Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 08, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | EVOLUS, INC. | |
Entity Central Index Key | 0001570562 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 33,728,478 | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | true | |
Entity Smaller Reporting Company | true | |
Entity Transition Period | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 34,652 | $ 109,892 |
Short-term investments | 64,987 | 19,911 |
Accounts receivable, net | 10,406 | 10,661 |
Inventories | 12,542 | 6,407 |
Prepaid expenses and other current assets | 3,555 | 5,326 |
Total current assets | 126,142 | 152,197 |
Property and equipment, net | 1,433 | 902 |
Operating lease right-of-use assets | 3,899 | 4,068 |
Intangible assets, net | 59,174 | 59,638 |
Goodwill | 21,208 | 21,208 |
Other assets | 2,295 | 2,429 |
Total assets | 214,151 | 240,442 |
Current liabilities | ||
Accounts payable | 10,699 | 5,796 |
Accrued expenses | 9,403 | 13,960 |
Contingent royalty obligation payable to Evolus Founders | 1,316 | 3,483 |
Operating lease liabilities | 1,195 | 1,200 |
Total current liabilities | 22,613 | 24,439 |
Contingent royalty obligation payable to Evolus Founders | 32,900 | 41,200 |
Contingent promissory note payable to Evolus Founders | 18,218 | 17,945 |
Long-term debt, net of discounts and issuance costs | 73,841 | 73,508 |
Operating lease liabilities | 3,717 | 3,893 |
Deferred tax liability | 256 | 0 |
Total liabilities | 151,545 | 160,985 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity | ||
Preferred stock, $0.00001 par value; 10,000,000 shares authorized; no shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Common stock, $0.00001 par value; 100,000,000 shares authorized; 33,728,035 and 33,562,665 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 1 | 1 |
Additional paid-in capital | 295,174 | 292,509 |
Accumulated other comprehensive gain | 225 | 6 |
Accumulated deficit | (232,794) | (213,059) |
Total stockholders’ equity | 62,606 | 79,457 |
Total liabilities and stockholders’ equity | $ 214,151 | $ 240,442 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares, issued (in shares) | 33,728,035 | 33,562,665 |
Common stock, shares, outstanding (in shares) | 33,728,035 | 33,562,665 |
Condensed Statements of Operati
Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 10,496 | $ 0 |
Cost of sales (excludes amortization of intangible assets) | 4,219 | 0 |
Gross profit | 6,277 | 0 |
Operating expenses: | ||
Selling, general and administrative | 31,300 | 17,519 |
Research and development | 507 | 2,353 |
Revaluation of contingent royalty obligation payable to Evolus Founders | (9,884) | 4,913 |
Depreciation and amortization | 1,749 | 484 |
Total operating expenses | 23,672 | 25,269 |
Loss from operations | (17,395) | (25,269) |
Other income (expense): | ||
Interest income | 374 | 389 |
Interest expense | (2,458) | (618) |
Loss before income taxes: | (19,479) | (25,498) |
Income tax expense (benefit) | 256 | (14,523) |
Net loss | (19,735) | (10,975) |
Other comprehensive gain (loss): | ||
Unrealized gain (loss) on available-for-sale securities, net of tax | 219 | (9) |
Comprehensive loss | $ (19,516) | $ (10,984) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.59) | $ (0.40) |
Weighted-average shares outstanding used to compute basic and diluted net loss per share (in shares) | 33,720,436 | 27,330,174 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Preferred StockSeries A Preferred Stock | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive (Loss) Gain | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 27,274,991 | ||||
Beginning balance at Dec. 31, 2018 | $ 84,384 | $ 0 | $ 1 | $ 207,408 | $ 0 | $ (123,025) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock in connection with the incentive equity plan (in shares) | 10,372 | |||||
Issuance of common stock in connection with the incentive equity plan | (58) | (58) | ||||
Stock-based compensation | 2,015 | 2,015 | ||||
Net loss | (10,975) | (10,975) | ||||
Other comprehensive income (loss) | (9) | (9) | ||||
Ending balance (in shares) at Mar. 31, 2019 | 0 | 27,285,363 | ||||
Ending balance at Mar. 31, 2019 | 75,357 | $ 0 | $ 1 | 209,365 | (9) | (134,000) |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 33,562,665 | ||||
Beginning balance at Dec. 31, 2019 | 79,457 | $ 0 | $ 1 | 292,509 | 6 | (213,059) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock in connection with the incentive equity plan (in shares) | 165,370 | |||||
Issuance of common stock in connection with the incentive equity plan | 0 | 0 | ||||
Stock-based compensation | 2,665 | 2,665 | ||||
Net loss | (19,735) | (19,735) | ||||
Other comprehensive income (loss) | 219 | 219 | ||||
Ending balance (in shares) at Mar. 31, 2020 | 0 | 33,728,035 | ||||
Ending balance at Mar. 31, 2020 | $ 62,606 | $ 0 | $ 1 | $ 295,174 | $ 225 | $ (232,794) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (19,735) | $ (10,975) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 1,749 | 484 |
Stock-based compensation | 2,628 | 1,998 |
Provision for bad debts | 2,607 | 0 |
Amortization of discount on short-term investments | (169) | (120) |
Amortization of operating lease right-of-use assets | 169 | 219 |
Amortization of debt discount and issuance costs | 647 | 281 |
Deferred income taxes | 256 | (14,523) |
Revaluation of contingent royalty obligation payable to Evolus Founders | (9,884) | 4,913 |
Changes in assets and liabilities: | ||
Inventories | (1,929) | (2,578) |
Accounts receivable | (2,352) | 0 |
Prepaid expenses and other current assets | 1,771 | (1,649) |
Accounts payable | 332 | 305 |
Accrued expenses | (3,949) | 2,667 |
Operating lease liabilities | (181) | (222) |
Other assets | 93 | 0 |
Net cash used in operating activities | (27,947) | (19,200) |
Cash flows from investing activities | ||
Purchases of property and equipment | (565) | 0 |
Additions to capitalized software | (935) | (823) |
Purchases of short-term investments | (49,688) | (79,202) |
Maturities of short-term investments | 5,000 | 0 |
Net cash used in investing activities | (46,188) | (80,025) |
Cash flows from financing activities | ||
Payment of contingent royalty obligation to Evolus Founders | (583) | (9,213) |
Milestone payment for intangible assets | 0 | (2,000) |
Proceeds from issuance of long-term debt, net of discounts | 0 | 73,906 |
Payments for debt issuance costs | 0 | (2,205) |
Payment for debt obligation | (522) | 0 |
Tax withholding paid on behalf of employees for stock-based awards | 0 | (58) |
Net cash (used in) provided by financing activities | (1,105) | 60,430 |
Change in cash and cash equivalents | (75,240) | (38,795) |
Cash and cash equivalents, beginning of period | 109,892 | 93,162 |
Cash and cash equivalents, end of period | 34,652 | 54,367 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 1,801 | 336 |
Non-cash investing and financing information: | ||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 0 | 1,029 |
Capitalized software recorded in accounts payable and accrued expenses | $ 168 | $ 350 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Description of Business Evolus, Inc., (“Evolus” or the “Company”) is a performance beauty company focused on delivering products in the self-pay aesthetic market. The Company received the approval of its first product Jeuveau ® (prabotulinumtoxinA-xvfs) from the U.S. Food and Drug Administration (the “FDA”) in February 2019. The product was approved by Health Canada in August 2018 and the European Commission (“EC”) in September 2019. Jeuveau ® is a proprietary 900 kDa purified botulinum toxin type A formulation indicated for the temporary improvement in the appearance of moderate to severe glabellar lines, also known as “frown lines,” in adults. The Company commercially launched Jeuveau ® in the United States in May 2019 and in Canada through a distribution partner in October 2019. The Company is headquartered in Newport Beach, California. Liquidity and Financial Condition The accompanying unaudited condensed financial statements have been prepared on a basis that assumes that the Company will continue as a going concern, and do not include any adjustments that may result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of the Company’s liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Since inception , the Company has incurred recurring net operating losses. T he Company has recorded net losses of $19,735 for the three months ended March 31, 2020 . Additionally, the Company used cash of $27,947 in operations during the three months ended March 31, 2020 . Management expects operating losses and negative cash flows to continue for at least the next 12 months. As of March 31, 2020 , the Company had $34,652 in cash and cash equivalents plus $64,987 in short-term investments and an accumulated deficit of $232,794 . The Company’s ability to execute on its business strategy, meet its future liquidity requirements, and achieve profitable operations, is dependent on a number of factors, including its ability to gain and expand market acceptance of its product and achieve a level of revenues adequate to support its cost structure, its ability maintain regulatory approval of its product, its ability to maintain compliance with debt covenants and avoid an event of default under its credit facility, the outcome of its ongoing litigation, and its ability to operate its business and sell products without infringing third party intellectual property rights. The Company believes that its current capital resources, which consist of cash, cash equivalents and short-term investments, are sufficient to fund operations through at least the next twelve months from the date the accompanying financial statements are issued based on the expected cash burn rate. The Company may be required to raise additional capital to fund future operations through the incurrence of additional debt allowed under existing debt arrangements , the entry into licensing or collaboration agreements with partners, sale of its equity securities, grants or other sources of financing. Sufficient funds may not be available to the Company at all or on attractive terms when needed from equity or debt financings. If the Company is unable to obtain additional funding from these or other sources when needed, or to the extent needed, it may be necessary to significantly reduce its controllable and variable expenditures and current rate of spending through reductions in staff and delaying, scaling back, or suspending certain research and development, sales and marketing programs and other operational goals. The recent COVID-19 outbreak that was first detected in Wuhan, China, in December 2019, has caused economic and social disruption on an unprecedented scale. The COVID-19 outbreak has negatively impacted and disrupted the global economy and financial markets which could interfere with the Company’s ability to access financing when and on terms that the Company desires. Although there is uncertainty related to the anticipated impact of the recent COVID-19 outbreak on the Company’s future results, the Company believes that its business strategy, its current cash reserves and the recent steps it has taken to reduce operating expenses, such as reducing headcount, temporarily reducing executive salaries and Board of Directors fees, reducing the size of the Board and delaying the European launch of Jeuveau ® , position the Company to manage its business through this crisis. See Note 10. Subsequent Events for additional details on the Company’s response to the COVID-19 outbreak. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation T he accompanying unaudited condensed financial statements have been prepared on a consistent basis with the annual financial statements and in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting . Pursuant to these SEC rules and regulations, the Company has condensed or omitted certain financial information and disclosures normally included in annual financial statements prepared in accordance with GAAP. In the opinion of management, the interim financial statements reflect all adjustments, which include normal recurring adjustments, considered necessary for a fair statement of the interim periods. The interim results presented herein are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2020 or for any other interim period. The accompanying unaudited condensed financial statements and related disclosures should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 25, 2020. Use of Estimates Management is required to make certain estimates and assumptions in order to prepare financial statements in conformity with GAAP. Such estimates and assumptions affect the reported financial statements. The Company’s most significant estimates relate to net revenues, allowance for doubtful accounts, fair value measurements, goodwill and long-lived asset valuations and impairment assessments, inventory valuations, income tax valuations, stock-based compensation and royalty obligations, among others. Management bases estimates on historical experience and on assumptions that management believes are reasonable. The Company’s actual results could differ materially from those estimates. Additionally, the full impact of the COVID-19 outbreak is unknown and cannot be reasonably estimated. However, where possible, management has made appropriate accounting estimates with respect to certain accounting matters, which include the fair value of royalty obligations, allowance for doubtful accounts, inventory valuation and impairment assessments of goodwill and other long-lived assets, based on the facts and circumstances available as of the reporting date. The Company’s future assessment of the magnitude and duration of the COVID-19 outbreak, as well as other factors, could result in material impacts to the Company’s financial statements in future reporting periods. Risks and Uncertainties In 2013, Evolus and Daewoong Pharmaceuticals Co., Ltd. (“Daewoong”) entered into an agreement (the “Daewoong Agreement”), pursuant to which, the Company has an exclusive distribution license to Jeuveau ® from Daewoong for aesthetic indications in the United States, European Union, Canada, Australia, Russia, Commonwealth of Independent States, and South Africa, as well as co-exclusive distribution rights with Daewoong in Japan. Jeuveau ® is manufactured by Daewoong in a facility in South Korea. The Company also has the option to negotiate first with Daewoong to secure a distribution license for any product that Daewoong directly or indirectly develops or commercializes that is classified as an injectable botulinum toxin (other than Jeuveau ® ) in a territory covered by the Daewoong Agreement. The Company relies on Daewoong, its exclusive and sole supplier, to manufacture Jeuveau ® . Any termination or loss of significant rights, including exclusivity, under the Daewoong Agreement would materially and adversely affect the Company’s commercialization of Jeuveau ® . The Daewoong Agreement, and Daewoong’s rights relating to Jeuveau ® , are subject to litigation. See Note 7 . Commitments and Contingencies for additional information regarding such litigation. The Company commercially launched Jeuveau ® in the United States in May 2019 and in Canada through a distribution partner in October 2019 and, as such, has a limited history of sales. If any previously granted approval is retracted or the Company is denied approval or approval is delayed by any other regulators, it may have a material adverse impact on the Company’s business and its financial statements. The Company is subject to risks common to companies in the pharmaceutical industry including, but not limited to, dependency on the commercial success of Jeuveau ® , the Company’s sole commercial product, significant competition within the medical aesthetics industry, its ability to maintain regulatory approval of Jeuveau ® , the need for additional financing to achieve its goals, third party litigation and challenges to its intellectual property, uncertainty of broad adoption of its product by physicians and patients, its ability to in-license, acquire or develop additional product candidates and to obtain the necessary approvals for those product candidates, and the need to scale manufacturing capabilities over time. The recent COVID-19 outbreak and restrictions intended to slow the spread of COVID-19, including quarantines, government-mandated actions, stay-at-home orders and other restrictions, have adversely affected the Company’s business in a number of ways, which have resulted, and may continue to result, in a period of business disruption and in reduced sales and operations. In addition, any disruption and volatility in the global capital markets may increase the Company’s cost of capital and adversely affect its ability to access financing when and on terms that we desire. Any of these events could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker. The Company has determined that it operates in a single operating and reportable segment. The Company’s chief operating decision maker is its Chief Executive Officer who manages operations and reviews the financial information as a single operating segment for purposes of allocating resources and evaluating its financial performance. