Tarsus Expensed $632.2 Million For Two Unapproved Retina Drugs, Leaving Equity At $104 Million
A $668.3 million quarterly loss hit the eye-drug maker's balance sheet, and its cash runway assumes no milestone payments come due.
Tarsus Pharmaceuticals, the commercial-stage eye-care company behind the XDEMVY eye drop, reported a third-quarter net loss of $668.3 million, almost all of it from expensing two acquired drug candidates that have not been approved. The company's 10-Q, filed Tuesday, shows stockholders' equity of $104.0 million, down from $346.7 million at the end of June.
A $632.2 million write-off
Acquired in-process research and development expense reached $632.2 million in the quarter: $81.0 million for iRenix and $551.2 million for Alkeus. Tarsus expensed both because the assets have no alternative future use. A year earlier the line was zero, and the net loss was $12.6 million.
The core business grew. XDEMVY net product sales were $194.6 million, up about 64% from $118.7 million a year earlier, with gross margin steady at 93%. Basic and diluted loss per share was $14.40, against $0.30 a year earlier.
XDEMVY treats Demodex blepharitis, an eyelid inflammation caused by mite infestation. The FDA approved it in July 2023, and cumulative net sales have now passed $1.0 billion.
Cash and equity both shrank
Cash, cash equivalents and marketable securities fell to $309.6 million at September 30 from $449.7 million at June 30, per the second-quarter filing. Equity fell to $104.0 million from $346.7 million over the same span.
Additional paid-in capital rose to $1.2 billion from $769.7 million at year-end, after Tarsus issued stock for both acquisitions and in an August private placement. Shares outstanding reached 49,303,413, up from 43,271,347 at June 30.
Milestones left out of the runway
The Alkeus deal carries contingent payments. The 10-Q says a potential $250.0 million regulatory milestone may be paid in cash, stock or both, at the company's election. On the closing date, those obligations were valued at $87.3 million.
Tarsus says it expects its cash to fund operations for at least the next twelve months. The company excludes any iRenix or Alkeus milestone or royalty payout from that projection, since it sees none as likely soon. Any such payment would be significant and would shorten the runway, the filing says, and Tarsus may need to raise capital earlier than it expects.
The acquired programs are late-stage but distant. IRX-101's Phase 3 trial is planned to start in the first half of 2027, with topline results expected in 2028. The Phase 3 trial of Alkeus's ALK-001 for Stargardt disease has topline results expected in 2029.
The company closed the iRenix deal on July 6 and the Alkeus deal on September 4, so its retina push is now on the books ahead of any revenue from it.
Sources
- 10-Q Filing — Tarsus Pharmaceuticals (TARS) — SEC EDGAR
- 10-Q Filing — Tarsus Pharmaceuticals (TARS), Q2 FY2026 filed 2026-08-06 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, exhibit991tarsus1132026.htm) — Tarsus Pharmaceuticals, filed 2026-11-03 — SEC EDGAR
