Evolus Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 7, 2023

There are 8 speakers on the call.

Operator

Afternoon, and welcome to Evolus Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the prepared remarks. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr.

Operator

Ned Mitchell from Investor Relations.

Speaker 1

Ned? Thank you, operator, and welcome to everyone joining us on today's call. With me today are David Moatazedi, President and Chief Executive Officer

Speaker 2

Rui

Speaker 1

Avelar, Chief Medical Officer and Head of R and D And Sandra Beaver, Chief Financial Officer. Our prepared remarks today will include forward looking statements within the meaning of United States securities laws, and management may make additional forward looking statements in response to your questions. Forward looking statements are based on management's Current assumptions and expectations of future events and trends, which may affect the company's business, strategy, operations or financial performance. A detailed discussion of the risks and uncertainties that the company faces is contained in its annual report on Form 10 ks, Quarterly reports on Form 10 Q and current reports on Form 8 ks. Actual results may differ materially from those to update or review any estimate, projection or forward looking statement.

Speaker 1

Additionally, today's discussion will include non GAAP financial measures, which should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A reconciliation of GAAP to non GAAP results may be found in our earnings release, which was furnished with our Form 8 ks filed today with the SEC and on our Investor Relations website at evolus.com. Following the conclusion of today's call, a replay will be available on our website at evolus.com. With that, I'll turn the call over to David.

Speaker 3

Thank you, Ned. We are very pleased to see the increasing momentum of our business driven by strong execution, which has translated into record quarterly revenue and record low cash burn in what is historically the seasonally lowest for the injectable category.

Speaker 1

Our

Speaker 3

focus has been consistent and intentional. We're building a beauty brand for the younger generation, which represents the fastest growing segment of the neurotoxin market. This differentiated approach to market Jeuveau has resulted in the highest quarterly revenue in the company's history. Our reported revenue of 50,000,000 Reflects 48% growth year over year and represents a sequential increase over the 2nd quarter. We've also maintained a strong focus on operating expenses and are pleased to report that our operating cash burn was at an all time low $900,000 this quarter, putting us on a pathway to profitability with our existing liquidity.

Speaker 3

Our success in the quarter demonstrates the strength of our brand building efforts and the resilience of the toxin market, which remains healthy as Consumers continue to prioritize their spend on beauty. Toxins are a great value for consumers due to the consistency and outcomes and affordability of the treatment. We believe Jeuveau is well positioned as a beauty brand in this market and will continue to capture this increasing demand. The success of our consumer centric strategy was demonstrated during the quarter in the number of total consumer loyalty redemptions, which eclipsed $1,200,000 since the program was introduced in 2020. In the quarter, we reached an all time high 149,000 redemption, demonstrating sustained and strong brand loyalty.

Speaker 3

On the market penetration side, We added more than 650 new accounts in the quarter, bringing our total purchasing customer count to nearly 11,600. As a reminder, with over 30,000 aesthetic customers in the United States, we continue to have a significant opportunity to further expand our market penetration over the coming years. In our international operations, Nuceva is now commercial in 4 major countries. I'm proud of the progress we've made with a small and nimble team. This week, we celebrated 1 year since Nuceva was first launched in Great Britain.

Speaker 3

Earlier this year, we launched in Germany and Austria. And most recently, We launched in Italy, which is off to a very strong start. Europe represents an estimated high single digit millions in sales in 2023 and is key to our overall long term growth strategy. The combination of continued strength and execution And increasing momentum gives us the confidence to raise again our full year 2023 revenue guidance to between $194,000,000 $198,000,000 This updated guidance equates to over 30% growth for the fiscal year and it is magnitudes greater than the estimated category growth rate. Looking beyond 2023, We remain highly confident in our 20 28 sales goal of $700,000,000 which is driven by the strong market opportunity of Jeuveau in the United States, The international expansion of Nucyva and the introduction of the Evolus line of fillers in the U.

Speaker 3

S. Beginning in 2025. Evolus continues to differentiate itself and outpace the growth of our competitors, leading with a strong beauty brand, A unique strategy targeting millennial and a cash pay business model that rewards customer loyalty. Our platform for growth continues to scale with Jeuveau and NuCEVA experiencing tremendous growth as evidenced by our Q3 results. Moving to our R and D efforts, I would like to provide an update on several of our pipeline assets.