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with remaining maturities at purchase of three months or less that can be liquidated without prior notice or penalty. Cash and cash equivalents may include deposits, money market funds and debt securities. Amounts receivable from credit card issuers are typically converted to cash within two to four days of the original sales transaction and are considered to be cash equivalents. The Company places its cash and cash equivalents with high credit quality financial institutions. At times, such investments may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) limit. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Short-Term Investments Short-term investments as of March 31, 2020 consisted of available-for-sale U.S. Treasury securities with original maturities greater than three months and remaining maturities of less than twelve months. These investments are recorded at fair value based on quoted prices in active markets, with unrealized gains and losses reported in other comprehensive (loss) gain in the Company’s condensed statements of operations and comprehensive loss. Purchase premiums and discounts are recognized in interest expense using the effective interest method over the terms of the securities. Realized gains and losses and declines in fair value that are deemed to be other than temporary are reflected in the condensed statements of operations and comprehensive loss using the specific-identification method. The Company periodically reviews all available-for-sale securities for other than temporary declines in fair value below the cost basis whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company also evaluates whether it has plans or is required to sell short-term investments before recovery of their amortized cost bases. To date, the Company has not identified any other than temporary declines in fair value of its short-term investments. Inventories Inventories consist of finished goods held for sale and distribution. Cost is determined using the first‑in, first‑out method with prioritization of the items with the earliest expiration dates. Inventory valuation reserves are established based on a number of factors including, but not limited to, finished goods not meeting product specifications, product excess and obsolescence, or application of the lower of cost or net realizable value concepts. The determination of events requiring the establishment of inventory valuation reserves, together with the calculation of the amount of such reserves may require judgment. No material inventory valuation reserves have been recorded for the periods presented. Adverse changes in assumptions utilized in the Company’s inventory reserve calculations could result in an increase to its inventory valuation reserves. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in an orderly transaction between market participants in a principal market on the measurement date. The fair value hierarchy defines a three-tiered valuation hierarchy for disclosure of fair value measurement is classified and disclosed by the Company in one of the three categories as follows: • Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, or can be corroborated by observable market data for substantially the full term of the asset or liability; and • Level 3—Prices or valuation techniques that require inputs that are unobservable that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The Company performs an annual qualitative assessment of its goodwill in the fourth quarter of each calendar year to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If further testing is required, the Company performs a two-step process. The first step involves comparing the fair value of the Company’s reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step of the test is performed by comparing the carrying value of the goodwill in the reporting unit to its implied fair value. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. For the purpose of impairment testing, the Company has determined that it has one reporting unit. There was no impairment of goodwill for any of the periods presented. Intangible Assets Upon FDA approval of Jeuveau ® in February 2019, the in-process research and development (“IPR&D”) related to Jeuveau ® was evaluated as completed and reclassified to a definite-lived distribution right intangible asset, which is amortized over the period the asset is expected to contribute to the future cash flows of the Company. The Company determined the pattern of this intangible asset’s future cash flows could not be readily determined with a high level of precision. As a result, the distribution right intangible asset is being amortized on a straight-line basis over the estimated useful life of 20 years. The Company capitalizes certain internal-use software costs associated with the development of its mobile and web-based customer platforms. These costs include personnel expenses and external costs that are directly associated with the software projects. These costs are included as intangible assets in the accompanying condensed balance sheets. The capitalized internal-use software costs are amortized on a straight-line basis over the estimated useful life of two years upon being placed in service. The Company reviews long-term and identifiable definite-lived intangible assets or asset groups for impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset or an asset group, further impairment analysis is performed. An impairment loss is measured as the amount by which the carrying amount of the asset or asset groups exceeds the fair value for assets to be held and used or fair value less cost to sell for assets to be disposed of. The Company also reviews the useful lives of its assets periodically to determine whether events and circumstances warrant a revision to the remaining useful life. Changes in the useful life are adjusted prospectively by revising the remaining period over which the asset is amortized. There was no material impairment of long-lived assets for any periods presented. Leases In accordance with Accounting Standards Codification 842, Leases (“ASC 842”), at the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, upon lease commencement, the Company records a lease liability which represents the Company’s obligation to make lease payments arising from the lease, and a corresponding right-of-use (“ROU”) asset which represents the Company’s right to use an underlying asset during the lease term. Operating lease assets and liabilities are included in ROU assets, current portion of operating lease liabilities and noncurrent operating lease liabilities in the accompanying condensed balance sheets. Operating lease ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated using the Company’s incremental borrowing rate applicable to the underlying asset unless the implicit rate is readily determinable. Operating lease ROU assets also include any lease payments made at or before lease commencement and exclude any lease incentives received, if any. The Company determines the lease term as the noncancelable period of the lease and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company’s leases do not contain any residual value guarantees. Leases with a term of 12 months or less are not recognized on the condensed balance sheets. For operating leases, the Company recognized rent expense on a straight-line basis over the lease term. There were no significant finance leases as of March 31, 2020 . Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses include personnel-related costs including stock based compensation, costs associated with pre-clinical and clinical development activities, costs associated with and costs for prototype products that are manufactured prior to market approval for that prototype product, internal and external costs associated with the Company’s regulatory compliance and quality assurance functions, including the costs of outside consultants and contractors that assist in the process of submitting and maintaining regulatory filings, and overhead costs, including allocated facility related expenses. Contingent Royalty Obligation Payable to the Evolus Founders The Company determines the fair value of the contingent royalty obligation payable at each reporting period end based on Level 3 inputs using a discounted cash flows method. Changes in the fair value of the contingent royalty obligation payable are determined at each reporting period end and recorded in operating expenses in the accompanying condensed statements of operations and comprehensive loss and as a liability in the condensed balance sheets. Contingent Promissory Note Payable to Evolus Founders On February 12, 2018, the Company recognized a contingent promissory note payable at present value using a discount rate for similar rated debt securities based on an estimated date that the Company believed the contingent promissory note will mature. Discount amortization related to the contingent promissory note is recorded in interest expense in the condensed statements of operations and comprehensive loss with a corresponding increase to the non-current liabilities in the condensed balance sheets. Long-Term Debt Long-term debt represents the debt balance with Oxford Finance (“Oxford”), net of debt issuance costs. Debt issuance costs represent legal, lender and consulting costs or fees associated with debt financing. Debt discounts and issuance costs are allocated pro rata between the funded and unfunded portions of the debt and are amortized into interest expense over the term of the debt. Revenue Recognition The Company applies Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), to account for revenue generated since the commercial launch of Jeuveau ® in May 2019. The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when the Company satisfies the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue recognition. General The Company currently generates product revenue from the sale of Jeuveau ® in the United States and service revenue from the sale of Jeuveau ® through a distribution partner in Canada. For product revenue, the Company recognizes revenue when control of the promised goods under a contract is transferred to a customer, in an amount that reflects the consideration the Company expects to receive in exchange for those goods as specified in the customer contract. The transfer of control occurs upon receipt of the goods by the customer since that is when the customer has obtained control of the goods’ economic benefits. The Company does not provide any service-type warranties and does not accept product returns except under limited circumstances such as damages in transit or ineffective product. The Company also excludes any amounts related to taxes assessed by governmental authorities from revenue measurement. Shipping and handling costs associated with outbound product freight are accounted for as fulfillment costs and are included in selling, general and marketing expenses in the accompanying condensed statements of operations and comprehensive loss. For service revenue, the Company evaluated the arrangement with the distribution partner in Canada and determined that it acts as an agent in the distribution of Jeuveau ® in Canada as it does not control the product before control is transferred to a customer. The indicators of which party exercises control include primary responsibility over performance obligations, inventory risk before the good or service is transferred and discretion in establishing the price. Accordingly, the Company records the sale as service revenue on a net basis. Revenue from services is recognized in the period the service is performed for the amount of consideration expected to be received. There were no service revenues for the three months ended March 31, 2020 . Disaggregation of Revenue The Company’s disaggregation of revenue is consistent with its operating segment as disclosed above. Gross-to-Net Revenue Adjustments The Company provides customers with trade and volume discounts and prompt pay discounts that are directly reflected in the invoice price. Revenues are recorded net of sales-related adjustments, wherever applicable, for rebates and coupon programs. Accrued rebate and coupon balances are recorded in accrued expenses on the accompanying condensed balance sheets. • Volume-based Rebates - Volume-based rebates are contractually offered to certain customers. The rebates payable to each customer are determined based on the contract and quarterly purchase volumes. • Coupons - The Company issued customers coupons redeemable into gift cards funded by the Company for the benefit of patients. The coupons are accounted for as variable consideration. The Company estimates the coupon redemption rates based on historical data and future expectations. The coupons are accrued based on estimated redemption rates and the volume of products purchased and are recorded as a reduction to revenues on product delivery. As of March 31, 2020 and December 31, 2019 , the accrued volume-based rebate and coupon liability was $2,479 and $1,709 , respectively. During the three months ended March 31, 2020 , provisions for rebate and coupon programs were $10,213 , which were offset by related payments of $9,443 . Contract balances A contract with a customer states the terms of the sale, including the description, quantity and price of each product purchased. Amounts are recorded as accounts receivable when the Company’s right to consideration becomes unconditional. As payment terms are short-term, the Company does not have any