TARSUS PHARMACEUTICALS, INC. (TARS)

Business overview

Business Overview 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 a 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.

XDEMVY targets and eradicates the root cause of Demodex blepharitis - Demodex mite infestation. The active pharmaceutical ingredient (“API”) of XDEMVY, lotilaner, paralyzes and eradicates mites and other parasites through the inhibition of parasite-specific gamma-aminobutyric acid-gated chloride (“GABA-Cl”) channels with no GABA-Cl inhibition in humans. To date, we have completed seven clinical trials that include a Phase 3 trial (the “Saturn-2 trial”), a Phase 2b/3 trial (the “Saturn-1 trial”), four Phase 2 trials, and a Phase 1 trial (the “Hyperion 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 a Phase 2a clinical trial (the “Ersa trial”) and a pilot clinical trial (the “Rhea trial”) involving an XDEMVY vehicle.

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 tablet formulation of lotilaner, for potential Lyme disease prophylaxis and community malaria reduction. TP-03 Demodex blepharitis in patients with Meibomian Gland Disease (MGD) MGD is commonly characterized by functional and structural dysfunction of the meibomian glands within the eyelid margin, leading to blockage and/or thickened, decreased meibum production.

If left untreated, MGD can lead to permanent changes to the tear film and progressive gland loss. Approximately 30-40 million Americans are impacted by MGD. Currently, there are no FDA-approved pharmacologic therapies for MGD patients. Demodex mites are key contributors to MGD in patients with Demodex blepharitis, causing eyelid inflammation and reduced meibomian gland function. In December 2023, we announced positive topline results from the Ersa trial evaluating XDEMVY administered twice daily (“BID”) or three times a day (“TID”) for six weeks and twelve 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, at the American Academy of Optometry (“AAOpt”) Annual Meeting 2024, and in April 2025 at the American 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. 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. […]

Management discussion and analysis

Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our “Selected Financial Data” and our financial statements and the related notes to those statements included elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those discussed under the section titled “Risk Factors” and elsewhere in this Annual Report on 10-K.

See the section titled “Note Regarding Forward-Looking Statements” elsewhere in this Annual Report on Form 10-K. Overview Our Business 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. XDEMVY targets and eradicates the root cause of Demodex blepharitis - Demodex mite infestation. The active pharmaceutical ingredient (“API”) of XDEMVY, lotilaner, paralyzes and eradicates mites and other parasites through the inhibition of parasite-specific gamma-aminobutyric acid-gated chloride (“GABA-Cl”) channels with no GABA-Cl inhibition in humans. 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. 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.

Recent Business and Corporate Highlights XDEMVY • XDEMVY is one of the best-selling prescription eye drops. ◦ Net product sales were $151. 7 million and $451. 4 million for the fourth quarter and full year 2025, respectively. ◦ Delivered approximately 130,000 and 400,000 bottles to patients during the fourth quarter and full year 2025, respectively. ◦ 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.

• Direct-to-consumer (“DTC”) campaign on streaming platforms and network television generated a positive return on investment in 2025 that continues to grow. 100 Table of Content ◦ Unaided awareness of Demodex blepharitis is now approximately 25% versus 2% of patients surveyed at the beginning of the campaign. • We continued to execute on our category-creating strategy, advancing a robust pipeline. • 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. ◦ 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. […]

Key risk disclosures

Risk Factors Investing in our common stock is speculative and involves a high degree of risk. Before investing in our common stock, you should consider carefully the risks described below, together with the other information contained in this Annual Report on Form 10-K, including our financial statements and the related notes appearing at the end of this Annual Report on Form 10-K. If any of the following risks occur, our business, financial condition, results of operations and future growth prospects could be materially and adversely affected. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your investment. The risks described below are not the only ones we face.

Additional risks that we are unaware of, or that we currently believe are not material, may also become important factors that affect us. This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below. See “Note Regarding Forward-Looking Statements.” Risks Related to our Business and Operations We are a commercial stage biopharmaceutical company with a limited operating history and a single product approved for commercial sale. While we have generated revenue from the launch of XDEMVY ® (lotilaner ophthalmic solution) 0.

25%, we have continued to incur losses and negative cash flows from operations since our inception and anticipate that we could continue to incur significant expenses and potential losses in the future. We have one product, XDEMVY ® , formerly known as TP-03, which obtained Food and Drug Administration (“FDA”) approval for the treatment of Demode x blepharitis in the U. S. in July 2023. We have incurred net losses each year since our Company’s formation in 2016. We have funded our operations primarily from the sale and issuance of redeemable convertible preferred stock, convertible promissory notes and the sale of our common stock in our IPO, subsequent Follow-On Public Offerings, and under our 2023 ATM Prospectus, as well as proceeds from product sales, net, our China Out-License and draws from our Credit Facilities (as defined below).

For the years ended December 31, 2025, 2024, and 2023, our net losses were $66. 4 million, $115. 6 million, and $135. 9 million, respectively. As of December 31, 2025 and December 31, 2024, we had an accumulated deficit of $426. 6 million and $360.

2 million, respectively. Additionally, the net losses we incur may fluctuate significantly from quarter to quarter such that a period-to-period comparison of our results of operations may not be a good indicator of our future performance. The size of potential future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. We initiated sales and marketing activities to commercialize XDEMVY in August 2023. We could potentially incur operating losses in the future until our revenue from product sales from XDEMVY and any other approved products exceeds expenses. We may never achieve profitability and, even if we do, we may not be able to sustain or increase our profitability.

Our prior losses, combined with potential future losses, have had and could continue to have an adverse effect on our accumulated deficit and working capital. We could continue incurring significant expenses and potential operating losses in the future.

We expect that our expenses will increase substantially as we: • continue to commercialize XDEMVY and any other products for which we may obtain marketing approval; 38 • enhance our product development and planned future commercialization efforts of our product candidates, including through hiring additional clinical, regulatory, quality control and scientific personnel; • seek marketing approvals and reimbursement for our product candidates; • prepare for and initiate additional preclinical, clinical and other studies for our product candidates; • change or add additional manufacturers or suppliers, some of which may require additional permits or other governmental approvals; • create additional infrastructure to support our operations as a public company, including adding operational, financial and management information systems and personnel; • seek to identify, assess, acquire or develop additional product candidates; • acquire or in-license other product candidates and technologies; • make milestone or other payments in connection with the development or approval of our product candidates; • maintain, protect, enforce and expand our intellectual property portfolio; and • experience any delays or encounter issues with any of the above. […]

Source and methodology

Review the latest Form 10-K document for the complete filing and its full context. Extraction is automated and is not a substitute for reading the original filing.

EFDP rankings, analyst growth estimates and interactive comparisons are separate protected product features.