Speaker 3

Today, We will provide an update on the first two expected injectable products within the EVALISSE line of fillers. Ruhi will also review the final Phase 2 Extra Strength Revoked Results. Starting with Evolise. We have continued to make progress over the past quarter and are pleased to provide an update on our filing for the first two EVALISSE fillers, which we expect to be completed by summer 2024. This keeps us on track to launch EVALISSE in the U.

Speaker 3

S. In 2025. On Monday, We announced the results from the Phase 2 clinical study evaluating the extra strength 40 unit dose for extended duration of Jeuveau, The only neurotoxin dedicated exclusively to aesthetics. The final data presented this past weekend in Chicago At the American Society For Dermatologic Surgery demonstrated 26 weeks or 6 months of performance with the extra strength dose of 40 units. The final Phase 2 outcomes were consistent with interim findings and reinforced that longer lasting effects, Particularly up to 26 weeks can be achieved with the extra strength 40 unit formulation of Jeuveau.

Speaker 3

I would now like to turn the call over to Rui Avelar, who will walk us through the findings.

Speaker 1

Thank you. As David mentioned, I'd like to share with you Final top line results of the Jeuveau Extra Strength Study that were presented this past Friday at ASDS in Chicago. Slide 2. The study looks at safety and duration of the effect when the Jeuveau dose was doubled and hyper concentrated. The primary objective of the study was to see how long it took a patient after a single treatment to return back to their baseline glabellar wrinkles at maximum frown This is a metric that's been used by others and has the advantage of being independent of the scale when looking across studies.

Speaker 1

Slide 3. The study was carried out at these 5 clinical sites. Slide 4. The design was double blind, randomized with 2 active controls, The duration of the trial was 1 year or When the patient return back to their baseline, as with all registration trials, patients have to be rated as either moderate or severe on the 4 point glabellar line scale to be eligible

Speaker 3

for the study. Slide 5.

Speaker 1

The patient demographics were typical for this type of study, primarily women in their late 40s. Slide 6. When looking at the baseline glabellar severity, it is notable that most of the subjects were rated as severe, both by the investigator and the patients themselves. Slide 7. With regards to safety, there were 35 adverse events in total and these occurred in 26 patients.

Speaker 1

All adverse events includes events that are both related and unrelated to the study drug, whereas drug related adverse events Refer to events caused by the drug. There is no difference between the three groups. Below the table, the actual drug related events Have been itemized with headaches being the most common and there was one case of isatosis in the 40 unit Jeuveau arm. Slide 8. In terms of adverse event severity, 88.9% were rated as mild with no difference between the groups and importantly, There is no serious adverse events.

Speaker 1

9, the primary objective of the study So look at how long it took a patient to return back to their baseline, irrespective of their glabellar line severity as assessed by the investigator. The 40 unit Jeuveau Extra Strength Kaplan Meier plot shows 26 weeks or 6 months to return to their baseline and the controls lasted 21 weeks consistent with previous studies. The hazard ratios and p values also provided And demonstrated statistical superiority for the 40 unit arm compared to the 20 unit control arms. Slide 10. A one point improvement on the glabellar line scale, which is by definition a clinically meaningful response, demonstrated the same duration results.

Speaker 1

Slide 11. As an alternative, Way to assess treatment effects is to use the Global Aesthetic Improvement Scale. By investigator assessment, The duration was 26.3 weeks or 6 months. Again, Jeuveau Extra Strength was statistically superior to both controls. 12.

Speaker 1

Here, we're looking at responder rates over time. To be a responder, one has to have none or mild Looking at the graph, one can see the percentage of responders over time and that In the 40 unit arm, there is always more responders and it lasted longer compared to the controls. There were no in office visits between day 2 day 30 to decrease the burden on patient visits and avoid dropouts. Emphasis was on monthly visits. This contributed to a high study completion rate of 94.7%.

Speaker 1

Slide 13. When you assume the responder definition of non or mild glabellar lines, it's important to understand the implications. Having no glabellar lines or mild ones is clinically meaningful measures since in real life these patients do not require repeat treatment. However, when using this as a responder definition, it's important to understand the baseline severity between the groups Since it can impact the results, if a group consists mostly severe before treatment, Then they only need a one point improvement to become responder. In contrast, a group that has mostly severe Sorry, if a group consists mostly of moderates before the treatment, they only need a one point improvement.