significant financing components in customer contracts given the expected time between transfer of the promised products and the payment of the associated consideration is less than one year. As of March 31, 2020 and December 31, 2019 , all amounts included in accounts receivable, net on the accompanying condensed balance sheets are related to contracts with customers. The Company did not have any contract assets nor unbilled receivables as of March 31, 2020 or December 31, 2019 . Sales commissions are included in selling, general and administrative expenses when incurred. Contract liabilities reflect estimated amounts that the Company is obligated to pay to customers or patients under the rebate and coupon programs. The Company’s contract liabilities are included in accounts payable and accrued expenses in the accompanying condensed balance sheets. During the three months ended March 31, 2020 , the Company did not recognize any revenue related to changes in transaction prices regarding its contracts with customers and did not recognize any material changes in revenue related to amounts included in contract liabilities at the beginning of the period. Collectability Accounts receivable are recorded at the invoiced amount and do not bear interest. At the time of contract inception or new customer account set-up, the Company performs a collectability assessment of the customer’s creditworthiness. The Company assesses the probability that the Company will collect the entitled consideration in exchange for the goods sold, by considering the customer’s ability and intention to pay when consideration is due. On a recurring basis, the Company estimates the amount of receivables considered uncollectable to reflect an allowance for doubtful accounts. The Company writes off accounts receivable balances when it is determined that there is no possibility of collection. As of March 31, 2020 and December 31, 2019 , allowance for doubtful accounts was $2,823 and $387 , respectively. For the three months ended March 31, 2020 , provision for bad debts was $2,607 and write-off amount was $171 . Practical Expedients The Company expenses sales commissions when incurred as the amortization period is one year or less. These costs are recorded within selling, general and administrative expenses in the accompanying condensed statements of operations and comprehensive loss. The Company does not adjust the amount of promised consideration for the effects of the time value of money for contracts in which the anticipated period between when the Company transfers the goods or services to the customer and when the customer pays within one year. Stock-Based Compensation The Company recognizes stock-based compensation expense for employees, consultants and members of the Board of Directors based on the fair value at the date of grant. The Company uses the Black-Scholes option pricing model to value stock option grants. The Black-Scholes option pricing model requires the input of subjective assumptions, including the expected volatility of the Company’s common stock, expected risk-free interest rate, and the option’s expected life. The fair value of the Company’s restricted stock units (“RSUs”) is based on the fair value on the grant date of the Company’s common stock. The Company also evaluates the impact of modifications made to the original terms of equity awards when they occur. The fair value of equity awards that are expected to vest is amortized on a straight-line basis over the requisite service period. Stock-based compensation expense is recognized net of actual forfeitures when they occur, as an increase to additional paid-in capital in the condensed balance sheets and in the selling, general and administrative or research and development expenses in the condensed statements of operations and comprehensive loss. Income Taxes The Company applies an estimated annual effective tax rate (“ETR”) approach for calculating a tax provision or benefit for interim periods, as required under GAAP. The Company recorded a tax provision of $256 and a tax benefit of $14,523 for the three months ended March 31, 2020 and 2019 , respectively. The Company’s ETR differs from the U.S. federal statutory tax rate of 21% for the three months ended March 31, 2020 and 2019 , primarily as a result of the impact of a valuation allowance on its deferred tax assets and state minimum taxes. The tax benefit recorded for the three months ended March 31, 2019 was primarily a result of the reduction of the valuation allowance recorded against the Company’s deferred tax assets. A valuation allowance is recorded against deferred tax assets to reduce the net carrying value when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. As of each reporting date, the Company considers evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. Upon FDA approval of Jeuveau ® in February 2019, the Company’s IPR&D intangible asset was reclassified to a definite-lived distribution right intangible asset. As a result, management determined that it was more likely than not that certain deferred tax assets became realizable due to the future reversals of the deferred tax liability associated with such intangible asset. Accordingly, the Company released $14,402 of its valuation allowance as a discrete item upon FDA approval in February 2019. Additionally, the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. Accordingly, the Company establishes reserves for uncertain tax positions. On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The Cares Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. While the CARES Act provides sweeping tax changes in response to the COVID-19 pandemic, some of the more significant provisions which are expected to impact the Company’s financial statements include removal of certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years, and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. Due to the recent enactment of the CARES Act, the Company is unable to quantify the impact, if any, that the CARES Act will have on its financial position, results of operations or cash flows. Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period including contingently issuable shares. Diluted earnings per share is based on the treasury stock method and includes the effect from potential issuance of ordinary shares, such as shares issuable pursuant to the exercise of stock options and the vesting of restricted stock units. Because the impact of the options and non-vested RSUs are anti-dilutive during periods of net loss, there was no difference between the weighted-average number of shares used to calculate basic and diluted net loss per common share for the periods presented. For the three months ended March 31, 2020 and 2019 , excluded from the dilutive net loss per share computation were stock options of 4,962,535 and 3,867,254 , respectively, and non-vested RSUs of 480,069 and 256,870 , respectively, because their inclusion would have been anti-dilutive. Although these securities were anti-dilutive for these periods, they could be dilutive in future periods. Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. ASU 2018-15 requires implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancelable term of the cloud computing arrangements plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The guidance is effective for interim and annual |
Fair Value Measurements and Sho
Fair Value Measurements and Short-Term Investments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Short-Term Investments | Fair Value Measurements and Short-Term Investments Short-Term Investments As of March 31, 2020 , all of the Company’s investments had remaining maturities less than 12 months. The following is a summary of the Company’s short-term investments, considered available-for-sale: As of March 31, 2020 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Available-for-sale securities U.S. treasury securities $ 64,768 $ 219 $ — $ 64,987 As of December 31, 2019 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Available-for-sale securities U.S. treasury securities $ 19,905 $ 6 $ — $ 19,911 As of March 31, 2020 , no investments had been in a continuous unrealized loss position for more than 12 months, and the Company did not record any other-than-temporary impairments on these securities. Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis. The fair value of these instruments was as follows: As of March 31, 2020 Fair Value Level 1 Level 2 Level 3 Available-for-sale debt securities U.S. treasury securities $ 64,987 $ 64,987 $ — $ — Liabilities Contingent royalty obligation payable to Evolus Founders $ 34,216 $ — $ — $ 34,216 As of December 31, 2019 Fair Value Level 1 Level 2 Level 3 Available-for-sale debt securities U.S. treasury securities $ 19,911 $ 19,911 $ — $ — Liabilities Contingent royalty obligation payable to Evolus Founders $ 44,683 $ — $ — $ 44,683 The Company did not transfer any assets or liabilities measured at fair value on a recurring basis between levels during the three months ended March 31, 2020 and 2019 . The Company determines the fair value of the contingent royalty obligation payable to Evolus Founders based on Level 3 inputs using a discounted cash flows method. The significant unobservable input assumptions that can significantly change the fair value include (i) projected amount and timing of net revenues during the payment period, which terminates in the quarter following the 10 -year anniversary of the first commercial sale of Jeuveau ® in the United States, (ii) the discount rate and (iii) the timing of payments. During the three months ended March 31, 2020 and 2019 , the Company utilized discount rates of 17.0% and 16.0% , reflecting changes in the Company’s risk profile. Net revenue projections are also updated to reflect changes in the timing of expected sales. The following table shows a reconciliation of the beginning and ending fair value measurements of the contingent royalty obligation payable: Three Months Ended 2020 2019 Fair value, beginning of period $ 44,683 $ 50,200 Payments (583 ) (9,213 ) Change in fair value recorded in operating expenses (9,884 ) 4,913 Fair value, end of period $ 34,216 $ 45,900 Other Financial Assets and Liabilities The Company’s financial instruments consist primarily of cash and cash equivalents, short-term available-for-sale debt securities, accounts receivable, accounts payable, accrued expenses, lease liabilities, and long-term debt. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their fair value because of the short-term maturity of such instruments. The Company estimates the fair value of the contingent promissory note payable to the Evolus Founders, long-term debt and operating lease liabilities using the discounted cash flow analysis based on the interest rates for similar rated debt securities (Level 2). As of March 31, 2020 , the fair value of the contingent promissory note and long-term debt was estimated to be $17,254 and $74,317 , respectively. The fair value of operating lease liabilities at March 31, 2020 approximated their carrying value. As of December 31, 2019 , the fair value of contingent promissory note and long-term debt was $16,696 and $76,203 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The table below shows the weighted-average life, original cost, accumulated amortization and net book value by major intangible asset classification: Weighted-Average Life (Years) Original Cost Accumulated Amortization Net Book Value Definite-lived intangible assets Distribution right 20 $ 59,076 $ (3,418 ) $ 55,658 Capitalized software 2 5,554 (2,038 ) 3,516 Intangible assets, net 64,630 (5,456 ) 59,174 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of March 31, 2020 $ 85,838 $ (5,456 ) $ 80,382 Weighted-Average Life (Years) Original Cost Accumulated Amortization Net Book Value Indefinite-lived intangible assets Distribution right 20 $ 59,076 $ (2,679 ) $ 56,397 Capitalized software 2 4,415 (1,174 ) 3,241 Intangible assets, net 63,491 (3,853 ) 59,638 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of December 31, 2019 $ 84,699 $ (3,853 ) $ 80,846 ________________________ * Intangible assets with indefinite lives have an indeterminable average life. The following table outlines the estimated future amortization expense related to intangible assets held as of March 31, 2020 that are subject to amortization: Fiscal year Remaining in 2020 $ 4,628 2021 4,060 2022 2,955 2023 2,955 2024 2,955 Thereafter 41,621 $ 59,174 During the three months ended March 31, 2020 and 2019 , the Company capitalized $1,139 and $1,190 , respectively, related to costs of computer software developed for internal use. During the three months ended March 31, 2020 and 2019 , total intangible assets amortization expense of $1,603 and $484 , respectively, was recorded within depreciation and amortization on the accompanying condensed statements of operations and comprehensive loss. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of: March 31, December 31, 2020 2019 Accrued professional services $ 4,115 $ 5,794 Accrued payroll and related benefits 1,941 5,229 Accrued volume-based rebate and coupon liability 2,479 1,709 Other accrued expenses 868 1,228 $ 9,403 $ 13,960 |
Oxford Term Loans
