Culper alleges deliberate concealment of Medicare copay support routed through the Healthwell Foundation, evidenced by Tarsus scrubbing 'patient assistance donations' language from its 2025 10-K in favor of the vague 'patient support functions,' and an estimated $78.5 million in 2025 charitable contributions nearly identical to Healthwell blepharitis fund donations. Separately, Culper argues XDEMVY's $2 billion TAM rests on a logical fallacy — equating collarette presence with disease — and that even generously assuming 3 million cumulative treated patients, revenues peak below $800 million in 2028.

Not Present: Governance

Culper reverse-engineered charitable donation figures from Tarsus deferred tax asset disclosures in annual 10-K filings and cross-referenced them against Healthwell IRS Form 990 statements, while conducting original interviews with prescribing physicians, a Carepoint pharmacy representative, and former Tarsus employees, and personally obtaining an XDEMVY prescription with refill via the Company's telehealth partner despite submitting photos of healthy eyelids.

Culper identifies potential DoJ prosecution under the Anti-Kickback Statute as a likely but undated catalyst, citing that Tarsus 'harbors many of the attributes of the arrangements that have been prosecuted' per a nearly 30-year healthcare attorney, and that 2026 profit estimates will disappoint as patient support expenses — which more than doubled YoY in Q1 2026 — are a variable cost buried within SG&A that analysts model as effectively flat.

Not Present: Thesis-Only, Specific Event

Healthwell Blepharitis Fund Effectively Funds XDEMVY Copays Only

Culper alleges that Healthwell's blepharitis fund — launched just one month after XDEMVY's August 2023 launch — disburses grants averaging $680 to $750 per patient per year, a figure only mathematically possible if XDEMVY (priced at $1,850 WAC) represents the vast majority of disbursements, given that all other listed treatments are low-cost generics and OTC products. In 2024, the fund disbursed $21.5 million across 31,668 recipients; total Medicare Part D Natacyn spending was just $969,715 across 788 beneficiaries that year, meaning Natacyn — the only other high-priced drug covered — cannot explain the fund's scale. A representative from Carepoint, one of Tarsus's top two specialty pharmacies, independently estimated that 50% of XDEMVY Medicare patients use Healthwell grants, implying 28,813 XDEMVY patients received grants in 2024, or 91% of the fund's 31,668 total recipients.

Tarsus Scrubbed Incriminating 'Patient Assistance Donations' Language

In its 2024 Form 10-K, Tarsus explicitly named 'patient assistance donations' as a material component of SG&A expenses — a telling disclosure, Culper argues, because the Company already records commercial copay support as a contra-revenue item, meaning donations to Medicare patients via Healthwell are the only logical explanation for a separate SG&A expense line. In its 2025 Form 10-K, Tarsus removed the word 'donations' entirely, replacing it with the vague 'patient support functions,' and buried the expense within a category also including IT, legal, professional, and other costs. Culper estimates this 'patient support' line grew by $84 million from 2023 to 2025, rising from 11% to 22% of total SG&A, and to 29% of SG&A in Q1 2026.

BlinkRx Steers Medicare Patients to Healthwell, Auto-Ships Refills

Multiple prescribing physicians told Culper that Tarsus sales representatives direct them to send XDEMVY prescriptions specifically to BlinkRx, with physicians stating 'that's what the rep told me,' 'send to Blink as the Company wants,' and 'we consolidate to Blink Rx per rep recommendation.' BlinkRx grew from 13% of XDEMVY revenues in 2023 to at least 63% in 2025, with a single BlinkRx employee publicly advertising a role specializing in 'Tarsus Financial Assistance Outreach & PAP through the Healthwell Foundation for patients covered under Medicare.' Separately, one high-prescribing physician told Culper that 30% to 40% of their patients receive XDEMVY refills they neither need nor request, and Culper itself obtained an XDEMVY prescription with a one-year refill via Tarsus's telehealth partner after submitting photos of healthy eyelids — photos that Claude confirmed showed no signs of demodex blepharitis — before an audio-only call in which the physician claimed to see 'classic signs' of DB.

25 Million Patient TAM Rests on Freshman-Level Logic Error

Tarsus's 25 million patient TAM derives from its self-funded Titan study, which found 58% of eye care clinic patients had collarettes, which the Company then equated with demodex blepharitis. Culper argues this is a logical fallacy — affirming the consequent — because collarettes are prevalent even in healthy patients, and Tarsus's own pivotal Saturn trials used a threshold of 10 or more collarettes per lid rather than any collarettes. Titan itself found age was non-predictive of collarette presence, even though Tarsus acknowledges DB prevalence rises with age. In Culper's own survey of 30 current XDEMVY prescribers, physicians reported that only 18% of patients (2,110 of 11,980) have DB, and only 12% have moderate to severe DB — versus the Company's 58% claim — and Tarsus itself admits just 1.5 million patients nationwide have ever been diagnosed with DB.

Peak Revenues Below $800M; Blackstone Deal Corroborates Skepticism

Culper models that even if Tarsus treats a cumulative 3 million patients by 2030 — twice the entire 1.5 million diagnosed U.S. patient population — revenues peak below $800 million in 2028, versus consensus of $905 million in 2027 and $1.086 billion in 2028; the Company's $2 billion peak revenue claim would require selling over 1.7 million bottles per year. In May 2025, Elanco sold its mid-to-high single digit royalty rights on all U.S. XDEMVY sales from April 2025 through August 2033 to Blackstone for $295 million; Culper estimates this implies Blackstone underwrote peak XDEMVY revenues of just $712 million (bear) to $1.284 billion (bull), 36% to 64% below the Company's $2 billion claim. A former Tarsus employee suggested to Culper that XDEMVY revenues should peak in late 2026 against payor pushback on cost and a shallow patient pool, and in Q1 2026, XDEMVY revenues declined sequentially for the first time since launch.