Tarsus Pharmaceuticals wow that's a lot of Revenue all right let's do Tarsus all right $26 stock looks like a eye disease company eye disease can be profitable very profitable in fact it's a rather important organ 1 billion market cap every biotech entrepreneurs goal tons of cash I would argue too much but there's a school of thought in biotech you can never have too much cash I disagree if management doesn't have to worry about cash it's kind of a I guess a good thing I get a little loan here looks like these guys are selling a product which is more than most people could say yeah you can have too much cash if you raise you can definitely have too much cash this company Taris it looks like they have a product and it looks like it's actually selling decently 24 million in one that's actually a ton for a new product and relative to their market cap right that's a 100 million run rate when you sell 25 million of products in a quarter that's 100 million of Revenue cost of sales very little that's what we like R&D sgna that's one one of the things biotechs don't understand is that when you launch a product you really do have to spend a lot of Financials review money that's one thing a lot of Biotech companies don't realize the way Pharma does it is insane I mean you could spend a billion dollars in promotion that first year pretty [💎] The product (XDEMVY) pretty important okay so what's the drug what do they have okay it's called xdy and it's Liller I've never heard of this drug in my life that is rare lotilaner ectoparasitic there's a drug with a similar ending wonder if any of you guys know trivia it's an ISO zoline isox isox azoline so it's got a ASO group it's not ISO it's oxa Ailene is oxazoline Ivermectin does not have the same ending so this is an animal Animal product got it for humans how smart is that right like that's just like a slam dunk right take an animal jog wear animals too and Ailene is the nitrogen oxazoline it's a five membered ring this G got to get clipped off but the Florin keep it a half lifee long so this is for Demodex blefaritis eyelash mites what the you got this in your eyes this guy's living it's all in your eyes just chilling you get in too close to kiss a chick and then this thing comes out 65 species if I got them mine's the best two live on humans okay two species live on humans Tiny Mites that live in the hair follicles of mammals so isn't this the dandruff guy too oh my God they're really big too that's so gross man who suggested this stock to me man oh it's disgusting so this is a third or four of a millimeter 164 of an inch oh yeah you can see3 but I think because I thought this was the dandruff but I guess it's the well you know on the on the flip side you may have put me on to something that I can you no maybe I could get treated I know I got this thing I know I got tons of this this guy and they're sitting there eating sitting there eating all all your food your eye food they're like yummy okay so pretty straightforward the question is how big can this drug get blepharitis is what is blefaritis yeah eyelid inflammation I have that I have that I dandruff yikes yeah I have a condition oh my God what is [💎] Smart strategy it I dandruff all right so I mean it's kind of like again a smart strategy like of course we're here to look at stocks but if you think about becoming an entrepreneur let's say you wanted to be rich I don't know if any of you want that God forbid right um you know look what this company did they took an old animal drug for dog mites dog mites and they said well it kills this demo deck species right so if it kills this demo deck species then it'll kill it for humans too right and if it's safe we can make it a drug and they did and now it's a billion dollar company kind of amazing huh sometimes they joke that if you put me on on a pub Med and give me 12 hours I'll give you a billion dollar company the problem is you have to actually execute the billion dollar company and management doesn't grow on trees Management's difficult all right so let's go to their website that's usually a good place to go Tarsus Pharmaceuticals they're selling really well I mean for it's one of their first quarters right um let's see how much they sold in q1 wow that's a lot of Revenue can you imagine you took an animal drug put it in humans now you're selling 40 million and a quarter that's 160 million run rate $160 million their problem is they have an Opthalmic solution that is an old drug so that molecule has no patent protection a new potential Blockbuster category in eye care what the imites iand driff really oh and these guys have a whole ass pipeline they're they got mayian gland disease next so some percentage of iian gland disease myob mayian mayian gland Rosacea drug disease uh mayian gland disease that's the that's the my my bonium is the corner of your eye where there's like a little duct yeah soft Landing is possible it's always possible so that's a label extension for this drug right all right so they have a drug for rosacea tp4 tpo5 for Lyme disease Lyme disease prevention and papulopustular rosacea AKA just rosacea rosacea is the redness extreme redness how in the world did these guys do this this should be studied by all business students oh it's a g I thought somebody was kidding it actually is a gab inhibitor no way it really is a mic specific Gaba inhibitor okay so this is also Lo tiller for rosacea so they're saying this stupid might is causing rosacea I dandruff you name it and then this is an oral version so okay so their pipeline is all the same drugs it's all the same drug it's just lower lower and more lower question is Pubmed (Ely lilly's ex drug) when was L Tiller first characterized for that I'll go to PubMed I want to put all these things on godell by the way Pub should be on godell Pacer should be on Goodell all this stuff's going to be on godell tiller okay it's been approved for about a year it's not like it's brand brand new okay we have some