Oxford Term Loans | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Oxford Term Loans | Oxford Term Loans On March 15, 2019, the Company entered into a credit facility of up to $100,000 with Oxford Finance (“Oxford”). Pursuant to the terms of the credit facility, the lender extended term loans (the “Term Loans”), available in two advances, to the Company. The first tranche of $75,000 was funded on the closing date. The second tranche of $25,000 may be drawn, at the request of the Company, no later than September 30, 2020, upon achieving specified minimum net sales milestones based on a trailing six-month basis and no event of default. As of March 31, 2020 , the Company had not yet met the net sales milestone to draw the second tranche. The credit facility bears an annual interest rate equal to the greater of 9.5% , or the 30-day U.S. Dollar LIBOR rate plus 7.0% . The Company agreed to pay interest-only on each tranche funded for the first 36 months until May 2022, which is followed by a 23 -month amortization period. Notwithstanding the foregoing, if the Company were to obtain the second tranche and maintain compliance with the specified minimum net sales covenant and meet other conditions during the initial interest-only period, upon the Company’s request, the interest-only period may be extended by an additional 12 months to a total of 48 months followed by an 11 -month amortization period. Upon the earliest to occur of the maturity date, the acceleration of the term loans, or the prepayment of the term loans, the Company is required to pay to Oxford a final payment of 5.5% of the full principal amount of the term loans funded (“Final Payment”). The Company may elect to prepay all amounts owed prior to the maturity date, provided that a prepayment fee is also paid, which shall be equal to 3.0% of the amount prepaid if the prepayment occurs on or prior to March 15, 2020, 2.0% of the amount prepaid if the prepayment occurs after March 15, 2020 and on or prior to March 15, 2021, or 1.0% of the amount prepaid if the prepayment occurs thereafter (“Prepayment Fee”). If the Term Loans are accelerated following the occurrence of an event of default, the Company is required to immediately pay to Oxford an amount equal to the sum of all outstanding principal of the term loans plus accrued and unpaid interest thereon through the prepayment date, the Final Payment, the Prepayment Fee and all other obligations that are due and payable, including payment of Oxford’s expenses and interest at the default rate with respect to any past due amounts. The credit facility is secured by substantially all of the Company’s assets. The credit facility includes affirmative and negative covenants applicable to the Company and any subsidiaries it may create in the future. The affirmative covenants include, among others, covenants requiring the Company to maintain its legal corporate existence and governmental approvals, deliver certain financial reports, maintain insurance coverage and satisfy certain requirements regarding deposit accounts. The negative covenants include, among others, restrictions on us transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets and suffering a change in control, in each case subject to certain exceptions. The credit facility also includes events of default, the occurrence and continuation of which could cause interest to be charged at a default interest rate equal to the applicable rate plus 5.0% and Oxford, as collateral agent, with the right to exercise remedies against the Company and the collateral securing the credit facility, including foreclosure against the property securing the credit facility, including the Company’s cash. These events of default include, among other things, any failure by the Company to pay principal or interest due under the credit facility, a breach of certain covenants under the credit facility, the Company’s insolvency, a material adverse change, the occurrence of any default under certain other indebtedness and one or more judgments against the Company, the institution of certain temporary or permanent relief in connection with pending litigation, or the breach, termination or other adverse events under the Daewoong Agreement. As of March 31, 2020 , the Company was in compliance with its debt covenants. At the closing date, the Company incurred $1,094 and $2,205 in debt discounts and issuance costs related to the Term Loans, respectively. Debt discounts and issuance costs related to the entire Term Loans have been allocated pro rata between the funded and unfunded portions. Debt discounts and issuance costs allocated to the first tranche of $75,000 have been presented as a deduction to the debt balance and are amortized into interest expense using the effective interest method. As of March 31, 2020 , the borrowings outstanding under the Term Loans were classified as long-term debt in the accompanying condensed balance sheets. Debt discounts and issuance costs associated with the unfunded tranche are deferred as assets until the tranche is drawn and are amortized into interest expense using the straight-line method over the term of the debt. The overall effective interest rate was approximately 11.6% as of March 31, 2020 . As of March 31, 2020 , the principal amounts of long-term debt maturities of the Term Loans during each of the next five fiscal years are as follows: Fiscal year Remainder of 2020 $ — 2021 — 2022 26,087 2023 39,130 2024 9,783 Total principal payments 75,000 Unamortized debt discounts and issuance costs (1,159 ) Long term debt, net of discounts and issuance costs $ 73,841 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company’s corporate headquarters is located in Newport Beach, California, in a facility that it subleased until January 2020 under a non-cancelable operating lease for a fixed amount each month. On May 15, 2019, the Company entered into a non-cancelable operating lease for the same office facility with the original lessor. This non-cancelable operating lease commenced on February 1, 2020 and expires on January 31, 2025. Lease payments increase based on an annual rent escalation clause that occurs each year on February 1. The Company may, under certain circumstances, terminate the lease on the 36 -month anniversary of the lease commencement date by providing a written notice 12 months prior to such anniversary and paying a termination fee equal to six months basic rent plus certain other expenses. The Company has an option to extend the term of the lease for an additional 60 months , which is not recognized as part of its ROU assets and lease liabilities. The lease with the original lessor is a modification of the existing sublease that is not accounted for as a separate contract. The Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants. The payments associated with the renewal will only be included in the measurement of the lease liability and ROU assets if the exercise of the renewal option is determined to be reasonably certain. The Company considers the timing of the renewal period and other economic factors such as the financial implications of a decision to extend or not to extend a lease in determining if the renewal option is reasonably certain to be exercised. For the three months ended March 31, 2020 , the components of operating lease expense: Three Months Ended Three Months Ended Fixed operating lease expense $ 274 $ 234 Variable operating lease expense 15 18 Short-term operating lease expense 168 21 $ 457 $ 273 The weighted-average remaining lease term was 4.8 years and weighted-average discount rate was 9.4% as of March 31, 2020 . Operating lease expenses were included in the selling, general and administration expenses in the accompanying condensed statements of operations and comprehensive loss. Operating lease right-of-use assets and related current and noncurrent operating lease liabilities are presented in the accompanying condensed balance sheets. The following table presents the maturity of the Company’s operating lease liabilities as of March 31, 2020 , future minimum payments under the operating lease agreements with non-cancelable terms as follows: Fiscal year Remainder of 2020 $ 896 2021 1,207 2022 1,259 2023 1,314 2024 1,371 Thereafter 115 Total operating lease payments 6,162 Less: imputed interest (1,250 ) Present value of operating lease liabilities $ 4,912 Purchase Commitments As of March 31, 2020 , the Company has entered into commitments to purchase services and products for an aggregate amount of approximately $6,140 . Certain minimum purchase commitments related to the purchase of Jeuveau ® are described below. License and Supply Agreement In connection with the Daewoong Agreement, the Company was obligated to make future milestone payments to Daewoong for certain confidential development and commercial milestones associated with Jeuveau ® . As of March 31, 2020 , Daewoong is eligible to receive remaining contingent milestone payments of up to $10,500 . The Daewoong Agreement also includes certain minimum annual purchases the Company is required to make in order to maintain the exclusivity of the license. The Company may, however, meet these minimum purchase obligations by achieving certain market share in its covered territories. These potential minimum purchase obligations were contingent upon the occurrence of future events, including receipt of governmental approvals and the Company’s future market share in various jurisdictions. Legal Proceedings In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because they involve claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. No amounts were accrued as of March 31, 2020 and December 31, 2019 . Medytox Litigation The Company, Daewoong and other individuals and entities are defendants to a lawsuit brought by Medytox, Inc. (“Medytox”) originally instituted in the Superior Court of the State of California in June 2017. With specific regard to the Company, Medytox alleges that (i) the Company has violated California Uniform Trade Secrets Act, Cal. Civ. Code § 3426 because Daewoong’s alleged knowledge of the misappropriation of certain trade secrets of Medytox is imputed to the Company as a result of the Company’s relationship with Daewoong, (ii) the Company has stolen the botulinum toxin bacterial strain of Medytox through our possession of and refusal to return the botulinum toxin bacterial strain, (iii) the Company has engaged in unlawful, unfair and fraudulent business acts and practices in violation of California Bus. & Prof. Code § 17200, including conversion of the botulinum toxin bacterial strain and misrepresentations to the public regarding the source of the botulinum toxin bacterial strain used to manufacture Jeuveau ® , and (iv) the Daewoong Agreement is invalid and in violation of Medytox’s rights (the “Medytox Litigation”). Medytox seeks, among other things, (i) actual, consequential and punitive damages, (ii) a reasonable royalty, as appropriate, (iii) a declaration that the Daewoong Agreement is void and unenforceable and that Medytox is entitled to disgorgement of all property wrongfully and unjustly retained or acquired by the defendants, including unlawfully gained profits, (iv) injunctive relief prohibiting the Company from using the license under the Daewoong Agreement and distributing Jeuveau ® , and (v) attorneys’ fees and costs. The Company believes it has meritorious defenses and intends to vigorously defend Medytox’s claims. The Company is unable to determine the likelihood of success of Medytox’s claims against the Company, and an estimate of the possible loss or range of loss cannot be made. While the Company is entitled to indemnity under the Daewoong Agreement, the indemnity may not be sufficient. An adverse ruling by the Superior Court against either us or Daewoong could materially adversely affect the Company’s ability to carry out its business and which would have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows and could also result in reputational harm. ITC Case On January 30, 2019, Allergan, plc and Allergan, Inc. (collectively, “Allergan”) and Medytox filed a complaint against us and Daewoong in the U.S. International Trade Commission (the “ITC”), containing substantially similar allegations to the Medytox Litigation, specifically that Jeuveau ® is manufactured based on misappropriated trade secrets of Medytox and therefore the importation of Jeuveau ® is an unfair act. The ITC matter is entitled In the Matter of Certain Botulinum Toxin Products (the “ITC Complaint”). The ITC instituted an investigation as ITC Inv. No. 337-TA-1145 (the “ITC Action”). The ITC Complaint seeks (i) an investigation by the ITC pursuant to Section 337 of the Tariff Act of 1930, (ii) a hearing with the ITC on permanent relief, (iii) issuance of a limited exclusion order forbidding entry of Jeuveau ® into the United States, (iv) a cease and desist order prohibiting Daewoong and us from engaging in the importations, sale for importation, marketing, distribution, offering for sale, the sale after the importation of, or otherwise transferring Jeuveau ® within the United States, (v) a bond issued during the presidential review period, (vi) the return of Medytox’s trade secrets and other confidential information including the alleged stolen botulinum toxin bacterial strain, and (vii) exclusion and cease and desist orders. The Company intends to defend itself vigorously in the proceedings. In January 2020, the three sets of parties to the ITC Action, (i) the Complainants - Allergan and Medytox, (ii) the Respondents - the Company and Daewoong and (iii) the OUII, each submitted pre-hearing briefs to the Administrative Law Judge assigned to the ITC Action setting forth each party’s positions on the substantive issues prior to the evidentiary hearing. From February 4-7, 2020, the Administrative Law Judge held an evidentiary hearing on the ITC Action. An initial determination by the Administrative Law Judge is due by June 5, 2020 and the target date for the final determination by the ITC is October 6, 2020. An adverse ruling by the ITC against either the Company or Daewoong could result in the imposition of an exclusion order which would bar imports of Jeuveau ® into the United States and a cease and desist order which would bar sales and marketing of Jeuveau ® within the United Sates either of which would materially adversely affect the Company’s ability to carry out its business and which would have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows and could also result in reputational harm. Even if the Company is successful, the ITC Action may result in reputation damage or other collateral consequences. Additionally, in certain cases if there is temporary or permanent relief granted under the Medytox Litigation or the ITC Action, it may constitute an event of default under our credit facility. Under the credit facility, in the event of default, a default interest rate equal to the applicable rate plus 5.0% would apply and Oxford, as collateral agent, could exercise remedies against the Company and the collateral securing the credit facility, including foreclosure against the property securing the credit facility, including cash. Any such action could materially and adversely affect the Company’s business and results of operations. Other Legal Matters The Company, from time to time, is involved in various litigation matters or regulatory encounters arising in the ordinary course of business that could result in unasserted or asserted claims or litigation. These other matters may raise difficult and complex legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit or regulatory encounter is brought, and differences in applicable laws and regulations. Except as set forth above, the Company does not believe that these other matters would have a material adverse effect on its accompanying financial position, results of operations or cash flows. However, the resolution of one or more of the other matters in any reporting period could have a material adverse impact on the Company’s financial results for that period. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stockholder's Equity | Stockholders’ Equity Preferred Stock The Company has 10,000,000 authorized shares of preferred stock with a par value of $0.00001 per share. As of March 31, 2020 , none were issued and outstanding. Common Stock The Company has 100,000,000 authorized shares of common stock with a par value of $0.00001 per share. As of March 31, 2020 , 33,728,035 shares were issued and outstanding. 