconomic benefit of treating. And so that was started early days. And then once we actually had an approved label, we can have more robust discussions with those payers. And so I think to your point, it is the pharmacoeconomic benefit of treating this, the fact that there's nothing out there from an FDA-approved therapy, or an over-the-counter therapy, that's proven efficacious and safe, quite frankly. So having that sort of great data package, a very efficacious treatment, it's a short duration, 6 weeks, and it's safe, has resonated with the payers.

And you've spoken about a long-term goal of gross-to-net discounts being around 50%. You're a little bit north of it right now. I guess is there a chance that you could have better than anticipated? You could fall out with improved discounts?

Yes. No. I think look, we are early days, we're halfway through the year. I think we feel really good about commercial and getting that broad coverage this year. It's early days on the Medicare side of things. And so that's really kind of the uncertainty at this point. So I think we're continuing to guide to the 50th percentile or 50% gross-to-net. But it could potentially get better. We just don't have enough data at this point to make that statement.

And on a more granular basis, as you think through the coming quarters of this year, remind us how you're thinking about quarter-over-quarter fluctuations. What does the cadence of that look like as you move towards that long-term goal of 50%?

So there's lots of ins and outs going on as we think about that gross-to-net evolution. But bottom line, I think what we expect is small incremental improvements in the gross-to-net discount quarter-over-quarter until we get to that 50% by the middle of next year.

And how much heterogeneity are you seeing across payers? I mean a lot of these decisions and agreements are coming online right now. But how much heterogeneity is there a payer to payer?

In terms of sort of the rebates and things like that. So generally, it's been fairly consistent. I think people understand the value proposition here. There are some that, as we get to the back half of the year, are more challenging and asking for more. But we're not in a position really to -- we have to capitulate at this point, right, because they are seeing the scripts coming through. They are covering them without the benefit of a rebate. So we are paying -- helping out with the co-pay as every other manufacturer would in that scenario. But bottom line is we suspect that we'll ultimately get pretty homogeneous rebates around that time frame.

As you think about the potential for retreatment, and we do think they're coming up next year, how do you anticipate payers will receive that? If you have a patient that needs maybe a treatment every year that's very different than a patient who maybe is getting retreatment every couple of months. How do you expect the payer would...

I think given our expectations on retreatment on an annual basis, we don't expect much pushback on that from the payers. It's a 6-week course treatment. There was a lot of off-label usage of dry eye medications, which people would take for 4 months, right, and not be satisfied so they come back to their doctor multiple times and try different therapies. So I think having an efficacious drug that's being treated sporadically is something that can be something that resonates with the payers there.

I want to ask you about your peak sales estimates that you've talked about in the past, of reaching $1 billion-plus within 4 to 6 years of launch. Maybe walk us through the path that gets you from here in your second full quarter of sales to that $1 billion peak sales potential.

Yes. No, I think there's multiple levers we can turn on, right, that right out of the gate we're doing really well, right, and exceeding where we thought we were going to be. But I think we're -- talked about the direct-to-consumer advertising that will attract more patients into the doctor's office. We are bringing on 50 incremental sales reps to getting to 150 sales reps, that we know that the more frequent interactions with maybe some of these slower-to-prescribe doctors drives more prescriptions, right, and has these doctors prescribe to more patients and seeing that positive outcome creates that sort of virtuous loop that we talked about. So it's that, I think, driving sort of the script growth. And then over time, we'll start to see the retreatments come back into play.

How much does that rely on capturing these other kind of parallel eye indications where -- whether it's cataracts, dry eye, the overlapping conditions, how much does that assume you need to penetrate into those patients?

Well, we show, just for an example, if we just capture the 1.5 million patients that have DB, that's over a $1 billion opportunity. Of course, we don't expect to get 100% of those patients. But we expect to get a large number of those, right? So it doesn't take much from each of those other categories to achieve that peak potential there. So that's kind of how we view that. Also, if you have a successful drug where therapies weren't existing before, weren't efficacious, historically, more patients come out of the woodwork. And so we do expect, out of that 25 million patients, to, well, probably that 7 million will grow to a bigger number over time as well.