Speaker 1

In contrast, if a group mostly Severe's would need a 2 point improvement to become a responder. Slide 14. We're frequently asked how 40 units of Jeuveau compares to 40 units of DAXI. While a direct comparison requires a head to head study, Here is an attempt to overlay the data from the respective clinical trials and using the same measurements. In this combined graph, we have 40 units Jeuveau non or mild results as assessed by both the investigator subject compared to the 40 Unit DAXI SICOR-one results as they appear in their FDA approved label.

Speaker 1

Note that due to the baseline characteristics in each study, most of the DAXA-five patients only required a one point improvement to become responder. In contrast, most of the Jeuveau patients required a 2 point improvement. The results also seem to suggest That Jeuveau lasts longer over time. Slide 15. Comparing the Jeuveau 40 units To the Daxify 4 Unit Results from SAKURA 2 as published in their FDA label, again demonstrates a similar pattern even though most of the Jeuveau patients required a 2 point improvement.

Speaker 1

16, The most stringent measure of efficacy is the 2 point composite score, which is why the FDA mandates it as the primary endpoint in all toxic pivotal studies. Using this as a responder definition, success is defined as achieving a grade of none or miles and A 2 great improvement from the baseline and both the investigator and the subjects agreeing this happened independently and concurrently. This 2 point composite endpoint represents the highest bar and the FDA also suggests it should be used to look at duration. Slide 17. In this last graph, we compare the 2 point composite scores for Jeuveau 40 units To those of DXA-five Ford units from SAKURA-one and SAKURA-two as published in their FDA label, The jabot responder rates are higher at all measured time points and the overlay of graph also suggests the duration is longer for jabot.

Speaker 1

Slide 18. In summary, Extra Strength Jeuveau demonstrated 26 weeks of duration or 6 months over multiple metrics And there seem to be no difference in safety compared to active controls, with 88.9% of adverse events being rated as mild And no serious drug related adverse events. With that, I'll turn it back to you, David. Thanks, Ruhi.

Speaker 3

This data set conclusively puts to rest the relative contribution of dose to duration. Going into the Phase 2 studies, We were expecting to see 24 weeks of longevity with Chabot in line with other 40 unit doses of toxin and these final results Exceeded our expectations with most time points achieving 26 weeks. This is a successful outcome that gives Evolus the ability To offer treatment options for customers and their patients using the same original strength Jeuveau file simply by changing how the product is reconstituted. On the filler side, we remain excited about the differentiation of the EVALYSE portfolio and its potential to become one of the leading fillers in the U. S.

Speaker 3

Our cash pay focused platform was designed for scale and there are tremendous synergies we can achieve by leveraging our seasoned sales force And our rapidly growing customer loyalty program to launch this innovative new technology alongside our flagship, Schuvo. We continue to believe the combination of a highly competitive filler line and our growing customer base provide the unique opportunity to build a durable brand that adds tremendous value to Evolus and our shareholders. Now, I'll turn it over to Sandra, who will cover the financials.

Speaker 4

Thank you, David. Our strong growth this quarter demonstrates our success and execution of our long term strategy to become a top brand in the growing performance beauty market. I'd like to congratulate the Evolus team for a record quarter of above market overall performance, including record highs in sales and our key metrics, and for continued focus on diligent operating expense and cash management. Global net revenues for the Q3 were $50,000,000 Up 48% compared to net revenue in the Q3 of 2022, with U. S.

Speaker 4

Sales comprising more than 95% of the total revenue, We continue to experience strong pricing in the U. S. With our average selling price in 2023 modestly increasing compared to the same period last year, while our customer reorder rate remains above 70%. Our reported gross margin for the Q3 was 67.7 percent and our adjusted gross margin, which excludes the amortization of intangibles, was 69.1% and in line with our guidance of 68% to 71%. Operating expenses declined sequentially in Q3 as compared to Q2.