2017 Omnibus Incentive Plan and Stock-based Compensation Allocation The Company’s 2017 Omnibus Incentive Plan (the “Plan”) provides for the grant of incentive options to employees of the Company, and for the grant of nonstatutory options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to the Company’s employees, including officers, directors, consultants and employees of the Company. The maximum number of shares of common stock that may be issued under the Plan is 4,361,291 shares, plus an annual increase on each anniversary of November 21 equal to 4% of the total issued and outstanding shares of the Company’s common stock as of such anniversary (or such lesser number of shares as may be determined by the Company’s board of directors). As of March 31, 2020 , the Company has available an aggregate of 859,412 shares of common stock for future issuance under the Plan. Stock-Based Award Activity and Balances Options are granted at exercise prices based on the Company’s common stock price on the date of grant. The options and RSU grants generally vest over a one -to four -year period. There have been no awards granted with performance conditions or market conditions for the periods presented. The options have a contractual term of ten years. The fair value of options is estimated using the Black‑Scholes option pricing model, which has various inputs, including the grant date common share price, exercise price, risk‑free interest rate, volatility, expected life and dividend yield. The change of any of these inputs could significantly impact the determination of the fair value of the Company’s options as well as significantly impact its results of operations. The fair value of RSU grants is determined at the grant date based on the common share price. The Company records stock‑based compensation expense net of actual forfeitures when they occur. The weighted-averages for key assumptions used in determining the fair value of stock options granted were as follows: Three Months Ended 2020 2019 Volatility 59.3% 59.2% Risk-free interest rate 1.61% 2.62% Expected life (years) 6.25 6.17 Dividend yield rate —% —% A summary of stock option activity under the Plan for the three months ended March 31, 2020 , is presented below: Weighted Weighted Average Average Remaining Aggregate Stock Exercise Contractual Intrinsic Options Per Share Terms (Years) Value Outstanding, December 31, 2019 3,977,401 $ 14.07 8.51 $ 7,198 Granted 1,085,734 10.10 Exercised — — Canceled/forfeited (100,600 ) 18.25 Outstanding, March 31, 2020 4,962,535 $ 13.12 8.63 $ 3,717 Exercisable, March 31, 2020 1,195,056 $ 12.77 8.15 $ — The aggregate intrinsic value of outstanding and exercisable options represents the excess of the fair market value of our common stock over the exercise price of underlying options as of March 31, 2020 and December 31, 2019 . A summary of RSU activity under the Plan for the three months ended March 31, 2020 , is presented below: Weighted Average Restricted Grant Date Stock Fair Value Units Per Share December 31, 2019 229,870 $ 15.89 Granted 416,049 10.19 Vested (165,370 ) 12.00 Forfeited (480 ) 10.19 Outstanding, March 31, 2020 480,069 $ 12.30 The following table summarizes stock-based compensation expense arising from the above Plan: Three Months Ended 2020 2019 Selling, general and administrative $ 2,540 $ 1,744 Research and development 88 254 $ 2,628 $ 1,998 In addition, during the three months ended March 31, 2020 and 2019 , the Company capitalized $37 and $17 , respectively, of stock-based compensation expense in capitalized software. Capitalized software is a component of intangible assets and is presented in the accompanying condensed balance sheets. See Note 4 , Goodwill and Intangible Assets for capitalized software information. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Services with Alphaeon In January 2018, the Company entered into a services agreement with Alphaeon Corporation (“Alphaeon”) , or the services agreement, which became effective upon the Company’s initial public offering (“IPO”). In 2019 Alphaeon changed its name to AEON Biopharma, Inc. and contributed all of the shares it held in the Company to Alphaeon 1, LLC. The Company continues to refer to the renamed AEON Biopharma, Inc. as “Alphaeon” and Alphaeon 1, LLC as Alphaeon 1, LLC. The services agreement sets forth certain agreements between Alphaeon and the Company that governs the respective responsibilities and obligations between Alphaeon and the Company as it relates to the services to be performed between them . The services agreement has a one -year term and thereafter will renew for successive one -year terms unless sooner terminated by either party. The Company or Alphaeon may terminate the services agreement upon sixty days ’ notice to the other party. There were no significant services provided under the services agreement after the Company’s initial public offering. As of March 31, 2020 and December 31, 2019 , Evolus had no related party accounts receivable or payable with Alphaeon. Evolus Founders Certain of the Evolus Founders from whom Strathspey Crown Holdings Group, LLC (formerly known as SCH-AEON, LLC) (“SCH”) purchased its equity interests include individuals who were previously employed by the Company in operational roles, including the Company’s former Chief Operating Officer. Payment Obligations Related to the Acquisition by Alphaeon The Company was acquired by SCH in 2013 and subsequently by its subsidiary, Alphaeon Corporation, by means of a stock purchase agreement (“Stock Purchase Agreement”) pursuant to which Alphaeon assumed certain payment obligations related to the acquisition. On December 14, 2017, the Stock Purchase Agreement was amended (“Amended Stock Purchase Agreement”), and, as a result, effective upon the closing of the Company’s initial public offering, the Company assumed all of Alphaeon’s payment obligations under the Amended Stock Purchase Agreement. Under the Amended Stock Purchase Agreement, the payment obligations consisted of (i) a $9,200 up-front payment upon obtaining FDA approval for Jeuveau ® for the treatment of glabellar lines which was paid in full during the first quarter of 2019, (ii) quarterly royalty payments of a low single digit percentage of net sales of Jeuveau ® , and (iii) a $20,000 promissory note that matures in November 2021. The payment obligations set forth in (ii) above terminates in the quarter following the 10 -year anniversary of the first commercial sale of Jeuveau ® in the United States. Under the Amended Stock Purchase Agreement, the Company recorded the fair value of all revised payment obligations and the promissory note owed to the Evolus Founders. See Note 3 , Fair Value Measurements and Short-Term Investments for more information about the Company’s accounting thereof. Under the Amended Stock Purchase Agreement, Evolus paid one-time bonuses of $1,575 to certain current and former employees upon FDA approval of Jeuveau ® in February 2019, including a one-time bonus of $700 paid to the Company’s Chief Medical Officer and Head of Research & Development. The payment is included in research and development expenses in the accompanying condensed statements of operations and comprehensive loss for the three months ended March 31, 2019 . The Company has the right to prepay the promissory note, in whole or in part, at any time and from time to time without penalty. Upon an event of default under the promissory note, all unpaid principal becomes immediately due and payable at the option of the holder. An event of default occurs under the terms of the promissory note upon any of the following events: (i) Evolus fails to meet the obligations to make the required payments thereunder, (ii) Evolus makes an assignment for the benefit of creditors, (iii) Evolus commences any bankruptcy proceeding, or (iv) Evolus materially breaches the Amended Stock Purchase Agreement or Tax Indemnity Agreement (which is defined below) and such breach is not cured within 30 days. In addition, upon a change-of-control of Evolus, all unpaid principal becomes immediately due and payable. Under the terms of the promissory note, a change-of-control is defined as (i) the sale of all or substantially all of Evolus’ assets, (ii) the exclusive license of Jeuveau ® or the business related to Jeuveau ® to a third-party (other than a sublicense under the Daewoong Agreement), or (iii) any merger, consolidation, or acquisition of Evolus, except a merger, consolidation, or acquisition of Evolus in which the holders of capital stock of Evolus immediately prior to such merger, consolidation, or acquisition hold at least 50% of the voting power of the capital stock of Evolus or the surviving entity. Notwithstanding the foregoing, the promissory note expressly provides that neither the IPO or any merger with or acquisition by Alphaeon or any of its subsidiaries or affiliates constitutes a change-of-control. In connection with the Amended Stock Purchase Agreement, the Company entered into a tax indemnity agreement with the Evolus Founders (“Tax Indemnity Agreement”). Pursuant to the Tax Indemnity Agreement, the Company is obligated to indemnify the Evolus Founders for any tax liability resulting from the Company’s assumption of the revised payment obligations under the Amended Stock Purchase Agreement from Alphaeon. Such assumption of the revised payment obligations occurred upon the completion of the IPO. Under the Amended Stock Purchase Agreement, the payment obligations are contingent and thus eligible for installment sale reporting under Section 453 of the Internal Revenue Code of 1986, as amended. Under the Tax Indemnity Agreement, the Company was obligated to indemnify the Evolus Founders for any taxes or penalties required to be paid by the Evolus Founders in the event the U.S. Internal Revenue Service or other taxing authority were to determine that Company’s assumption of the revised payment obligations under the Amended Stock Purchase Agreement rendered continued installment sale reporting unavailable to the Evolus Founders. Any taxes or penalties paid by us on behalf of the Evolus Founders under the Tax Indemnity Agreement will be offset dollar-for-dollar against the promissory note and future royalties that will be payable to the Evolus Founders under the Amended Stock Purchase Agreement. Exclusive Distribution and Supply Agreement with Clarion Medical Technologies Inc. On November 30, 2017, the Company entered into an exclusive distribution and supply agreement (the “Distribution Agreement”), with Clarion Medical Technologies Inc. (“Clarion”). The Distribution Agreement provides terms pursuant to which the Company will exclusively supply Jeuveau ® to Clarion in Canada. Clarion was previously a wholly-owned subsidiary of Alphaeon. However, pursuant to previous agreements among Alphaeon, Clarion, and previous equity holders of Clarion, the previous equity holders of Clarion had the option, and exercised such option, to unwind Alphaeon’s acquisition of Clarion. As a result, Alphaeon owes the equity holders of Clarion an unwinding fee of $9,550 (the “Unwinding Fee”). The Distribution Agreement sets forth that a portion of the proceeds received by the Company from each unit of Jeuveau ® purchased by Clarion shall be paid directly to the previous equity holders of Clarion, and will reduce, on a dollar-for-dollar basis, the amount of the Unwinding Fee Alphaeon owes. In addition, Alphaeon and SCH have agreed with Clarion to pay the unpaid amount of the Unwinding Fee on December 31, 2022, if demanded by the previous equity holders of Clarion. There were no sales of Jeuveau ® in Canada under the Distribution Agreement in any of the periods presented in these financial statements. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In April 2020, in response to the ongoing COVID-19 pandemic and as part of broader actions taken by the Company to reduce operating expenses and conserve cash resources, the Company announced expense reductions including separating approximately 100 employees, temporarily reducing executive salaries and Board of Directors fees and reducing the size of its Board of Directors by two members. The Company expects to incur employee separation costs of approximately $2,900 , primarily relating to severance and benefits costs. In May 2020, the Company announced the launch of a consumer loyalty program, Evolus Rewards, which allows participating customers to earn rewards for qualifying treatments to their patients (i.e. consumers) using Jeuveau ® and redeem the rewards for Jeuveau ® in the future at no additional cost. The loyalty program provides customers a material right, which is a separate performance obligation. The Company considers the launch of the consumer loyalty program a modification to the existing contracts with customers. Such contract modification is accounted for prospectively. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation T he accompanying unaudited condensed financial statements have been prepared on a consistent basis with the annual financial statements and in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting . Pursuant to these SEC rules and regulations, the Company has condensed or omitted certain financial information and disclosures normally included in annual financial statements prepared in accordance with GAAP. In the opinion of management, the interim financial statements reflect all adjustments, which include normal recurring adjustments, considered necessary for a fair statement of the interim periods. The interim results presented herein are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2020 or for any other interim period. The accompanying unaudited condensed financial statements and related disclosures should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 25, 2020. |
Use of Estimates | Use of Estimates Management is required to make certain estimates and assumptions in order to prepare financial statements in conformity with GAAP. Such estimates and assumptions affect the reported financial statements. The Company’s most significant estimates relate to net revenues, allowance for doubtful accounts, fair value measurements, goodwill and long-lived asset valuations and impairment assessments, inventory valuations, income tax valuations, stock-based compensation and royalty obligations, among others. Management bases estimates on historical experience and on assumptions that management believes are reasonable. The Company’s actual results could differ materially from those estimates. Additionally, the full impact of the COVID-19 outbreak is unknown and cannot be reasonably estimated. However, where possible, management has made appropriate accounting estimates with respect to certain accounting matters, which include the fair value of royalty obligations, allowance for doubtful accounts, inventory valuation and impairment assessments of goodwill and other long-lived assets, based on the facts and circumstances available as of the reporting date. The Company’s future assessment of the magnitude and duration of the COVID-19 outbreak, as well as other factors, could result in material impacts to the Company’s financial statements in future reporting periods. |
