Biotech name Tarsus Pharmaceuticals continues to improve its bottom line, and analysts see profitability on its horizon. The drugmaker has a treatment for Lyme disease in its pipeline and is racing the clock as cases have spiked this summer. Even celebrities cannot escape the spreading disease, as a famous pop singer just revealed he has contracted the illness.
The IBD 50 Growth Stocks To Watch name gapped up after the company's latest quarterly results and offered an early entry to astute investors. But the biotech stock is closing in on another buy point in a base.
Tarsus Pharmaceuticals specializes in developing solutions for eye care, infectious disease prevention, and parasite-mediated disease treatments.
It has one medicine approved by the U.S. Food and Drug Administration called Xdemvy, an eye drop for an eyelid inflammation disorder caused by a type of mite. The eye drop launched nearly two years ago, and the company has high hopes for its future.
"We now believe its peak potential is even greater than we initially expected at launch," Tarsus Pharmaceuticals Chief Executive Bobak Azamian in its recent earnings release.
Its pipeline of treatments and preventive medicines includes those for Lyme disease, ocular rosacea, and malaria.
Lyme disease is a malady transmitted by tick bites. But Tarsus needs to hurry, as cases of tick bites causing the disease ramped up in emergency rooms this summer. Lyme disease cases spiked in June and July, with ER-related visits at levels not seen since 2017, according to the Centers for Disease Control and Prevention.
Hardest hit was the Northeast region, including New York, Connecticut, and Northern New Jersey, where rates of bite risk were seen as "very high," according to the CDC.
Pop singer Justin Timberlake revealed in late July that he contracted the disease and admitted he struggled with it on his recent tour.
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This Biotech Eyes A Buy Point
Tarsus Pharmaceuticals stock has been on the rise since it popped more than 15% in heavy volume on Aug. 7, following the company's mixed second-quarter financial results.
The biotech stock is nearing the 53.89 buy point of an early-stage cup base, according to MarketSurge pattern recognition. But investors could have used the July 18 high of 45.48 as an early entry, which almost coincides with the move above the 200-day moving average.
Its relative strength line has climbed sharply from its recent low on July 31 and the IBD 50 stock holds a respectable IBD Relative Strength Rating of 89.
Lyme Disease Treatment Developer Nears A Profit
Tarsus reported a larger-than-expected second-quarter loss with higher sales than views. Its sales have been exploding and the company topped $100 million for the first time in the second quarter, or 152% growth.
Analysts' projections show third-quarter sales rising 134% to $112.7 million, then ramp up to $162.5 million over the next four quarters.
Full-year 2025 estimates show the biotech with a loss of $1.35 per share. But Tarsus continues to slash its losses and Wall Street sees it turning a profit in the first quarter of 2026. Forecasts now call for a profit of $1.03 per share in 2026.
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