Speaker 4

Our GAAP operating expenses for the 3rd quarter were $63,400,000 compared to $64,500,000 in the 2nd quarter. Non GAAP operating expenses for the 3rd quarter were 40 point $3,000,000 compared to $42,700,000 in the prior quarter. As a reminder, non GAAP operating expenses exclude product cost of sales. Reported selling, general and administrative expenses for the Q3 were $43,300,000 compared to $41,200,000 recorded in the With the increase mainly attributable to higher commercial costs. This quarter, SG and A expenses includes $4,300,000 of non cash stock based compensation compared to $4,000,000 in the 2nd quarter.

Speaker 4

Our non GAAP loss from operations in the 3rd quarter was $5,700,000 compared to $8,000,000 reported in the 2nd quarter. Non GAAP operating losses declined $2,200,000 as compared to Q2 and $7,500,000 Compared to Q3 2022, which represents a 57% year over year improvement, continuing our trend toward profitability. Consistent with our initial 2023 guidance, we continue to expect to achieve non GAAP operating profitability in the 4th quarter, excluding our investments related to Evolise. Both non GAAP operating expenses and non GAAP loss from operations include stock based compensation expense, revaluation of the contingent royalty obligation and depreciation and amortization. Turning to the balance sheet.

Speaker 4

We ended the 3rd quarter with $38,700,000 in cash compared to $41,700,000 at June 30, 2023. During the quarter, we had a record low in quarterly cash use of $3,000,000 In the quarter, net cash used for operating activities was $900,000 Net cash used in the Q3 of 2023 continued its sequential quarterly decline throughout 2023, further demonstrating our continued progress towards cash Before we turn to Q and A, I would like to summarize our 2023 guidance. Based on our strong year to date performance and confidence in the resilient toxin market, we now expect total net revenues for the full year of 194 $198,000,000 This equates to over 30% growth for the fiscal year. And adjusted gross margin in the range of 68 71%, unchanged from our prior guidance full year 2023 non GAAP operating expenses Between $153,000,000 $158,000,000 also unchanged from prior guidance. Other modeling assumptions for 2023 include quarterly interest expense of 3,500,000 and full year weighted average shares outstanding of approximately 57,000,000.

Speaker 4

Looking beyond 2023, we We continue to target total revenue of $700,000,000 in 20.28, driven by continued growth and share gain in our neurotoxin franchise in the U. S. International markets, along with the growing contribution from our EVALYSE line of fillers that begins in 2025. This equates to a compounded annual growth rate of 29% on a total addressable market that is 70% greater with the addition of a filler product line. Now, let me turn the call back to the operator to begin Q and A.

Operator

Thank you. At this time, we will be conducting a question and answer session. And our first question comes from the line of Louise Chen with Cantor Fitzgerald. Please proceed with your question.

Speaker 4

Hi, congratulations on a very strong quarter and execution. Thanks for taking my questions here. So first question I want to ask you is, What gives you confidence that this rate of growth that you're seeing is sustainable? And is there any seasonality for the Q4? And then the second question is next steps and how you're thinking about Jeuveau forty units and how important this is to your product portfolio?

Speaker 4

Thank you.

Speaker 3

Great. Louis, thanks for the questions. Starting with the Q4, as you know, the Q4 is generally the strongest Quarter of the year in terms of procedural demand. And as you see with the guidance range we provided, We expect the Q4 to be another all time high in terms of revenue. And so we do believe that the growth rates That we've demonstrated year to date, we'll continue to hold and our guidance range reflects that with over 30% growth year on year for the quarter.

Speaker 3

On the second question around the Jeuveau 40 unit dose and next steps, I'm going to ask Ru to take that.

Speaker 1

So the main objective of course will be to publish that. And as we ask healthcare providers what we should do next, One thing that's coming out loud and clear is given that there is not a longer duration label out there and people are Basically saying do not proceed to a Phase 3. There is no need. So the main emphasis will be on publishing the Phase 2 studies and then we'll continue to watch how The doubling the dose market evolves and then decide what we do next.

Speaker 5

Okay. Thank you.

Operator

Our next question comes from the line of Annabel Samimy with Stifel. Please proceed with your question.

Speaker 6

Hi. Thanks for taking my questions and congratulations from me on a good quarter. So just Big picture, I guess, for the last few years, it appears the market has been still relatively underpenetrated. And I guess, Botox was always the product as the market leader who was setting the growth rate. But obviously, with your growth rate and now with Another competitor coming in.