Risks and Uncertainties | Risks and Uncertainties In 2013, Evolus and Daewoong Pharmaceuticals Co., Ltd. (“Daewoong”) entered into an agreement (the “Daewoong Agreement”), pursuant to which, the Company has an exclusive distribution license to Jeuveau ® from Daewoong for aesthetic indications in the United States, European Union, Canada, Australia, Russia, Commonwealth of Independent States, and South Africa, as well as co-exclusive distribution rights with Daewoong in Japan. Jeuveau ® is manufactured by Daewoong in a facility in South Korea. The Company also has the option to negotiate first with Daewoong to secure a distribution license for any product that Daewoong directly or indirectly develops or commercializes that is classified as an injectable botulinum toxin (other than Jeuveau ® ) in a territory covered by the Daewoong Agreement. The Company relies on Daewoong, its exclusive and sole supplier, to manufacture Jeuveau ® . Any termination or loss of significant rights, including exclusivity, under the Daewoong Agreement would materially and adversely affect the Company’s commercialization of Jeuveau ® . The Daewoong Agreement, and Daewoong’s rights relating to Jeuveau ® , are subject to litigation. See Note 7 . Commitments and Contingencies for additional information regarding such litigation. The Company commercially launched Jeuveau ® in the United States in May 2019 and in Canada through a distribution partner in October 2019 and, as such, has a limited history of sales. If any previously granted approval is retracted or the Company is denied approval or approval is delayed by any other regulators, it may have a material adverse impact on the Company’s business and its financial statements. The Company is subject to risks common to companies in the pharmaceutical industry including, but not limited to, dependency on the commercial success of Jeuveau ® , the Company’s sole commercial product, significant competition within the medical aesthetics industry, its ability to maintain regulatory approval of Jeuveau ® , the need for additional financing to achieve its goals, third party litigation and challenges to its intellectual property, uncertainty of broad adoption of its product by physicians and patients, its ability to in-license, acquire or develop additional product candidates and to obtain the necessary approvals for those product candidates, and the need to scale manufacturing capabilities over time. The recent COVID-19 outbreak and restrictions intended to slow the spread of COVID-19, including quarantines, government-mandated actions, stay-at-home orders and other restrictions, have adversely affected the Company’s business in a number of ways, which have resulted, and may continue to result, in a period of business disruption and in reduced sales and operations. In addition, any disruption and volatility in the global capital markets may increase the Company’s cost of capital and adversely affect its ability to access financing when and on terms that we desire. Any of these events could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker. The Company has determined that it operates in a single operating and reportable segment. The Company’s chief operating decision maker is its Chief Executive Officer who manages operations and reviews the financial information as a single operating segment for purposes of allocating resources and evaluating its financial performance. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with remaining maturities at purchase of three months or less that can be liquidated without prior notice or penalty. Cash and cash equivalents may include deposits, money market funds and debt securities. Amounts receivable from credit card issuers are typically converted to cash within two to four days of the original sales transaction and are considered to be cash equivalents. The Company places its cash and cash equivalents with high credit quality financial institutions. At times, such investments may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) limit. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. |
Short-Term Investments | Short-Term Investments Short-term investments as of March 31, 2020 consisted of available-for-sale U.S. Treasury securities with original maturities greater than three months and remaining maturities of less than twelve months. These investments are recorded at fair value based on quoted prices in active markets, with unrealized gains and losses reported in other comprehensive (loss) gain in the Company’s condensed statements of operations and comprehensive loss. Purchase premiums and discounts are recognized in interest expense using the effective interest method over the terms of the securities. Realized gains and losses and declines in fair value that are deemed to be other than temporary are reflected in the condensed statements of operations and comprehensive loss using the specific-identification method. The Company periodically reviews all available-for-sale securities for other than temporary declines in fair value below the cost basis whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company also evaluates whether it has plans or is required to sell short-term investments before recovery of their amortized cost bases. To date, the Company has not identified any other than temporary declines in fair value of its short-term investments. |
Inventories | Inventories Inventories consist of finished goods held for sale and distribution. Cost is determined using the first‑in, first‑out method with prioritization of the items with the earliest expiration dates. Inventory valuation reserves are established based on a number of factors including, but not limited to, finished goods not meeting product specifications, product excess and obsolescence, or application of the lower of cost or net realizable value concepts. The determination of events requiring the establishment of inventory valuation reserves, together with the calculation of the amount of such reserves may require judgment. No material inventory valuation reserves have been recorded for the periods presented. Adverse changes in assumptions utilized in the Company’s inventory reserve calculations could result in an increase to its inventory valuation reserves. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in an orderly transaction between market participants in a principal market on the measurement date. The fair value hierarchy defines a three-tiered valuation hierarchy for disclosure of fair value measurement is classified and disclosed by the Company in one of the three categories as follows: • Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, or can be corroborated by observable market data for substantially the full term of the asset or liability; and • Level 3—Prices or valuation techniques that require inputs that are unobservable that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The Company performs an annual qualitative assessment of its goodwill in the fourth quarter of each calendar year to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If further testing is required, the Company performs a two-step process. The first step involves comparing the fair value of the Company’s reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step of the test is performed by comparing the carrying value of the goodwill in the reporting unit to its implied fair value. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. For the purpose of impairment testing, the Company has determined that it has one reporting unit. |
Intangible Assets | Intangible Assets Upon FDA approval of Jeuveau ® in February 2019, the in-process research and development (“IPR&D”) related to Jeuveau ® was evaluated as completed and reclassified to a definite-lived distribution right intangible asset, which is amortized over the period the asset is expected to contribute to the future cash flows of the Company. The Company determined the pattern of this intangible asset’s future cash flows could not be readily determined with a high level of precision. As a result, the distribution right intangible asset is being amortized on a straight-line basis over the estimated useful life of 20 years. The Company capitalizes certain internal-use software costs associated with the development of its mobile and web-based customer platforms. These costs include personnel expenses and external costs that are directly associated with the software projects. These costs are included as intangible assets in the accompanying condensed balance sheets. The capitalized internal-use software costs are amortized on a straight-line basis over the estimated useful life of two years upon being placed in service. The Company reviews long-term and identifiable definite-lived intangible assets or asset groups for impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset or an asset group, further impairment analysis is performed. An impairment loss is measured as the amount by which the carrying amount of the asset or asset groups exceeds the fair value for assets to be held and used or fair value less cost to sell for assets to be disposed of. The Company also reviews the useful lives of its assets periodically to determine whether events and circumstances warrant a revision to the remaining useful life. Changes in the useful life are adjusted prospectively by revising the remaining period over which the asset is amortized. There was no material impairment of long-lived assets for any periods presented. |
Leases | Leases In accordance with Accounting Standards Codification 842, Leases (“ASC 842”), at the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, upon lease commencement, the Company records a lease liability which represents the Company’s obligation to make lease payments arising from the lease, and a corresponding right-of-use (“ROU”) asset which represents the Company’s right to use an underlying asset during the lease term. Operating lease assets and liabilities are included in ROU assets, current portion of operating lease liabilities and noncurrent operating lease liabilities in the accompanying condensed balance sheets. Operating lease ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated using the Company’s incremental borrowing rate applicable to the underlying asset unless the implicit rate is readily determinable. Operating lease ROU assets also include any lease payments made at or before lease commencement and exclude any lease incentives received, if any. The Company determines the lease term as the noncancelable period of the lease and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company’s leases do not contain any residual value guarantees. Leases with a term of 12 months or less are not recognized on the condensed balance sheets. For operating leases, the Company recognized rent expense on a straight-line basis over the lease term. There were no significant finance leases as of March 31, 2020 . |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses include personnel-related costs including stock based compensation, costs associated with pre-clinical and clinical development activities, costs associated with and costs for prototype products that are manufactured prior to market approval for that prototype product, internal and external costs associated with the Company’s regulatory compliance and quality assurance functions, including the costs of outside consultants and contractors that assist in the process of submitting and maintaining regulatory filings, and overhead costs, including allocated facility related expenses. |
Contingent Royalty Obligation Payable to the Evolus Founders | Contingent Royalty Obligation Payable to the Evolus Founders The Company determines the fair value of the contingent royalty obligation payable at each reporting period end based on Level 3 inputs using a discounted cash flows method. Changes in the fair value of the contingent royalty obligation payable are determined at each reporting period end and recorded in operating expenses in the accompanying condensed statements of operations and comprehensive loss and as a liability in the condensed balance sheets. Contingent Promissory Note Payable to Evolus Founders On February 12, 2018, the Company recognized a contingent promissory note payable at present value using a discount rate for similar rated debt securities based on an estimated date that the Company believed the contingent promissory note will mature. Discount amortization related to the contingent promissory note is recorded in interest expense in the condensed statements of operations and comprehensive loss with a corresponding increase to the non-current liabilities in the condensed balance sheets. |
Long-Term Debt | Long-Term Debt Long-term debt represents the debt balance with Oxford Finance (“Oxford”), net of debt issuance costs. Debt issuance costs represent legal, lender and consulting costs or fees associated with debt financing. Debt discounts and issuance costs are allocated pro rata between the funded and unfunded portions of the debt and are amortized into interest expense over the term of the debt. |
Revenue Recognition | Revenue Recognition The Company applies Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), to account for revenue generated since the commercial launch of Jeuveau ® in May 2019. The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when the Company satisfies the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue recognition. General The Company currently generates product revenue from the sale of Jeuveau ® in the United States and service revenue from the sale of Jeuveau ® through a distribution partner in Canada. For product revenue, the Company recognizes revenue when control of the promised goods under a contract is transferred to a customer, in an amount that reflects the consideration the Company expects to receive in exchange for those goods as specified in the customer contract. The transfer of control occurs upon receipt of the goods by the customer since that is when the customer has obtained control of the goods’ economic benefits. The Company does not provide any service-type warranties and does not accept product returns except under limited circumstances such as damages in transit or ineffective product. The Company also excludes any amounts related to taxes assessed by governmental authorities from revenue measurement. Shipping and handling costs associated with outbound product freight are accounted for as fulfillment costs and are included in selling, general and marketing expenses in the accompanying condensed statements of operations and comprehensive loss. For service revenue, the Company evaluated the arrangement with the distribution partner in Canada and determined that it acts as an agent in the distribution of Jeuveau ® in Canada as it does not control the product before control is transferred to a customer. The indicators of which party exercises control include primary responsibility over performance obligations, inventory risk before the good or service is transferred and discretion in establishing the price. Accordingly, the Company records the sale as service revenue on a net basis. Revenue from services is recognized in the period the service is performed for the amount of consideration expected to be received. There were no service revenues for the three months ended March 31, 2020 . Disaggregation of Revenue The Company’s disaggregation of revenue is consistent with its operating segment as disclosed above. Gross-to-Net Revenue Adjustments The Company provides customers with trade and volume discounts and prompt pay discounts that are directly reflected in the invoice price. Revenues are recorded net of sales-related adjustments, wherever applicable, for rebates and coupon programs. Accrued rebate and coupon balances are recorded in accrued expenses on the accompanying condensed balance sheets. • Volume-based Rebates - Volume-based rebates are contractually offered to certain customers. The rebates payable to each customer are determined based on the contract and quarterly purchase volumes. • Coupons - The Company issued customers coupons redeemable into gift cards funded by the Company for the benefit of patients. The coupons are accounted for as variable consideration. The Company estimates the coupon redemption rates based on historical data and future expectations. The coupons are accrued based on estimated redemption rates and the volume of products purchased and are recorded as a reduction to revenues on product delivery. As of March 31, 2020 and December 31, 2019 , the accrued volume-based rebate and coupon liability was $2,479 and $1,709 , respectively. During the three months ended March 31, 2020 , provisions for rebate and coupon programs were $10,213 , which were offset by related payments of $9,443 . Contract balances A contract with a customer states the terms of the