Remind us where things stand in your ex U.S. efforts. Europe, you've spoken in the past about needing to look at a new formulation. What is the latest there?

Yes. No, we have developed a preservative-free formulation. It's a -- typically what the European regulators have required, a single-use preservative-free formulation. So that's -- we've developed that, and we're doing some stability studies as we speak. The discussions with the regulators are really going to focus on do we need to do an incremental clinical study there in Europe? And historically, European regulators want to see a comparator study as a Phase III study, comparing to the standard of care. What's unique here is there's really no standard of care for Demodex blepharitis. So there could be a scenario where they don't require us to do an incremental Phase III study and it would be more just a bridging study between our non-preservative-free with the preservative formulations. So that's on the regulatory front. On the development of the commercial front, we are engaging a well-known payer group to help us look at pricing strategies there. And so we're in the midst of doing that pricing analysis. And also thinking about what is the timing and the country logic of entering into each of those territories is very important because of sort of the market basket approach that they take there. So we're in the midst of doing that. Once we have that data, we will take a look at what makes sense from an organizational perspective, including NPV. Does it make sense for us to build up the infrastructure for ourselves? Does it make sense to potentially partner this? Or is there some hybrid approach where perhaps we own one aspect of the European launch, maybe disease education, while we partner out other aspects like maybe the sales force or back office type of things? So we'll explore all those opportunities and make a decision sometime in the fourth quarter probably on what that best pathway might be for us.

And then how do things stand right now in China? So you did have the LIBRA study. Interestingly there, you had 2 primary endpoints, only hit on 1.

Yes.

How do you think about maybe, one, what drove the difference there versus the U.S.-based trials? And then 2, what does that mean from a regulatory standpoint? And you have a new partner now as well? Any updates you can provide there?

Yes. No, I think -- so we had previously a partnership with LianBio. And if folks aren't familiar, they basically -- they sold some of their assets and assigned some of the other assets and are dissolving. And we agreed to the assignment of our collaboration to a company called Grand Pharma. It was actually a well-regarded sort of ophthalmologic, they have an arm that focuses on ophthalmology. So they have the expertise in there. So we were pleased to see that partnership come through. We don't -- they are in the midst of having discussions on the regulatory front to determine whether they can get approval on the one primary endpoint, which is basically the foundational root cause of the disease. It killed all the mites. It missed on the collarettes. And so they -- I think there's a good opportunity to state their case to the FDA equivalent over there, and could see an approval. But it might be a review decision. And typically, that type of review takes about 18 months. And I don't believe they've submitted their package and I think they're still in the early discussions there. So we'll wait and see on that front. If they don't get that, they said that they would do another Phase III study to do that. On your point on why they didn't hit on the collarettes, we don't know fundamentally because we weren't really involved in the study. We do -- we spend a lot of time educating the sites on -- with lid wipes and [Technical Difficulty] to try to remove the collarettes. And so we don't know if that same sense of [Technical Difficulty] removal of the collarettes, which resulted in them not hitting that endpoint.

Maybe in the last 6 minutes or so, if we can touch on your pipeline, and I think one natural extension for XDEMVY is obviously into MGD. Remind us where you stand with that. How are you thinking about potential expansion into this indication, your willingness to maybe engage in additional clinical trials? Where do you think there's a path forward through your discussions with the FDA?

Right. No, we are -- we were really excited about that data, and we shared it at multiple ad boards. And the KOLs are really, I would say, excited about the objective measures of improvement that we saw. You don't -- you haven't historically seen that. We saw an improvement in something called the MGSS score, which is where they measure the secretions that come out of the 15 Meibomian glands in the lower lid. And we went from a sort of moderately severe patient to a normal patient at the end of the 85 days. It was not just statistically significant, but also clinically meaningful for the patients. So that was encouraging. And then the other measure that we took was the number of glands that secreted the optimal secretion, which is an olive oil like texture, it's a score of 3. And it went from essentially below 1 gland per patient, to about 6 glands that were producing the clear gland. Anything 2 or more is considered clinically meaningful. So the data, again, was stat sig, but also clinically meaningful. So the KOLs have really been excited about that as an opportunity. We're moving forward with the discussion with the agency about potentially a label expanding opportunity or an MGD label. But the thing we don't want to do is harm our great label, right? We've got a great label for the treatment of Demodex blepharitis, and so we don't want to get associated with the dry eye drug or anything like that. So that could be one approach. The other approach is doing more of a disease education and getting that current data out into literature and into KOL speaker events -- for more studies there to really get that out in the public domain. So [Technical Difficulty] way forward once we have the discussion with the agency.