Speaker 6

It does seem that you are they are having an impact from new products. So how do you see how are these dynamics Actually really shifting in the marketplace. And are you still riding a wave of growing market? Or are you Actually growing that share now and what may that share be? So that's my first question.

Speaker 3

Great. Annabel, thanks for the question. Look, the market has remained highly under penetrated. And I think as you saw in the Q3, the market leader posted Yes, solid growth and you saw that we also showed very strong performance as well. We do believe some of the dynamics at play here are first Starting with our focus with Jeuveau as a beauty brand, that is how this younger generation of consumers Proceed this procedure and we've positioned ourselves well there.

Speaker 3

We've held a number of advisory board meetings over the last quarter. And what we consistently hear back even from non users of Jeuveau that are interested in bringing on our product into their practice Is that they view us as a product for the younger generation and that younger generation is the fastest growing segment of the market and we believe that gives us Really sustainable growth from a consumer standpoint into the future. Now in addition to that in the market, you see that we're in Just over 11,000 accounts and the market has over 30,000 customers. So we benefit from Having continued market penetration opportunities of opening up new customers as well. And then of course both of these two ideas do go hand in hand.

Speaker 3

As we continue to drive More younger consumers in the practice, it opens more new accounts for us that have an interest in partnering with us. And Our cash pay positioning gives us the ability to really capitalize on that opportunity in a way that positions us as a beauty brand that helps grow This segment of a practice. And so I think it's hard to isolate any one variable, but I think collectively the positioning It's driving that continued growth and you're seeing that reflected each quarter where you've seen our growth continue to persist and accelerate. We've been the fastest growing neurotoxin On the market now for 2 consecutive years and this year continues to be very strong as well and we do think that it's all reflected in our positioning in cash paid strategy.

Speaker 6

And do you dare to venture what market share could be at this point?

Speaker 3

As far as market share last quarter, we estimated that We had captured about 11% of the market. We don't expect to clip up a full share point every quarter. Clearly, we gained share in the 3rd quarter And so I think we're approaching a share point higher and we'll certainly give you an update when we feel confident that we've eclipsed that 11 share point.

Speaker 6

Okay. And then one other question. To what extent do you say, I mean, obviously, you guys have done a really good job penetrating Counts, to what extent do you think Evolise is going to boost additional account penetration? How many accounts do you think are out there who Do not entertain the use of Jeuveau just because you don't have, I guess, a portfolio of products to offer them.

Speaker 3

We believe that with Jeuveau alone, we can continue to expand our market penetration. I think when you look back over the last 3 years, our penetration of new accounts has accelerated over the last 12 months relative to the 12 months prior. So we believe that accounts Are more interested in bringing us on today, than we were in a position a year or 2 years prior. So, Evolise is certainly a catalyst In the sense that it becomes more interesting to partner with us on a broader portfolio, but we do believe that we have Excellent runway of existing accounts with just Jeuveau and Evolise gives us an opportunity to offer our existing customer base, Which now sees 11,000 customers the opportunity to expand their portfolio offering with us, which is something that we consistently heard from our customers is that they Like our cash pay positioning, they like our investment in advertising that happens through co branded media and to the extent that we could extend that offering to the filler line that would give them more reasons to want to partner with us across their portfolio of products. So For that reason, we're very optimistic about what Evolise could bring when we introduce it to the market.

Speaker 3

Of course, we still have some time until we launch Evolise in 2025. Until then, we see just a tremendous amount of runway for Jeuveau and continued market opportunity.

Speaker 6

Great. Thanks for the color.

Operator

Our next question comes from the line of Mark Goodman with SVB Securities. Please proceed with your question. David, what is your sense that the market grew this past quarter? Do you think it was high single digits? I mean, it just seemed obviously, BOTOX grew 5%, right?

Operator

I mean, And then secondly, what are your thoughts about Revance and the dynamics of what they've done and their metrics so far. Thanks.

Speaker 3

Hey, Mark. We were really pleased to see that the 3rd quarter reflected A really healthy rebound in terms of procedural volume. It's hard to pin the exact number, but we do believe this is a high single digit growth market Coming into this year and I think overall our views are relatively intact and Q3 was certainly an acceleration of market growth from the front half of the year, which is positive and We're assuming that carries through into the Q4. We have no reason to believe that it wouldn't. And just keep in mind that that's been the traditional growth rate for this market over many years.