patents here let's look at this one 2030 expert this must be the molecule yeah this is the molecule patent Elon oh this is Elon elanco drug this was Lily's Animal Health business composition the matter from wano expires 2030 this is where I should get good at uh speaking of getting good at patent term restoration because okay and this was originally a nardis drug okay so let's look at this patent a little more closely so 2009 2009 that's the application date so usually it's 20 years from that all right so that's 12 17 20 29 if you take the application date as the expir you add 20 years so that's from application date issue date is 177 years so if you take that issue date 226 2013 issue date you add 17 years bet you guys didn't know that it's very important so that's 2030 um so that sounds about right but patent term restoration is for the amount of time a drug St and clinical trials which is probably not very long here oh and they did adjust the expiration so I'll take the 2030 at face value that's insane there are eczema treatments that don't kill you dup pixon D pixon is pretty good I got my first shot of dupixent getting my second shot of dupixent has proven a little difficult but all right so you got a 2030 patent XPR I'm sure they have all kinds of fancy patents here I mean they should get credit for their invention it's just hard to give you give them credit for that you know all those other patents a generic would have to fight and go to court and you make it hard for them but ultimately it's not a surprise that if you take an antiparasitic for a dog and put it in a human that it works is that an invention a judge might say yes the company would say well why didn't they do it then why did we have to invent it and that's not really a good argument to be honest they could get more than 2030 wait they had debt so now oh okay I looked at the balance sheet I didn't see a massive amount of Debt (?) debt I would expect chat would have told me if I missed something here Term Loan 29 million I got the term loan I'm missing anything else the might party campaign oh my God these guys look at this is there a m party on your eyelids look at these mites they're chilling balloons having fun all up in my eyelids oh okay so they're drawing down 7 5 and paying off 30 that makes way more sense got it got it got it pharmac con's great I used to work with them a little they're really great lenders all right so these guys are selling like crazy I think they're going to keep selling right like whatever is working for them wonder what the price of the strug is let's see xmv price do you have to keep taking it limited distribution of course each prescription lasts a year huh so you don't refill all right How big can this drug get? anybody want to take a guess on how big this drug could get I mean it's for imites come on bro how big could it get okay so their gross to net went up a little bit they said exceptional gross to net discount that's that exceptional now they're getting 1,00 all right so 30,000 bottles yeah they don't have the the the the company that has the dog drug is elanco so yeah once you're done with your eyes come here kitty 7 billion market cap so elano could have made this drug and gotten a billion market cap for themselves Sava I think Sava does not work it's not ready to explode it's ready to go down a lot um maybe we should look at cassava right yeah let's look at cassava sometime oh they eat dead cells maybe then you need uh you need them if they're eating dead cells why are they so bad maybe I should get IES and drop them into my eyes what do you think ladies IES get a little vial of them Marty's imites oh my God I mean this company would love me for for that they'd be like yeah take his imites and then take xdy how many Eye Care Professionals are there 11,000 of star 60% prescri okay yeah I think it could do 3 or 400 mil yeah I'm I'm going to increase the sales to this company by like 10% I might awareness stay okay so I just want to look at one more prior quarter and then we're going to we're going to forecast this son of a gun I swear to God the the people in the godell chat have the best stock picks it's like an enriched group of people good for them man I don't know I don't come up with these stock picks these guys ask me to look at the stock and look at my favorite stock and like half these people their favorite stock is actually really good one of them was in Zoom one of them was in iance they was like this is a great buy I wonder if they can get International sales of this thing Europeans don't they're barbarians out there they're not they're not treating this the Europeans are like H yes the imites the delicious the imites need their own rights we need we need socialism for the imites tragedy and I think it's a personal tragedy that all drugs face is that they inevitably go generic right we have such a wellestablished way of you know making pharmaceutical companies lose all their revenue look how creative this company is like they should be allowed to have a monopoly forever that's just my opinion you know hate me if you want but they like literally only have six more years to seven eight years total in this case cuz it's it's an it's not a brand brand new drug but it's it's a little bit older probably get to like 500 million or something infinite marginal demand for healthcare that's my line all right What happens after 2030? so the question is what happens after 2030 and the answer is probably just falls off a cliff and goes generic eye drugs look at the biggest eye drugs of all time like Restasis and others they're not always easy to make generics of so we should look at the patent estate a little more carefully yeah I definitely think this is a buy um wow oh you also get 300 on a balance sheet that's not worth nothing so this is like a relatively conservative model because I'm not including anything for the pipeline and I get 45 bucks and I actually think they can beat these sales