sale, including the description, quantity and price of each product purchased. Amounts are recorded as accounts receivable when the Company’s right to consideration becomes unconditional. As payment terms are short-term, the Company does not have any significant financing components in customer contracts given the expected time between transfer of the promised products and the payment of the associated consideration is less than one year. As of March 31, 2020 and December 31, 2019 , all amounts included in accounts receivable, net on the accompanying condensed balance sheets are related to contracts with customers. The Company did not have any contract assets nor unbilled receivables as of March 31, 2020 or December 31, 2019 . Sales commissions are included in selling, general and administrative expenses when incurred. Contract liabilities reflect estimated amounts that the Company is obligated to pay to customers or patients under the rebate and coupon programs. The Company’s contract liabilities are included in accounts payable and accrued expenses in the accompanying condensed balance sheets. During the three months ended March 31, 2020 , the Company did not recognize any revenue related to changes in transaction prices regarding its contracts with customers and did not recognize any material changes in revenue related to amounts included in contract liabilities at the beginning of the period. Collectability Accounts receivable are recorded at the invoiced amount and do not bear interest. At the time of contract inception or new customer account set-up, the Company performs a collectability assessment of the customer’s creditworthiness. The Company assesses the probability that the Company will collect the entitled consideration in exchange for the goods sold, by considering the customer’s ability and intention to pay when consideration is due. On a recurring basis, the Company estimates the amount of receivables considered uncollectable to reflect an allowance for doubtful accounts. The Company writes off accounts receivable balances when it is determined that there is no possibility of collection. As of March 31, 2020 and December 31, 2019 , allowance for doubtful accounts was $2,823 and $387 , respectively. For the three months ended March 31, 2020 , provision for bad debts was $2,607 and write-off amount was $171 . Practical Expedients The Company expenses sales commissions when incurred as the amortization period is one year or less. These costs are recorded within selling, general and administrative expenses in the accompanying condensed statements of operations and comprehensive loss. The Company does not adjust the amount of promised consideration for the effects of the time value of money for contracts in which the anticipated period between when the Company transfers the goods or services to the customer and when the customer pays within one year. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation expense for employees, consultants and members of the Board of Directors based on the fair value at the date of grant. The Company uses the Black-Scholes option pricing model to value stock option grants. The Black-Scholes option pricing model requires the input of subjective assumptions, including the expected volatility of the Company’s common stock, expected risk-free interest rate, and the option’s expected life. The fair value of the Company’s restricted stock units (“RSUs”) is based on the fair value on the grant date of the Company’s common stock. The Company also evaluates the impact of modifications made to the original terms of equity awards when they occur. The fair value of equity awards that are expected to vest is amortized on a straight-line basis over the requisite service period. Stock-based compensation expense is recognized net of actual forfeitures when they occur, as an increase to additional paid-in capital in the condensed balance sheets and in the selling, general and administrative or research and development expenses in the condensed statements of operations and comprehensive loss. |
Income Taxes | Income Taxes The Company applies an estimated annual effective tax rate (“ETR”) approach for calculating a tax provision or benefit for interim periods, as required under GAAP. The Company recorded a tax provision of $256 and a tax benefit of $14,523 for the three months ended March 31, 2020 and 2019 , respectively. The Company’s ETR differs from the U.S. federal statutory tax rate of 21% for the three months ended March 31, 2020 and 2019 , primarily as a result of the impact of a valuation allowance on its deferred tax assets and state minimum taxes. The tax benefit recorded for the three months ended March 31, 2019 was primarily a result of the reduction of the valuation allowance recorded against the Company’s deferred tax assets. A valuation allowance is recorded against deferred tax assets to reduce the net carrying value when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. As of each reporting date, the Company considers evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. Upon FDA approval of Jeuveau ® in February 2019, the Company’s IPR&D intangible asset was reclassified to a definite-lived distribution right intangible asset. As a result, management determined that it was more likely than not that certain deferred tax assets became realizable due to the future reversals of the deferred tax liability associated with such intangible asset. Accordingly, the Company released $14,402 of its valuation allowance as a discrete item upon FDA approval in February 2019. Additionally, the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. Accordingly, the Company establishes reserves for uncertain tax positions. On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The Cares Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. While the CARES Act provides sweeping tax changes in response to the COVID-19 pandemic, some of the more significant provisions which are expected to impact the Company’s financial statements include removal of certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years, and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. Due to the recent enactment of the CARES Act, the Company is unable to quantify the impact, if any, that the CARES Act will have on its financial position, results of operations or cash flows. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period including contingently issuable shares. Diluted earnings per share is based on the treasury stock method and includes the effect from potential issuance of ordinary shares, such as shares issuable pursuant to the exercise of stock options and the vesting of restricted stock units. Because the impact of the options and non-vested RSUs are anti-dilutive during periods of net loss, there was no difference between the weighted-average number of shares used to calculate basic and diluted net loss per common share for the periods presented. For the three months ended March 31, 2020 and 2019 , |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. ASU 2018-15 requires implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancelable term of the cloud computing arrangements plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The guidance is effective for interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted. The Company adopted the guidance using the prospective method on January 1, 2020, and such adoption did not have a material impact on its financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. The update is part of the disclosure framework project and eliminates certain disclosure requirements for fair value measurements, requires entities to disclose new information, and modifies existing disclosure requirements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation processes for Level 3 fair value measurements. However, public companies will be required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. The guidance is effective for interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted. The Company adopted the guidance in the current interim period, and such adoption is reflected in Note 3 . Fair Value Measurements and Short-Term Investments Recent Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The update simplifies the accounting for goodwill impairment by removing step two of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will be the amount by which a reporting unit’s carrying amount, including goodwill, exceeds its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. As amended by ASU 2019-10, the updated guidance is effective for the Company as a smaller reporting company beginning January 1, 2023. The standard requires prospective application. Early adoption is permitted. The Company is evaluating the effect of this standard on its financial statements and related disclosures as well as whether to early adopt the new guidance. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which modifies the measurement and recognition of credit losses for most financial assets and certain other instruments. The new standard requires the use of forward-looking expected credit loss models based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount, which may result in earlier recognition of credit losses under the new standard. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses . This ASU does not change the core principle of the guidance in ASU 2016-13, instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard. The FASB also subsequently issued ASU 2019-04 which did not change the core principle of the guidance in ASU 2016-13 but clarified that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should not exceed amounts previously written off and expected to be written off. As amended by ASU 2019-10, the updated guidance is effective for the Company as a smaller reporting company beginning January 1, 2023. The Company is in the process of determining the effects the adoption will have on its financial statements and reviewing credit loss models to assess the impact of the adoption of the standard on the financial statements. Based on initial assessments, the Company believes that while adoption will modify the way it analyzes financial instruments, it does not expect adoption of this guidance will have a material impact to its financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future financial position, results of operations or cash flows. |
Fair Value Measurements and S_2
Fair Value Measurements and Short-Term Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Debt Securities, Available-for-sale | The following is a summary of the Company’s short-term investments, considered available-for-sale: As of March 31, 2020 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Available-for-sale securities U.S. treasury securities $ 64,768 $ 219 $ — $ 64,987 As of December 31, 2019 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Available-for-sale securities U.S. treasury securities $ 19,905 $ 6 $ — $ 19,911 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The fair value of these instruments was as follows: As of March 31, 2020 Fair Value Level 1 Level 2 Level 3 Available-for-sale debt securities U.S. treasury securities $ 64,987 $ 64,987 $ — $ — Liabilities Contingent royalty obligation payable to Evolus Founders $ 34,216 $ — $ — $ 34,216 As of December 31, 2019 Fair Value Level 1 Level 2 Level 3 Available-for-sale debt securities U.S. treasury securities $ 19,911 $ 19,911 $ — $ — Liabilities Contingent royalty obligation payable to Evolus Founders $ 44,683 $ — $ — $ 44,683 |
Schedule of Financial Instruments Recorded at Fair Value on a Recurring Basis | The following table shows a reconciliation of the beginning and ending fair value measurements of the contingent royalty obligation payable: Three Months Ended 2020 2019 Fair value, beginning of period $ 44,683 $ 50,200 Payments (583 ) (9,213 ) Change in fair value recorded in operating expenses (9,884 ) 4,913 Fair value, end of period $ 34,216 $ 45,900 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The table below shows the weighted-average life, original cost, accumulated amortization and net book value by major intangible asset classification: Weighted-Average Life (Years) Original Cost Accumulated Amortization Net Book Value Definite-lived intangible assets Distribution right 20 $ 59,076 $ (3,418 ) $ 55,658 Capitalized software 2 5,554 (2,038 ) 3,516 Intangible assets, net 64,630 (5,456 ) 59,174 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of March 31, 2020 $ 85,838 $ (5,456 ) $ 80,382 Weighted-Average Life (Years) Original Cost Accumulated Amortization Net Book Value Indefinite-lived intangible assets Distribution right 20 $ 59,076 $ (2,679 ) $ 56,397 Capitalized software 2 4,415 (1,174 ) 3,241 Intangible assets, net 63,491 (3,853 ) 59,638 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of December 31, 2019 $ 84,699 $ (3,853 ) $ 80,846 ________________________ * Intangible assets with indefinite lives have an indeterminable average life. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table outlines the estimated future amortization expense related to intangible assets held as of March 31, 2020 that are subject to amortization: Fiscal year Remaining in 2020 $ 4,628 2021 4,060 2022 2,955 2023 2,955 2024 2,955 Thereafter 41,621 $ 59,174 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accrued expenses consisted of: March 31, December 31, 2020 2019 Accrued professional services $ 4,115 $ 5,794 Accrued payroll and related benefits 1,941 5,229 Accrued volume-based rebate and coupon liability 2,479 1,709 Other accrued expenses 868 1,228 $ 9,403 $ 13,960 |
Oxford Term Loans (Tables)
Oxford Term Loans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | As of March 31, 2020 , the principal amounts of long-term debt maturities of the Term Loans during each of the next five fiscal years are as follows: Fiscal year Remainder of 2020 $ — 2021 — 2022 26,087 2023 39,130 2024 9,783 Total principal payments 75,000 Unamortized debt discounts and issuance costs (1,159 ) Long term debt, net of discounts and issuance costs $ 73,841 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease, Cost | For the three months ended March 31, 2020 , the components of operating lease expense: Three Months Ended Three Months Ended Fixed operating lease expense $ 274 $ 234 Variable operating lease expense 15 18 Short-term operating lease expense 168 21 $ 457 $ 273 |
Lessee, Operating Lease, Liability, Maturity | The following table presents the maturity of the Company’s operating lease liabilities as of March 31, 2020 , future minimum payments under the operating lease agreements with non-cancelable terms as follows: Fiscal year Remainder of 2020 $ 896 2021 1,207 2022 1,259 2023 1,314 2024 1,371 Thereafter 115 Total operating lease payments 6,162 Less: imputed interest (1,250 ) Present value of operating lease liabilities $ 4,912 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted-averages for key assumptions used in determining the fair value of stock options granted were as follows: Three Months Ended 2020 2019 Volatility 59.3% 59.2% Risk-free interest rate 1.61% 2.62% Expected life (years) 6.25 6.17 Dividend yield rate —% —% |