Speaker 3

As far as the market dynamics of competitors, we continue to maintain our focus on our brand positioning and establishing this brand in the market as a unique beauty product. And I think that's differentiated us From the existing competitive set that competes on similar dynamics that other drug companies do. And I think we'll continue to do that. I don't have a view to share on how other companies that are launching are coming along. I think we'll get a view from that when they report there.

Speaker 7

Thanks.

Operator

Our next question comes from the line of Doug Chau with A. C. Wainwright, please proceed with your question.

Speaker 2

Hi, good afternoon and congrats on the progress. Just on the Extra Strength, I'm just curious, do you have a thought or perspective on the amount Sort of extended duration is a function of just more toxin versus the hyper concentration or is the hyper concentration

Speaker 1

Thanks, Doug. John Joseph was Doctor. John Joseph is the first one to kind of introduce that concept of increasing the concentration and Getting a little bit duration. So there may be a contributor there. The other thing that's kind of interesting is a few years ago, BOTOX also demonstrated When they did a double the dose, they actually hyper concentrated almost to the same level as everyone else.

Speaker 1

And when they did that on the 20 unit arm, They noticed that even the 28 arm performed a little bit better than the baseline. So the bottom line, what we're seeing is certainly doubling the dose gives you longer duration. It's not linear though and that comment applies to all the toxins that we see kind of come out. And it looks like concentrating may actually contribute a little bit, but we've seen that used by others also.

Speaker 2

Do you is sort of getting this hyperconcentration something Does the injector can accomplish themselves, if they kind of know the right recipe?

Speaker 1

That's exactly right. Today, you have a vial, there's a certain number of units in there and it's dry. And then you can control the concentration by adding the diluent into the vial, how much you put in and then You can determine the concentration. And if we look at people today who reject it, you take a vial of 100 units of Few different products. You may concentrate it with 1 milliliter if diluent, 2, 2.5 or up to 5.

Speaker 1

So you'll get a spectrum. So even today in common practice, you'll see some people do hyper concentrate a little bit. And then in the context of Chivo Extra Strength, for instance, That's right. It would be effectively in the publication. You can get a 100 unit file and then you could reconstitute it as you read about it in the publications And then create your own 4 units hyper concentrated and enter your office.

Speaker 2

Okay, great. Thank you.

Operator

Our next question comes from the line of Naveen Thai with BNP Paribas. Please proceed with your questions.

Speaker 5

Hi, thanks for good afternoon. Thanks for taking my questions. First one on a follow-up on DEXYZ, if you have seen Any impact at all from the change in pricing strategy since September 1, during and after the quarter? And then I was also curious about whether you have conducted any promotional activities in the quarter? And will you conduct any versus November Botox Day?

Speaker 5

Thank you.

Speaker 3

Hi, Nivon. As it relates to the newest competitor to X Find the Market, I think you've seen the guidance we gave at the beginning of the year when we were aware of their launch and we guided to a very healthy performance. We've since guided up a few times, so I think it gives you a sense for our confidence for how Jeuveau is performing despite the entrance of a new competitor. And of course, This is a competitive market, but we've always believed that the bigger market opportunities around the consumer and targeting this younger generation. I think our focus Has been consistent and unwavering over the last several years, what you're seeing reflected in the results is just that.

Speaker 3

It has nothing to do with the competitive environment as much as it does our market positioning and how our customers are responding to that And voting for Jeuveau as an increasing share of their practice. So we feel great about that. As it relates to promotions in the market, In the Q3, there wasn't anything particularly unique about the quarter that was worth noting. In the Q4, that is the Peak season, the holidays for the injectable category, so you tend to see promotions that occur from all of the competitors. We're certainly a part of that as well.

Speaker 3

We have a program that we've been doing for consecutive years now called the 11th day, which is Currently in market now and it's something as I said we've done each and every year. So it's been a successful program for us. It evolves in different ways. But in the end, there's a lot of consumers coming into this market and this 11 day program is designed to capture a larger share of that market segment.

Speaker 5

That's very helpful. Thank you.

Operator

And our next question comes from the line of Eui Ihir with Mizuho Securities. Please proceed with your question.

