Tarsus Pharmaceuticals, Inc.TARS
Tarsus Pharmaceuticals, Inc. Fair Value Disclosure
FAIR VALUE MEASUREMENTS
Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type are presented in the following table:
| December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
Money market funds(1) | $ | 173,694 | $ | — | $ | — | $ | 173,694 | |||||||||||||||
| U.S. Treasury securities | 129,350 | — | — | 129,350 | |||||||||||||||||||
| Commercial paper | — | 39,040 | — | 39,040 | |||||||||||||||||||
| Corporate debt securities | — | 70,186 | — | 70,186 | |||||||||||||||||||
| Government-related debt securities | — | 4,998 | — | 4,998 | |||||||||||||||||||
| Total assets measured at fair value | $ | 303,044 | $ | 114,224 | $ | — | $ | 417,268 | |||||||||||||||
(1) This balance includes cash requirements settled on a nightly basis.
| December 31, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
Money market funds(1) | $ | 89,822 | $ | — | $ | — | $ | 89,822 | |||||||||||||||
| U.S. Treasury securities | 103,314 | — | — | 103,314 | |||||||||||||||||||
| Commercial paper | — | 21,795 | — | 21,795 | |||||||||||||||||||
| Corporate debt securities | — | 46,644 | — | 46,644 | |||||||||||||||||||
| Government-related debt securities | — | 29,801 | — | 29,801 | |||||||||||||||||||
| Total assets measured at fair value | $ | 193,136 | $ | 98,240 | $ | — | $ | 291,376 | |||||||||||||||
(1) This balance includes cash requirements settled on a nightly basis.
Money Market Funds and U.S. Treasury Securities
Money market funds and U.S. Treasury securities are highly liquid investments and are actively traded with readily-available market prices that are publicly observable and independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.
Commercial Paper, Corporate Debt Securities, and Government-Related Debt Securities
Commercial paper, corporate debt securities and government-related debt securities were valued using Level 2 inputs that utilized industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. The Company reviews trading activity and pricing for these investments as of each measurement date.
The fair value and amortized cost of cash equivalents, and available-for-sale investments by major security type are presented in the following table:
| December 31, 2025 | |||||||||||||||||||||||
| Amortized cost | Unrealized gains | Unrealized losses | Estimated fair value | ||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
Money market funds(1) | $ | 173,694 | $ | — | $ | — | $ | 173,694 | |||||||||||||||
| U.S. Treasury securities | 9,946 | 1 | — | 9,947 | |||||||||||||||||||
| Total cash equivalents | $ | 183,640 | $ | 1 | $ | — | $ | 183,641 | |||||||||||||||
| Marketable securities: | |||||||||||||||||||||||
| U.S. Treasury securities | $ | 119,194 | $ | 209 | $ | — | $ | 119,403 | |||||||||||||||
| Commercial paper | 39,022 | 26 | (8) | 39,040 | |||||||||||||||||||
| Corporate debt securities | 70,032 | 154 | — | 70,186 | |||||||||||||||||||
| Government-related debt securities | 4,999 | — | (1) | 4,998 | |||||||||||||||||||
| Total marketable securities | $ | 233,247 | $ | 389 | $ | (9) | $ | 233,627 | |||||||||||||||
(1) This balance includes cash requirements settled on a nightly basis.
| December 31, 2024 | |||||||||||||||||||||||
| Amortized cost | Unrealized gains | Unrealized losses | Estimated fair value | ||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
Money market funds(1) | $ | 89,822 | $ | — | $ | — | $ | 89,822 | |||||||||||||||
| U.S. Treasury securities | 4,996 | 1 | — | 4,997 | |||||||||||||||||||
| Total cash equivalents | $ | 94,818 | $ | 1 | $ | — | $ | 94,819 | |||||||||||||||
| Marketable securities: | |||||||||||||||||||||||
| U.S. Treasury securities | $ | 98,247 | $ | 72 | $ | (2) | $ | 98,317 | |||||||||||||||
| Commercial paper | 21,757 | 38 | — | 21,795 | |||||||||||||||||||
| Corporate debt securities | 46,570 | 84 | (10) | 46,644 | |||||||||||||||||||
| Government-related securities | 29,805 | 12 | (16) | 29,801 | |||||||||||||||||||
| Total marketable securities | $ | 196,379 | $ | 206 | $ | (28) | $ | 196,557 | |||||||||||||||
(1) This balance includes cash requirements settled on a nightly basis.
As of December 31, 2025 and 2024, a majority of the Company’s debt securities had a maturity of 12 months or less. As of December 31, 2025, twenty debt securities had a contractual maturity between and two years, with an estimated fair market value of $46.9 million and amortized cost of $46.8 million. As of December 31, 2024, eight debt securities had a contractual maturity between and two years, with estimated fair market value of $19.0 million and amortized cost of $19.0 million.
As of December 31, 2025 and 2024, the Company had seven and ten debt securities, respectively, in a continuous gross unrealized loss position for less than one year. As of December 31, 2025 and 2024, unrealized credit losses on these securities were not material. Further, the Company does not intend to sell these investments and it is not more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis. Accordingly, the Company did not recognize any other-than-temporary impairment losses.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 17, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 31, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.