Share-based Compensation, Stock Options, Activity | A summary of stock option activity under the Plan for the three months ended March 31, 2020 , is presented below: Weighted Weighted Average Average Remaining Aggregate Stock Exercise Contractual Intrinsic Options Per Share Terms (Years) Value Outstanding, December 31, 2019 3,977,401 $ 14.07 8.51 $ 7,198 Granted 1,085,734 10.10 Exercised — — Canceled/forfeited (100,600 ) 18.25 Outstanding, March 31, 2020 4,962,535 $ 13.12 8.63 $ 3,717 Exercisable, March 31, 2020 1,195,056 $ 12.77 8.15 $ — |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | A summary of RSU activity under the Plan for the three months ended March 31, 2020 , is presented below: Weighted Average Restricted Grant Date Stock Fair Value Units Per Share December 31, 2019 229,870 $ 15.89 Granted 416,049 10.19 Vested (165,370 ) 12.00 Forfeited (480 ) 10.19 Outstanding, March 31, 2020 480,069 $ 12.30 |
Schedule of Stock-based Compensation Expense Allocation | The following table summarizes stock-based compensation expense arising from the above Plan: Three Months Ended 2020 2019 Selling, general and administrative $ 2,540 $ 1,744 Research and development 88 254 $ 2,628 $ 1,998 |
Description of Business (Detail
Description of Business (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net loss | $ (19,735) | $ (10,975) | |
Cash used in operations | (27,947) | $ (19,200) | |
Cash and cash equivalents | 34,652 | $ 109,892 | |
Short-term investments | 64,987 | 19,911 | |
Accumulated deficit | $ 232,794 | $ 213,059 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Feb. 28, 2019USD ($) | Mar. 31, 2020USD ($)unitshares | Mar. 31, 2019USD ($)shares | Dec. 31, 2019USD ($) | |
Accounting Policies [Line Items] | ||||
Number of reporting units | unit | 1 | |||
Impairment of goodwill | $ 0 | |||
Impairment of intangible assets | 0 | |||
Accrued volume-based rebate and coupon liability | 2,479,000 | $ 1,709,000 | ||
Provisions for accrued volume-based rebate and coupon liability | 10,213,000 | |||
Payments for Provisions for accrued volume-based rebate and coupon liability | 9,443,000 | |||
Allowance for doubtful accounts | 2,823,000 | $ 387,000 | ||
Provision for bad debts | 2,607,000 | $ 0 | ||
Accounts receivable, writeoff | 0 | |||
Income tax expense (benefit) | $ 256,000 | $ (14,523,000) | ||
Valuation allowance increase (decrease) recorded against gross deferred tax asset | $ (14,402,000) | |||
Distribution right | ||||
Accounting Policies [Line Items] | ||||
Useful life | 20 years | 20 years | ||
Internal-use software | ||||
Accounting Policies [Line Items] | ||||
Useful life | 2 years | |||
Common stock options | ||||
Accounting Policies [Line Items] | ||||
Securities excluded from the computation of diluted net loss per share (in shares) | shares | 4,962,535 | 3,867,254 | ||
Restricted stock units | ||||
Accounting Policies [Line Items] | ||||
Securities excluded from the computation of diluted net loss per share (in shares) | shares | 480,069 | 256,870 |
Fair Value Measurements and S_3
Fair Value Measurements and Short-Term Investments - Schedule of Short-term Investments (Details) - U.S. treasury securities - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | $ 64,768 | $ 19,905 |
Gross Unrealized | ||
Gains | 219 | 6 |
Losses | 0 | 0 |
Estimated Fair Value | $ 64,987 | $ 19,911 |
Fair Value Measurements and S_4
Fair Value Measurements and Short-Term Investments - Assets and Liabilities on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term investments | $ 64,987 | $ 19,911 | ||
Contingent royalty obligation payable to Evolus Founders | 34,216 | 44,683 | $ 45,900 | $ 50,200 |
U.S. treasury securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term investments | 64,987 | 19,911 | ||
U.S. treasury securities | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale debt securities | 64,987 | 19,911 | ||
U.S. treasury securities | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale debt securities | 0 | 0 | ||
U.S. treasury securities | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale debt securities | 0 | 0 | ||
Notes Payable, Other Payables | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent royalty obligation payable to Evolus Founders | 34,216 | 44,683 | ||
Notes Payable, Other Payables | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent royalty obligation payable to Evolus Founders | 0 | 0 | ||
Notes Payable, Other Payables | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent royalty obligation payable to Evolus Founders | 0 | 0 | ||
Notes Payable, Other Payables | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent royalty obligation payable to Evolus Founders | $ 34,216 | $ 44,683 |
Fair Value Measurements and S_5
Fair Value Measurements and Short-Term Investments - Narrative (Details) $ in Thousands | Mar. 31, 2020USD ($)year | Dec. 31, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent royalty obligation payable to Evolus Founders | $ 34,216 | $ 44,683 | $ 45,900 | $ 50,200 |
Contingent Royalty Obligation | Measurement Input, Expected Term | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Measurement input | year | 10 | |||
Contingent Royalty Obligation | Measurement Input, Discount Rate | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Measurement input | 0.170 | 0.16 | ||
Estimate of Fair Value Measurement | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent promissory note payable | $ 17,254 | |||
Contingent royalty obligation payable to Evolus Founders | 16,696 | |||
Oxford Term Loans | Estimate of Fair Value Measurement | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent promissory note payable | $ 74,317 | |||
Contingent royalty obligation payable to Evolus Founders | $ 76,203 |
Fair Value Measurements and S_6
Fair Value Measurements and Short-Term Investments - Contingent Royalty Obligation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 44,683 | $ 50,200 |
Payments | (583) | (9,213) |
Change in fair value recorded in operating expenses | (9,884) | 4,913 |
Ending balance | $ 34,216 | $ 45,900 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Definite and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Definite-lived intangible assets | ||
Original Cost | $ 64,630 | $ 63,491 |
Accumulated Amortization | (5,456) | (3,853) |
Net Book Value | 59,174 | |
Intangible assets, net | 59,174 | 59,638 |
Indefinite-lived intangible asset | ||
Goodwill | 21,208 | 21,208 |
Intangible assets, gross (including goodwill) | 85,838 | 84,699 |
Total net book value | 80,382 | 80,846 |
Distribution right | ||
Definite-lived intangible assets | ||
Original Cost | 59,076 | 59,076 |
Accumulated Amortization | (3,418) | (2,679) |
Net Book Value | $ 55,658 | $ 56,397 |
Useful life | 20 years | 20 years |
Capitalized software | ||
Definite-lived intangible assets | ||
Original Cost | $ 5,554 | $ 4,415 |
Accumulated Amortization | (2,038) | (1,174) |
Net Book Value | $ 3,516 | $ 3,241 |
Useful life | 2 years | 2 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining in 2020 | $ 4,628 |
2021 | 4,060 |
2022 | 2,955 |
2023 | 2,955 |
2024 | 2,955 |
Thereafter | 41,621 |
Net Book Value | $ 59,174 |
Goodwill and Intangible Asset -
Goodwill and Intangible Asset - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Capitalized computer software | $ 1,139 | $ 1,190 |
Amortization expense | $ 1,603 | $ 484 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued professional services | $ 4,115 | $ 5,794 |
Accrued payroll and related benefits | 1,941 | 5,229 |
Accrued volume-based rebate and coupon liability | 2,479 | 1,709 |
Other accrued expenses | 868 | 1,228 |
Accounts payable and accrued liabilities, current | $ 9,403 | $ 13,960 |
Oxford Term Loans - Narrative (
Oxford Term Loans - Narrative (Details) - USD ($) | Mar. 15, 2019 | Mar. 31, 2020 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 75,000,000 | |
Interest rate on debt | 11.60% | |
Percentage of final payment of full principal amount | 5.50% | |
Prepayment fee percentage, next twelve months | 3.00% | |
Prepayment fee percentage, year two | 2.00% | |
Prepayment fee percentage, thereafter | 1.00% | |
Debt discount | $ 1,094,000 | |
Debt issuance costs | $ 2,205,000 | |
Term Loan Facility | Applicable Rate | ||
Debt Instrument [Line Items] | ||
Default interest rate | 5.00% | |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 100,000,000 | |
Interest rate on debt | 9.50% | |
Period of interest only payments | 36 months | |
Amortization period | 23 months | |
Additional period of agreement of interest payment | 12 months | |
Aggregate period | 48 months | |
Additional amortization period | 11 months | |
Secured Debt | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 7.00% | |
Secured Debt | Term Loan Facility, Tranche One | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 75,000,000 | |
Secured Debt | Term Loan Facility, Tranche Two | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 25,000,000 |
Oxford Term Loans - Maturities
Oxford Term Loans - Maturities of Debt (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2020 | $ 0 |
2021 | 0 |
2022 | 26,087 |
2023 | 39,130 |
2024 | 9,783 |
Total principal payments | 75,000 |
Unamortized debt discounts and issuance costs | (1,159) |
Long term debt, net of discounts and issuance costs | $ 73,841 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | Mar. 15, 2019 | Mar. 31, 2020 | Dec. 31, 2019 |
Loss Contingencies [Line Items] | |||
Termination period | 36 months | ||
Period of written notice | 12 months | ||
Period of termination fee prior to lease termination date | 6 months | ||
Renewal term | 60 months | ||
Purchase obligation | $ 6,140,000 | ||
Loss contingency accrual | 0 | $ 0 | |
Daewoong | |||
Loss Contingencies [Line Items] | |||
Milestone payment in connection with license and supply agreement | $ 10,500,000 | ||
Applicable Rate | Term Loan Facility | |||
Loss Contingencies [Line Items] | |||
Default interest rate | 5.00% |
Commitments and Contingencies_2
Commitments and Contingencies - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Fixed operating lease expense | $ 274 | $ 234 |
Variable operating lease expense | 15 | 18 |
Short-term operating lease expense | 168 | 21 |
Lease, cost | $ 457 | $ 273 |
Weighted-average remaining lease term (years) | 4 years 9 months 18 days | |
Weighted-average discount rate | 9.40% |
Commitments and Contingencies_3
Commitments and Contingencies - Operating Lease Maturity (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
Remainder of 2020 | $ 896 |
2021 | 1,207 |
2022 | 1,259 |
2023 | 1,314 |
2024 | 1,371 |
Thereafter | 115 |
Total operating lease payments | 6,162 |
Less: imputed interest | (1,250) |
Present value of operating lease liabilities | $ 4,912 |
Stockholder's Equity - Narrativ
Stockholder's Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 21, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | ||
Common stock, shares, issued (in shares) | 33,728,035 | 33,562,665 | ||
Common stock, shares, outstanding (in shares) | 33,728,035 | 33,562,665 | ||
Maximum number of shares authorized under the plan (in shares) | 4,361,291 | |||
Annual increase percentage of maximum shares outstanding (equal to) | 4.00% | |||
Capital shares reserved for future issuance (in shares) | 859,412 | |||
Contractual term | 10 years | |||
Capitalized compensation expense | $ 37 | $ 17 | ||
Minimum | ||||
Class of Stock [Line Items] | ||||
Award vesting period | 1 year | |||
Maximum | ||||
Class of Stock [Line Items] | ||||
Award vesting period | 4 years |
Stockholders_ Equity - Schedule
Stockholders’ Equity - Schedule of Valuation Assumptions (Details) - Common stock options | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Class of Stock [Line Items] | ||
Volatility | 59.30% | 59.20% |
Risk-free interest rate | 1.61% | 2.62% |
Expected life (years) | 6 years 3 months | 6 years 1 month 30 days |
Dividend yield rate | 0.00% | 0.00% |
Stockholders_ Equity - Schedu_2
Stockholders’ Equity - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Weighted Average Contractual Term | ||
Contractual term | 10 years | |
Common stock options | ||
Stock Options | ||
Beginning balance (in shares) | 3,977,401 | |
Granted (in shares) | 1,085,734 | |
Exercised (in shares) | 0 | |
Cancelled/forfeited (in shares) | (100,600) | |
Ending balance (in shares) | 4,962,535 | 3,977,401 |
Exercisable (in shares) | 1,195,056 | |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 14.07 | |
Granted (in dollars per share) | 10.10 | |
Exercised (in dollars per share) | 0 | |
Cancelled/forfeited (in dollars per share) | 18.25 | |
Ending balance (in dollars per share) | 13.12 | $ 14.07 |
Exercisable (in dollars per share) | $ 12.77 | |
Weighted Average Contractual Term | ||
Contractual term | 8 years 7 months 17 days | 8 years 6 months 3 days |
Exercisable | 8 years 1 month 23 days | |
Aggregate Intrinsic Value | ||
Beginning balance | $ 7,198 | |
Granted | ||
Exercised | ||
Canceled/forfeited | ||
Ending balance | 3,717 | $ 7,198 |
Exercisable | $ 0 |
Stockholders_ Equity - Restrict
Stockholders’ Equity - Restricted Stock Unit (Details) - Restricted stock units | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Restricted Stock Unit | |
Beginning balance (in shares) | shares | 229,870 |
Granted (in shares) | shares | 416,049 |
Vested (in shares) | shares | (165,370) |
Forfeited (in shares) | shares | (480) |
Ending balance (in shares) | shares | 480,069 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning balance (in dollars per share) | $ / shares | $ 15.89 |
Granted (in dollars per share) | $ / shares | 10.19 |
Vested (in dollars per share) | $ / shares | 12 |
Forfeited (in dollars per share) | $ / shares | 10.19 |
Ending balance (in dollars per share) | $ / shares | $ 12.30 |
Stockholder's Equity - Stock-ba
Stockholder's Equity - Stock-based Compensation Expense Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Allocated stock-based compensation expense | $ 2,628 | $ 1,998 |
Selling, general and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Allocated stock-based compensation expense | 2,540 | 1,744 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Allocated stock-based compensation expense | $ 88 | $ 254 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 14, 2017 | Nov. 30, 2017 | Jan. 31, 2018 | Dec. 31, 2019 |
ALPHAEON | ||||
Related Party Transaction [Line Items] | ||||
Period available to cure breach | 30 days | |||
Unwinding fee | $ 9,550,000 | |||
ALPHAEON | Majority Shareholder | ||||
Related Party Transaction [Line Items] | ||||
Term of agreement | 1 year | |||
Renewal period option | 1 year | |||
Period to notify termination | 60 days | |||
Due from related parties, current | $ 0 | |||
Evolus, Inc. | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | $ 1,575,000 | |||
Percentage of voting interests acquired (at least) | 50.00% | |||
Evolus, Inc. | Chief Medical Officer | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | $ 700,000 | |||
Evolus, Inc. | SCH | ||||
Related Party Transaction [Line Items] | ||||
Up-front payment upon obtaining FDA approval | 9,200,000 | |||
Related party transaction amount in period | $ 20,000,000 | |||
Period of termination of first commercial sale | 10 years |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - COVID-19 Pandemic - Subsequent Event $ in Thousands | 1 Months Ended |
Apr. 30, 2020USD ($)position_terminated | |
Employee Severance And Special Termination Benefits | |
Subsequent Event [Line Items] | |
Restructuring and related cost, expected cost | $ | $ 2,900 |
Employees | |
Subsequent Event [Line Items] | |
Number of positions terminated | 100 |
Board of Director Members | |
Subsequent Event [Line Items] | |
Number of positions terminated | 2 |