Speaker 7

Hey, guys. Thanks for taking my questions. I guess the first question is, David, are you kind of saying that the 4th quarter was Perhaps the growth was driven more by the market growth? Or did you do something that's different, I guess, To have this to have a quarter where, I guess, seasonally it would be down, but it's not. And I guess my second question is, what do you think of the short acting And that Allergan, I guess, reported some data for the BonTE.

Speaker 7

Thanks.

Speaker 3

Sure. I think on the Q3, I think what we said is we saw the overall procedural volume tick Positively year on year, I think we went into the quarter with that assumption that it would. I believe the Leading market player has guided to the same thing, the market rebound. So that was our assumption and we're pleased that it played out. We did not expect our business To grow sequentially, we had anticipated as we have with prior years that you generally see a slight step down In the Q3 and then a step back up in the 4th.

Speaker 3

So we were pleasantly surprised by the increase in demand for Jeuveau in the 3rd quarter. So we attribute that to continued market penetration and share gains more than we do to the actual procedural volume Increase in the quarter that we had already factored for. Moving on to the additional toxins that are coming in the market. I don't have a lot of color to give you on the Bonti. I'm curious to better understand how AbbVie would position A shorter acting toxin, I think the streets now have visibility to what longer acting could be, perhaps what shorter acting might be.

Speaker 3

In the end, Again, I think we're well positioned here. We have the only 900 kilodalt molecule aside from the market leader in the category. We have a brand that's positioned against the younger generation, which is the fastest growing segment in this market and a cash pay positioning that enables us To help grow the top line for those practices, while being conscientious of the fact that these practices want to continue to drive profitability Into the future as they see some of the higher ticket procedures start to see some slowing. So I think overall, we're very well positioned here Regardless of the competitive set that may be coming down the road, but I'm certainly curious to hear how that product gets positioned.

Operator

Thank you for all of your questions. At this time, I would like to turn the call back over to David Moe Tazedi, President and Chief Executive Officer for closing comments. David?

Speaker 3

Thank you, operator. In closing, The success of our long term strategy is evident in the strong results of the Q3 and clearly demonstrate the continued above market progress the Evolus team is Achieving in driving brand awareness and capturing market share. With record quarterly revenue and all time highs in key metrics, We continue to build momentum outpacing both the underlying growth of our market as well as the competition. The final results of our extra strength study this past week And the addition of the Evolise line of dermal fillers beginning in 2025 underline our continuing efforts to build a strong and growing beauty brand. With a healthy injectable market backdrop and a 70% expansion in our total addressable market directly attributable To the addition of a dermal filler line, we remain confident in our $700,000,000 revenue target for 2028, which represents a 29% revenue CAGR.

Speaker 3

We are fully funded to achieve that growth and we have an experienced team and place to execute our growth plans. This category is in transition from pharma to beauty, from an older generation of users To the millennials and our cash pay focus enables us to uniquely partner with practices through 1st in class programs like our co branded media, which helps accelerate practice growth and profitability. With our business model focused on the cash pay market, We have built a moat from our competitors. This is a unique and sustainable competitive advantage for Evolus, the benefits of which are evident in our pace of growth and strong financial results. Note, we will be participating at the Stifel Conference in New York On November 14, 15 and the Evercore Healthcare Conference in Miami on November 28.

Speaker 3

We look forward to seeing you there. Thank you all for joining us today.

Operator

We've reached the end of our call. You may now disconnect your

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Key Takeaways

  • Q3 revenue reached $50 million, up 48% year-over-year, with record low cash burn of $0.9 million, putting Evolus on a clear path to profitability.
  • Raised full-year 2023 revenue guidance to $194–198 million (>30% growth) and reaffirmed the 2028 sales target of $700 million, driven by US and international Jeuveau expansion and a 2025 filler launch.
  • Jeuveau achieved its highest quarterly sales ever, added over 650 new US accounts (nearly 11,600 total), and saw a record 149,000 consumer loyalty redemptions in Q3.
  • Internationally, Nuceva is now commercial in the UK, Germany, Austria and Italy, delivering high-single-digit million-dollar sales in Europe in 2023.
  • Phase 2 data showed Extra Strength Jeuveau (40 units) provides 26 weeks of wrinkle reduction, and filings for the first two EVALYSE fillers are on track for summer 2024.
A.I. generated. May contain errors.
Earnings Conference Call
Evolus Q3 2023
00:00 / 00:00