numbers which sounds crazy because it's a drug for imites but they also are going to try to get this molecule to do other things which look sometimes that works sometimes it doesn't clearly management seems to be really bright I mean it's not going to 10 x that you got to get comfortable with they're trying to get xdv approved for or they're doing a gel formulation yeah they're doing a gel formulation for the mayian gland so guess those mites go in there too if that gets approval well I don't know some people might use this thing but it doesn't last that's why you not the gel the gel kind of this is just a solution the gel so you probably have to like pull the eyelid and then pour it in there and kill the mites but the the gel kind of like stays in there rosacea is probably a wild card but if rosacea works that's another couple hundred mil you think rosace is called by caused by Demodex let's take a look this Demodex is a problem I wonder if the company is paying for all this these Romanian researchers actually you can make a ton of money just take ior mechon and get the turn it into a cream probably cost you like 5 million bucks 10 million bucks to do the trial apparently you could just it is I want a hedge it might be a triple it could be a double man it is this is my new favorite stock the [💎] My new favorite stock 2030 XPR is really the big problem because let's say even if you had um massive growth could POS yeah I mean a triple with the massive growth with rosacea can they get a settlement for like 2032 oh man I hope Tarsus isn't going up cuz I because of me but regardless let's look at the okay let's look at the other patents just in case I doubt they're anything special you usually in the drug business you just kind of throw whatever patents you you can at the wall and see hope that you know hope that they might have some Merit I mean no offense to the inventors you know like you work hard to create a medicine but the funny thing is this company seems like they're actually pretty smart so like could they get off this molecule and onto another molecule Maybe something stronger all right methods for treating ocular demo decks formulation or a method patent this is Tarsus that's the CEO of the company a method for treating Demodex comprising of a topically administered topically administering uh to the ocular surface oh there's the there's the drug I was thinking of Flor aloner so laler fluralaner is really old um really old antiparos I I thought about that drug as well so this is not an interesting pattern like any judge I think would say well you can never tell what judges but I think any judge would say big deal you took an animal drug and put it in humans humans are just a bigger animal is this an invention this patent looks to be pretty much the same is it an extension with more claims twice daily for 4 weeks you know you try to settle with these patents you try to out Fox the generic but the only way out for this one is a brand new drug two more patents all of these will get busted and they give eight more years which is a lot I was going to say it's not that much but it is a lot okay so none of these patents look like they add very much they're like continuation claims or whatever so 2030 is basically the drop dead date so the question is how how how much Revenue can you get by 2030 you How much revenue can they get by 2030? know it seems like a really smart management team like they could I mean rosacea is going to cost money to do but man there's upside in rosacea like arguably they they can just do just I could be a billion I wonder how much of the company management owns that usually suggests they'll work pretty hard not always not always shockingly oh two guys own a bunch of guys I know own smart people actually very very smart people own uh 10% of the company each that's good this person sold most of their stake that's cool man um really interesting stock you know I I don't think that just because like your friend or a smart fund owns a stock means that you should buy the stock there's a lot of reasons why and in my early days of [💎] Never do this! my career I used to be really interested in that and these days I'm basically completely uninterested in who the other shareholders are it's basically irrelevant what matters is do you like the stock not somebody else um the reasons are one every successful fund goes through a period where it's less successful partially that's related to hubris partially size partially bad luck you know partially market conditions so just because a fund has returned say 30% a year which is amazing um legendary performance doesn't mean it's going to keep returning 30% a year and it certainly doesn't mean that that specific stock and that specific portfolio is going to go up so you really can't just take oh so and so owns the stock well so and so has had a hot hand but hot hands go cold and you know you think your hot hand will last forever and sometimes it doesn't so there's that the other reason is you have probability distribution of returns no fund has Only Winners that just doesn't exist um even the very best funds you know Warren Buffett is like 80% winners but he makes like four trades a year so you could take that approach maybe but most of these funds don't make four trades a year they make maybe 400 trades a year or 4,000 and you know they're going to be right 60% of the time but you're not going to get a big Edge by just randomly picking a stock out of their portfolio you got to like it you got to be convinced um I don't even think you should put any Credence at all into it in fact if you've got a bunch of hedge funds in the stock the kind of means that they're the Supply right and you're their exit liquidity so I'd almost rather have it that there are no hedge funds in the stock and that the buyers will be institutions that'll never sell but again better to just ignore it all and focus your mind on okay is this the stock I like can I live with this