And remind us what the incremental commercial opportunity could look like if you are able to expand into MGD.

Sure. No, we think it's -- it's a well-known disease, and there's not a lot of treatment paradigms out there [ to help ] patients. So on top of the DB opportunity, we think [Technical Difficulty] revenues. Yes, meaningful.

Maybe as we think about the rest of your pipeline, and I'll ask this in maybe a 2-part question. The first being, you have rosacea, you have Lyme disease, you've seen some nice data emerge from both of those programs, how are you thinking about the forward steps now? How do you think about maybe the considerations of developing that independently versus finding a partner? And then the second part of that, to maybe tie it all together, just remind us where you stand with your cash runway, what activities that's designed to support? And how do you think about resource allocation in the context of this pipeline and your ongoing launch?

Yes. A lot of questions there, so. But I think bottom line on the rosacea, we were initially thinking about partnering this out for the derm indication. I mean the data was strong clinically. What was interesting when we published the data, we had some feedback from KOLs that they would love to see a product for ocular rosacea, something they see quite frequently in their practice. And so we initially thought, all right, well, that's interesting, maybe it's just some noise coming from a couple of KOLs, but we consistently heard that. So we are developing a TPP, target product profile, and going to do some market research there, do some ad boards and see if there's a market there. If there is a market there, you could see us potentially moving into a Phase IIb study in ocular rosacea. But we would still think about partnering the derm indication. So we'll have 2 independent rosacea discussions with the FDA, one with the derm division, one with the eye care division. On the Lyme program, great data, very exciting opportunity to have an on-demand oral prophylactic, but the studies are likely to be pretty large. The Pfizer study is about 3,000 for the vaccine, about 3,000 patients over 2 years, and a very heavy commercial infrastructure would be required to really commercialize that efficiently. So that is something we're going to have a conversation with the agency about what a Phase IIb might look like. Is there a more accelerated pathway? And also what a Phase III might be. And then we'll start the partnership discussions after that conversation there. And then on your balance sheet question. So we ended the first quarter with about $300 million in cash. We also have $125 million in term loan that we could tap into if we want to. But that balance sheet alone is sufficient for us to do the DTC program, to do the incremental sales rep hiring, and then move some of our pipelines if we think about ocular rosacea forward. So we don't have a need to do an additional financing to move those programs forward, always keeping an eye on our crown jewel, which is the XDEMVY launch for DB. So that's always going to be where we prioritize our resources.

Maybe in the last 30 seconds here, as people look towards the next 12 months, next 18 months, where should they be focused? Is it the XDEMVY launch, continued execution on that front? Is it the pipeline development? How should we think about that?

Yes. I think, one, it's continued sort of eyes on the execution on the XDEMVY launch. But I do think we've got some sleepers in the pipeline, including the ocular rosacea. It's very synergistic. It could drop into our bag very efficiently. And then the MGD program as well, too. We're getting no value for that at this point. But I think given the data that we've shown and the robust feedback from the KOLs, that this could be a very compelling synergistic opportunity for as well.

And that, maybe just quickly, that 20% to 40% incremental opportunity, is that MGD without Demodex blepharitis, or that's where you do continue to have overlap of MGD with Demodex?

It would be -- so to be on label, they would have to have DB, so they have to have collarettes plus MGD. So yes.

Awesome. Well, with that, Jeff, thank you so much.

My pleasure. And thank you for having us.

Of course.